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Productivity, efficiency, effectiveness: what does it all mean?

As auditors, accountants, and employees we often hear these three adjectives used interchangeably to describe a desired change among work processes and organizations. As a government auditor, we have gone through lots of CPE and conferences over the last few months. These conferences often have motivational speakers that try to point out one or two ways to improve efficiencies or increase productivity. No doubt, they provide good advice, but what is the result we are trying to achieve?

Most recently I attended a training that made me think twice about using the words efficiency and effectiveness interchangeably. When you analyze your own work, what does it mean to you when you are being efficient versus being effective?

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The definition of productive is achieving a significant amount. Does this mean that no matter the quality of the work we perform, as long as we get MORE done than the other guy, we’re winning? That seems counterintuitive. We want good work quality product, not just quantity of work.

The definition of efficient is achieving maximum productivity with minimum wasted effort or expense.  In one perspective, this translates to producing something with the least amount of wasted effort. Just get the job done, right? Even if you sacrifice the quality?

The definition of effective is being successful in producing a desired or intended result. This sounds more like a good work product. It may not include ways to reduce waste or create a significant amount, but the result and key term to notice is “successful”. The previous two definitions did not relate the activity to the result. Are we not trying to achieve a successful result? If we try to produce more in less time, but we don’t deliver the intended product, how will reduce time and effort?

As a main takeaway, when you analyze the work product or your efficiency in the process, make sure you are evaluating the effectiveness too. I used to be big on improving efficiencies. However, I will now prioritize the work product by looking first at effectiveness, then efficiency and lastly productivity. Quality over quantity will provide a more successful outcome in the long run.

 

Noemi Barter