productivity and efficiency
lindas1967
Registered Posts: 16 New contributor 🐸
can any one tell me how do you explain the difference or where can i get some information on these please
thank linda
thank linda
0
Comments
-
Linda
I discuss performance with production managers and accountants in manufacturing businesses. We talk about output in terms of the labour hours used or the value of equipment used. We use the words productivity and efficiency as if they mean the same thing.
If a car plant can produce a car from 12 hours of labour time when it used to take 14 hours then productivity is up. The production manager is also using the labour time more efficiently.
A long time ago the exam that has now become financial performance had an examiner who used to test the difference between these two words: productivity and efficiency.
I didn't consider it was a difference worth looking at then and I still don't. But as happens if you are a tutor and you know what an examiner is looking for, I included it in my classes.
On those old exams I would tell candidates that the examiner wanted productivity to be measured in the physical output whereas efficiency should be measured in the value of output.
For example:
Productivity - Average hours needed per car produced or number of widgets produced per labour hour
Efficiency - Value of production per labour hour or value of production per £1 of labour cost used to produce it
The information you get is very similar in each case. The value of production per £1 of labour cost does build in the fact that different production methods need different grades of staff. But in a realistic working environment I have yet to meet anyone who sees the two words as meaning different things. That sort of thing seems to be more of an academic point.
I would be taken by surprise (and disappointment) if AAT exams were to test the difference between productivity and efficiency again.
Sandy
sandy@sandyhood.com
www.sandyhood.com5 -
Thank you this does help a lot0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 318 NEW! Qualifications 2022
- 161 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 87 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 273 Tax
- 135 Bookkeeping
- 7.2K General accounting discussion
- 200 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership