There’s a misconception that productivity and efficiency are the same things. But that’s kind of a problem when it comes to improving your performance. Learning how to measure efficiency is an important step in your professional career but how do you do so?
Ben Mulholland explains this nicely over at Process Street . Productivity “measures output over time, whereas efficiency measures input versus output. Together they can tell you how quickly something is completed, the resources it takes to get there, and (through analysis) whether the whole thing is worth your investment.”
Or, as Jessica Greene from Zapier , explains, “Productivity measures how much you do or produce within a given timeframe. Efficiency, on the other hand, is about being productive with less effort.”
“So if you answered 50 more customer support tickets this week because you worked through them as fast as possible, you were more productive,” writes Jessica. “But if you answered 50 more tickets because you used a text expansion app to respond to commonly asked questions, you were more productive and more efficient.”
In other words, “to be more productive in a way that won’t burn you out in the long run, you have to figure out how to be more efficient .”
Hopefully, this clears the difference between productivity and efficiency. But, more importantly, I hope that you understand why it’s essential to measure your efficiency. And, here’s how you can do just that.
If you have employees, you probably use performance metrics to see how, well, they’re performing. Typically, a metric falls into one of the following four categories.
Work quality metrics
“Work quality metrics say something about the quality of the employee’s performance,” explains Erik van Vulpen over at HR Analytics . “The best-known metric is a subjective appraisal by the direct manager.”
- Management by objectives. The management objectives are goals that an employee works towards and receives points if he reaches them.
- Subjective appraisal by the manager. Usually, a nine-box grid holds the stats for assessing performance and potential done by the manager.
- Product defects . Product defects are usually involved in an industry that manufactures products. You could determine performance by the number of defects the employee was responsible for.
- The number of errors. Similar to the above, the “number of errors” can be applied to programming.
- Net promoter score. “NPS is a number (usually between 1 and 10) which represents the willingness of a client to recommend a company’s service to other potential clients,” explains Erik van Vulpen.
- 360-degree feedback. 360-feedback is when peers, subordinates, customers, and managers are asked to asses the individual’s performance.
- 180-degree feedback. 180-degree feedback is a simpler alternative to the above where only direct colleagues and managers are involved.
- Forced ranking. Forced ranking is when a manager ranks their team from best to worst.
Work quantity metrics
“As quantity is often easier to measure than quality, there are multiple ways to measure this employee performance metric,” notes Erik van Vulpen.
- The number of sales. Applicable if this is you or your employee’s responsibility. You may also want to look at the number of (potential) client contacts one has, the number of phone calls one makes—the number of company visits and the number of active leads.
- The number of units produced. Besides traditional manufacturing, this metric can be used in areas like content creation. For example, you could use the number of keys someone can hit per minute on their keyboard.
- Handling time, first-call resolution, contact quality, etc. Mainly, each of these metrics is relevant if involved in customer service. But, as you can see, most measurable usages in one area can be figured for application in another area of production.
Work efficiency metrics
Work efficiency is finding the balance between quantity and quality . To achieve the resulting number, “metric considers the resources (e.g., time and money: quantity) needed to produce a specific output (that’s quality).
Organizational performance metrics
Finally, Erik says that “Organizations can also use employee performance metrics to assess their own competitiveness,” such as:
- Revenue per employee. Calculate the income per FTE (Full-time equivalent).
- Profit per FTE. Similar to above, but focuses on profit instead.
- Human Capital ROI. Here you would asses the value of human capital, such as knowledge and personal attributes.
- Absenteeism Rate. Absenteeism is usually a self-explanatory metric. If you want to dig deeper — I’d suggest finding out the “why’s.” The why may have to do with the work or people at work. Check your environmental factors.
- Overtime per Employee. “Employees who are willing to put in the extra effort are generally more motivated and produce more (in terms of work quantity),” writes Erik van Vulpen.
Can you use these metrics also to help you identify your efficiency? Sure. But, there are more natural ways to find your metrics.
Weren’t goals a part of management by objectives? Yes. But, as Choncé Maddox writes in another Calendar article , “Goals, in general, can be challenging as they often prompt you to change your life in a major or minor way.”
What’s more, it’s not always easy to tell if you’re even close to reaching your goal , let alone achieving them. And, to muddle things up, even more, goals are constantly changing depending on what your priorities are at the moment.
One way to get out of this predicament is to use a strategy like the SMART goal formula.
“SMART goal is an acronym to describe goals that are Specific, Measurable, Achievable, Relevant and Time-Bound,” explains Choncé. “For example, setting a vague goal such as ‘I want to lose weight this year’ probably won’t give you the best results.”
What if you said that you wanted to “lose 40 pounds in 10 months by getting on a low-carb diet and exercising four days per week?” According to Choncé, “That’s a much better goal that follows the SMART formula. You’re specific by saying how much weight you want to lose, giving yourself a deadline, so you know when to expect results, and specifying how you’ll reach your goal and measure your results over time.”
Yes. Work quality was another performance metric you can use to measure your team’s efficiency. But, I think when it comes to yourself, we can simplify this.
Are you meeting deadlines? Did you also meet the requirements of the task or project?. For example, were you able to crank out an 1200 work article or cover all of the meeting agenda points in the time allotted? If so, then I’d say that you’re pretty darn efficient
What does this have to do with efficiency? In my opinion, quite a bit. It shows that you’re able to manage your time correctly. For instance, if you’re running late to a scheduled meeting, maybe it’s because you underestimated how long the previous task took to complete. Or, perhaps you’re so disorganized that it totally slipped your mind until the last minute.
Efficient people avoid bad habits . I’m talking about failing to plan ahead, not having a routine, multitasking, procrastinating , or being easily distracted. They also try to everything on their own when there should be tasks they’re delegating so that more of their time and energy on what’s important .
Feedback from others.
Now we’re circling back to feedback. And, there’s a good reason for that. We have a tendency to be biassed towards our own self-assessments and performance. You may think that you’re killing at work until someone brings it to your attention that you actually haven’t been delivering your best work as of late.
Hearing feedback from others can also be challenging. But, instead of avoiding peer or management feedback, solicit it from people you trust. Try asking a peer, business partner, or family member.
To become more efficient, expect more of yourself.
Hopefully, you know how to measure your efficiency . But, there’s one last step you should take. Raise your expectations.
Let’s say that met you have a met or requirement, instead of being complacent. Push yourself to go above and beyond. It’s great that you can write a 1200 word article in under three hours. But, can you produce the same number of words in under two? How about upping the word count?
You don’t know what your true limits are — because you can always up-your-count on almost anything. Try it. Pushing your limits, keeps you engaged, and forces you to embrace better habits so that you learn how to be effective and efficient.