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Effectiveness and Efficiency in Business

JGA MarketingBlogEffectiveness and Efficiency in Business

When companies are looking to expand their productivity in business, they will typically talk about both increasing their business effectiveness and their business efficiency as though they are interchangeable terms. However, this is simply not the case. Effectiveness and efficiency refer to different aspects of business, even though they appear and sound similar at first glance. While an effective employee is able to produce results on a more meaningful or impactful level, an efficient employee is able to produce results quickly given the circumstances of the business. In essence, companies need to combine effectiveness and efficiency in their business practices in order to be successful.

Effectiveness in Business

In business, effectiveness refers to the quality of results that are derived from tasks completed by both employees and their managers. To create effectiveness in the workplace, an employee or manager needs to deliver consistent results. For example, if someone is a marketing manager and their marketing campaigns deliver consistent leads, they would then be thought of as an effective marketing manager. If however, the marketing manager is not able to draw any leads from any of his or her campaigns, then he or she would be ineffective. To improve effectiveness in a company, a business needs to conduct regular performance reviews of both their employees and managers to determine if their methods and techniques are effective and producing results. Ineffective results could easily impact the quality of a company’s services or products, so it’s important for any business to make sure that all of their employees and managers are filling their roles effectively.

Efficiency in Business

Efficiency in a business refers to how long it takes for a task to get completed, not at how effective the task was completed. In other words, an employee may be effective at completing a task to a high level, but may take way longer than needed to complete the task. A good example of this is a manager who sends emails to all employees vs. a manager who writes handwritten letters to each individual employee. While both are effective in conveying a message, an email in the modern workplace is obviously more efficient than a letter, especially at a larger company.

Improving Both Effectiveness and Efficiency in Business

Businesses and employees that are effective are not always efficient, and businesses and employees that are efficient are not always effective. In fact, the terms should not be looked at as mutually exclusive, especially when it comes to running a business. While efficiency can increase productivity and save time and money, it won’t ultimately get results if the effectiveness of your employees is low. To increase both effectiveness and efficiency, businesses need to provide resources, training and constructive criticism to employees and managers so that they can improve their performance and be energized to work at your business.