Should you buy your dog a new bone to chew?

How to determine whether to buy a tool for your employee

v = xp + cr

x = total cost of employee (usually approx. double their salary) over 
    useful lifetime of tool
p = productivity gain provided by tool, expressed as a fraction of x
c = increase in employee retention provided by tool, expressed as a
    fraction of 1
r = total cost of hiring and training a replacement to current
    employee's level of productivity

v = total expense at which tool is worth purchasing

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As an example, consider finding p for a new workstation costing $4,000, which is
expected to have a useful life of 8 months, for an developer who costs $180,000 
to keep on staff (salary, rent, super, support, administration costs, etc). 

We'll assume the developer has no opinion at all about how fancy his computer is, 
so we can omit c and r from the equation.

x = 8/12 * 180,000 = 120,000
v = 4,000
4,000 = 120,000 * p
4 / 120 = p
p = 0.033

So, the purchase makes sense as long as it makes the developer at least 3% 
more productive.