Arrange the following steps of on-the-job training in the order in which they take place:
(A) The firm recovers the benefits of the enhanced productivity
(B) The firm spends on training its workers, in the firm or off-campus
(C) The workers gain skills, and their labour productivity rises
(D) The trained workers work for the firm for a specific period of time
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (B), (C), (D), (A)
A firm pays for training first, and gets its money back later from the trained worker’s higher productivity.
(B) The firm spends on training its workers, in the firm or off-campus — The firm bears the cost of training first.
(C) The workers gain skills, and their labour productivity rises — Training gives enhanced productivity.
(D) The trained workers work for the firm for a specific period of time — The firm asks them to stay for a specific period after training.
(A) The firm recovers the benefits of the enhanced productivity — During that period the firm recovers what it spent.
NCERT (2026-27): “4.3 Sources of Human Capital … Firms spend on giving on-the-job-training to their workers. This may take different forms: one, the workers may be trained in the firm itself under the supervision of a skilled worker; two, the workers may be sent for off-campus training. In both these cases firms incur some expenses. Firms will, thus, insist that the workers should work for a specific period of time, after their on-the-job training, during which it can recover the benefits of the enhanced productivity owing to the training. Expenditure regarding on-the-job training is a source of human capital formation as the return of such expenditure in the form of enhanced labour productivity is more than the cost of it.” |