Which formula expresses the human economic value added?

The correct formula for expressing human economic value added involves calculating net profit after taxes and accounting for the cost of capital, then dividing this figure by the total number of full-time employees. This approach effectively measures the additional value created per employee, beyond just covering operational costs and capital requirements.

By taking net profit after taxes, the formula focuses on the actual profitability of the organization, reflecting what remains after fulfilling tax obligations. Subtracting the cost of capital acknowledges that the organization must generate a return not only for its operations but also for the capital invested. By dividing by the full-time head count, this formula translates the overall economic performance into a per-employee measure, indicating how effectively workforce contributions translate into economic value.

This interpretation is crucial, especially in the public sector, where understanding how human resources contribute to economic outputs can inform policy and management strategies. The focus on net profit and cost of capital also highlights the importance of both profitability and investment return in assessing workforce efficiency and effectiveness.