An essential element of human capital management is measuring the net income generated by each employee. Knowing how to calculate net income per employee provides managers with crucial insights into worker productivity, overall business performance, and potential areas for improvement.
Calculating net income per employee begins by defining net income as gross business income minus various deductions. Next, dividing net income by the number of employees yields the average net outcome contributed by each individual. This evaluation aids decision-making and enables data-driven strategies.