Productivity vs Efficiency: What is the difference?

Productivity vs Efficiency

Many people view productivity and efficiency as synonyms, but they are two different concepts. So, Productivity vs Efficiency: What is the difference?

However, it is a fact that one can’t go without the other since they are interdependent and go hand in hand.

Here’s the guide that will help you understand how and why you should differentiate between the two terms.

First, let’s dive in and take a closer look at productivity.

Defining Productivity

Productivity is a metric that helps in gauging the efficiency of an organization, person, machine, etc. in manufacturing or producing something.

Defining Efficiency

Efficiency is the state of producing a maximum number of quality products with limited inputs, i.e., labor, money, material, time etc.

Productivity vs Efficiency: What is the difference?

Now that we have defined productivity and efficiency, you may be wondering which one should organizations strive for.

Key Differences in Productivity and Efficiency:

Productivity vs Efficiency: What is the difference? The answer is so simple: they should strive for both. Let’s understand the difference.

Quantity vs. Quality

To be clearer, efficiency is quality and productivity is quantity. This is the major difference between the two and both are important for the success of any business.

Raw Measure vs. Refined Measure

Productivity is the raw measure, whereas the efficiency is the refined one. Raw productivity shows you how much was accomplished while efficiency reflects the amount of productivity that generates profit.

Underlying Costs

Efficiency considers the underlying costs which cannot be said about productivity that has a single goal – more products created.

For example, as a startup, they may be more focused on productivity as compared to efficiency, at the beginning simply because they need to build something.

As the startup grows, they may then begin to focus more and more on their efficiency.

Balancing productivity and efficiency are like walking a tightrope, but it is essential in delivering consistent results.

Helping You Sort The Differences in Productivity and Efficiency:

At CSR Pathway we can help you organize your business and your team to become more productive and efficient at work.