Productivity vs efficiency: differences, examples and tips

By Indeed Editorial Team

Updated 12 September 2022

Published 3 January 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Productivity and efficiency are words that business circles often use interchangeably. Although their meanings do overlap, they describe different concepts. Understanding the differences between the two in a workplace context can help you to maximise both so that you can be as productive and efficient as possible in your job. In this article, we provide a definition of productivity vs efficiency, explain some key differences between the two concepts and share our tips for improving both your productivity and efficiency at work.

Productivity vs efficiency

To understand the differences between productivity vs efficiency, it's important to understand what both words mean individually. Here are the definitions of both words:

What is productivity?

Productivity measures a person, team or company's performance in terms of output. Usually, you calculate this by determining the output per unit of time. For example, if you work for a manufacturing company that produces 1000 devices every seven-hour shift, the company's productivity is around 143 items per hour. Another way for companies to calculate their productivity is to consider the output per employee. For example, if a sales team made up of five people generates £3000 in sales each week, they can calculate that each employee produces £600 worth of sales in a week.

Businesses or individuals that are concerned with productivity are interested in producing the maximum possible yield with the resources that they have. Companies can increase their productivity by adding more resources, such as adding more people to a customer service department at a busy time of year. On an individual level, increasing your productivity at work might mean finding ways to eliminate distractions so that you can increase your output.

Related: How is productivity calculated? (With formula and examples)

What is efficiency?

Efficiency is the focus on producing the desired results with as little waste as possible. Companies and individuals that focus on efficiency are not only concerned with their output, but also with the resources they use to produce it. For example, if a social media manager produces 200 posts to share on their company channels over a month, they may well be very productive. If they create the same number of posts the next month but do it in half the time, their productivity hasn't improved, but they have performed their work in a more efficient way.

Another way to look at efficiency is in terms of the quality of the output. For example, if a manufacturer produces 2000 products in a day, but 400 of them are later found to be defective, this is inefficient even if their productivity looks high. In this way, becoming more efficient in the way you work can make your effective productivity better in the long run.

Three ways of understanding productivity vs. efficiency

Here are three ways you can think about the differences between productivity and efficiency:

1. Quantity vs quality

While productivity measures bulk output, you use efficiency to measure the amount of output that functions as intended. Solely focusing on productivity at work might increase your output, but it won't necessarily mean that you produce better work. Similarly, companies simply measuring their team member's productivity don't necessarily get a clear picture of how everyone is performing, as those with a lower productivity rate might nonetheless have a higher quality of work.

Related: 10 valuable soft skills that you need to succeed in your career

2. Underlying costs

Unlike efficiency, productivity doesn't take into account the measured underlying cost of the output. For example, someone working at a printing company might handle 100 documents each day. If 30% of the work they do contains mistakes that take time to rectify, this could mean they are not working efficiently. Someone else who only completes 80 documents per day could be the more efficient of the two if they take the time to do these carefully so that there are no mistakes in the finished product.

3. Raw vs refined measure

Raw productivity only shows how much someone has produced. Efficiency, on the other hand, is a more refined way of measuring their effectiveness. Because it takes into account the underlying cost and the quality of the output, you can use it to measure how much of the produced output is profitable. Focusing on efficiency in your work instead of just productivity can help you to produce a better quality of work, and avoid time wasted on rectifying past mistakes.

Productivity and efficiency examples

Here are some practical examples of productivity and efficiency in the workplace, to help you understand both concepts and the differences between them:

Example 1

Sally and Catherine work in a company's IT department. A large part of their role includes responding to customer problems that come through as tickets on their customer management platform. Over six months, Sally and Catherine's manager finds that Catherine has closed an average of 10 tickets per day, whereas Sally has closed an average of 6.

On further inquiry, she finds that 50% of the customers Catherine dealt with ended up raising another ticket within seven days, whereas this is only the case for 10% of Sally's customers. Sally also received a higher rating on the survey that is sent out to customers after their call. While Catherine might be more productive, Sally is the more efficient member of the team.

Example 2

Hannah and Brad both work at a copywriting agency as writers. Hannah can produce 10,000 words of copy every week, while Brad only completes about 7,000 words, which means that Hannah is the more productive employee. Despite this, Hannah's writing contains errors and requires on average 20 extra hours of editing before the agency can deliver it to clients while Brad's copy is ready to publish as it is. This means that Brad is much more efficient, even if it might look like he is less productive in terms of pure output.

Tips for improving your productivity and efficiency at work

Improving both your productivity and efficiency at work can help you to get more work done and to improve the quality of the work you deliver in almost any career. Here are our tips for improving both your productivity and efficiency:

Look for gaps or bottlenecks in your current workflow

Team leaders and managers can increase their teams' efficiency by looking closely at their workflow to spot any problems. They can then focus on areas where there are delays or other issues. This might allow teams to get through more work (increasing their productivity) or to use their resources more efficiently.

Find tools that help you become more efficient

Employees in many different industries can use various tools and technologies to make their work more efficient. Examples are tools that automate certain repetitive processes, which could help you to save time and complete your work more efficiently. While these tools might cost money, you can weigh them up against the time it currently takes you to perform the tasks manually and they may end up representing a more cost-effective way of doing things.

Related: 10 best time tracking apps

Track and limit the time you spend on tasks

By tracking the time you spend on each task or part of a task at work, you can identify areas that are taking longer than normal. You could even compare your tracked time with colleagues doing the same work. Then, you can look for ways to streamline the parts of tasks that currently take the longest, to improve your overall efficiency.

Take regular breaks

One surefire way to kill your productivity is to work for long periods without taking breaks. Although it might sound counterintuitive, taking regular breaks allows your brain to rest and reset. You might end up working for less time throughout the day, but get more work done as you're able to work faster when you are active.

Use the two-minute rule

The 'two-minute rule' is a productivity technique that suggests completing a task straight away if it would take two minutes or less to complete. This avoids wasting time by putting off tasks, or small tasks piling up into large workloads over time. By following this rule, you can create the time to focus on larger, more important tasks without distraction.

Hold standing meetings

If you're a manager or team leader that needs to hold regular meetings with your team, you might want to consider holding standing meetings. This technique can help make sure that everyone is engaged. It can also make meetings shorter (thus making your work more efficient) as people are less likely to waste time when they're less comfortable. Of course, it's essential to ensure that everyone on your team is physically able to attend meetings this way before implementing this strategy.

Related: 19 ways to increase staff motivation at work

Try the 'eat the frog' technique

The 'eat the frog' technique is another interesting productivity method. The technique suggests that if you have an unpleasant task to complete (such as eating a frog), you do it first thing in the morning. This way, the prospect of having to do an unpleasant thing won't distract you for the rest of the day and can perform the rest of your work more efficiently.

Disclaimer: The model shown is for illustration purposes only, and may require additional formatting to meet accepted standards.

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