Category: Business Essay
Recommendation Report

This report comprises results and recommendations of an assessment carried out in several randomly chosen Better Health Enterprises facilities including all its three chains. It mainly covers the issues of new fee structures proposed by the organizations top management and new methods of employee working and payment. The report is a result of the analysis of the opinions of the companys employees that arose from the managements change proposition. It will try to compare those view to the merits and demerits of the proposed changes. The report utilizes the pros and cons approach of comparison of the two options of fee payment under discussion that is: the current service fee payment and the newly proposed per use charge fee that is accompanied with a new remuneration system for the workers, mainly instructors.

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Data collected from the assessment is represented in the report as comparisons and factual statements that give a deeper understanding of the gyms financial situation and how the proposed change will affect the workers. Analysis of this information with consideration of the needs of all individuals in different facilities enables one to come up with a couple of recommendations. These recommendations will be important in making the decision of whether the proposed changes should be applied with explanation and justification for each. They are also meant to give deeper understanding of the problems facing the gym workers and how they can be effectively dealt with.

Recommendation Report

Introduction

The assessment carried out in facilities of the different chains is meant to collect information from the employees that will be analyzed and used to come up with recommendations on what payment system would be more beneficial to the organization. It will also give deeper knowledge of how the company functions with better understanding of the different functions of the workers and challenges they face.

During the assessment process, it is assumed that the views of the random workers chosen for the exercise represent the ideas of all the employees from all the facilities. It is assumed that the proposed recommendations will be the main content considered when making the final decision about implementing the change.

The methods applied for the collection of information for the assessment analysis mostly involved interviews with the workers who gave their opinions concerning the proposal for change in fee and remuneration systems. This was supplemented with an e-mail questioning of 136 gym managers of the organization.

The assessment process was, however, not an easy one considering the lack of cooperation among some workers who were enraged by the proposed changes. There were also some employees who did not want to participate in the assessment citing lack of interest; this dont care attitude had a negative impact on the activity and was mostly observed in 25 Hour Fitness gyms.

To come up with the proposed recommendations, all the statistics collected from the assessment combined with the workers opinions were compared. All these data were analyzed so as to get a clear idea of what the best route for the organization to follow would be, as recommended in the report.

Background Information

A healthy people is a healthy nation; that is why it has become important in this century of sedentary lifestyle that more people engage in fitness exercising. Training sessions have been made professional and are available in fitness gyms such as Better Health Enterprises where participants are guided through the experience of becoming a healthier human being. There are various professionally trained individuals tasked with the responsibility of making sure that people attending such fitness sessions acquire high-quality workout. This is done with consideration of safety during the whole experience.

Better Health Enterprises has three national chains of fitness gyms with multiple facilities in several cities nationwide. It has a workforce comprising of gym managers, instructors and non-instructors.

The companys CEO proposed changes to the member payment fees and remuneration system, which was received with mixed feelings from the gym employees. There are two opposing parties to be affected by the proposed changes:

1. The gym instructors most of whom are against the idea of the CEO to eliminate service fees. They do not favor per-use fee for fitness classes and time with personal trainers,

2. The non-instructors most of whom support the proposed change. Managers also agree with the idea.

Currently, the collection of service fee method is used with employment of part-time and full-time workers in all the facilities of the different chains under Better Health Enterprises. The mentioned positions are in the management, membership, fitness instruction (including class instructors, personal trainers, and gym attendants), customer service and information technology.

According to the data collected, there are more instructors under the age of 25 years in the facilities under the Platinum Fitness chain while the Lifeline Fitness chain comprises mostly instructors over 25 years of age. 25 Hour Fitness also has younger instructors mostly from college and university towns.

If the change is implemented, full-time instructors who are currently paid a weekly salary will receive reduced hourly wage and will get paid extra for classes and personal training. Instructors, however, said that fee elimination will negatively affect the frequent gym class attending members since they will have to pay extra for the services. They also argued that their expertise had helped increase sales in the gym pro shop and snack bar which, as 67% of them said, should be rewarded. 45% of instructors also stated that if the service fee was replaced they will probably have to find other jobs to support themselves. This concern is further discussed in the report with justification for why it might be true.

Some 17% of instructors, however, thought that if the change was to be implemented, managers should not be responsible for assigning the class schedule according to the potential income of an individual, since that might lead to favoritism rather than the quality of work determining the number of classes or training assignments they get.

Managers supported the change with a combined 64% of them agreeing that the service fee should be eliminated and replaced with the previously mentioned method where users will be charged according to how frequently they get fitness classes and how much time they spend with trainers. The responses acquired from most managers generally stated that the new mode of fee payment will save a lot of money in the long run, since instructors will be paid according to the number of classes they have instead of a general hourly wage. They also hinted that the best instructors will benefit most, as they will be the top choice thus in more demand.

The analysis of the data collected from the assessment also indicated a low morale level in 25 Hour chain personnel, which mostly comprise of college and university students. This was indicated by their low response rate to the survey.

All the data collected from the assessment establish a dilemma of whether the organization should implement the proposed changes or stick to the initial method of 10% additional service payment. It prompted the need to compare the merits and demerits of both choices so as to weigh out which option will be more beneficial to the company. Both alternatives proved to be viable solutions, but only one of them was required. The comparison followed the pros and cons approach, where both options were gauged and analyzed to come up with the final decision of which choice is to be recommended as the best for the organization. Managers, instructors and non-instructors opinions were also considered during the assessment and data analysis processes. The effect of the change on the gym members was also taken into account when assessing and analyzing the collected data.

