Productivity and Efficiency! We hear these words a lot while some even try to achieve them. These words are related. However, their meanings are mistaken. Both the terms have a separate meaning and significance of their own. While one focuses on quantity, the other focuses on quality. Today we will try to understand the difference between productivity vs efficiency.
So, what is productivity? Productivity is basically completing or finishing work. It can be as simple as finishing the allotted task by the end of the day. It computes the outcome produced in a defined amount of time. It measures the quantity of production generated over time. Henceforth, Productivity is the rate of completing a task.
Productivity = Quantity of Output
How to enhance productivity?
A person can enhance productivity if they can generate more outcomes within the same time. It aims at increasing output production. So, the more a person can achieve in a particular defined time, the more is productivity. Productivity is measured as:
Output Generated/ Input Consumed
For instance: A company hires ten employees to operate its business. The total value of output generated is $6500. The aggregate working hours of employees is 2400 hours in a month. So, the labor productivity of the company is $2.7. Here we compared the value of output with input.
Labor Productivity = 6500/ 2400 = $2.7
Productivity increases when the overall outcome increases either by:
1. increasing efforts,
2. increasing inputs, or
3. technical advancement.
Efficiency is the measure of the quality of output. It aims at achieving an outcome that fulfills the motive of production. If a task completed does not offer desired quality or is not operational, the work lacks efficiency. Existing quality standards set a parameter for determining efficiency.
Let us take a closer look at an example.
Ritesh and Meenal work in a company. By EOD, Ritesh can file two projects while Meenal six projects. Meenal is more productive because the total outcome given by Meenal is more.
Meenal is more productive for sure, but is she efficient?
Projects compiled by Meenal require thorough reading and have many errors. She had to work on those projects for another day. The original project was of poor quality. Also, it took her more time to finish those projects. This reveals that Ritesh is more efficient.
If we understand precisely, We realize that efficiency is a comparison measure of input and output. Efficiency focuses on both- input quantity and output quality. We analyze the costs of input and output produced. Hence, Efficiency aims to get the best quality output with minimum input required. It is a measure of profit and waste generated. True efficiency is achieving high-quality outcomes with minimum inputs used.
Efficiency = Input costs + Output Quality
How to improve efficiency?
Reduced Input costs and Increased Output quality make up total efficiency. The main agenda is to reduce overall production costs to produce an optimal level of output. Decreased inputs such as – efforts, time, or tools and good quality outcomes enhance efficiency. Therefore, planning the production process, inputs, and setting quality standards help increase efficiency.
We just acknowledged the difference between the two terms. However, they are closely related. An organization needs to focus on both to sustain the business. A company can not survive without Productivity or efficiency. All the institutions aim to increase productivity and efficiency.
We learned that productivity focuses on the quantity of output. But, is a bad quality output an output?
A man makes five earthen pots in an hour. Later, he discovered that the pots were weak and were not fit for sale. Will we still consider the man productive?
Another man produced three earthen pots in an hour. They were sturdy and surpassed basic quality standards. Though the man created fewer pots, he was productive and efficient. He achieved the output of desired quality at reduced costs.
If a task completed does not provide quality results, we consider it unaccomplished. Not only the task remained unaccomplished, but there was wastage of raw material and efforts. Hence, the man was neither productive nor efficient.
Productivity measures the output quantity, while efficiency measures the performance of the output produced. Productivity and efficiency go hand in hand. Hence, We need to focus on both to achieve the best results.
We can achieve both by:
1. modifying our methods of production/ work,
2. focusing on quality> quantity,
3. reduce input wastage, and
4. Using tools and applications
For Example, An employee receives 73 emails in a day. S/he can modify their approach towards email management. They can make several tweaks to spend less time in email management. Also, They can use an email management tool for assistance. For instance, Mailman!
Mailman is an email management software that helps in decluttering our inboxes. It allows you to
1. schedule messages,
2. create templates,
3. block unimportant emails,
4. segregate crucial emails and junk, and reach Inbox Zero.
We can focus on quality over quantity by concentrating on critical emails and reducing effort and time. This leads to increased efficiency and productivity.
We explored the difference in terms of Productivity vs Efficiency. We understood these terms in depth. There is a difference, but they can not act without each other. Efficiency without productivity or vice-versa is not beneficial. A business organization/ institution needs to focus on both and ensure a constant increase in both.