Difference between Effectiveness & Efficiency of Employees in an Organization

‘Effectiveness & Efficiency’ — we often hear these buzzwords in our daily life, mainly at our workplace and get confused how they differ exactly from each other. Logically speaking these terms are commonly used to measure the performance of employees in an organization. Many companies strive really hard to pursue their organizational goals but sometimes fail to achieve the scores because of lack of efficiency & effectiveness of their employees. To be more clear on these topics, let us discuss the meaning and difference between these two terms.

Efficiency -
If we look at the definition — performing any work with an effort in the best manner within least amount of time is known as efficiency. In order to perform work efficiently one must have enough knowledge, skill & capability to do that. Despite the limited availability of resources like money, material & employees, some organizations show higher productivity than the other large companies. One of the main reasons is that these organizations execute efficient operation strategies where employees work towards achieving greater productivity, producing higher quality results with limited resources. Without knowing how to be efficient with the existing tools and resources, some employees keep complaining about the things that are missing at the workplace. Businesses with such issues will have hard time to get success because there will not be any proportionality between the company’s investment on resources and the output achieved by the employees.

Effectiveness -
The point to which objectives are accomplished or produced & the extent to which targeted problems are solved is called as effectiveness. Unlike efficiency which is time & process oriented, effectiveness focuses on achieving the goals perfectly with positive result. Being effective is not an one time process, instead it is about producing consistent positive results that adds up to the company’s sustainable growth & success. Many companies assess their employees for effectiveness in the performance reviews and try to build up their levels by giving them proper skill based training.

Are both Efficiency & Effectiveness important for an organization?
Effectiveness and efficiency are both important for the companies to increase the productivity and produce better quality products with fewer resources. Businesses that only focus on efficiency neglecting the other will have short term profitability whereas firms that focus on effectiveness neglecting efficiency result in marginal growth. Sometimes, managers and employees concentrate more on efficiency which is really a good thing for the organization, but do not really focus on the right approach to get the desired result. This will again lack the effectiveness, which means they are not clear on the results they really want or have no capability to evaluate, plan & focus on specific results. Hence organizational performance depends on both these attributes as one without the other will not result in sustainable business growth.

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