Stephen Covey's time management matrix divides tasks into four quadrants based on their urgency and importance. Quadrant 1 contains urgent and important tasks like deadlines and problems. Quadrant 2 contains important but not urgent tasks like relationship building and career development. Quadrant 3 contains urgent but not important tasks like some phone calls. Quadrant 4 contains not urgent and not important tasks like time wasters. The document recommends identifying what is most important to facilitate effective time management decisions.