Would You Rather Be Efficient or Productive?
Unlocking value is directly related to time. And time is often measured as efficiency and/or productivity. Both are valuable measures; but successful organizations realize that measuring efficiency alone can be misleading and overall productivity is the goal.
Efficiency is the measure of how effectively we can complete a task while we are doing that task. Productivity is the measure of how much is produced over a period of time. Both rely on an established standard time for a task, but measuring efficiency alone may not hit the bottom line.
You Can Be Efficient But Not Productive
Efficiency is a ratio of established standard time for the task divided by the actual time spent completing the task.
30 minutes established standard time to weld the bracket
divided by
40 minutes to actually weld the bracket
= 75% Efficient
This is an important measure for understanding if you are able to achieve your established standard time for this particular task. It is testing the expectation for the specific work.
The risk in only looking at efficiency is that you miss the time you are not working on the task.
For example; let’s say someone is employed for eight hours to weld the brackets referenced above. That employee welded four brackets during the eight-hour shift, with each taking 40 minutes. They were 75% efficient while welding brackets, but based on the 30-minute expectation, the employee only completed 25% of what was expected!!
The employee welded four brackets. Each bracket was expected to take 30 minutes. So, for the employee’s eight-hour day, he only earned two hours (four brackets expected to take 30 minutes each).
If the manager only reports that the employee was 75% efficient, it misses the fact that the employee used four times as much labor as expected. The employee was 75% efficient, but 25% productive.
Productivity Is Clean
Productivity, on the other hand, is not misleading and is a clean measure of performance. Productivity requires the person working on tasks to account for all of his available time. If someone is paid to work for eight hours, productivity asks what the employee completed based on the expected standard time in the full eight hours.
Productivity is a ratio of established standard time for the tasks completed divided by the total time paid to work.
4 brackets completed at an expected 30 minutes each (120)
divided by
8 hours of total time paid (480 minutes)
25% Productive
Help your organization avoid only measuring efficiency or run rates. Help it work toward true productivity that measures the total time worked compared to the total expected work completed.
Learn more in Patrick’s book, “Facilitating Effective Change,” available online through Amazon and Barnes & Noble.
Patrick Putorti
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