Productivity measurement is something that all companies across all industries are concerned with. There is not just one productivity formula that is applied, but rather many different types of measurements and strategies that organisations can undertake to increase and keep track of their productivity. In this article, you will learn about productivity efficiency, pareto efficiency and how Sinnaps, the project management app can help you to increase productivity, become more cost efficient and to increase your operational efficiency.


Productive Efficiency


What is Productive Efficiency?


Business efficiency essentially comes down to production and costs. Productive efficiency refers to the production of goods and services through an optimal combination of inputs in order to produce maximum output at minimum cost. an economy’s production of two goods is efficient if it is producing on its production possibility frontier, which means that it would be impossible to produce more of one item without producing less of another.

When a firm produces at the lowest point on the short run average cost curve, which is where marginal costs meet average costs, it is productively efficient.

There are different types of efficiency. Economic efficiency examples include having a machine that can produce clothes that will then be sold at $11, $50 or $25. The most economically efficient is for it to produce clothes to be sold at $100. Efficiency is also concerned with technical efficiency and allocative efficiency.  Technical efficiency refers to the optimal combination of labour and capital to produce a good which, in other words is when more of a good cannot be produced without more inputs. Allocative efficiency refers to the optimal distribution of resources. A perfectly competitive industry achieves allocative efficiency because production represents consumer preferences.

The difference between production and productivity is that production refers to how much an organisation actually produces, and productivity refers to the increase of output from each unit in the production process.


Pareto Efficiency


You may have heard of pareto efficiency in game theory. To be considered as pareto efficient, the individuals of a country, let’s say for example, are maximising their utility. Allocation decisions cannot be changed or improved as this would take away from and cause harm to others.  

Pareto improvement allows for one side to experience improvements; however, the improvement must not come at the expense of another. For example, if a company is producing 500 products as part of its normal operations and an additional employee is introduced on a specific production line, the company would experience higher outputs without negatively impacting someone else.

However, if the company then decided to move the employee from one production line to another, an increase would occur in one production line and a decrease would occur in the other, meaning therefore that it is not pareto efficient.

Dynamic efficiency further moves on to describe a situation where it is impossible to make one party better off without making any other party worse off.


How to Become More Cost Efficient

Most companies spend a lot of time on becoming more cost efficient. The following are some tips to improve the cost efficiency of your organisation:


    • Possibility of outsourcing tasks that are infrequent.
    • Cutting utility expenses.
    • Utilisation of telecommuting. Sinnaps project management app is fantastic for this as it allows you and your team member to access the projects that you are working on from any platform with a simple internet browser.
    • Work on building a stronger social media presence and cut marketing costs. Sinnaps can be used to plan an effective social media marketing strategy.
    • Get a professional’s advice. You may have to spend some money so that you can save more money in the future 😉
    • Invest in your employees so that their motivation translates into more production.
    • Negotiate whenever possible


Being cost efficient starts off with careful and precise planning. This is something that Sinnaps is an expert in and can help you and your team to do. After having planned your costs carefully, it is essential to keep track of expenditure, another area that Sinnaps will support you in through tools such as the resource consumption graphic that will help you to reach an efficient allocation of resources and expenditure reports.




How to plan a project


Increase your Operational Efficiency


Apart from increasing cost efficiency, it is also important to look at how the operational efficiency of your organisation can also be increased. Here are some tips:

  • Provide employees with consistent access to information. With Sinnaps, team members can access project information wherever they are and at any time. They are also sent weekly progress reports to keep them up to date.
  • Deliver anytime, anywhere access to employees so that they can engage in productive time.
  • Work on creating effective business processes with partners.
  • Make it easy to collaborate. Sinnaps stimulates a collaborative environment within its community through initiatives such as template sharing.  
  • Keep up communication with customers.
  • Reduce unproductive travel time.
  • Outsource IT tasks that are difficult for your organisation to perform.
  • Work on developing and improving level of employee retention and satisfaction, which will lead to productivity improvement.
  • Place a focus on technology and how it can help your firm.
  • A production efficiency formula can also be utilised to measure the efficiency of employee production.

In this article we have covered aspects such as productive resources, allocative and productive efficiency, how to increase productivity in the workplace with the help of Sinnaps and about pareto efficiency. In terms of productivity vs efficiency, increased efficiency can hinder productivity and vice versa. It essentially comes down to quality versus quality. Find the perfect balance with Sinnaps today!


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