Productivity vs. Efficiency: are they the same?
You’ve likely used the words productivity and efficiency as synonyms many times. Even though these terms are very much used as important everyday work lingo, they are not interchangeable.
Productivity refers to the quantity of work, and efficiency refers to the quality of work.
These notions are not synonyms, but they are interdependent. In this article, we’ll explore exactly how they’re different from one another, but both are needed in your job performance.
What is productivity?
Productivity is all about performance, translated into the output of produced goods and services by someone (or a team) via resources they have available. It reflects on making the most and performing the most (in quantity) with the available resources.
It’s not the number of things someone produces but how much it is produced with certain resources available.
It’s achieving better with the same resources that we had last time or using fewer to produce the same. There is a direct correlation between what the input is and its output.
Can you measure productivity? How?
Indeed, measuring productivity is possible. It follows the current tendencies valued by many managers and entrepreneurs, focusing on numbers.
Although productivity is more than just numbers, they matter greatly in the end.
Considering the measurability of productivity, the focus is on doing the most or achieving more, using the same or fewer resources. It’s the output achieved vs. the input invested.
Formula: Total Output / Total Input = Productivity
This formula, while applicable to the overall business, will probably come across differently in different areas and departments of a company or a business.
Examples of productivity
A good example of productivity is maximizing the time used to perform a certain task. For example, while performing interviews with possible new workers, an HR manager can take around 30 minutes. To boost productivity, this manager will probably aim to interview two candidates in the same 30 minutes.
Let’s imagine that you’re a social media coordinator, and you publish, on average and across all platforms, 30 posts per week. Your employer wants to add another social media platform to the table or increase the number of weekly posts to 40.
You have the same amount of working hours and need to use your resources to boost your productivity and achieve the intended results.
You can find a tool that helps you save time and thus produce more posts, or you can repurpose the same content for different platforms. What matters is that the levels of productivity increase. But this example brings to the table the discussion of quantity vs. quality.
Your posts may reach more people, but is the content good enough to attract business? The HR manager interviewed two candidates in 30 minutes: was it enough time to get to know and correctly evaluate them?
Let’s have another example of an output of results vs. the input of resources. A textile business produces 50 pieces of clothing daily, of which 20 have flaws that make it impossible to sell them. Are they more or less productive than a competitor business that produces 35 perfect, unflawed pieces?
They have the same fabric supplier and use the same tools. A deeper analysis would obviously help explain why they differ in their output.
What is efficiency?
Now that we explored the meaning of productivity, what exactly is efficiency? With productivity, we care about the output achieved, and with efficiency, we manage how well the resources available are used to achieve the output.
When we focus on efficiency, we focus on achieving the same using fewer resources. Efficiency is all about the resources invested to achieve the results valued by productivity.
How to measure efficiency?
Whereas with productivity, the end result was the most important. Efficiency cares about the recourses needed to produce a certain output. In this case are also considered the results’ quality, with superior results having a higher priority than simple quantity.
Formula: Input Costs + Output Quality = Efficiency
Examples of efficiency
Imagine that you work in customer support services, and you’re required to take 20 customer calls per shift and solve their inquiry in 24 hours. However, someone was laid off recently, and your manager asks you to take extra 5 calls a shift (with the same 34 hours to solve the client’s requests, which complexity you know nothing about beforehand).
You’ll have to answer more calls with limited resources (time). If you could take those 25 calls and solve the issues in the same amount of time, as usual, you would be efficient.
The number of accounts measures a salesperson’s productivity closed in a certain period. Let’s say five new accounts a month. If the salesperson achieves this result, productivity is at the highest level.
To understand the efficiency of this worker, you can track how many meetings/calls it takes, on average, to close a deal, how many calls and e-mails are necessary to book a call, and how much each new deal is worth.
Looking at another example: a manufacturing company that in October produced 25% more units of their product than the previous month, September. Unfortunately, later on, you find out that 20% of the units were defective. This means that you were running at low efficiency while productivity was up. We’d probably have to enforce techniques to improve efficiency in this case.
Productivity vs. efficiency: differences and interdependency
Productivity means doing more work during the same time frame, and efficiency means doing the same amount of work in less time.
They’re two separate things and concepts, but it’s important to remember they’re interdependent.
The main difference between these two is that productivity relates directly to quantity and efficiency to quality. In reality, what makes these two notions work together is more important than their differences.
The best example of this is the way a lack of some kind of resources, such as time or manpower, brings both down. If there is a lack of resources, the work process is less efficient and reflects poorly on productivity.
Productivity is ultimately dependent on the resources or their efficient usage of them. This, the quantity achieved in the end, is higher or better when the quality of resources, and efficiency, are added to the equation.
Is it possible to increase productivity without sacrificing efficiency? Or is it better to focus on efficiency even if that means sacrificing productivity levels?
If each company, business, or individual professional figures out what best works for them, increasing productivity doesn’t require sacrificing efficiency.
In simple terms, some people work best in a quiet, isolated environment. Others may thrive with noise, music, and more stimulation. Some people need two or three screens, others don’t, and these details need to be considered.
If you know what you need to achieve a certain output and what’s most important in the process, it will be easier to stay focused and productive.
What is the definition of productivity vs. efficiency?
In direct terms, productivity is about doing more work during the same time frame, while efficiency means doing the same work in less time.
What is the relationship between efficiency vs. productivity in economics?
While productivity is a measurement of output, normally expressed as some units per amount of time, production efficiency reflects the costs per unit of production.
What are the formulas for measuring productivity and efficiency?
Productivity Formula: Total Output / Total Input = Productivity
Efficiency Formula: Input Costs + Output Quality = Efficiency
Who said productivity and efficiency work in inverse proportion?
Frederick Taylor said productivity and efficiency work in inverse proportion. In 1909, Frederick Taylor published “The Principles of Scientific Management”.
How can productivity and efficiency be improved?
There are several ways to improve productivity and efficiency. There is individual coaching, courses, mentoring, and offering more responsibilities for the latter. For productivity, it’s useful to avoid time-wasters, avoid multitasking and manage time better with tools such as Timeular.
Focusing on productivity and getting more things done while using the same resources may not result in better quality. In the same way, asking someone to increase work efficiency as much as possible may have the same result. The (almost) perfect balance is the main goal.
Balancing productivity and efficiency is crucial in delivering consistent results. It’s very important to consider both factors to achieve success. You can’t consider one of these notions more important than the other.
You want to be productive enough to meet your goals, but not so much that you waste time or energy on unnecessary things.
Productivity without efficiency is dangerous for any business. The best way to achieve success is to intentionally couple productivity with efficiency.
They may be interdependent, but inforcing one does not automatically bring the other.
Many people focus on increasing productivity to get more done, but if you sacrifice efficiency, you are not really achieving anything. However, they need to find that almost perfect balance, which is possible by applying several techniques and methods.
In this day and age, we can’t mention the role of technology in this productivity/efficiency relationship. New tech tools improve employer availability, create new job posts, and can enhance the organization’s role in its market.
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