Final answer:
The absence of a common measure for outputs is a major issue in assessing the productivity of service organizations. Productivity in services can be gauged using customer satisfaction, service quality, and innovation. Additionally, data on labor costs and profits as well as considerations of economic factors like diseconomies of scale and implicit costs provide further insights.
Step-by-step explanation:
One major problem in measuring the productivity of a service organization is the absence of a common measure for its outputs. Unlike manufacturing, where output can be easily quantified, services are more intangible and heterogeneous, making it challenging to establish a uniform measure of productivity. However, productivity can be assessed through other means besides the amount produced per hour of work. Other measures include the quality of services provided, customer satisfaction levels, the efficiency of service delivery, and the innovation in service offerings.
Furthermore, the Productivity and Costs data considers various economic factors such as labor costs and profits which can give a more comprehensive picture of an organization's productivity. Factors such as diseconomies of scale, economic profit, and the cost of fixed inputs are crucial for understanding how productivity changes with scale and how implicit costs, like opportunity costs of owned resources, affect productivity.