Efficiency refers to the ability to accomplish a job with a minimum expenditure of time and effort.
An efficient employee, for example, would be one who has used productivity techniques to streamline their workflow, automate processes, and otherwise remove distractions or roadblocks that deter from the fast execution of tasks.
In more academic contexts such as economics and engineering, it is often expressed as the ratio of useful output to total input, which can be represented in terms of energy, money, time, or materials.
Below, I’ll explore a range of examples and types of efficiency for both individual productivity and economic improvement.
Types of Efficiency
Efficiency can be categorized into various types, each addressing a different aspect of optimization and productivity.
Some notable ones are as follows:
- Economic Efficiency
This type of efficiency is used in economic analysis. It refers to the optimal production and distribution of resources (Buchanan, 2016; Du & O’Connor, 2018). A society reaches economic efficiency when it cannot make anyone better off without making someone else worse off (for example, when resources are allocated in the market where the price buyers are willing to pay is equal to the price sellers are willing to sell).
- Technical Efficiency
Technical efficiency refers to getting the most output from the minimum amount of inputs (Nowak, Kijek & Domanska, 2015). It focuses on the process of production, maximizing output with the available resources or minimizing resources for a given output. This is typical in factories where labor, machinery, and materials are optimized to produce maximum amounts of goods (like a car manufacturing plant aiming to produce as many cars as it can without wasting resources).
- Productive Efficiency
Think of productive efficiency as achieving the highest outputs with given inputs, or using the least inputs to achieve a given output (Berman, 2015). This is the point at which a business or economy is producing at its maximum output level, without wasting resources (for instance, a restaurant would be efficiently using its ingredients, staff, and utilities to serve as many customers as possible).
- Allocative Efficiency
Allocative efficiency is about aligning resources in such a way that benefits and costs are balanced (Buchanan, 2016). It is ideally achieved when resources are distributed where the last unit of output produced provides a utility value equal to the marginal cost of producing it (as an example, a bakery perfectly balances producing bread and pastries based on customer demand, ensuring nothing is wasted).
- Dynamic Efficiency
Dynamic efficiency considers how resources are used over different periods of time. It is about adapting and changing production over time to optimize resource allocation (Silva, Stefanou & Lansink, 2020). A typical example of dynamic efficiency would be a technology company that continually updates and develops its products to stay relevant to user needs.
- Social Efficiency
Social efficiency considers the impact of an activity not just on the producers and consumers involved, but also on society as a whole. This includes external factors such as environment, social welfare, etc. An example of social efficiency would be a company producing solar panels, which benefits not only the company and customers but also effectively contributes to environmental sustainability (Martinez, Ebenhack & Wagner, 2019).
For a Job Interview
The following examples demonstrate ways you can demonstrate your efficiency to a potential employer:
- Prioritization Abilities: A candidate might talk about how they use prioritization techniques to manage their workload effectively. This may involve explaining how they categorize tasks according to urgency and importance, ensuring the most critical tasks are done first (such as a marketing manager who prioritized launching a pivotal product campaign over rebranding efforts).
- Organizational Skills: Applicants can demonstrate their organizational skills by talking about ways they’ve kept their workplace, projects, tasks or team members organized, increasing overall productivity. This can involve using tools like calendars, project management software, or established procedures (like an executive assistant who managed a CEO’s calendar, ensuring smooth scheduling and allowance for reactive tasks).
- Responsiveness: Being able to respond promptly to changes or requests can highlight an individual’s efficiency. A candidate may offer examples of how they have responded to unexpected changes in the workplace, like a sudden shift in project direction or an abrupt deadline change (like a salesperson handling a sudden influx of customer orders due to a competitor’s product recall).
- A Propensity for Action: One vital attribute of efficient people is not waiting around for tasks. Candidates can highlight scenarios where they’ve taken initiative, proactively addressing tasks or problems before being asked (like an accountant who identified and remedied potential errors in the company’s financial report before it was due to be presented).
- Mastery of Tools: In an interview, discussing your familiarity with tools relevant to the job can be an effective way to demonstrate efficiency. For instance, a graphic designer can share their competence with design software (like Adobe Photoshop or Illustrator), which allows them to produce quality work quickly.
- Problem-Solving Skills: A potential employee can demonstrate their efficiency by discussing past instances when they’ve successfully resolved issues or obstacles. This can include problems that arose on a project, in a team, or with a particular task (like how an IT professional swiftly solved a critical system outage that could have disrupted the company’s operations for days).
- Successful Project Completion: Candidates can illustrate their efficiency by talking about past projects that were completed on or ahead of schedule. A project manager, for instance, can mention a software development project where milestones were systematically achieved and tasks were methodically delegated, leading to early completion.
The following are ways students can be more efficient:
- Study Schedule: A student can increase their efficiency by implementing a strict, well-structured study schedule. This could mean allocating specific periods of the day for focused study, giving each subject or task an appropriate amount of time (like spending weekday evenings on homework and reserving weekend mornings for project work).
- Use of Technology: Students today have many technology tools at their disposal that can help streamline their studies. For example, the use of apps and platforms for note-taking, flashcards, or project management can make studying more efficient (like using Anki for spaced repetition studying, helping to memorize information more effectively).
- Task Prioritization: Prioritizing tasks according to their importance and urgency can help students tackle their workload more efficiently. This could involve following techniques like the Eisenhower matrix to classify assignments and study tasks (like prioritizing a paper due in two days over reading for a test that’s a week away).
