The original sentence is: "Increased productivity necessary reflects greater efforts made by the employees." The phrase "Increased productivity necessary" is grammatically awkward.

Grammar Analysis

• The sentence requires a clear subject and verb. The phrase "Increased productivity necessary" is problematic. "Necessary" appears misplaced, potentially intended as an adverb modifying "reflects" or an adjective for "productivity" in an incorrect structure.
• The core idea is that a rise in productivity is linked to employee efforts.

Option Evaluation

• Option 1: "Increase in productivity necessary" - This option maintains the awkward placement of "necessary", making the sentence grammatically weak.
• Option 2: "Increase productivity is necessary" - Inserting this creates: "Increase productivity is necessary reflects greater efforts...". This structure is incorrect, combining a statement ("is necessary") with a verb ("reflects") without proper conjunction or sentence separation.
• Option 3: "Increase in productivity necessarily" - This creates the sentence: "Increase in productivity necessarily reflects greater efforts made by the employees." Here, "Increase in productivity" serves as a proper noun phrase subject, and "necessarily" correctly functions as an adverb modifying the verb "reflects". This option is grammatically sound and clearly conveys the intended meaning – that the rise in productivity inherently points to greater efforts.
• Option 4: "No improvement required" - The original phrase is grammatically questionable, suggesting improvement is indeed needed.

Conclusion

Option 3 provides the grammatically correct and most suitable replacement for the underlined phrase, ensuring the sentence accurately reflects the relationship between productivity and employee efforts.