What is Efficiency? | Credit Management

Businesses do not need to research the issue of whether resources are used effectively in trouble-free periods when profitability is high. However, in times when economic developments reach a certain saturation or when competition reaches its peak among companies doing the same job, the first thing to do is to investigate how profitability can be increased. At this point, modern enterprises primarily attempt to increase productivity.

To this end; On the one hand, they look for ways to realize the production of the enterprise with lower costs, on the other hand, they pay attention to increasing the quality in order to be successful in the competition. Efforts to improve quality have recentlyTotal Quality ManagementI“It accelerated its formation. Another effort in this direction is the efforts to ensure maximum production with the minimum number of personnel. This point also draws attentionStaff Efficiency“He directed the subject.

What is Efficiency?

Today, one of the biggest reasons why even small businesses have come to a level that can compete with large businesses is that they have been able to put all kinds of innovations into practice with great courage, together with their efforts to increase efficiency.

In order for organizations that are based on two sub-systems, basically technical and human, to fulfill their functions effectively, it is necessary to make some arrangements in order to balance these systems and increase efficiency.

If the golden key of corporate efficiency and profitability is “Staff Efficiency“is.

What is Efficiency?

The “efficiency concept”, which was first put forward in industrial enterprises in terminology, is the relationship between input and output with its simplest definition. The main indicator of efficiency; It is the ratio of input to output of fixed or improved quality.

In that case The efficiency formula can be written as:

Efficiency Formula

For example:

If one of the two enterprises producing 50 meters of fabric per unit time uses less input than the other; is said to be more efficient.

Increasing positive results with minimal effort; The effort to eliminate the negatives and at the same time reduce the expenses is the way to the “rational working method”. As a result of this effort, businesses often become efficient, so; rationality is the way of working, efficiency is the result.

Another concept that is often confused with the concept of efficiency is “efficiency“is. In our opinion, the main difference between the two concepts is; is the inequality between goals and possibilities.

For example;

Suppose there are 2 cars that want to reach city B from city A. One of these cars is an 8-cylinder BMW and the other is a 4-cylinder Volkswagen. While the BMW driver prefers the long and winding mountain road to reach the B city, he considers using the full engine capacity and the technical advantages of the car. The Volkswagen driver, on the other hand, prefers the short straight but dirt road and plans to reach city B as soon as possible. Considering that both cars reach B city in an hour from different roads; We can say that the BMW driver was efficient and the Volkswagen driver worked efficiently. While BMW’s aim is to show engine power and technical features, Wolswagen’s aim is to reach the target as soon as possible.

So to talk about efficiency:

  • To what extent the objectives have been achieved,
  • Whether resources are used effectively or not,
  • It is necessary to know what has happened compared to what is possible to happen.

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