In this example, each worker is assigned 80 hours of training per year, bringing the Needed Complement to 1,130 (extra workers are needed to replace those who are in the classroom). Investing in training increases the Productivity Index and reduces Turnover.

The training costs $1,808,000, however, Turnover has dropped to 7%. Part of the expense of the extra payroll and training will be offset by lower Recruiting Costs and future gains in Productivity. In this example the Productivity Index remains at 100%. This is due to the 509 Employees added this year. Had fewer employees been added the 80 Training Hours would have increased the Productivity Index.

In this example, $2,000 is entered in Recruiting Spend (the amount of additional money spent — per worker — to attract a higher caliber worker). Note that the Productivity Index has increased almost 2% to 101.8%.

Part of the extra recruitment expense will be recouped by increased production line efficiency. Productivity indexes can never fall below 100%. After the round is processed, the results of all HR investments appear on Page 12 of The Capstone® Courier in the HR/TQM Report.

If Labor Negotiations are scheduled, increases in the Productivity Index can be lost if the company uses a low wage/benefit tactic (see Labor Negotiations).