Difference Between Productivity and Efficiency

Topics: Economics, Manufacturing, Marketing Pages: 2 (313 words) Published: March 14, 2013
Difference Between

Productivity is an ability of factors to produce some thing. Productivity means that some thing is produced, how much produced, in how much time. Quality and wastage is not so important factor. But the quantity is important that how much produced.

E.g. All the lands are not fertile. The fertile land gives more out put, but infertile land gives less output. So the productivity of fertile land is more than that of an infertile land.

Productivity can be measured by this formula:
Productivity= Quantity of output/Quantity of input.

Efficiency means giving more quality to products in lesser time, giving less wastage, consuming less energy, and any thing which gives quality to the product. We can say that efficiency is the measure of production in comparison with all resources and cost of the product. Efficiency not work on the formula of productivity (more output) but it works on giving the quality to the product.

i) A man work for 5 days and manufactures 100 commodities. And another man work for 2 days and manufactures 100 commodities. 2nd man is more efficient than the 1st.

ii) A firm manufactures chairs in large number its machinery and labor is not so efficient to reduce cost, reduces wastages, give quality to its product, as a result public do not like this chair because of its quality and high price. Sale of the firm reduces. On the other hand another firm is manufactures chairs, its labor and machinery is efficient and reduces the cost of production, give quality to its product. As a result public like this chair because of its quality and less price. Profit of the firm increases.

Productivity with out the efficiency is very expensive and useless. Lack of efficiency effect all sort of business, can even lead to the failure of the business....
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