What's the difference between productivity and efficiency, and what's more important

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

Comparing these concepts is like comparing quantity to quality. Most often they are not consistent with each other.

Productivity reflects the number of results

Measuring productivity is usually straightforward, which is why many people focus on it. For this, the volume of the results obtained is calculated for two identical time periods. For example, if you read two books in December and four in February, then you were more productive in February.

Companies calculate productivity by comparing the performance of employees, departments, and divisions. If, for example, a company office in California earned $ 60,000 in a month, and an office in Florida earned $ 50,000, the former is considered more productive.

When evaluating someone or something, you shouldn't rely on quantitative results alone. This information is not enough.

Productivity seems to reflect the full picture of work. For example, when a leader asks you to complete a report by the end of the day, he or she thinks the request is reasonable. While it really doesn't take very long, you may well be running out of time. After all, you probably have your own ongoing responsibilities and unforeseen urgent tasks.

Efficiency measures quality

If productivity focuses on results, then efficiency focuses on quality of work. Therefore, productivity can be thought of as sales revenue, and efficiency can be thought of as the amount that will remain in your hands after all the deductions.

Let's go back to the previous example. The company's California office generated $ 60,000 in sales, but $ 20,000 of that had to be spent on organizing the seminar and in travel expenses. At the Florida office, the seminar was conducted using an inexpensive online platform. As a result, their revenue turned out to be higher, and they themselves were more efficient.

Also, efficiency can be measured by the ratio of the quality of work and the time spent. For example, two call center employees have to interview 100 customers a day. The former fulfilled the quota by calling 150 people, and the latter by calling 300. Although they both achieved the desired result, the former was more effective. He made only 50 extra calls, while the second made 200.

But don't just focus on efficiency. Don't set yourself high. Difficulties and mistakes are a natural part of developing and achieving goals.

When we focus on quality, we begin to doubt ourselves, worry, and procrastinate. If you are also in a leadership position, it will be difficult for your team to create something for fear of making a mistake.

For this reason, many get stuck at the analysis stage, trying to anticipate all the possible consequences. While there are examples of successful perfectionists like Steve Jobs, research confirms that most successful people in any field are not perfectionists. It interferes with making decisions, and the fear of making a mistake does not allow you to move forward.

We need to find a balance

This is not to say that one is more important than the other. Both indicators need to be improved. Yes, it's nice to reach your goals and keep your promises, but it's worth assessing the costs first.

Track how much time and resources you have invested in achieving your goal. If your productivity is so high that there are many errors in the results of your work, on which you then have to spend additional attention, the law of diminishing returns comes into force. The same thing happens when you think only about quality and run into perfectionism. Fear of failure prevents you from performing at your optimal level.

3 ways to improve your results

1. Be mindful of time and resources

Try to keep the current number of results by reducing the resources used. To do this, consciously approach your goals.

For example, let's say you control the marketing budget of a multi-billion dollar company. Perhaps you are getting the results you want just because you flood the market with ads.

Review all of your marketing campaigns and evaluate each in terms of ROI. To improve both efficiency and productivity, reallocate costs. Invest the money you are currently spending on the 10% of campaigns at the bottom of the ROI list in the top 10% of campaigns on this list.

2. Reduce losses

Find cheaper, but reliable alternatives that will help you achieve the same results that you are getting now. To do this, it is helpful to review your expenses every year. This will help you notice areas where you can save money. If you are unsure, take a look at the prices in the market. This method can be applied to both work and personal finance.

3. Highlight the main goals

Perfectionism makes you think you need everything or nothing. If you don't want to fall into this trap, you have to admit that things can't go exactly the way you want them to. Decide what matters most to you and be prepared to sacrifice less important goals.

Take freight transport, for example. There is a lot of competition in this area, so drivers constantly need to think about reducing costs and increasing efficiency. To keep costs down, they never drive without a load. That is, if you need to transport a load to a city, there must be a load on the way back from that city.

If there is no new order at the place of unloading for the same price, they agree to a lower payment. Because the main goal is not to drive empty. This option is much less expensive than traveling to another city without cargo. After all, the choice is not between the reduced price and the regular price, but between the reduced price and the idle trip. As a result, the decision to lower the freight cost increases productivity.

If you have a tough decision to make, stop and think about what matters most to you.

Imagine that you can only achieve one or two goals. What will be the greatest effect? Then, consider what needs to be changed in your productivity or efficiency in order to achieve this goal.