The Relationship between Efficiency, Effectiveness, and Productivity
Productivity is a measure of how well an organization transforms its resources into goods and services. It is the combination of both efficiency and effectiveness. To be productive, an organization has to be both efficient and effective. That means that an organization that is only concerned with effectiveness or efficiency is either partly productive or entirely non-productive. An organization must emphasize obtaining the maximum outputs with minimum resources (efficiency) and ensuring that the actual outputs meet the desired output (effectiveness).
For instance, for company X to produce its goods, it has to incorporate the best possible techniques with the least wasted resources, improve its current workflow, be time-sensitive in its operations, and utilize minimal company resources for maximum payoffs. Company X should realize the return on investment and profit per sale for it to be efficient. At the same time, the company has to focus on the best possible results regardless of the inputs used, high-quality work, and it has to be concerned with its competitive nature in the market. The company has to focus on achieving the end goal by ensuring that its actual outputs meet the desired goals. For the company to produce quality outcomes, both the manager and employees should demonstrate effectiveness. The manager can ensure effectiveness through regular employees’ motivation and by ensuring that all employees engage in activities that contribute to the company’s objectives. Generally, the company should be concerned with aspects that lead to production of goods that satisfy customers’ needs and desires for it to be effective. Overall, Company X has to consider all these aspects of efficiency and effectiveness to be productive.
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