You will recognise the 3 word in the title to this post as being …. well, what, exactly? related terms? or synonyms?
If you do a search for these terms online, you can find lots of definitions and lots of ratios … many go which are just plain wrong!
In descriptive terms, efficiency is doing things right … and effectiveness is doing the right things.
In simple ratios … Efficiency = Actual Output / Standard Output (i.e. it measures how good performance is compared to some measure of what the machine or the person or the team should do … in the case of a machine this might be the manufacturer’s specified optimal performance).
Effectiveness = Standard Output / Resources Required (i.e. it measures how well we turn resources into – quality sets of – our planned output)
Then productivity becomes Efficiency x Effectiveness
= (Actual Output / Standard Output) x (Standard Output / Resources Used)
= Actual Output / Resources Used
Simple, really!
(This has been a public service refresher announcement!)