Computer literacy has been identified as one of the most important factors for the effective use of computer-based technology in the workplace. Managers need to know the most efficient methods available to teach computer skills to their employees in a short time. Such methods need to be suitable for all employees, whether academically gifted or weak. A study was conducted to investigate the effectiveness of the methods used in teaching computer literacy to business students at a western Canadian university. Subjects were 128 undergraduate management students taking a required micro-computing course designed to make students computer literate. Classroom methods for the course consisted of traditional lectures and computer-assisted instruction (CAI). Students' grades for the course, grade point averages (GPA), and grades in a BASIC programming course completed by approximately one-half of the subjects were examined. The results revealed that student performance using CAI was predicted by GPA and was affected by completion of the BASIC course. GPA was also found to be a significant predictor of class mark in the micro-computing course. The results suggest that hands-on teaching is superior to traditional classroom lectures, especially for less academically inclined students. Organizations should design training seminars which reflect actual work situations for the benefit or both the end-user and the company. (NB)