Criteria and Evaluation

1) Cost Reduction-The decrease in the medical expense by the employees which are
provided by the employer; reduces the overall financial burden. In this we will consider the
three factors for the cost reduction-A) Population, B) Medical cost per person, and C)
Medical Budget.

Category Population Population (in Medical cost Medical Budget

(%) numbers) per employee ($)
($)

Minority 1 25% 62 $300 $18,600

Minority 2 10% 25 $100 $2,500

Majority 65% 163 $500 $81,500

Chart Title
Majority
Medical Budget
Minority 2

Minority 1

0 20000 40000 60000 80000 100000

A) Population of users and non-users of the fitness centres-
● The minority employees 35% (25%+10%) of those who are users of the
fitness centre for once, twice, thrice, or more in a week on a daily basis.
● And the majority employees 65% of those who are non-users of the fitness
centre on a daily basis.
B) Medical cost per person- In this the medical cost of minority employees $400 ($300+
$100 each) is less than the majority of employees $500.
C) Combined medical budget of all employees- In this the medical Budget of minority
employees $21,100 ($18,600+$2,500) is less than the majority of employees $81,500.
 The less impact of the minority employees in medical cost and medical budget. But
the decrease in medical cost and medical budget, which a company has to incur
annually, but the slightest cost saving is a boon for a company.

2) Comparison of Present and Past-Since the Wellness Program began eight-

months ago then we are comparing it with the previous eight-month period. In order to know
the changes. There are the following changes. For example, there are 2 time period conditions
(In this we are taking productivity and sick days in terms of monetary):-

Details Amount

Total work $1,00,000

Efficiency- 18% Increase/ Decrease $18,000

Sick Days- 5% Increase/ Decrease $5,000

*Mathematical operations-
Time Work Done=Total Work – Efficiency – Sick days Loss= Total Work- Work Done
8 months ago Work done =1,00,000 - 18,000 - 5,000 =) $ 77,000 $1,00,000- $77,000=$33,000

Time Work Done=Total Work + Efficiency +Sick days Profit=Work Done - Total Work

Present 8 Work done= 1,00,000 + 18,000 + 5,000 =)$ $1,23,000 - $1,00,000 =$23,000
months 1,23,000

 The comparison of both periods showed the difference in terms of increase and
decline in the productivity and the sick days.

3) Profit Maximization-
● Profit-making and maximization can be done by the middle and lower-level
employees only, because of the tactical and operational nature of the work.
● If the expenditure has to incur for the employees and in return, the employees are
giving a great return on investment then there should be no dis-investment in respect
of fitness centre.
(In this we are taking productivity and sick days in terms of monetary):-

*Mathematical operations-
Work Done=Total Work + Net Profit=Gross Profit - Actual Work
Efficiency +Sick days

Work done = 1,00,000 + 18,000 + $1,23,000 - $1,00,000 = $23,000

5,000 = $ 1,23,000

 The space was built to be a fitness centre, not according to the office. It requires
expending considerable resources to remodel the space.
 The remodelling will cost as a loss due to the dis-investment of all the equipment
purchased.