Rocky Mountain Case Analysis

Situation Analysis:

• Rocky Mountain Mutual had built a fitness center by investing about a million dollars. Driven by Claims Manager Joe Mirolas’ belief in fitness as a way of life, a Wellness Program was set up that used peer encouragement and support groups to foster a culture of fitness among employees. 

• The analysis also shows that the fitness center has had an impact on productivity levels, has resulted in reduced absenteeism, and has reduced medical claims by members of the Fitness Center.

• Zachary Evans recently promoted as Vice President, however, feels that the Fitness center is a burden on the company’s costs. As Zach is personally not inclined towards exercising, he is also of the view that the Fitness center does not add value but serves as an entertainment center for a few employees, and that the cost of running it does not justify the returns it is providing. 

• Zach also believes that the Fitness Centre could be adapted to accommodate the growing Corporate Information Systems department

Problem Statement

The crux of the problem lies in the difference of opinion between Joe and Zach on the benefits of the Fitness Center.Joe is now faced with the challenge of convincing Zach about the long term benefits of the center. 

Options for evaluation:

1. Keep the fitness centre 

2. Transform the fitness centre into Corporate Information Systems(CIS) department

3.  Identify equipments not being used frequently and dispose them. This will help to reduce maintenance costs and will also free up space to transform partial space of the Fitness Centre into CIS department while continuing to use the rest as the Fitness Centre.

Criteria for evaluation:

1>Maintenance Costs of fitness centre

2> Space constraints

3> Not necessary as per industry best practices(Competitors don't have Fitness centres)

4> Low usage( only about 25% of employees use it frequently)

5> Health costs of employees

6> Productivity of employees

7> Employee welfare

8> Reduction in absenteeism

9>Employer Branding

10>Intangible benefits for employees- Improve in morale

Evaluation of options

RETAIN THE FITNESS CENTER

1. Cost: Present data indicates that about $22,250(Exhibit A) are being saved per annum by reduction in medical claims by employees. This is the biggest benefit for the company in terms of cost savings.

2. Reduction in absenteeism: There is a drop in absenteeism by 5%, and productivity has improved by 18%.

3. Increase in Man Days: Presently, 792 (Exhibit B)man days per year are being saved due to reduced absenteeism.

4. Intangible Benefits  : The Wellness Program has greatly increased intangible benefits such as bonding and camaraderie among employees, a healthier lifestyle, potential to be used in Employer Branding, and boosting brand name, as no other competitor has similar facility in the vicinity.