Which metric is used to determine organizational effectiveness?

The metric most commonly used to determine organizational effectiveness is revenue per full-time equivalent (FTE) (B). At the SPHR level, organizational effectiveness metrics evaluate how well an organization converts human capital into business results.

Revenue per FTE measures productivity by showing how much revenue is generated for each employee. This metric directly links workforce utilization to financial outcomes, making it a strong indicator of how effectively the organization leverages its people to achieve strategic objectives. Because it integrates both operational and financial performance, it is widely used by senior leadership to assess overall effectiveness.

Average time to fill (A) is a staffing efficiency metric. Benefit costs as a percentage of payroll (C) is a cost management indicator. Absenteeism trends (D) reflect engagement or attendance issues but do not directly measure organizational output or effectiveness.

SPHR exam content emphasizes that effectiveness metrics focus on outcomes and value creation, not process efficiency alone. Revenue per FTE provides a clear, comparable, and strategic measure of organizational performance.

References :

HRCI SPHR Exam Content Outline — Functional Area: Leadership and Strategy (organizational effectiveness metrics).

HRCI SPHR Study Guide — Productivity and effectiveness measures.

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