“Increase in company stock prices” is NOT likely to have a direct correlation with an increase in productivity in a company because when speaking about productivity it refers to improving the amount of products manufactured or sold by a company. For example, if a company that assembles cars today makes 1.000 cars per day and then increases that amount to 2.000 cars assembled per day, company productivity has improved 100%.
Company productivity may increase for the following reasons:
• Buying new technology: following the car company example, if it acquires new technology that speeds up the production process, such as an assembly machine, then more cars will be made.
• Additional training for their labor force: If the company that bought a new machine trains its labor force to use it, then production will also increase as employees know how to handle the equipment.
• Hiring additional workers: more qualified workers mean more production. For example, a company has 50 workers and they make 100 pair of shoes daily, then it hires 50 more workers so they make 200 pair of shoes by day. Therefore, the company productivity has increased.
