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Productivity vs. Efficiency: What's the Difference?

Edited by Aimie Carlson || By Janet White || Published on November 26, 2023
Productivity measures output per unit of input, while efficiency evaluates how well resources are utilized without waste.

Key Differences

Productivity is the ratio of output to input, reflecting the amount of work done with given resources. Efficiency, on the other hand, focuses on how well resources are used, aiming for maximum output with minimal waste.
Higher productivity means more is produced with the same amount of resources, but it doesn’t necessarily imply resource optimization. Efficiency is about optimizing resource use to reduce waste while maintaining or improving output.
Productivity can increase through more output or reduced inputs, but it may still involve wasteful practices. Efficiency is inherently about reducing waste, ensuring that every resource contributes optimally to the output.
In a business context, improving productivity often involves scaling output, whereas enhancing efficiency is about streamlining processes.
Productivity improvements can lead to higher profits and market competitiveness. Efficiency improvements, while also beneficial to profitability, primarily enhance operational sustainability and resource conservation.

Comparison Chart


Output per unit of input
Optimal use of resources with minimal waste


Quantity of output
Quality of process and resource utilization


Measured in terms of output relative to input
Measured in terms of waste reduction and resource use

Improvement Approach

Increasing output or reducing input
Streamlining processes and reducing waste


Can lead to increased profits and market share
Enhances operational sustainability and resource saving


Broad, focusing on overall output
Specific, focusing on process optimization

Productivity and Efficiency Definitions


Enhancing productivity often involves technological upgrades.
Implementing automation tools significantly increased the team's productivity.


Efficiency is achieving maximum productivity with minimum wasted effort or expense.
The new workflow system increased efficiency by reducing redundant tasks.


Productivity is the measure of output produced with a given amount of inputs.
The factory's productivity improved when it produced more cars with the same number of workers.


It involves using resources in the most optimal way.
The plant's efficiency was evident in its low energy consumption.


Productivity can indicate the growth potential of a business.
The startup's high productivity showed its potential for rapid expansion.


Efficiency can be environmental, referring to minimal resource waste.
The company's environmental efficiency improved with the new recycling program.


Productivity is key to competitiveness in a global market.
The company's productivity gains helped it outperform international competitors.


Technological advancements often drive improvements in efficiency.
Upgrading to more efficient machinery reduced the factory's downtime


It reflects the efficiency and effectiveness of production.
High productivity in the software company resulted from efficient coding practices.


Efficiency reduces costs and improves profitability.
Streamlining the supply chain process enhanced the company's efficiency and reduced costs.


The quality of being productive.


The quality or property of being efficient.


(Economics) The rate at which goods or services are produced especially output per unit of labor.


The degree to which this quality is exercised
The program was implemented with great efficiency and speed.


(Ecology) The rate at which photosynthesizing or chemosynthesizing producers form organic substances that can be used as food by consumers.


The ratio of the effective or useful output to the total input in any system.


The state of being productive, fertile or efficient.


The rate at which goods or services are produced by a standard population of workers.
You can see the computer age everywhere but in the productivity statistics.


The rate at which crops are grown on a standard area of land.


(linguistics) The ability to form new words using established patterns and discrete linguistic elements, as derivational affixes -ness and -ity.


The quality or state of being productive; productiveness.
Not indeed as the product, but as the producing power, the productivity.


The quality of being productive or having the power to produce


(economics) the ratio of the quantity and quality of units produced to the labor per unit of time


What is productivity?

Productivity measures the output generated from a given amount of inputs in a specific time period.

How is productivity calculated?

It's usually calculated by dividing total output by total input (e.g., output per labor hour).

What is the difference between productivity and production?

Production is the total output, while productivity is the efficiency of producing this output.

Does technology always increase productivity?

Generally, yes, but it depends on how well the technology is integrated and used.

How is efficiency different from productivity?

Efficiency focuses on using fewer resources for the same output, while productivity is about the output level regardless of resource use.

Can productivity be improved?

Yes, through better training, technology, and processes.

How does employee morale affect productivity?

Positive morale typically leads to higher productivity as employees are more engaged and motivated.

Why is productivity important in business?

Higher productivity means more output from the same resources, leading to better profitability and competitiveness.

Can a company be productive but not profitable?

Yes, if the output is high but the market value is low or costs are too high.

Is high productivity always good?

Not necessarily; it should not come at the cost of quality or employee well-being.

How can efficiency be improved in the workplace?

By streamlining processes, reducing waste, and improving resource management.

Can a process be efficient but not effective?

Yes, if it uses minimal resources but doesn’t achieve the desired outcome.

Is technological advancement always efficient?

It can be, but it depends on how well it's implemented and utilized.

What is efficiency?

Efficiency measures how well something is performed with the least waste of resources.

Why is efficiency important?

It helps to reduce costs, save time, and improve sustainability.

Can efficiency be harmful?

If pursued excessively, it can lead to overwork, reduced quality, or environmental harm.

How does efficiency affect customer satisfaction?

Efficient operations often lead to faster service and better product quality, enhancing customer satisfaction.

Is productivity more about quantity or quality?

It's a balance; too much focus on quantity can reduce quality, and vice versa.

Is efficiency always about speed?

Not necessarily; it's more about resource usage, including time, materials, and energy.

Does efficiency lead to cost savings?

Generally, yes, as it reduces unnecessary resource consumption.
About Author
Written by
Janet White
Janet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
Edited by
Aimie Carlson
Aimie Carlson, holding a master's degree in English literature, is a fervent English language enthusiast. She lends her writing talents to Difference Wiki, a prominent website that specializes in comparisons, offering readers insightful analyses that both captivate and inform.

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