On-the-Job Training of New Hires. ILR Reprints No. 668.

A group of 2,594 employers identified as having hired a new employee prior to 1981 served as the population for a study of the provision and outcomes of on-the-job training of new employees. Respondents were asked how much time the new employees had spent on four types of training activities during their first 3 months of employment. A simple theory of training investment was constructed, and a multivariate analysis of the determinants of training investment was offered. Training effectiveness was analyzed in relation to training provider, establishment size, and generality of training. On average, new employees spent 47.3 hours watching others, 10.7 hours in formal training programs, 51 hours receiving informal training by management, and 24.2 hours receiving informal training by coworkers. Training resulted in substantial increases in workers' productivity during their first year on the job. Informal training by coworkers and training by watching others had higher benefit/cost ratios than informal training by management. The benefit/cost ratio for formal training depended on how the model was specified; however, the marginal rates of return to training appeared to be quite high. Highly general training had a larger effect on wage growth than specific training. (Contains 12 tables, 32 references.) (MN)