- Active Learning: By engaging in techniques such as self-explaining, teaching others, or practicing problem-solving, students can deepen their comprehension and retain knowledge more effectively. For instance, a student might prepare for an exam by explaining key topics to a peer, thereby reinforcing their own understanding (known as the Protege Effect).
- Regular Breaks: Incorporating regular breaks into their study routine can prevent burnout and maintain productivity. Techniques like the Pomodoro method, which proposes intervals of focused study broken up by short breaks, can be particularly effective (like studying for 25 minutes, then taking a 5 minute break to rest and refresh).
- Group Study: Efficient learning can be achieved through group study sessions where participants can share knowledge, ideas, and insights. For example, a group of physics students may convene regularly to discuss complex theoretical concepts, helping each other understand more rapidly than studying alone.
- Elimination of Distractions: Students can enhance their study efficiency by identifying and eliminating potential distractions. This can involve creating a quiet, clutter-free study space, turning off mobile phone notifications during study sessions, or using apps to block distracting websites.
In the Workplace
The following demonstrate some examples of ways to make a workplace more efficient:
- Inventory Management: Efficient inventory management ensures that stock levels are kept optimal, reducing storage costs and preventing any stagnation of capital. For instance, a retail store could use a first-in-first-out (FIFO) approach to ensure items do not expire before they are sold. This minimizes waste and maximizes use of inventory.
- Time Management: Effective time management, such as following a strict schedule or adhering to the Eisenhower box (which involves categorizing tasks by their importance and urgency), can help individuals and teams complete tasks more efficiently by allocating their time where it is most needed. For example, a team might schedule brainstorming sessions in the morning when everyone is alert and save routine tasks for later in the day.
- Automation of Tasks: Automated systems can reduce manual workloads, speed up processes, and minimize errors. A customer service department, for example, might use automated responses to handle common customer inquiries, freeing up representatives to handle more complex inquiries (like a chatbot handling FAQ while human agents deal with specific customer complaints).
- Delegation: Delegation involves assigning tasks to the team member most suited to handle them, ensuring efficient completion. For instance, in a graphic design team, the creative design work is handled by designers, while the project management and client communication are taken care of by the project manager.
- Open Communication Channels: Ensuring clear and open communication among team members can lead to more efficient operations. At a hospital, nurses, doctors, and other medical staff maintaining regular communication about patient statuses ensures everyone is on the same page, treatments are coordinated, and patient care is optimized.
The following are general examples of economic efficiency:
- Optimal Product Pricing: Economic efficiency can be demonstrated when a product is priced perfectly at the point where supply meets demand. An example might be a clothing company that manages to price its items at a level where the quantity consumers wish to buy equals the quantity the company wants to sell.
- Efficient Allocation of Resources: When a business assigns its resources – such as workers or equipment – so that maximum output is achieved with the smallest input possible, this illustrates economic efficiency. Manufacturers, for example, strive to maintain an effective balance between staff numbers, machine usage, and production output.
- Energy Conservation: Companies that take steps to lower their energy use are practicing economic efficiency. Let us consider a shipping company that strategically plans routes to minimize fuel consumption. This reduces environmental impact and lowers operating costs, leading to efficient usage of energy resources.
- Streamlined Supply Chains: Efficient supply chains can ensure that goods move from producer to consumer in the quickest, most cost-effective manner possible. An example could be a grocery store that buys fruits and vegetables directly from local farmers, eliminating the need for long, expensive transport.
- Waste Reduction: Minimizing waste is another way to approach economic efficiency. A fast-food restaurant might use an inventory management system to monitor ingredient use and adjust its orders accordingly. This can cut costs and waste, with the ultimate goal of ensuring all purchased inventory contributes to sellable products.
- Resource Recycling: Firms that recycle waste material back into their production process exemplify economic efficiency. For example, a paper manufacturing company might recycle discarded paper to produce new products, saving raw materials and reducing waste generation, leading to a more efficient use of resources.
Overall, you can see that efficiency is not just a dry, theoretical concept. It’s a practical tool that assists us in making informed decisions about purchases, business operations, and even sustainability practices. As such, understanding and being mindful of efficiency can lead to better outcomes, both personally and professionally.
Berman, E. M. (2015). Performance and productivity in public and nonprofit organizations. New York: Routledge.
Buchanan, A. (2016). Ethics, efficiency, and the market. In Democracy: A Reader (pp. 335-343). New York: Columbia University Press.
Du, K., & O’Connor, A. (2018). Entrepreneurship and advancing national level economic efficiency. Small Business Economics, 50, 91-111. doi: https://doi.org/10.1007/s11187-017-9904-4
Johnes, J., Portela, M., & Thanassoulis, E. (2017). Efficiency in education. Journal of the Operational Research Society, 68(4), 331-338. doi: https://doi.org/10.1057/s41274-016-0109-z
Martinez, D. M., Ebenhack, B. W., & Wagner, T. P. (2019). Energy Efficiency: Concepts and Calculations. London: Elsevier Science.
Nowak, A., Kijek, T., & Domańska, K. (2015). Technical efficiency and its determinants in the European Union. Agricultural Economics, 61(6), 275-283. doi: https://doi.org/10.17221/200/2014-AGRICECON
Silva, E., Stefanou, S. E., & Lansink, A. O. (2020). Dynamic efficiency and productivity measurement. Oxford: Oxford University Press.
Dr. Chris Drew is the founder of the Helpful Professor. He holds a PhD in education and has published over 20 articles in scholarly journals. He is the former editor of the Journal of Learning Development in Higher Education. [Image Descriptor: Photo of Chris]