One metric that I have seen misunderstood is the average cost of trainer per training class. At 10% of $1,600 ($160) If an individual needs the training class there is an additional fee of $250 (above the normal class fee) and the instructor is only paid $250 as compared to the total of the class. As a result, percentage wise, this is much higher than normal (250 vs. 160), but in reality it is pure profit with essentially 0% of the normal cost paid to faculty. If we just look at the numbers, this is bad, but if we use some thought, this is not only good, it is great!

Another example is a static (fixed) budget for food in a nursing home of 15,000 per month. But if this is 16,000 and the number of patients increased more than proportionally to this cost, it is a good thing. Conversely if the cost is only 14,000 but the number of patients went down much more than that, it looks good, but it is actually bad. All variances need to be explained, there is a reason. Generally, there is no blame, just facts and we need to keep it that way.

What can happen if we blame people for these variances?

Answer rating: 100% (QA)

If it is blamed to people for these variances then it to take it in positive way that ... View the full answer