This measure calculates personnel cost to test market products/services—where prototypes are used to assess the market potential for new or revised product/service development—per project that exits or completes the test market products/services phase. The results of the test market phase help a company finalize product/service characteristics and technical requirements. Personnel cost refers to employee salaries/wages, bonuses, benefits, etc. This measure is part of a set of Cost Effectiveness measures that help companies understand all cost expenditures related to the process "test market for new or revised products and services."
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Personnel cost to test market products/services / Number of projects that exit or complete the test market products/services phase
Personnel cost is the cost associated with personnel compensation and fringe benefits of employees (i.e., those classified as FTEs which includes both full-time and salaried/hourly employees) contributing to each respective process. Personnel cost should include all of the following costs.
Employee Compensation: Includes salaries and wages, bonuses, overtime and benefits.
Fringe: Includes contributions made towards the employees' government retirement fund, workers compensation, insurance plans, savings plans, pension funds/retirement plans, and stock purchase plans. This should also include special allowances, such as relocation expenses and car allowances.
Cost effectiveness measures are those in which two related variables, one of which is the cost and one of which is the related outcome related to the expenditure are used to determine a particular metric value.
The metric value which represents the 50th percentile of a peer group. This could also be communicated as the metric value where half of the peer group sample shows lower performance than the expressed metric value or half of the peer group sample shows higher performance than the expressed metric value.