Which metric is a direct indicator of labor efficiency?

• A. Forecast accuracy.
• B. Menu item count.
• C. Labor cost percentage.
• D. Labor productivity (sales per labor hour).

Answer: (D)

Efficient use of labor means generating more output per hour. The metric that directly ties output to the labor input is labor productivity, calculated as sales divided by total labor hours. This shows how much revenue each hour of labor produces, so you can see whether staffing and work processes are yielding higher or lower output per hour. If sales rise without increasing labor hours, productivity goes up; if labor hours increase without more sales, productivity goes down. The other metrics don’t directly measure how much output is produced per hour: forecast accuracy is about predicting demand, not actual labor performance; menu item count relates to menu breadth and complexity, not how efficiently staff work; labor cost percentage indicates how large labor costs are relative to sales, reflecting cost control and profitability but blending price, volume, and efficiency rather than isolating it.