Productivity vs Performance

Productivity is the efficiency of completing tasks and achieving goals within a specific time frame, whereas performance encompasses broader aspects of effectiveness, including quality, creativity, and alignment with organizational objectives.

Productivity focuses on the “quantity” of results while performance focuses on the “quality” of results. Productivity measures how much a business gets out of its resources, like money, time, and labor. Performance measures how well those resources are used to reach intended aims and objectives.

Defining Each Term

What is Productivity?

Productivity measures the efficiency of production – how much is produced for what amount of input. Productivity is often measured in terms of units produced per employee or machine and can be improved by improving processes, technology, or equipment.Productivity is the process of producing something, usually measured in terms of output per unit of input.

It measures how much time, money, people, or resources have been used to produce a certain result. Productivity can be measured through the use of metrics, such as output-input ratios or efficiency rates.

What is productivity

In most cases, productivity is what businesses measure to ensure they are using their resources effectively and efficiently.

Productivity measures include things like total output, labor productivity, capital efficiency, profits per employee, and return on investment.

What is Performance?

Performance measures the effectiveness of production – what is produced and how well it meets customer expectations. Performance is usually measured in terms of time, quality, cost, and satisfaction – i.e. how long it takes to produce a product, the quality of output, the cost per item, and customer satisfaction with the result. Performance is improved by better training and management.Performance, on the other hand, is defined as the degree to which something meets its intended purpose or outcome.

What is performance

Performance measures “output”, rather than “input”, and can be measured in terms of quality, speed, or accuracy.


In business terms, performance is therefore a measure of “effectiveness” and may be the result of efforts from an individual, a team, or an entire organization.

For business, the measurement of performance usually takes the form of business accomplishments like customer satisfaction, lead time, cycle time, cost per output, and quality achievements.

Performance parameters are set and constantly reviewed to ensure resources are used optimally.

Productivity, on the other hand, seeks to maximize efficiencies in the use of labor, capital, and materials in order that the company can best meet performance targets.

Productivity metrics may include employee absenteeism rates, machine utilization rates, cost per unit produced, and total costs for a given product or service.

The Main Differences

A lot of this comes down to being able to track the results. Otherwise, you simply have no way of knowing if you are being productive, or performing well … over and above a sense that it might be working!

Let’s look at ways you can measure productivity within your business…

Measuring Productivity

Ways to measure productivity include:

Measuring productivity in an organization
  • Tracking employee hours worked
  • The number of products produced
  • The type and number of services delivered per hour
  • Calculating the per unit used.

Productivity also takes into account how efficiently resources are used to produce a given output.

For example, if you are producing a product, how much raw material and labor is required to produce one unit of the product?

Measuring Performance

Performance can be measured in many ways. It includes tracking sales figures, customer feedback ratings, job satisfaction surveys, and employee turnover rates.

It also takes into account the overall effectiveness of staff members. This can be measured through performance appraisals, which assess an individual’s ability to meet specific goals.

Performance is also reported in terms of how well processes are running within the organization. This includes tracking how quickly orders are processed, how quickly tasks are completed, and any other indicators that can be used to measure efficiency.

Here at Plentive, we specialize in implementing and streamlining an incentive scheme and the necessary tools to go with it. This is why, if you’re introducing an incentive scheme you need to check our quick 15-minute demonstration to find out more.

But we’re also about giving you actionable knowledge in our articles, so here we’ll offer some ways to improve both productivity and performance…


Optimizing the work environment is essential to make as many large gains and marginal gains as possible.

Productivity and performance are not only maximized when the environment is optimized, but also when employees have access to the right tools, processes that they can follow, and a support system in place.

Here are the main ways to help you optimize your environment…

  • Productivity can be increased by streamlining processes, reducing wasted resources and time, and providing your workforce with needed tools and training to finish tasks faster.
  • Performance can be increased by providing incentives for employees to work more efficiently and effectively, encouraging collaboration between departments, and setting realistic goals that are achievable.

Collecting and Analyzing Data

What good is measuring productivity or performance if you don’t know what to do with the information? Well, in order to know, you need to analyze any findings that the results can offer…

Data can offer valuable insights with regard to how teams are performing, how individual employees are handling their duties, what areas need improvement and more.

Productivity vs performance collecting and analyzing data

Here’s a quick and handy list of what to check for, simplified, and based loosely on the 7 steps of action planning

  • Identifying areas for improvement: What data points can you gather to assess if a team is missing targets? What indicators can you plot and monitor to see if the team is falling behind on productivity, or service, or needs more support?
  • Developing an improvement plan of action: Productivity reports can help you to see where teams are struggling, which tasks need improvement, and which areas could benefit from additional support or resources. Performance analysis can tell you which areas need improvement and what type of feedback is needed.
  • Plan implementation, and tracking progress: Armed with where potential failings are, or where opportunities for improvements lie, you can then put together a plan of action to address the issues. Productivity reports can help you measure how well improvement plans are working, and track your progress over time. Performance analysis can give insights into how successful strategies have been at improving performance or meeting targets compared to previous results.
  • Evaluating results and making adjustments: Beyond implementation, you can then track the success of your productivity and performance plans. This can help you to not only identify what improvements are working well …but also where any adjustments need to be made. Productivity reports can show you how much progress has been made, while performance analysis can pinpoint areas that might need more attention.


The end goal of productivity vs performance is the same: increase efficiency, improve output, and provide value to your customers. This approach is part of a larger strategy and must be carried out strategically in order to maximize results.

We can help you achieve your productivity and performance goals by implementing an incentive scheme that is easy to manage and automate.

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