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. To gauge your productivity and efficiency better, use this productivity calculator and dive into the article.

What is Productivity?

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. Productivity computes the outcome produced in a defined amount of time. Also, 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 s/he 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.

What is Efficiency? 

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.

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. Hence we do not need to choose between Productivity vs efficiency.

What should one focus on- Productivity vs 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 vs 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?

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!

Software to increase productivity and efficiency

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 
  5. 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 instead of worrying about productivity vs efficiency.

Productivity vs efficiency- who wins?

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.

How does efficiency affect productivity?

Efficiency affects productivity positively as high efficiency means tasks are done faster. Hence efficiency should be considered while calculating productivity.

What is the formula of productivity?

Quite basically, Productivity = total output / total input

Why efficiency is so important?

Efficiency is important as it saves time, resources as well as efforts while also improving productivity.

Why is productivity important?

High productivity ensures higher work output and thus an increase in sales or revenue.