k ences OPBP Operating profit Personnel costs $400,000 $100,000 $300,000 Employee productivity can be determined by calculating OPBP less capital charge, per employee. For this example, because there are 10,000 employees, OPBP is $40,000 per employee and the capital charge is $5,000 per employee so that productivity is $35,000 per employee. The next step is to determine personnel cost per employee, $30,000, and subtract that from employee productivity to obtain economic profit per employee, $5,000 (.e., $35,000-$30,000). Total economic profit for all employees is thus $5,000 10,000, or $50 million, the same amount as determined in the conventional way. The value of the decomposition of economic profit into employee productivity and personnel costs per employee is that it provides measures that the hotel chain can benchmark to other hotel chains. It also provides a direct measure of the profit that is being generated per employee relative to the average personnel cost for each employee. Measures of revenue per employee and personnel cost per employee are widely used in the hospital, health and human services, and other people-oriented service industries. Required: Use the above approach and assume a chain of residential care facilities employs 15,000 people, has a cost of capital of 6%, and has the following information (000s). Revenue Operating costs Personnel costs Other costs Operating profit Investment $ 600,000 360,000 150,000 $ 90,000 $1,000,000 Determine the productivity per employee, personnel costs per employee, and economic profit per employee. (Enter your answers in thousands.) Productivity per employee Personnel costs per employee Economic profit per employee