Rocky Mountain Mutual
Letter of TransmittalDate: 20 March 2015Zachary EvansVice PresidentOperationsRocky Mountain MutualSubject: Letter of TransmittalRespected Sir,As per your instructions, we have prepared a detailed analysis report on the case. We have analyzed the case and completed the necessary analysis. From the several choices the directors and co-presidents had we zeroed in on one of the choices. We recommend that we should scale down the facility and introduce motivational program to attract more employees. Yours truly,Executive SummaryThe report analysis the problem in the hands of Mr. Zachary Evans, Vice President, Operations of Rocky Mountain Mutual to decide on the continuation of the fitness centre. We have the option of shutting down the facility, continue with the facility as it is or to scale down the facility and introduce motivational program for the employees. We have evaluated against the criteria’s of the Cost Benefit Analysis for the firm, productivity absenteeism and medical expenses of the employees and the effect on the attrition rate.Situational AnalysisThe case presents a problem in the hands of Zachary Evans regarding the continuation of the Rocky Mountain Mutual’s fitness centre. Three years ago the company built a new headquarter in the suburban area of Utah. A lavish fitness centre having high running cost with state-of-the-art facilities was made available to the employees. The absence of any sports club facilities near the headquarter was one of the major reasons for the management to rate this facility as a major draw for the young employees. After two years a study was conducted which revealed that the regular visitors had a lower medical cost and a significant decrease in the absenteeism was also seen. Even though a direct association could not be inferred, it validated many scientific studies that exercise improves health. Taking this forward Joseph Mirola, Claims Manager, started to encourage employees to take advantage of the facility and started a ‘Wellness Program’. Eight months into the program productivity in the claims department rose by 18% and sick days deceased by 5% and the morale seemed well than ever. However Zac believed that the fitness facility is too costly to run and its space could be adopted to accommodate the Corporate Information’s System department. He believed that majority of the employees don’t use the facility and the high running cost doesn’t justify its use. Joe argues that the fitness centre is not for the fun of few but for the better health of the employees and as employees start to see the benefits, they will folk to the facility. Also it will act as a great recruiting device as no other competitor had a similar facility in the area.

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