Question 1

A break-even analysis allows you to find the value at which benefits equal costs and so utility is greater than zero but less than one.

Accepted Answer

A break-even analysis allows you to determine the point at which total costs and total revenue are equal, not when benefits equal costs and utility is greater than zero but less than one.

Question 2

The utility of a training program equals (T)(N)(td)× [(SDy - (N)(C)].

Accepted Answer

The formula given is not a valid formula for calculating the utility of a training program. It is not recognized by any established training evaluation model or theory. Therefore, the statement is false.

Question 3

Often,the benefit-cost ratio of a training program will be the same as the return on investment ratio.

Accepted Answer

The benefit-cost ratio and return on investment ratio are related but not always the same. Benefit-cost ratio is the total benefits divided by the total costs of a program, while return on investment ratio is the net gains divided by the total cost. They can be the same if the net gains equal the benefits, but this is not always the case.

Question 4

If a training program costs $2,000 per employee and the benefit of the program is $5,000 per employee,then the ROI is 1.50,or 150 percent.

Accepted Answer

ROI is calculated by dividing the benefit of the program by the cost of the program. In this case, ROI = $5,000/$2,000 = 2.5 or 250%. Therefore, the statement is false.

Question 5

Return on expectations is a comparison of the cost of a training program relative to its benefits that involves dividing the net benefit by the cost of the training program.

Accepted Answer

Return on expectations (ROE) is a measure of whether a training program meets the stakeholders' expectations, not a financial calculation like dividing net benefit by cost.

Question 6

Break-even analysis can be calculated for any variable in the utility formula.However,the most valuable break-even calculations should be based on the "effect size."

Accepted Answer

Break-even analysis is most valuable when based on the "effect size," which refers to the variable in the utility formula that has the greatest impact on utility. By calculating the break-even point for this variable, organizations can determine the level of investment or change required to achieve a meaningful increase in utility.

Question 7

The training program described in the MW CanadaChapter-opening vignette had two main objectives: decrease equipment downtime and improve product quality.

Accepted Answer

The MW Canada Chapter-opening vignette mentioned that the training program had two goals: to decrease equipment downtime and improve product quality.

Question 8

If a training program is expected to reduce the amount of scrap in the production of a product,then a cost-effectiveness evaluation would indicate how much the training program costs and the impact on the bottom line caused by the reduction in scrap as a result of training.

Accepted Answer

This statement accurately describes the purpose of a cost-effectiveness evaluation in the context of a training program aimed at reducing scrap in production.

Question 9

Calculations of ROI and utility could be described as "one part science and one part art."

Accepted Answer

Calculating ROI and utility involves the use of quantitative data (science) and subjective judgment and interpretation (art).

Question 10

If untrained employees are performing at relatively similar levels,the effectiveness of a training program tends to be less in dollar terms.

Accepted Answer

If untrained employees are already performing at relatively similar levels, the difference in performance after a training program may be minimal, resulting in reduced effectiveness of the program in terms of its monetary value.

Question 11

Break-even analysis can be very useful because it helps eliminate the uncertainty associated with the estimates of the various parameters used to calculate utility.

Accepted Answer

Break-even analysis is a useful tool because it helps determine the point at which the cost of producing a product or providing a service is equal to the revenue generated from it. This can inform decisions about pricing, production levels, and resource allocation. By identifying the break-even point, businesses can eliminate some of the uncertainty involved in estimating costs and revenues, making it easier to make informed decisions about how to allocate resources and optimize profits.

Question 12

Direct costs include the trainer's salary,food and refreshments,cost of travel,and the basic costs associated with doing a needs analysis.

Accepted Answer

Direct costs are directly attributable to a specific project or activity, such as the trainer's salary, food and refreshments, and cost of travel. The basic costs associated with doing a needs analysis are typically considered indirect costs, as they are not directly tied to the delivery of a specific training session but are more general overhead costs.

Question 13

The effect size measures the difference in performance between trained and untrained employees.

Accepted Answer

The effect size is a statistical measure that quantifies the magnitude of the difference between two groups, such as trained and untrained employees. So, the statement is true.

Question 14

A training program is expected to cost $1,000 and the "gross benefit" of the program is $2,000.Given that the return on investment in this scenario is positive,management should NOT invest in this program.

Accepted Answer

A positive return on investment means that the benefits outweigh the costs, so investing in the program would likely result in a net gain. Therefore, management should invest in this program.

Question 15

To calculate the impact training has on the bottom line,trainers or program designers must be able to calculate the costs and benefits of training programs.

Accepted Answer

This statement is true. In order to determine whether training programs are valuable investments, the costs and benefits must be assessed and compared.

Question 16

A training program costs $10,000 to deliver and produces a "utility value" of zero.By definition,this program will break even.

Accepted Answer

The answer of A training program costs $10,000 to deliver...

Question 17

When making estimates of training benefits,it is recommended that human resource departments use both internal and external experts.

Accepted Answer

It is recommended to use both internal and external experts to ensure a comprehensive and accurate estimate of training benefits. Internal experts may have knowledge of the organization's specific needs and goals, while external experts may provide industry insights and best practices. Combining both perspectives can lead to a more effective training program and increased return on investment.

Question 18

A training program costs $10,000 to deliver.An evaluation of the program determines a decrease in employee turnover from 20 percent to 10 percent.This would be classified as a cost-effectiveness evaluation.

Accepted Answer

The answer of A training program costs $10,000 to deliver.An...

Question 19

Given that trainees are already being paid by the company,their salary should NOT be included in a training program cost structure.

Accepted Answer

Trainees are already being paid by the company but their salary should be included in the training program cost structure as it represents a direct cost of the program. The company incurs this cost in addition to the other costs associated with the training program such as trainer fees, materials, and facilities.

Question 20

Because cost-effectiveness evaluations are NOT dependent on assumptions and opinions,the results should be considered 100 percent accurate.

Accepted Answer

Cost-effectiveness evaluations involve complex calculations and modeling, which inherently involve some level of assumptions and opinions. Therefore, the results should be considered estimates rather than 100 percent accurate.

Quiz 12: The Costs and Benefits of Training Programs