Gene Kirila says he believes that "conflict starts from ignorance," so when he founded Pyramid Plastics, in Sharpsville, Pa., eight years ago, he began teaching employees the latest management techniques. But is the schooling, which costs $2,000 per person in out-of-house expenses alone, worth it? Kirila devised a "baseline survey" to answer that question.

Kirila asked each department to list five things that everyone in the company should know. Then he and the managers developed questions to measure employees' knowledge. The quiz is updated periodically.

New employees take the quiz after their "indoctrination" -- 40 hours of classwork and on-the-job training -- and once a year after that. Although they know when the quiz is coming, there's no way they can study for it.

Early on, scores were in the 30%-to-40% range; now they average 69%. Each set of results tells Kirila about the effectiveness of new teaching techniques. For instance, he has cut classroom time because he found workers learned more on the job.

The scores are not used as part of employees' performance reviews. (Kirila says that would undermine teamwork; only he and outside tabulators see individual scores.) However, he does use each department's aggregate result as part of the reviews for his managers.

The results reflect more than the strength of the education program. "Our scores are very closely related to our efficiency and our profitability," Kirila claims. How closely? "Give me our score for a year, and I can tell you our gross profit."

* * *

Kirila's Test
Here are some sample questions from Kirila's quiz. Other questions ask employees to match terms such as kaizen, Pareto diagram, and fishbone diagram with their definitions. How would your employees score?

What is the date of our fiscal year end?

A. December 31 C. May 31

B. June 30 D. January 1

Why do we take physical inventory?

A. To satisfy banks C. Government requirements

B. Auditors make us D. Production control

Pyramid's policy for sending replacement parts is that all parts will be shipped within --

A. 24 hours C. 48 hours

B. 36 hours D. None of the above

Name the three major competitors of Pyramid.

(Answers to the first three questions: A, D, A.)