This is where efficiency and effectiveness come in. By understanding the difference between these two concepts, managers can achieve success. Efficiency and effectiveness are not the same thing. Efficiency is defined as the ability to accomplish something with the least amount of wasted time, money, and effort or competency in performance.
Effectiveness is defined as the degree to which something is successful in producing a desired result; success. Managers need to appreciate the way each affects an organization. One measure of maintenance efficiency is total maintenance costs compared to replacement asset value RAV. Some refer to this as equipment replacement value ERV. It is defined as the monetary value that would be required to replace the current assets in the organization.
It includes production and process equipment, as well as utilities, support, and all related costs. For example, in the past 12 months, I have had some maintenance expenses.
Based on these expenses, the ratio of total maintenance costs to RAV is 3. Managers are responsible for determining the most appropriate mix of physical asset policies, work management, and reliability improvement processes to reduce the costs of non-value added or recurring expenses. In my example, some expenses might be considered capital expense or improvements.
Perhaps I purchase a higher quality shingle, for example. Also the importance of this study will be realized after completion of reading this research paper. Which led to draw a theoretical conclusion. In this report performance is meant by job activities by the employees of an organization.
More precisely meaning, good job performance. In other word, Doing the right activities with Getting the right results Using the right intentions is called performance. And Relationship means the state if being connected, how multiple person, object, or works etc are related to each other.
So the relationship is mainly based on dependency. No data is collected from primary source. So this research did not get any support from primary source. All data are secondary data from online. Additional Discussions: 6.
Efficiency relates to the use of all inputs in producing any given output, including personal time and energy. Efficiency is a measurable concept that can be determined by determining the ratio of useful output to total input. It minimizes the waste of resources such as physical materials, energy and time, while successfully achieving the desired output.
Historical techniques, Breakthroughs in efficiency have often coincided with the invention of new tools that contribute to labor. Early examples include the wheel and the horse collar, which redistributes the weight on a horse's back so the animal can carry large loads without being overburdened.
The advent of tools such as the steam engines and motor vehicles during the Industrial Revolution allowed people to move farther in shorter periods of time, and contributed to efficiency in travel and trade. The Industrial Revolution also introduced new sources of power, such as burning fossil fuels, that were cheaper, more effective, and able to be used more broadly. Movements such as the Industrial Revolution also brought efficiency in time.
For example, the factory system, in which each participant focuses on a specific task in the factory line, allowed operations to move along much more quickly increasing output while also saving time. Many scientists have also developed practices for the most efficient ways to perform specific tasks.
A famous example in popular culture of the quest for efficiency is the biographical novel "Cheaper by the Dozen. The impacts of efficiency, an efficient society is better able to serve its citizens and operate in a healthy manner.
When goods are produced efficiently, they are often able to be sold at a lower price. The advances that have been made in efficiency 7. Efficiency results in a sharp drop in hunger and malnutrition, as goods are able to be moved farther and more quickly. Also, advances in efficiency have allowed the work week to decline considerably.
More work can now be performed in a shorter amount of time, so it is no longer necessary to spend those extra hours laboring.
Efficiency is an important attribute because all inputs are scarce. Time, money and raw materials are limited, so it makes sense to try to conserve them while maintaining an acceptable level of output or a general production level. Effectiveness Determined by comparing what a process or installation can produce with what they actually produce; therefore, effectiveness does not tell anything about the efficiency — the amount of resources that have to be committed to obtain that output.
If we are successful in manufacturing more good product in the same time period, effectiveness will increase. Organizational effectiveness has a very broad and often vague definition, so much so that most sources explain the concept by example rather than definition.
Basically, the effectiveness of a business constitutes its ability to perform a function with optimal levels of input and output. Companies use organizational effectiveness to measure any number of things, from the relationship between employee performance and company profits to the correlation between manufacturing 8. No set parameters exist for organizational effectiveness and it follows no definitive mathematical formula -- each organization creates its own method of measuring effectiveness.
Measuring effectiveness can help a small business without the ability to absorb ineffective processes modify its approach to avoid loss. Effectiveness oriented companies are concerned with output, sales, quality, creation of value added, innovation, cost reduction. It measures the degree to which a business achieves its goals or the way outputs interact with the economic and social environment.
Usually effectiveness determines the policy objectives of the organization or the degree to which an organization realizes its own goals Zheng, Meyer and Herscovitch analyzed organizational effectiveness through organizational commitment. Shiva and Suar agree that superior performance is possible by transforming staff attitudes towards organization from lower to a higher plane of maturity, therefore human capital management should be closely binded with the concepts of the effectiveness.
According to Heilman and Kennedy — Philips organizational effectiveness helps to assess the progress towards mission fulfillment and goal achievement. To improve organizational effectiveness management should strive for better communication, interaction, leadership, direction, adaptability and positive environment. Back in , Seiichi Nakajima has introduced the concept of Total Productive Maintenance, which has been widely applied in the plants and covered the entire life of the equipment in every department including planning, manufacturing, and maintenance Fu-Kwun Wang, ; Muthiah and Huang, The systemallowed assessing overall performance of the plant, since it covered: 1.
Total effectiveness productivity, quality delivery, safety, social responsibility and morals ; 2. Total maintenance system maintenance prevention system, maintainability improvement ; 3. If the input is cost then efficiency cares about the cost. So with these definitions in mind, we can talk about the terms intelligently.
When we want to increase performance, then we can do that in any number of ways. Because performance implies a benchmark, then there can be a tendency to game the benchmark.
Benchmarks are often synthetic metrics, derived from statistical analysis of an activity. There are usually some assumptions, i. To improve productivity this way is to ignore our constraints. Productivity as a term, is loaded. I think that people say performance, when they mean effectiveness, and they say productivity, when they mean efficiency. As leaders and managers, we should be always talking about effectiveness and efficiency.
We should be looking for ways to make our staff more effective — that might mean learning not training , it might mean more diversified experience not cross training , both leading to a greater understanding of how they are expected to add value. We should be looking for ways to make our staff more efficient, that is to accomplish our goals, without ignoring our constraints.
It may mean removing unnecessary activities from our work processes. That may mean tools and techniques. If that means faster computers, more sophisticated or reliable software, we should consider — how much do we pay our staff, and how fast would the expenditure pay for itself.
I think most people can point to issues with their own efficiency. I think they can identify the amount of time they spend waiting for systems to finish, or things they do by hand that could be automated. I think people find it harder to assess their own effectiveness. What they are missing that would make them more effective.
As a manager, you may work closely enough with your staff, to observe some of these things, but often it is their peers who have a greater ability to assess.
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