What’s the Difference Between Productivity & Efficiency?


Productivity and efficiency are two of the most valued traits in any organization, with employers making key decisions based on how they will affect the overall productivity and efficiency of their team members. This can mean implementing new software solutions to improve processes, streamlining employee workflows, creating new teams, and a whole host of other important decisions. Without a heavy focus on productivity and efficiency, an organization simply can’t get ahead in today’s incredibly competitive landscape.

So what exactly do productivity and efficiency mean? There are misconceptions about the differences, largely due to the subtleties that differentiate them. Before you and your team can focus on improving productivity and efficiency, it’s critical that you understand those differences and what practices are and aren’t productive and efficient.

The difference between productivity and efficiency

In short, productivity is how much work is produced or completed by your business, and efficiency is how many resources were used in order to complete that work. The more work your team completes, the more productive your business is, and the less resources that were used to complete work, the more efficient your business is. The ultimate goal of any business is to increase productivity without sacrificing efficiency, allowing your organization to complete more work without consuming as many resources, streamlining processes and enabling your team with intelligent solutions that allow your business to become more profitable.

It’s important to note that efficiency often focuses heavily on the quality of the work produced, meaning that a high level of output at a low quality of work is ultimately not efficient, as much of the work completed most likely doesn’t meet the standards of quality outlined by your business.  Improved productivity can often be achieved by making certain processes more efficient, sometimes achieved through technology solutions, an increased focus on teamwork and collaboration, or effective time management.

Remember not to focus all your efforts on one of these goals - in order to succeed, you can’t lose sight of both productivity and efficiency. Too much focus on one without the other can lead to more resources being used, increased costs, and in many cases, higher strain on your employees which can lead to stress, anxiety, and ultimately burnout. Here we offer some tips for preventing burnout. 

Often, increased productivity can come at the expense of efficiency, and vice versa. In order for your business to get ahead, any new processes, measures, and solutions implemented into your organization must focus on improving one or the other - anything that sacrifices productivity or efficiency is ultimately a costly setback for your business. Improved productivity can often be achieved by making certain processes more efficient, sometimes achieved through technology solutions, an increased focus on teamwork and collaboration, and effective time management.

Focus on daily deliverables and less busy work

One of the most effective and least time consuming ways to start immediately improving productivity and efficiency is to reduce the amount of “busy work” completed by your workforce throughout their day and instead put the focus on larger deliverables. Busy work often serves only to eat up your team’s time without actually making the business any money or getting you any closer to achieving important goals and milestones. It’s far too easy for members of your team to lose entire days due to virtually meaningless busy work, affecting productivity and serving as a very inefficient way of spending working hours.

This isn’t anybody’s fault - after all, busy work often exists for a reason. They’re usually administrative processes that need to be completed at some point, but which don’t necessarily benefit the business’s bottom line. Rather than eliminate it entirely, it’s better to simply shift the focus to aiming for completing at least one “big” deliverable each day before busy work is completed. For example, if you are managing a sales team, ask that your staff complete any burning proposals that are on their desks before diving into answering emails and making sales calls. 

Daily deliverables get your team members into the habit of focusing their effort on completing productive work in an efficient manner, allowing employers to track progress, minimize multitasking, and ultimately improve workplace productivity and efficiency. By completing daily deliverables before doing something else, your workforce can collectively improve productivity and use their valuable time more efficiently, furthering both goals and pushing your organization closer to success.

It’s also worth looking at what your employees are actually doing with their days - if they are spending too much time with one particular client, for example, the client may need to be taken off of their hands unless their entire job is to spend time with that one client. If you have capacity, taking over problem clients yourself may be helpful in reforming them from being “time wasters.” If not, you can decide if the reward of their account is worth the risk of the sunk time cost. It may be worth asking your employees to speak up if they have any particular task that is sucking away their time so you can help them brainstorm how to either reduce the amount of time spent on the task or delegate it to someone else who may be able to manage it better. 

Understanding employee productivity lets you spot opportunities for improvement

Without understanding how your employees are working, it can be nearly impossible to make informed decisions. Visibility into employee productivity can unlock major opportunities for improving workplace productivity and efficiency. Productivity intelligence solutions like Prodoscore use machine learning, AI, and natural language processing to capture information about how your employees are spending their time in common office suites, CRM solutions, communications software, and other workplace software solutions, assigning a unique productivity score to each individual.

These scores can be used to compare employees, streamline operations, enhance coaching, and identify opportunities for immediate improvement that will result in improved productivity and efficiency, letting you cut out unnecessary processes and solutions so your team can focus on what works. You’ll have access to actionable insights into the work being accomplished by your teams, as well as identify when employee performance has decreased so you can take appropriate action to help get them back on track.

By gaining visibility into how your teams are operating, you’ll be far better prepared to make decisions about how to improve productivity and efficiency without sacrificing one or the other, making it far easier to achieve long and short-term goals, avoid the risks of burnout, and prevent an impact on performance.