Is Productivity the Same as Efficiency? (Helpful Examples)
Productivity and efficiency are related, but they do not mean the same. Productivity is the amount of work done in a specified time, considering inputs. Efficiency refers to how well you use resources and effort to produce quality results.
Doing more with less effort is efficient. You achieve true productivity when you get more done (quantity) with less effort (efficiency), making the most of the same resources.
Being efficient at work or school helps cover more text within the same timeline. Efficiency increases your output and eliminates time wastage.
If you are a stay-at-home mum juggling work and family responsibilities, you are productive when you get more done in a given time. The same applies to the entrepreneur who tries to keep up with the competition.
This post shows you how to measure productivity and explains the terms productivity and efficiency. It’ll also explain how they are correlated and why you must balance them since both are essential.
What is productivity?
Productivity is the ability to get more outputs from the resources at your disposal within a set timeline (performance). You are more productive when the amount of output increases, whether in your personal or professional life.
Productivity in business is output per hour per worker or output per hour. Business productivity assesses how efficiently organizations or individuals use labor, time, and capital inputs to produce high-quality outputs (products and services).
A company with a profit margin of $85,000 is more productive than the one with a profit margin of $50,000.
Entrepreneurs today are more focused on results and figures because of the market’s competitive nature. Nevertheless, productivity is not limited to the number of goods produced or services rendered during a specific time frame. Instead, productivity is the quantitative relationship between a unit of output and the units of particular inputs.
Therefore, productivity is a business measure that tells the total number of goods and services provided in a certain amount of time for each factor resource (employee, capital, time, costs, etc.)
On the other hand, personal productivity is how well you perform and achieve your goals while balancing all aspects of life.
How do you measure productivity?
We measure personal productivity through the benchmarks of completed tasks, meeting deadlines, personal growth, and increased income.
The simple formula for measuring productivity in business is
Total Output/Total Input = Productivity
Let’s take, for instance, a content writer who manages 5000 words daily in 10 hours.
Five thousand words are the output, and 10 hours is the input. The productivity of the writer then is 5000/10=500 words per hour.
Personal productivity = Total number of hours spent working/ Hours spent on productive activities X100
The total number of hours spent working are the hours behind a desk or the hours you should be working. The productive hours are those you worked, considering the distractions and breaks.
Say, as a work-at-home mum, you work 12 hours daily but scroll on social media for 6 hours. So, you are productive for 6 hours. Your productivity is 12/6 X100=20%.
Examples of productivity
Here are some helpful real-life examples of productivity
Suppose you read just a few books (4 in a week) and keep reviewing the pages before memorizing. In that case, you are less productive than a student who speed-reads eight books in the same week but uses retrieval techniques such as flashcards, discussion groups, and quizzes to remember concepts.
A proficient student can increase the number of words they read in a minute, compared to the typical average reading speed of 250 wpm by speed reading.
The student becomes more productive in their ability to read and comprehend as they get exposed to more content in the same field and get used to seeing words faster.
Digital marketing agency output
If your digital marketing agency produces 5000 words per hour and a similar company 8000 words per hour, the second company is more productive than the first.
Suppose the first company somehow doubles its words per hour by increasing typing speed, using special tools, restructuring business systems, or limiting distractions. They become more productive, provided the resources used remain constant.
You can increase productivity by using fewer resources or the same input to create more or better goods or services or use lesser resources to generate the same output.
In the digital marketing example above, the company could have 4 hours of quiet time daily when they prohibit phone communication and replying to email. That way, the same people type more words per hour using the same resources.
Human resource scenario
If you are the HR manager of a company that is hell-bent on performance, your boss may ask you to interview more people daily, more than you used to, to address a shortage.
You cut their speaking time and some standard questions to beat the deadline. You interview more people and deliver results as requested.
However, you compromise on quality and end up too exhausted. As the HR, you fail to get into the interviewees’ in-depth details, which later affects their output and increases administrative costs on training and development.
So, high productivity or performance is not always good for business, which leads us to efficiency.
What is efficiency?
Efficiency is the ability to do something or achieve results without wasting resources (time, effort, or money).
It focuses on achieving the best or the same results with minimal effort, and less time, without compromising quality. It is doing things right.
Overall, the term efficiency refers to the highest level of performance that uses the fewest resources to produce the most output.
How do you measure efficiency?
Efficiency measures how much work or energy you conserve to accomplish a goal.
It is the energy output divided by the energy output and then multiplied by 100.
Efficiency = Energy Output × 100
The reason why we multiply by a hundred is that efficiency is a percentage. The higher the ratio, the more efficient a process is.
Examples of efficiency
Here are examples of efficiency which focus on the resources used.
