Income per Employee

Income per Employee is considered an indicator of management efficiency.  Income per employee looks at the ratio of operating income to the number of employees required to produce that level of income.  Therefore, income per employee measures management's ability to use their employee resources effectively to create profits for the company.

The calculation of income per employee is as follows:

Operating Income / Number of Employees

Comparisons of income per employee should only be made between companies in similar industries.  When making a comparison between two companies, the company with the higher value for income per employee is the more efficient company.