A practical organizational efficiency measure

There is often a call in any organization to make the system ‘more efficient’. This document describes a novel framework for measuring organizational efficiency at the microeconomic level. We show how this framework can be used to monitor an organization using data typically available in extant performance management frameworks. This is most useful in large organizations with eclectic outputs where resources may be too constrained to perform industry-level analyses, such as data envelope analysis, to infer efficiency. This method helps illuminate how the factors of an organization’s internal practices can affect its efficient use of resources.