Productivity vs Efficiency- Which is More Important?

Introduction

An important thing for business owners to understand is productivity vs efficiency including all the ways in which they are similar and different.

The Differences Between Productivity and Efficiency

Productivity vs efficiency is a common concept for employers to consider and an important thing to research. Business owners who seek to improve productivity while improving efficiency must understand the differences between the two terms.

While productivity is defined as output in relation to time spent, efficiency is defined as the best output for an amount of time spent. In its most simple terms, productivity is quantity while efficiency is quality. Therefore it may be helpful to think of productivity vs efficiency as quantity vs quality.

Too often productivity vs efficiency is a concept that is not acknowledged. When business owners use the terms interchangeably they miss the opportunity to increase productivity levels and see a positive efficiency difference in their business.

Let's look at an example of productivity vs efficiency in the workplace. Perhaps you have a writer who produces 15 articles in one week at home. Another writer produces 10 articles in one week at the office. Looking at these numbers alone, you may assume that because the first writer gets more work done that they are more efficient than the first writer.

However, if you measure efficiency levels, you may find the first writer's work is sloppier, requiring more editing, optimizing, and feedback than the second writer. The second writer may use fewer resources to produce more quality work than the first writer when factoring in behind the scenes work.

While measuring productivity may show you the amount of work done, you must measure efficiency to see if quality work was actually produced. Another example of efficiency vs productivity can be seen between daytime actors and movie stars. Some daytime actors produce a new show every day that they work, and in one week they can create half a dozen shows or more.

On the other hand, movie stars may spend weeks, months, or even years rehearsing for and performing an individual role. Make sure to consider productivity levels and finished product when considering efficiency vs productivity in the workplace.

When considering productivity vs efficiency it is crucial to factor in quality control. Efficiency does evaluate the quality of work produced while productivity does not. Quality control is an important thing to consider to provide customers and clients with the best results possible.

While productivity does not measure underlying costs, efficiency does. If an employee produces low quality work every day then other employees will likely spend valuable time correcting mistakes. These labor costs add up quickly and make everyone on staff less productive and less efficient. Use fewer resources by improving efficiency and encouraging employees to produce quality work every day that they are on the job.

What Matters Most

When business owners properly understand productivity vs efficiency they realize that neither concept is necessarily more important than the other. Optimal productivity levels require a mixture of both efficiency and productivity.

When productivity exists without efficiency it can quickly rot a business from the inside out. When businesses use fewer resources to produce quality work then they will likely succeed in the market.

Many business owners measure productivity as output per employee. When attempting to increase productivity a business owner may raise KPIs or create new objectives. However, demanding too much productivity will result in decreased every day employee engagement.

Instead, business owners should focus on time management and using fewer resources to produce quality work whenever possible. When you improve efficiency you must find creative and innovative ways to use fewer resources including labor, time, and money.

If you had to choose between which of the two concepts is more important, case studies would argue for efficiency. Analyzing output per employee alone does not tell business owners anything about resource usage.

An employee can become productive in their role without being efficient. When an employer wants to increase output they should set objectives that allow employees to achieve goals reasonably.

Quality work is more valuable than a high quantity of low quality work. The most important thing for a business to focus on in the long term is finding a great balance between increased efficiency and high productivity levels.

Conclusion

• Understanding the difference between productivity and efficiency is crucial to business success.
• Productivity measures quantity while efficiency measures the quality of work produced.
• Efficiency considers quality control and underlying costs while productivity does not.
• High productivity employees who are not efficient can be a drain on resources as they require much effort from other employees to fix the original low quality work produced.
• An employee who quickly gets things done may not be producing a high quality of work.
• Business owners often focus on KPIs to measure productivity without considering how this will change efficiency levels.
• Focus on time management and using fewer resources to increase efficiency in the workplace. Finding a balance between productivity and efficiency will help you establish your business's best practice techniques.