Let’s say your company can process 40 documents per hour. A company focused on productivity would try to increase the number of documents they can produce in that hour.
So, your people have worked hard and are now able to scan a total of 50 documents per hour. They have just become 25% more productive.
Whether they have 6 hours or one hour, the productivity-focused company can still work at the same pace. They still produce as much as they can, even if their total numbers drop due to cuts.
MORE IDEAS FROM Efficiency vs. Productivity
In a perfect world, companies would try to be both efficient and productive. Companies should always be looking for ways to do more with what they have while doing the same amount of work with less waste.
That being said, most successful companies put their primary focus on productivity, not efficiency.
Productivity helps companies do more, while efficiency helps companies do the same with less.
If a company is going to focus on making anything more efficient, it should be all of the tedious work that needs to get done but doesn’t really help the company grow.
Total Output / Total Input = Labor Productivity
(Standard Labor Hours / Amount of Time Worked) x 100 = Efficiency
Let’s say your company, which can now process 50 documents per hour, gets its budget slashed. Now, the company is trying to do the same amount of work (50 documents processed per hour) with fewer resources to process them. This would be the time to focus on efficiency.
The dictionary defines being productive as, “having the quality or power of producing especially in abundance.” Those who are concerned with productivity are trying to make the most output with the resources they have.
If your company is efficient, that means it is especially capable of producing desired results with little or no waste with very few resources.
Therefore, efficiency is simply the quality and degree of effectiveness at which a company is being efficient.
To be more productive in a way that won't burn you out over time, you have to understand how to be more efficient. Productivity often leads to working harder, while efficiency focuses on working smarter.
Fixing employee productivity in the industrial age, when most workers were handling machinery and it’s parts, was a tedious but doable process. The managers had to fix the people who were making mistakes or were inefficient through systematic management.
Today, in the age of software and intellectual property, when half of the workforce is made up of knowledge workers, the old practices are of no use.
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