Productivity vs. Efficiency – What to Measure

In ordinary day-to-day conversation for most people, the words ‘productivity’ and ‘efficiency’ are thrown around indiscriminately. They are, however, different and it’s important to know the difference and when to use them. PRODUCTIVITY V EFFICIENCY Productivity is the raw measure of how much product is made in a certain time, disregarding other metrics, like demand or wastage. For example, an employee of a company that makes 45 units an hour while the company only needs 30 is seen as very productive. [...]