“Productivity” and “Efficiency” are probably two of the most used words in any industry or organization. There is a raging debate if both terms mean the same thing. The answer is a resounding NO.
So, what do these terms mean, and how are they different? Let’s explore this further.
What is Productivity?
To begin with, there is no definitive explanation for productivity because it means different things to different industries and businesses. The differences in capital intensity and workforce diversity make it impossible to arrive at an absolute definition for the term.
Generally speaking, it is defined as the performance of a company, team, or individual within a specific time frame. In this context, the output per hour is the fundamental metric to measure productivity.
Here's an example that simplifies this definition even further.
Suppose your HR manager requires thirty minutes to interview a potential candidate. If your prime focus is productivity, you will aim to interview two candidates within the same time frame. Therefore, you will implement measures to expedite the process by omitting unwanted questions and making it possible to interview both candidates within the given thirty-minute frame.
This example clearly demonstrates how productivity increases when employees focus only on result-oriented tasks and reduce time spent on work that adds no value to the company. This strategy results in better output in a shorter period of time.
Measuring Productivity
Is it possible to measure productivity? Yes, it is because the results of productivity are tangible.
Here is a simple formula that’s often used to estimate productivity:
Total output in dollars
—------------------------------------ = Productivity
The total number of hours worked.
The same metric can also calculate the rate per employee or unit produced if your business makes goods instead of services.
Despite all these formulae and examples, the simplest way to evaluate productivity is to look closely at your employees. A productive employee works harder, stays focused on their tasks, and doesn't give in to distractions during work hours.
If productivity is all about completing tasks within a specific time, efficiency is all about the capacity to produce the output by completing tasks correctly with minimum time and effort.
Efficiency in the workplace helps expedite organizational work by:
Here’s a good example demonstrating workplace efficiency:
A content writer who typically requires upto five days to complete a single blog post is instructed by the manager to complete all future blogs within three days. Due to a labor shortage in the company, the remaining employees are required to achieve the same result but with lesser time. Your blog post is finished on time, but you fear that you did not do enough research to justify your work.
This example shows that you may attain different quality results when you complete your tasks with fewer resources.
Are there any unique formulae to measure efficiency? Not precisely, because unlike productivity, efficiency is only sometimes tangible. However, you can evaluate your employees’ efficiency by:
Measuring efficiency specifically in your production and sales departments is also possible.
Now that we’ve clearly analyzed productivity and efficiency and how both are measured, it is time to explore their differences.
Efficiency
Productivity
It all boils down to two things: Quantity and quality. For example, a bakery that makes fifty cakes per hour daily can push the production to sixty cakes when all the employees work harder. This increases productivity by 10%.
Let’s assume some staff are laid off due to a financial crisis. Now, two major resources (manpower and money) are limited, but the bakery has to make sixty cakes per hour. Generally, when the quantity increases, the quality decreases, and vice versa. In this scenario, efficiency comes into focus.
Obviously, both productivity and efficiency win the race. Every organization and its employees need these tools to survive, win, and stay ahead of competitors. A strategy focusing on one aspect at the expense of the other is unsuccessful, as these elements are like yin and yang.
Fortunately, in this digital age, advancements in technology have blessed us with employee productivity monitoring software packed with intuitive features such as:
More/Hour is an innovative software designed to instil and enhance employee productivity through monitoring. To gain insights about how our software works, do call us. We are happy to help you understand how your workforce will benefit with More/Hour.
