Productivity is a result of the way that a business operates – the result of the way that its people, business processes, different functional units and suppliers come together to meet the needs and wants of its customers.
Productivity is the combination of intelligent planning and focused efforts and hence, it is a combination of Efficiency and Effectiveness.
Efficiency :
Efficiency is an internal measure of performance for companies that shows how well the company converts inputs into outputs. The more the ratio of outputs to inputs approaches 100 percent, the better the efficiency of the process will be. In simple terms, it is “doing things right” and comes from proper harnessing of time, cost and efforts.
Effectiveness :
Organizational effectiveness is an external measure of performance and indicates how well an organization fulfills the demands of various organizational stakeholders. Simply put, it is “doing the right things."
