The author develops a network of interlinked productivity indices and attempts thereby to propose a practical tool for studying the effect of Various factors on observed changes in man-year productivity. The system is devised to reflect the structure of possible working hours which consists of the following categories: non-working days and working days, days not worked and days worked, operated hours and omitted man-hours, and lost time and effective hours. Thus the index of man-year productivity is analysed by 19 indices which are interlinked indices of related factors. Among these factors, there are three groups of indices. The first group is a set of elemental indices which is composed of such indices as effective man-hours, operated man-hours, duty man-hours, days worked, working days, and rate of over-time work. The second group is a set of hierarchical indices of labour resource use such as rate of effective hours, ratio of operated hours to duty hours, ratio of duty man-hours to working man-days, and rate of working days. The third group is a set of indices of distribution of labour resources among products or sectors. The index number system necessarily includes some subcategories of labour productivity such as operated man-hour productivity, duty man-hour productivity and effective man-hour productivity. The theory and its application will be shown in detail,