Flight Instructor reported while conducting training on a simulated engine failure on takeoff; the student retracted the flaps completely; resulting in the aircraft sinking back down to the runway and hitting the landing gear hard.

Narrative

During recurrent proficiency training with the aircraft owner; having previously briefed the maneuver; we were practicing a simulated engine failure immediately upon takeoff. With flaps set at 50%; and airspeed at about 90 kts.; we reduced power to idle and pushed the nose over to establish best glide (92 kts). As previously briefed; I instructed the pilot to set flaps to 100%. Instead he retracted them to full up (0%). As the airplane sank very rapidly; I shouted at him to; 'add power; add power; go around.' We hit the runway very hard on all three gears. We stopped and shut the aircraft down on the runway without any further incident. The pilot exclaimed in horror that he had placed the flaps in the 'full up;' rather than the full down position. He apologized to me; further explaining that he had done so in error because that what he normally would do on a takeoff. After talking together with the pilot after the occurrence; here are some suggestions for both pilots and instructors that may be helpful to them in the future. Before practicing the maneuver at the airport; do it first in a simulator or up high in a practice area. Have the instructor accomplish a demonstration of the maneuver first and then answer any questions before having the pilot accomplish it. After thoroughly briefing the maneuver; have the pilot repeat back to the instructor exactly what they heard to ensure effective communication had taken place and they understood exactly what they were expected to do.