Difference Between Efficiency & Effectiveness

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The exact meanings of effectiveness and efficiency are often misunderstood.
The exact meanings of effectiveness and efficiency are often misunderstood. (Image: Jupiterimages/BananaStock/Getty Images)

Though often used interchangeably, the terms “efficiency” and “effectiveness” do not have the same meaning. Further, though outcomes of efficient and effective performances are both highly desirable, efficient performance and effective performance can have very different results. Best outcomes result from effective and efficient practices.

Definition of Efficiency

The term “efficient” is defined as acting or producing effectively with a minimum of waste, expense or unnecessary effort and as exhibiting a high ratio of output to input. To be efficient means to achieve an end result by using resources such as time and materials without wasting them in order to optimize performance.

Definition of Effectiveness

The term “effective” is defined as having a desired or intended result. An effective performance is one that brings about the objective of an undertaking. It is interesting to note that the word “efficiency” as defined above incorporates the concept of effectiveness.

Interrelationship of Efficiency and Effectiveness

In daily life, and in business, it is necessary for those responsible for implementing goals of the affected organization to be both efficient and effective. For example, if a business sets a monthly sales objective but the sales force spends half of each day in meetings to discuss how to sell, it is unlikely that the sales goals will be met. The sales force may be effective in making individual sales due to all of the discussions about how to make sales, but the amount of time spent in meetings may render the sales force so inefficient than enough sales cannot effectively reach the monthly sales goal. The same is true in day-to-day life. If the objective is to manage a household, hiring four maids, two cooks and three gardeners to perform household tasks may be an effective way to achieve the result desired, but it is not likely to be an efficient way to do it.

Tips to Becoming Efficient and Effective

A few tips can help you become more efficient and effective. First, define what it means to be effective; that is, set realistic goals. Second, determine the minimal number of activities necessary to achieve the result desired. Third, evaluate the time and other resources needed to complete the activities and adjust as needed to meet objectives. Finally, learn from experience. Once completed, take a few minutes to review the project to see if it could have been accomplished more efficiently and effectively.

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