Economic indicators.It refers to essentially quantitative data, which allows us to realize how things are in relation to some aspect of reality that we are interested in knowing. The Indicators can be: measures, numbers, facts, opinions or perceptions that indicate specific conditions or situations. The indicators must be adequately reflected, the nature, peculiarities and links of the processes that originate in the economic-productive activity, their results, expenses, among others, and be characterized by being stable and understandable, therefore, it is not enough with just one of them to measure the management of the company, but rather the need to consider the indicator systems, that is, an interrelated set of them that encompasses the greatest possible number of quantities to be measured.
Summary
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- 1 Importance of the indicators
- 2 How to build good indicators?
- 3 Types of economic indicators
- 4 Indicators to evaluate performance
- 1 Efficacy
- 2 Effectiveness
- 3 The increase in production effectiveness is expressed in:
- 4 The fundamental ways to increase effectiveness
- 5 Examples of indicators to measure the effectiveness of production
- 1 Starting points of a production plan
- 2 Efficiency
- 6 Sources
Importance of the indicators
- It allows to measure changes in that condition or situation over time.
- They make it easier to look closely at the results of initiatives or actions.
- They are very important instruments to evaluate and give rise to the development process.
- They are valuable instruments to guide us on how better results can be achieved in development projects.
How to build good indicators?
Some criteria for the construction of good indicators are:
- Measurability: Ability to measure or systematize what is intended to be known.
- Analysis: Ability to capture qualitative or quantitative aspects of
realities that aims to measure or systematize.
- Relevance: Ability to express what is intended to be measured.
Types of economic indicators
- Quantitative Indicators: They are those that directly refer to measurements in numbers or quantities. These are classified into:
– Physical production.
– Exportable production.
– Mercantile production .
– Gross production of the industry.
– Production carried out
- Qualitative Indicators: They are those that refer to qualities. These are aspects that are not directly quantified. It is about people’s opinions, perceptions or judgment about something.
- Direct Indicators: They are those that allow a direct direction of the phenomenon.
- Indirect Indicators: When the economic condition cannot be measured directly, we use substitute indicators or sets of indicators related to the phenomenon that we are interested in measuring or systematizing.
- Positive Indicators: They are those in which if their value increases they would be indicating an advance towards equity.
- Negative Indicator: They are those in which if their value increases they would be indicating a decline towards inequality.
Indicators: The system of indicators must characterize the technical – organizational level of development of the company, the resources it possesses and the general results of the productive activity with high quality, the resources it possesses and the efficiency of its employment. The location and mobilization of the internal reserve depends on the correct application of these indicators.
Indicators to assess performance
Effectiveness
It is virtue, activity, and power to act. “” When a group achieves previously established goals or objectives, the group is effective. Evaluate the impact of what we do, the product or service we provide. It is not enough to produce with 100% effectiveness the service or product that we set ourselves, both in quantity and quality, but it is necessary that it be adequate; the one that will really succeed in satisfying the customer or impacting the market.
Effectiveness
It is the relationship between the results achieved and the proposed results, that is, it allows us to measure the degree of fulfillment of the planned objectives. When considering quantity as the only criterion, one falls into effective styles, those where the result is important, no matter at what cost. Effectiveness is linked to productivity through impacting the achievement of greater and better products (according to the objective); however, it lacks the notion of resource use.
This indicator helps us to measure certain quality parameters that every organization must preset and also to be able to control waste from the process and increase added value. Raising the effectiveness of production is a task for the entire town. The party teaches that only by increasing economic effectiveness can sufficient resources and means be guaranteed to simultaneously ensure a considerable increase in the well-being of workers and the further development of production.
The effectiveness of the production is the economic development of the productive activity, the calculations of this allow to relate and integrate in a single plan the volumes and rates of growth of the production in correspondence with the social needs, on the one hand, and the magnitudes of the productive expenses on the other.
The increase in the effectiveness of production constitutes the most important orientation of the socialist economy, it has to pay very serious attention to the problem of the volume of spending that intervenes to create one or another type of product.
The increase in production effectiveness is expressed in:
- The growth of labor productivity.
- Yield of the funds.
- Decrease in the consumption of materials per production unit.
- Improvement of production quality.
- Increased profit and production profitability.
Fundamental pathways to increased effectiveness
- Successive improvement of the structure of the national economy.
- Increased production locality.
- Acceleration of growth rates of labor productivity.
- Rational use of productive funds.
- Decrease in the consumption of materials per production unit.
- Improvement of a whole system of economic planning and management.
Examples of indicators to measure the effectiveness of production
- Labor productivity: it is the relationship that exists between the volume of production and the average number of workers.
- Material expenses by weight of production: it is the relation that exists between the consumption of productive material and the volume of gross production.
- Salary expenditure by weight of production: it is the relation that exists between the wage fund of productive workers and the volume of production.
Starting points of a production plan
- Work productivity.
- Yield of the funds.
- Application of new technologies.
- Increased profit and profitability.
- Increased quality.
- Saving of resources.
Efficiency
It consists of the good use of resources. In achieving as much as possible with what we have. If a human group has a certain number of inputs that are used to produce goods or services, efficient will be that group that achieves the greatest number of goods or services using the fewest inputs possible. Efficient is who achieves high productivity in relation to the resources available.
It is used to relate the efforts to the results obtained. The greater the results, the greater the efficiency. If better results are obtained with less expenditure of resources or less effort, efficiency will have increased. Two factors are used to measure or evaluate the efficiency of people or companies: Cost and Time.
It constitutes an objective premise of socialism and at the same time a fundamental factor for the increase of social wealth, there is a close link between the category efficiency and the fundamental economic law of socialism that determines the objective of socialist production aimed at the full satisfaction of the growing needs of society.
On the other hand, efficiency is understood as the effectiveness of a certain socioeconomic form of administration from the point of view of the criteria that emanates from the nature of the relations of production, from the expenses that it has to carry out to obtain the expected result, that is, the setting in motion of all the necessary production funds to achieve the maximum satisfaction of the needs of society.
Social efficiency: It is determined by the measure of the level of insurance of the needs of society, in material and spiritual goods and services, including the creation of the necessary commissions for the free and harmonious multilateral development of all members of society.
Economic efficiency: Reflects the relationship between expenses and the results obtained; This is characterized by the magnitude and dynamics of national income.
Efficiency and effectiveness in general, not only result in the profits of a company, but also contribute significantly to the self-improvement, development and progress of the individual, society and the country in which he lives. In our environment, perhaps not all of us understand this well and therefore we frequently underuse our capacities.
The analysis of these three indicators shows that none of them can be considered independently, since each one provides a partial measurement of the results. That is why they must be considered as a System of Indicators that serve to comprehensively measure productivity. indicators associated with productivity and quality.
