HR MANAGEMENT - How Effectiveness & Efficiency Relate to Productivity

How Effectiveness & Efficiency Relate to Productivity

by Kevin Johnston, Demand Media

You can manage productivity through tried-and-true techniques.

When you start a small business, you must determine your purpose. One way to do this is to explain why you will be good at serving your customers. Once you have this purpose firmly in mind, you can target your productivity efforts toward serving your customer and therefore growing your sales. You must look at how effective you are at serving your customer, and you must look at how efficient you are at serving your customer, because effectiveness and efficiency drive productivity.

Effectiveness

Effectiveness must come first in all of your considerations about productivity. Effectiveness is doing the right things. You must make sure that all your objectives serve your goals, which in turn serve your purpose. Objectives are short-term achievements, goals are long-term achievements, and your purpose is serving customers in ways that satisfy their needs and desires. Start by looking at whether you are doing the right things, and whether you are asking employees to do the right things. For example, if you are a manufacturer, ask yourself whether all employee tasks contribute to manufacturing, or whether some tasks, such as washing company vehicles or ordering lunch for staff, are irrelevant. Make sure your employees engage in activities that are effective in moving you toward your goals.

Efficiency

Once you have employees doing the right things, you can make sure they do things right. Examine all employee tasks and determine if there is a better way to get them done. For example, perhaps your order pickers spend most of their time walking through the warehouse looking for products. To give another example, your back-office personnel may be dictating to front-office salespeople how many orders they can handle. Find more efficient ways to get work done through computerization, streamlined communication channels and rearranging of the physical environment.

Productivity

Productivity is doing the right things in the right way. Once you ensure employees are being effective and efficient, you will see a rise in productivity. You should start measuring this productivity on a daily, weekly and monthly basis. You can use metrics such as number of units produced, sales or customer-satisfaction surveys. With effectiveness and efficiency in place, you will be able to establish some baseline measures of the productivity of your company.

Increased Productivity

With the basics in place, you can increase productivity incentives. These can take the form of increased commissions on sales above your present levels, bonuses for reaching higher production quotas and pay raises for sustained productivity increases. With incentives in place, employees will find their own ways to become more effective and efficient, and thus increase productivity.