During the past 8 months, have instituted a Wellness Program which used peer encouragement to promote use of the Fitness Center thereby resulting in greater camaraderie and team cohesiveness amongst the employees.
A detailed analysis of the company records further evince that the fitness centre decreases employee absenteeism, reduces company medical cost and increases employee productivity and protectiveness. Employees who have taken advantage of the Fitness Center miss half the number of work days than employees who do not use the fitness center.Also productivity in the Claims department has risen by 18 percent and the mount of sick days have fallen off by 5%. Investing in our most important asset – the employees, would not only improve the cost to benefit ratio, by lowering the company insurance premium’s towards employee benefit, but also contribute to the overall efficiency of the company. Having a healthy, happy, productive front line can positively affect our bottoming. After much analysis my recommendation would be to keep the fitness center open in order to ascertain the long term benefits for the company.Thank you.
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EXECUTIVE SUMMARY Rocky Mountain Mutual, a growing insurance company built a new quarter complex in the remote suburbs of Utah. The distinctive feature of this branch was its state of the art fitness centre. Though the fitness center was not being used by the 65% of the employees, but the employees who used to visit the center were found to have comparatively low rates of absenteeism and low medical claims, leading to a more pleasant and productive work environment.
But Zachary Evans, the Vice President of Operations, wants to close the fitness centre due to increased expenses and space constraints. TABLE OF CONTENTS Serial No. Co intents Page No. Situation Analysis Problem Statement 3 Options 4 Criteria 5 Evaluations of options 6 Recommendations 7 Action Plan 8 Contingency plan 9 SITUATION ANALYSIS Ex. bit Rocky Mountain Mutual built a new headquarter complex in a remote suburban area in Utah. A swanky new state of the art Fitness Centre having high running cost was established for the employees.A wellness program was also instituted that used peer encouragement and support groups to foster a culture of fitness among employees.
Increased productivity levels, reduced absenteeism, and reduced medical claims were the corollary Of the fitness regime. The recently promoted Vice President of Operations, Zachary Evans believes that the Fitness Centre is a non commercial liability for the company. According to him, center does not add value but series as an entertainment center for a few employees, and that the cost of running it does not justify the returns it is providing.So he proposes to shut the fitness centre and utilities the same space to accommodate the growing Corporate Information Systems department. THE PROBLEM Convincing Each about the long term benefits of keeping the Fitness Center open THE pitons 1 . Keep the fitness centre and encourage employees to participate by extending the Wellness Program to the entire organization. 2. Shut down unnecessary parts of the fitness center for space and cost optimization.
1 Page CRITERIA FOR EVALUATION 1. Maintenance cost of the Fitness Centre. 2.
Space constraints. 3. Low usage ( 65% people do not use the centre) 4. Intangible and tangible benefits to the employee 5. Cost to the company EVALUATION OF OPTIONS OPTION (1) Maintaining the Fitness Centre may sound like a big expense, but considering the cost to benefit ratio, if regular exercise at the gym makes our most important assets more productive and reduces the number of days they’re UT for health reasons, it’s an investment that pays off in the long run. Other benefits could be substantiated by the facts mentioned below : 1.Reduction in cost to company: Present data indicates that about $22,250(Exhibit A) are being saved per annum by reduction in medical claims by employees.
2. Reduction in absenteeism: There is a drop in absenteeism by 5%, and productivity has improved by 18%. 3. Intangible Benefits : The Wellness Program has greatly increased intangible benefits such as team bonding and camaraderie among employees, a healthier lifestyle, building high morale and threatening the employee/employer relations and and boosting brand name,. 4.Impetus to attract young employees and retain the old employees: since our office is located in a fairly remote suburban area, our fitness center could act as an incentive to draw young and talented 2 Page employees when we expand our business-Furthermore, as no other competitor has similar facility in the vicinity also gives us an edge to be ahead of our competitors at all times. Even though only 35% employees use the fitness centre, if we close the facility down, they may feel insulted and we may be contributing to employee assessment by such a measure, which can have very adverse consequences going into the future.Our current employees must have taken into consideration all such facilities offered by the company before they made the decision to join us, despite being located in a remote suburban area and duping them could result in a high turnover of employees OPTION (2) By careful investigation company can shut those parts of fitness center that are used least , sell the surplus firmness equipment, reduce the number of staff , thereby optimizing the cost of maintenance of the fitness centre.
The centre as build 3 years ago. Since the place was originally built as a fitness centre, the cost associated with rehashing it to Corporate Information System Department could outweigh the benefit for such conversion. Instead, opening the fitness centre for the general public with a membership fee could definitely bring in money for Rocky Mountain meet the current expenses Of the center. As not many of the employees are using its services presently, we have ample space to accommodate other people. Page RECOMMENDATION It is seen that option (1) has the potential to convince the top management to peep the Fitness Centre operational for pursuit of long term benefits. ACTION PLAN In order to keep the fitness centre going, the following must be done : 1 .
The Wellness Program needs to be extended to the rest of the organization. 2. Schedule a Hi Tea : This could be done to explain the details of the program and generate excitement around the program.Take this time to explain to employees why their health is important to you, and how they can benefit from a healthier lifestyle. 3. Offer a reward or incentive for participants: Offering an internal reward like exercise incentive, encourages healthy imputation and anticipation among employees. 4. Schedule socials : Scheduling off-site socials to encourage participants to talk about the health benefits they have received by adopting the fitness regime.
This would foster group interaction and cohesiveness 5.