Introduction Performance of organisations may be articulated to several factors. For an organisation to function to achieve the purposes for which it is established, various factors of production must be ploughed in at various proportions. From the human resource perspective, many organisations consider people as the most crucial resources to help in building sustainable relationships with customers (Sikula, Olmosk, Kim & Cupps 2001). Having the capacity to establish good relationships with customers implies more sales and hence better financial performance of an organisation on a long-term basis. However, some business management scholars contend that organisations cannot gain optimal performance by only putting in strategies for getting people to accomplish their tasks better and in an effective way alone. Instead, efficiency and effectiveness of an organisation are essential to develop the capability to pursue the low-cost strategy. The economic theories inform this contention. Comparing the two approaches to enhancing organisation’s performance, a dilemma is encountered whether an organisation should capitalise on improving the welfare of its people to enhance its performance or effectiveness and efficiency approaches advocated for by economic theories. From this platform, this paper confirms the invalidity of the claims that management’s pursuit of efficiency and effectiveness has been at the expense of labour’s welfare. Organisational Effectiveness The concept of organisational effectiveness is articulated to the idea that organisations must operate in a manner that ensures that they are able to achieve their outcomes. Organisation’s effectiveness is very crucial to investors. Investors are interested in the capacity of organisation to deliver value in the form of returns to investments (Waddell, Jones, & George, 2011). This means that organisations should operate in a manner that ensures that profits are maximised by reducing the costs of production as implied by macro-economic and microeconomic theories. Viewing employees in an organisation as one of the resources that can be utilised to achieve the desired outcomes, it means that all costs that an organisation encounters to ensure it is motivated and committed to its objectives and functions should be minimised to achieve optimal profitability. Consequently, it is arguable that effectiveness in organisation is achieved by establishing compromises for various variables, which must be combined in the right proportion to achieve success. These variables include employees’ welfare benefits. While the argument that organisations should not principally focus on increasing effectiveness and efficiency at the expense of the welfare benefits and gains of its employee is valid, it is essential to note that such profits and gains are funded using financial resources. Such resources would be increased by increasing an organisation’s profit levels. Consequently, the argument that management’s pursuit of efficiency and effectiveness have been at the expense of labour’s welfare remain invalid. Effectiveness of an organisation is important for optimal welfare gains. Organisations Efficiency Stakeholders subj