Homework Help is Here – Start Your Trial Now!
Business
Economics
Refer to the case study then answer the question below, provide a solution, and explain. Question: Estimate the benefits from reduced sickness and absenteeism.

Refer to the case study then answer the question below, provide a solution, and explain. Question: Estimate the benefits from reduced sickness and absenteeism.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
See similar textbooks
icon
Related questions
Question

Refer to the case study then answer the question below, provide a solution, and explain.

Question:

Estimate the benefits from reduced sickness and absenteeism.

CASE STUDY Peñamante Co. is considering establishing a corporate fitness programme for its employees. The firm currently employs 500 workers, mainly managerial and administrative, in a number of offices in one local area. The type of programme being considered involves subsidizing employees by paying 50 per cent of any membership fees to a specific fitness centre. This subsidy represents the cost of operating the programme, while the main benefits expected are in terms of increased productivity, reduced sickness and absenteeism, and reduced staff turnover costs. The average salary paid to employees is P240,000 per year, and employees work a forty-hour week for fifty weeks in the year. The firm has researched the extent of these costs and benefits and discovered the following information: 1. 10 per cent of employees can be expected to participate in the programme. 2. The membership fees are 1200 per individual on a group scheme. 3. Workers who do not participate in any fitness programme suffer a drop in productivity of 50 per cent in their last two hours of work each day. 4. The normal sickness/absenteeism rate of eight days lost per year is reduced by 50 percent for those workers on a fitness programme. 5. Staff turnover should be reduced from 20 per cent a year to 10 per cent. 6. Each new employee involves a total of twelve hours of hiring time. 7. Each new employee takes five days to train, and training is carried out in teams of five new employees at a time. 8. Each new employee has a productivity that is 25 per cent lower than average for their first six weeks at work.
Transcribed Image Text:CASE STUDY Peñamante Co. is considering establishing a corporate fitness programme for its employees. The firm currently employs 500 workers, mainly managerial and administrative, in a number of offices in one local area. The type of programme being considered involves subsidizing employees by paying 50 per cent of any membership fees to a specific fitness centre. This subsidy represents the cost of operating the programme, while the main benefits expected are in terms of increased productivity, reduced sickness and absenteeism, and reduced staff turnover costs. The average salary paid to employees is P240,000 per year, and employees work a forty-hour week for fifty weeks in the year. The firm has researched the extent of these costs and benefits and discovered the following information: 1. 10 per cent of employees can be expected to participate in the programme. 2. The membership fees are 1200 per individual on a group scheme. 3. Workers who do not participate in any fitness programme suffer a drop in productivity of 50 per cent in their last two hours of work each day. 4. The normal sickness/absenteeism rate of eight days lost per year is reduced by 50 percent for those workers on a fitness programme. 5. Staff turnover should be reduced from 20 per cent a year to 10 per cent. 6. Each new employee involves a total of twelve hours of hiring time. 7. Each new employee takes five days to train, and training is carried out in teams of five new employees at a time. 8. Each new employee has a productivity that is 25 per cent lower than average for their first six weeks at work.
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Health Insurance
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS