Today, we are here to explain a simple fact to you about employee efficiency by using an online time tracking software and how to measure it. However, before we jump right into the topic, we will need to explain and understand the difference between productivity and efficiency.
WHAT DOES EFFICIENCY MEAN?
The dictionary defines efficiency as ‘the state or quality of being efficient, or able to accomplish something with the least waste of time and effort’. To translate this into a real-world example, we’ll use cars.
While there are many types of efficiency depending on what is doing work, in cars there’s what’s called ‘thermal efficiency’. Thermal efficiency is a simple concept: it’s how much of the heat is converted to energy that moves the car. Now you’re probably thinking, ‘But people don’t run on gasoline!’ And that’s correct, they don’t. They run on time and money with a confluence of a variety of other factors that can affect their ‘mileage’.
As for why it’s important for employees to be efficient while using an online time tracking software, it all comes down to functionality (effort put towards a goal) and money. Businesses see time as money and money as time. Hence, whenever employees are inefficient, they cost the company more in the same way that a gas guzzler hits an owner’s pocket.
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All this translates gains from an employee’s potential into realized losses for a company. The good news is that there are ways to improve this if you know what types of efficiency to look for and measure.
WHAT DOES PRODUCTIVITY MEAN?
Productivity is defined as the rate at which goods and services having exchange value are brought forth or produced. In its essence, it measures how much work (quantity) is being done over a certain period of time.
A good example of this would be a car factory. Wonder why? Well it’s because car factories are just like people in that they have a certain level of output. It might be five thousand cars per month, ten thousand cars per month, or some other number.
People, too, have a certain number of tasks that they can accomplish per month (or per week or day). But unlike factory outputs, people’s outputs are rarely consistent and one person may get much more done than another person in the same timeframe.
In such cases it may make more sense for a company to value one employee over another other despite the differences in output when taking into account other factors like efficiency.
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WHAT’S THE DIFFERENCE BETWEEN EMPLOYEE EFFICIENCY AND PRODUCTIVITY, AND WHY’S IT IMPORTANT WHILE USING AN ONLINE TIME TRACKING SOFTWARE?
If we know that productivity is the relationship between output and time, then efficiency and productivity are opposites of each other. Similarly, where one is related to quantity and the other is related to quality. As quality goes up, quantity goes down and vice-versa. And because employees are not pre-programmed machines that perform tasks as fast as physics allow, they have a maximum level of productivity and efficiency that can be attained.
The ideal situation is to maintain a balance between these two because top quality may be highly efficient but unproductive, although this depends on priorities because lower productivity isn’t necessarily a bad thing.
WHAT PERTINENT TYPES OF EMPLOYEE EFFICIENCY ARE THERE?
In the case of white collar workers, many economic and manufacturing efficiencies can be applied to them even if they aren’t a machine that creates a consumer grade good. For our intents and purposes, we only need to care about the two most relevant types of efficiency:
Static efficiency is a type of efficiency that relates to an existing environment in online time tracking software which the work gets done. This usually means improving upon an existing process or product and taking advantage of existing opportunities.
The word dynamic here refers to improvements and developments of new processes and products in relation to time. This can also apply to creation of new opportunities for oneself to improve long-term profitability.
Using Time Logger as an example. So, we can say that investing into it for the first time to make the process of invoicing and project tracking easier is a time-dependent process that may have a high upfront cost, but with it comes the increase of profitability in the long run because manual accounting is no longer necessary. Here we access new resources and make new improvements, all resulting in an observable increase in dynamic efficiency.
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If you’re still confused, don’t be. Let’s sum it up to make it easier for you to understand. Well, static efficiency concerns itself with the right combination of resources already at hand. And on the other hand, dynamic efficiency concerns itself with the acquisition of the right resources over time for improved profitability. In case you want to know more about the online time tracking software, then don’t waste your time and simply get in touch with the experts at Time Logger.