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Less-experienced workers often engage in ”learning by doing”;
they acquire new skills simply by observing more-skilled workers, filling in for
them when they are ill or on vacation, or engaging in informal conversation
during coffee breaks.
1.1 Costs and Benefits
Like formal education, on-the-job training entails present sacrifices and fu-
ture benefits. It thus is an investment in human capital and can be analyzed
through the net present value and internal rate of return frameworks. In de-
ciding whether to provide on-the-job training, a firm will weigh the expected
added revenues generated by the training against the costs of providing it...
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