Typing words on a computer
It is possible to classify and gauge your skill in typing based on how many words you can type per minute, with fewer errors.
The average typing speed is around 40 wpm (words per minute). In jobs that lean heavily on typing skills, it is not unheard of to have more than 60 wpm or even higher.
Let’s take the example of two people, one with a 30 wpm typing ability and another who can type at 80wpm. If both of them were to type the same 2400-word document, it would take the first individual 80 minutes, while the typist with the higher word count can accomplish the same in 30 minutes.
However, if it takes 2 hours to edit content from the 80 wpm writer and 30 minutes to edit content from the 30 wpm writer, then the faster writer is inefficient even with a speed of 2.5 faster.
Efficient reading example with tips
Reading efficiency is critical to reading skills where the reader can read faster and understand more information.
An efficient reading process frees the reader’s mind to understand the text as most of the mental capacity and effort is not bogged down by the mechanics of reading.
Efficient reading involves developing reading techniques or strategies to search through the document for what you are looking for and how to find that information while using the path of the least resistance to get and understand that information in the least amount of time.
Some of these strategies include surveying the text, which gives you the ability to decide whether the information is helpful to you and its suitability for your reading intentions.
The second strategy is skimming, where one looks over the entire text selectively and reads very quickly, looking for the general idea.
The third strategy to use for efficient reading is scanning. For efficient scanning, it is crucial to have some keywords or phrases and a good understanding of the text structure to look through the text quickly while ignoring information that is not relevant.
Manufacturing of electric vehicle batteries
If you produce 50 batteries for electric vehicles (EV) and only 40 of them function well, you are more productive but less efficient than the manufacturer who made 40 EV batteries that are working correctly and need zero maintenance.
A similar scenario is where a company asks employees to increase productivity. The output for the next week goes up by 20%. Only 65% of the goods produced are fit for the market. 35% are defective and need correction. The increase in productivity is not followed by good efficiency.
What’s the correlation between productivity and efficiency
Being productive means getting more done in the same amount of time. Yet, being efficient means getting the same amount of work done with fewer resources like time.
Productivity and efficiency are two different things, but you must remember that they depend on each other. When productivity is about the number of goods and services, efficiency is how well you make goods or deliver the service.
So, if there aren’t enough resources, the work is not done as well (less efficient), hurting the output or productivity (less productive). Ultimately, your productivity depends on how well you use your resources. (efficient use of resources).
While efficiency is reactive, productivity takes a proactive approach.
Productivity aims to produce the best possible results under any given circumstances.
Businesses do not get more productive when their budgets or timeframes expand. A corporation is more productive when it focuses on getting more with its existing resources.
Enterprises that prioritize productivity care more about getting the most out of their current resources, no matter how big or small the budget is.
How to get the right productivity vs. efficiency balance
Businesses and people looking to improve their lives should strive to improve productivity and efficiency, and below, we explain why.
- While productivity offers the quantity, efficiency provides quality.
Going back to the example of the HR who, in the quest for increased productivity, undermines the quality of interviewees, we note that, in the long run, the incompetent employees cost the business more.
- Efficiency considers the cost factor, but productivity does not.
Using the same HR example, you note that the company later invested in training and development to equip new hires with needed skills.
The work output of the new hires had to be up to standard with the organization’s culture.
- Efficiency is the refined measure, while productivity is the raw output.
Raw productivity reflects the numbers, while efficiency demonstrates the amount of produced units or services rendered that positively affect a business’s bottom line. Management must always consider efficiency as organizations plan to increase productivity.
For instance, in the productivity example of a company producing 40 high-quality batteries versus the one with more output of 50 batteries, the company that produces highly efficient batteries will sell more because they have a good reputation for batteries that last.
In short, actual productivity is a product of efficiency and productivity.
Productivity and efficiency are often mistakenly used interchangeably. Yet, productivity and efficiency do not mean the same.
Efficiency borders on quality and achieving similar results with less time. On the other hand, productivity relates to quantity.
If you focus on efficiency alone, you lose productivity, which drives profits. If you focus on productivity alone, you lose efficiency and fail to account for underlying costs like waste and correction costs.
So, for a company to achieve true productivity, efficiency and productivity must be intricately linked.
The same goes for personal growth and improved reading. You must be both productive and efficient in personal matters and in reading.
If you yearn for your days to be more productive, consider the Iris Reading Personal Productivity course. It has 13 hours of science-based productivity content.
What’s more, there are three bonus videos. One on quick life hacks to maximize productivity, and another on top productivity apps for professionals. The last video covers the top productivity apps for students. You don’t want to miss out!