Measuring How Organizations Create Value Through People
Here’s a new simple formula and/or AI query you can use to quickly score your investment portfolio or your own company’s ability to measurably and effectively create value through its investments in employees and customers over time. No software other than AI or a spreadsheet are needed.
Background. The EEA EEI™ Enterprise Engagement Index is a practical management
and investment analysis formula designed to help organizations evaluate how effectively they convert investments in people, customers, culture, and stakeholder engagement into measurable business outcomes. No software other than AI or your own spreadsheet program is required.
Extensive analysis of 49 public companies in 17 industries has already demonstrated the EEI’s ability to not only demonstrate how employee and customer investments materially contribute to the bottom line but to correlate this with overall profitability, stock market performance, customer and employee engagement, turnover, productivity, willingness to recommend, innovation, DEI, etc. The EEI can be used not only to identify organizational strengths and weaknesses but to evaluate a critical aspect of a company’s ability to create future value and even stock performance. Click here for the latest studies and information on the EEI.
Developed by the Enterprise Engagement Alliance Impact Committee based on years of collective human capital analytics experience, the EEI uses publicly available financial data and transparent calculations to provide a standardized view of how well organizations create value specifically through employees and companies.
Unlike traditional engagement surveys that primarily measure sentiment or activity levels, the EEI focuses on financial outcomes: productivity, profitability, growth, and the efficiency of human-capital investment. The framework applies Total Quality Management (TQM) principles to people management systems, helping organizations evaluate whether engagement initiatives are producing measurable enterprise value.
What makes the EEI potentially valuable is not the individual metrics themselves, but the integration, weighting, benchmarking, and interpretation of those metrics into a management and diagnostic framework specifically focused on organizational effectiveness and stakeholder value creation through people.
What the EEI Measures
The EEI combines five weighted indicators into a single score designed to benchmark organizational effectiveness across industries:
| Component | What It Measures | Weight |
| Revenue per Employee | Organizational productivity | 20% |
| Profit per Employee | Value creation efficiency | 30% |
| Human Capital ROI (HCROI) | Return on people investment | 10% |
| Profitability to Net Income Ratio | Economic value creation | 10% |
| Three-Year Revenue Growth | Market validation and momentum | 30% |
The weights are designed to balance the impact of human resources metrics with those of economic value creation and revenue growth and potentially can be adjusted over time with increased use. Employee components are weighted somewhat higher because they account for more of an organization’s fixed costs.
For reference purposes only, the framework also tracks three-year stock performance versus the S&P 500 as a separate comparative indicator, but not part of the score, as well as customer or employee satisfaction scores or any other data you wish to apply. Click here for complete details and a regularly updated library of analyses of public companies by industry. Click here for the the findings of additional industry analysis to date.
How to Calculate the EEI for Public Companies or Your Own Company
Option 1: For analysis of public companies:
While use of the EEA Enterprise Engagement People Value Impact Calculator provides the most precise results, you can use the following AI query to quickly obtain a preliminary, unvalidated evaluation of any public company. In fact, you can use the same query to compare multiple public companies or even your portfolio. You will get the most success by analyzing companies by sector, since a company’s business model has a significant bearing on the score.
AI Query: All you have to do is copy and paste the following query with the three charts chart. Important caveat: even when using for casual evaluations, the AI results have to be carefully checked by a knowledgeable person for logic. All calculations should be eyeballed for consistency, and any report should be manually verified if used for a material purpose.
Please evaluate the company(s) on the following basis.
| Component | What It Measures | Weight |
| Revenue per employee | Revenue ÷ Employees | 20% |
| Profit per employee | Value creation | 30% |
| HCROI | Efficiency of people investment | 10% |
| Profitability to net income ratio (Net income ÷ revenue) | Economic value of customers | 10% |
| 3-year revenue growth | Market validation | 30% |
| Stock market performance | Three-year stock performance compared with the S&P 500 | Not included in the EEEI score |
| EEEI Fixed Benchmark Scales | |||||
| Metric | 20 Score | 40 Score | 60 Score | 80 Score | 100 Score |
| Revenue per Employee | $150,000 | $250,000 | $400,000 | $600,000 | $800,000 |
| Profit per Employee | $25,000 | $50,000 | $100,000 | $175,000 | $250,000 |
| HCROI | 1.00x | 1.50x | 2.00x | 3.00x | 3.75x |
| Operating Margin | 3.0% | 5.0% | 10.0% | 20.0% | 30.0% |
| 3-Year Revenue CAGR | 0.0% | 2.0% | 5.0% | 10.0% | 15.0% |
| Ratings |
| 90–100 | World-class organizational performance |
| 80–89 | Strong stakeholder alignment |
| 70–79 | Competitive but inconsistent |
| 60–69 | Average organizational effectiveness |
| Below 60 | Weak conversion of people investment into outcomes |
Scoring rule: the model linearly interpolates between the benchmark points and caps scores at 100. Negative revenue growth is scored at 20. These thresholds can be modified for industry-specific versions.
(End of query)
Option 2: For private companies. Until the EEA’s People Value Impact Calculator is updated with this formula, organizations can set up a spreadsheet using the formulas above for the financial components measured and weighted; how they are benchmarked and scored. The calculation for Human Capital Return on Investment is: Revenues minus operating expenses minus human capital expenses divided by human capital expenses. Otherwise, all other calculations are straightforward.
Designed to Work With the EEA People Value Impact Calculator™
The EEI is designed to be used in conjunction with the EEA People Value Impact Calculator™, an advanced diagnostic and benchmarking platform that enables organizations to correlate EEI results with virtually any operational or engagement data available within the enterprise.
Using the People Value Impact Calculator, organizations can compare changes in EEI performance against:
- Employee engagement survey results
- Customer satisfaction and Net Promoter Scores (NPS)
- Turnover and retention trends
- Investments in training and leadership development
- Incentive, recognition, and reward programs
- Safety, quality, and productivity metrics
- Customer loyalty and retention data
- Sales and channel performance indicators
- Communication and culture initiatives
This capability helps organizations move beyond isolated metrics to identify which activities produce the greatest macro-level business impact. Instead of simply tracking engagement activities, companies can begin to understand which investments and management practices most strongly correlate with improvements in productivity, profitability, customer value, growth, and overall enterprise performance.
Applications for Management and Investors
The EEI can be used by:
- Senior management teams evaluating operational effectiveness
- HR, sales, and marketing leaders assessing engagement impact
- Boards seeking enterprise-level performance diagnostics
- Investors and analysts evaluating organizational quality
- Private companies benchmarking enterprise performance
- Organizations implementing stakeholder engagement or TQM strategies
Because the EEI uses standardized financial and operational measures, it provides a common framework for comparing performance across organizations and over time.
From Inputs to Outcomes
The logic behind the EEI is straightforward: rather than focusing primarily on what organizations do for employees or customers, the framework evaluates what the system produces. If an organization’s engagement and management systems are effective, the results should appear in measurable operational and financial outcomes.
The EEI therefore helps organizations connect stakeholder engagement strategies to tangible business performance — turning engagement from an activity into a measurable management discipline.
For more information: Bruce Bolger; 914-591-7600, ext. 230; Bolger@TheEEA.org.