TRAINING AND DEVELOPMENT

A wood manufacturing plant produced panels that contractors use as building materials. The plant employed 300 workers, 48 supervisors, 7 shift superintendents and a plant manager. The business had several problems. First, two percent of the wood panels produced each day were rejected because of poor quality. Second, the production area was experiencing poor housekeeping, such as improperly stacked finished panels that would fall and be damaged or injure employees. Third, the number of preventable accidents was higher than the industry average. The metrics (measures) of these problems before training are outlined in Table 1.

To correct these problems, the plant manager, shift superintendents and supervisors participated in training in (1) performance management and interpersonal skills related to quality problems and poor work habits of employees and (2) rewarding employees for performance improvement. The training was delivered in a low cost facility close to the plant by company trainers. The costs to design and deliver the training were calculated in five categories: direct costs, indirect costs, development costs, overhead costs, and compensation costs. Calculate the costs of the training in Table 2 (note some of the rows have been calculated for you - you need to calculate all of the others). Round your calculations to the nearest dollar.

After training the same metrics were used to see if the training had been worthwhile. The results are noted in Table 1. Use these to calculate the change from before the training to after the training. Complete the Performance Improvements column. Make sure that you calculate BOTH the monetary and non-monetary performance improvements for Quality of Wood Panels and Preventable Accidents.

Table 1 Business Problems Before and After Training

Performance Results	Metric	Results Before Training	Results After Training	Performance Improvement
Quality of Wood Panels	# of defects $ cost of defects	10/day $518,400/yr	2/day $345,600/yr
Preventable Accidents	# of accidents $ cost of accidents	24/yr $144,000/yr	16/yr $96,000/yr

Table 2 Training Costs

Direct Costs	$
Internal trainer salaries (12 days @$300/day)
Benefits (25% of salary)
Travel expenses	0
Materials ($60/trainee)
Audio visual equipment rental (12 days @$50/day)
Refreshments ($10/day x 3 days/trainee)
Total Direct Costs
Indirect Costs
Training management	0
Clerical and administrative salaries	750
Benefits (25% of salary)
Postage, shipping, telephone	0
Pre-training materials ($4/trainee)
Total indirect costs
Development Costs
Training program license fee	3,600
Registration fees	1,400
Travel expenses	975
Trainer salaries	625
Benefits (25% of salary)
Total development costs
Overhead Costs
General organizational support, top management time (10% of direct, indirect and development costs)
Total overhead costs
Trainee Compensation
Trainees salaries and benefits (based on time away from job)	16,969
Total training costs