These words have been repeatedly used incorrectly over time and confused to mean the same thing in conversation. There are critical differences between the two that you should understand in order to analyze your operation’s performance correctly.
Productivity is the output per unit of time while efficiency is the best possible output per unit of time: i.e., doing things correctly. When you do your tasks correctly, you will hit your maximum level of efficiency and productivity.
For example: if Joe and his six-person crew install 100 squares of a roof in a 10-hour day, while Mike and his six-person crew install 80 squares of roofing in the same 10-hour day, it may look like Joe’s crew is more productive. That would be true if all things considered were equal. But if Joe’s crew did not complete everything as they went and required another half day to finish the 100 square section’s flashings, Mike’s crew would be 34 percent more efficient. Mike’s team is clearly more efficient than Joe’s, which connects directly to their actual productivity. Ultimately, they are more productive than Joe’s team, which would be easily missed if you only observed squares’ raw productivity. Read More.