Efficiency means 'doing things in the right way'.2 Two sorts of efficiency are often referred to, namely static efficiency and dynamic efficiency.3
- Static efficiency. Static efficiency relates to refining existing products, processes or opportunities; making improvements within existing conditions.
- Dynamic efficiency. Dynamic efficiency refers to the continuous development of new products, processes or opportunities, so that profitability improves.
The importance of efficiency
Something is only efficient when it is effective. In other words: something is efficient if it has a useful effect. It has to be functional. Efficiency is the ability to act or produce effectively with a minimum of waste, expenditure or unnecessary effort. The focus is on the resources and speed with which organisational goals are achieved.
The effectiveness of your organisation is determined by how successfully you assign resources in order to achieve your (organisational) goals in the right way. In other words, how well your organisation converts input into output, such as products, programmes and services. In this way effectiveness contributes to the success of your organisation.4
1 productive with minimum waste or effort
2 (of a person) capable; acting effectively
Productivity, like all themes, is difficult to objectively quantify. When one asks the opinion of employees, it is difficult to ask directly about their performance and productivity. What can be asked is how they perceive the productivity of the organisation, or their team. Do they feel it is up to par or are there improvements to be made? Linked with answers to workload and motivational factors, it is possible to estimate the productivity within an organisation.
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Is your organisation productive?
Productivity within an organisation is vital to success. Especially in times of economic uncertainty an organisation needs to remain (or become) as productive as possible within the limits of workload. But how do you know whether your organisation performs to its best abilities? Where do employees feel the productivity within the organisation is lacking? And within their team?
Knowing the score for perceived productivity is not enough. You need to know what drives productivity within your organisation. And what you need to improve in order to ensure a healthy productivity for your organisation.
- Doucouliagos, C. and Laroche, P. (2002), Efficiency, Productivity and Employee Relations in French Equipment Manufacturing, Cahier de recherche, 3, 1-27
- Drucker, P.F. (1974). Management, Tasks, Responsibilities, Practices, New York: Harper & Row
- Ghemawat, P. and Ricart, J.E. (1993), The Organizational Tension between Static and Dynamic Efficiency, Strategic Management Journal, October, 1-23
- Love, A. J. (1991), Internal Evaluation: Building Organizations from Within. Newbury Park, CA: Sage Publications, 111-124