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701 E. Apache Blvd., Phoenix, AZ 85821 Phone: (480) 595-4563 www.bandc.com
TO: Vice President of Operations
FROM: Kobe Johnson, Store Manager of B&C Electronics in Phoenix KJ
DATE: March 24, 2013
SUBJECT: Proposal for Investing in Pedometers for Employees
Since the opening of our store in Phoenix in 2006, B&C Electronics have become one of the most popular stores in Arizona. Nevertheless, because of the increasing in the number of employees’ days of absence and the expanding burden of health care costs, our financial performances have been worsening in the past two years. To increase in the efficiency of our business and create opportunities for future growth, B&C Electronics has to promote the healthy lifestyle of our employees through investing in pedometers for them. The proposed investment would increase productivity and reduce the non-operating expenses, which could significantly help improve our business performances.
As the former Financial Manager of Super Electronics, I had similar experience of introducing a wellness program for its employees. Due to the increasing productivity and sales, the business performances of Super Electronics had been improved greatly. I believe that I can do the same for B&C Electronics.
The pedometers would be delivered on Monday, April 4, 2013 if we place the order by next Thursday. It would cost $900 for 25 pedometers. While investing in a relatively low cost, not only our employees’ health will be improved, but our business performances will also grow drastically.
Impacts of Employees’ Health on B&C Electronics Performance
B&C Electronics has been growing steadily over the past five years as we have been taking advantages of the high market demand and the increasing sales prices. However, our financial performances have been relatively weak compared with our competitors’. In order to achieve economies of scale which aims to increase sales and reduce overhead costs, we need to promote the healthy lifestyle of our employees. Our employees’ skills and innovative spirits help us to become a high performance business. Promoting employees’ health is the key to enhancing our financial performances.
In order to achieve our goals, our Finance team analyzed B&C Electronics’ financial statements against the financial performances of our competitors over the past five years, and discovered three factors that cause our company to suffer economic disadvantages: 1. Productivity: According to the research conducted by our Finance team, our revenue is 20% lower than our competitors’ due to the reduction of sales. In addition, the working hours of our employees were 30% lower than the market average. The result of a survey conducted by the Journal of Occupational and Environmental Medicine shows that “Employee health problems lead to approximately 41 minutes of absence and 2 hours and 29 minutes of lost productivity each week” (“The Association,” 2006). It suggests that the way to improving the productivity of our employees is to increase the number of days of attendance,