Before we get into a discussion about productivity and efficiency and how they’re interrelated when it comes to businesses, what the terms entail should be established first. In lexical terms, Productivity means the total amount of work done within a specific period of time, whereas efficiency is the term that is generally used to refer to the quality of the work that is done.
Relation between productivity and efficiency
If you try to see it in simpler terms, you’ll find that productivity gets reduced if more and more efforts are directed at enhancing the efficiency level. That is to say, if you try to make the quality of a product or service better, you most likely will find that the quantity of total output decreases to a huge extent. It can be said that with increased efficiency, the productivity decreases.
The reverse is also true. If you aim at maximizing productivity, you’ll find that your ability to focus on the details or the quality of the work decreases with increasing amounts of efforts being directed at getting as many outputs as possible.
Efficiency takes into account the total amount of resources that are put in to ensure that a particular piece of work is qualitatively excellent. If you put in a lot of work to produce a result then it can be argued to be an inefficient process. It doesn’t matter if you manage to do a large amount of work if the work you do is filled with mistakes and flaws. That is to say that if your productivity is almost of no value if in case there is no efficiency in the work. For example, you may be able to produce a huge number of goods but they aren’t of any value if the goods are faulty and they cannot be sold on the market for their defects.
Efficiency from another perspective
In case of businesses, the main focus is on increasing the total amount of work done without hampering the quality of the products. In this context, the term efficiency also involves the idea of using the least amount of resources, i.e. material, time, manpower, etc for getting the most amount of output.
To ensure the above, you should make sure that you organize all the resources available at your disposal and do adequate amount of planning. You should do this to make sure that the resources are easily retrievable when they’re needed. For example, if in a production, a glitch occurs and the normal flow of work is hampered it results in a disharmony within the system and the specific workstations, then, the work might get slowed down or else completely stopped. This can be regarded as an example of inefficiency. In case of an office, you’ll have to set the amount of time you’d put in for work and based on that, decide the number or amount of work you’ll want to get done. You’ll find that there are a number of productivity tools available on the market that help you get more done within a specific state of time.
Which one’s more important? Productivity or efficiency?
Now that the terms productivity and efficiency can be clearly understood along with the relationship they have with each other, it is important to focus on which one is more important for a typical business.
The importance of having a balanced approach
It is common notion that organizations prefer to get more done instead of focusing on the quality too much. It can backfire on the company and cause it to be harmed. In order to understand this, the help of an example can be taken. A company can be considered which aims at releasing a product on time despite being behind schedule. Its employees may be able to put in some extra hours on the job to make sure that the product releases on time. If you’re a manager in this company and you’re impressed by the results and decide to put in the same amount of effort the next month as well, you would be making a mistake.
Pushing your employees to be more productive can wear them out and you may be able see that there’s attrition in your organization. Directing too much effort towards making sure that you get as much efficiency as possible from your employees may also make things go wrong.
Both are important for your venture
So in the end it can be concluded that efficiency and productivity both are important but you shouldn’t focus solely on increasing one while not paying adequate attention to the other. Caring about productivity is a must as a leader, but make sure that you take a middle ground. This will ensure smooth working of an office.