Available Options

Service Fee Elimination

Merits. According to managers responses, eliminating the service fee will save a lot of money in the long run, since instructors will be paid based on the number of classes they teach instead of a weekly wage. This is true since it is possible that some instructors might be lazy and not work at the same rate as their colleagues but still get paid the same amount as them. Apart from killing the hard-working individuals morale, the use of service fee method will make it possible for lazy employees to get money they do not deserve. Work output should match the wages paid.

According to Eisenberg (2011), it is also beneficial for the organization to have a pool of part-time instructors who can be acquired when needed rather than have full-timers who must also be provided with benefits. This will ensure that wages paid to instructors are optimized in the companys favor, since only services needed will be paid for instead of paying workers even when there is not much to do. A proper system of time scheduling is required to balance the need for full-time and part-time instructors based on the requirements of different facilities of different chains of the organization.

Implementing the change will force lazy workers to do better since the best instructors will be more demanded, and thus will get more classes which translate to more wages. This method will make sure that only those who work hard are rewarded more compared to the service fee method where the best and most hard-working individuals were neither fully recognized nor well-compensated for their work.

Demerits. The change will make it necessary to schedule classes based on demand. This could take more managerial time, especially at first, since there is still shuffling of duties and responsibilities from individual to individual. Managers will be faced with the task of tracking the best instructors based on their work output and reviews by customers to assign them classes as per member preferences. It will take some time before things settle and the best instructors are identified and assigned which means more work for the managers in the meantime.

It is likely that favoritism towards specific instructors will arise among the managers, whom they may deem best. This will be a major morale killer for other instructors who may not be chosen for assignment, since they are not the managers favorites. The change will give more power to the managers which can be misused as has been described. This kind of behavior should be highly discouraged at the workplace.

There is a high risk that members who attend the gym frequently will start attending fewer classes and personal trainings, since once the service fee is eliminated and the new system implemented, they will have to pay more for these services. This will hurt them and may even push a significant number of clients to the companys competitors who may be offering cheaper services. This is especially true for the 25 Hour fitness chain that, according to the assessment, is visited by mostly young people from colleges and university towns. This is because they as students probably have no jobs yet and thus have a limited amount of money to spend on recreational activities such as fitness. Increasing the price by implementing the change will force most of them to reduce or completely stop attending classes and personal training sessions which will not be good for business.

Members will have to pay upfront before attending classes or training which may be inconvenient to many people, especially those who prefer to go to the gym not carrying anything since they are focused on the exercising and want to be free while doing so. Such individuals may feel like the gym is more focused on getting their money rather than guiding them in the training and exercising process.

If the new mode of payment is implemented, there is a good chance that due to the tight employment market, some locations might lose good instructors. This is especially true for the Lifeline Fitness chain, where most instructors are over 25 years old with an assumption that they have more years of experience in the business. Moreover, it is assumed that they probably have families depending on them and hence the need of a stable paid job. The change will bring instability to their earnings thus forcing them to find other better-paying positions. This is bad for the business since it is assumed that instructors from this chain are the best among all three groups which is evident by the larger number of instructors in Lifeline Fitness (115) compared to those in 25 Hour (73) and Platinum Fitness (93). However, it can be assumed that the higher number of instructors in Lifeline Fitness is based on the fact that there are more members in cities where the chains facilities are located.

The change may also force the instructors to overwork in an attempt to cover more classes so as to get higher wages. This will negatively affect the quality of services provided to members by the instructors who will be tired most of the time thus not focused on how well they perform their jobs. The effects of this are lower customer satisfaction which might lead to loss of clientele and reduced new memberships after information about the low quality of service offered by the gyms spreads.

Retaining Service Fee

Merits. The service fee method is cheaper compared to the one proposed, thus it will keep members coming back and not transferring to other competitor gyms. It will enable the organization to draw new customers as well as keep the loyal ones satisfied. This has a positive impact on the longevity of the company and its business.

This method also brings in a steady flow of revenue for the business, since it does not depend on how many times members attend classes or fitness trainings. It requires that the clients who wish to attend and get the services provided pay an annual membership fee and an extra 10% service fee. This enables the business to collect attendance fees earlier and thus have a stable financial plan that is not affected by how often members go to gym.

This mode of fee payment will be a major boost for the members attendance since it forces even individuals fond of giving up quickly to attend more classes so as to get their moneys value from the services offered by the gyms. More clients in attendance translates to a good reputation for Better Health Enterprises, since they will have good attendance numbers which sends a message of high-quality services being offered by the organization.

The steady revenue acquired will be beneficial to the instructors who will also get a steady wage on their jobs. They will be getting weekly payment by the hour with consideration to how much service fee is collected. This method will boost the instructors morale, since they will be assured of good salary at the end of the week. This will ensure that the instructors remain loyal to the organization and provide services at full potential.

This mode of payment keeps the management honest, since they will not have the power to favor their preferred instructors. This is contrary to the case of eliminating the fee, where favoritism may become rampant, since the managers will be responsible for scheduling classes based on potential income of an instructor. Maintaining the service fee will enable all instructors to get equal chances to teach and train members which counts as a major booster to their morale to work.

Since classes and fitness training sessions do not require scheduling by the managers based on demand as in the case of the proposed method, there is reduced managerial workload, which will give the managers more time to focus on the quality of services rendered rather than how the services are scheduled. This will enable the gyms to provide better quality to their members which, in turn, ensures customer satisfaction. Happy clients are known to be the best for business.

This system allows flexibility of how the instructors work thus giving them enough time to fully perform in classes and personal sessions without the hurry of trying to cover more in less time so as to get higher pay. As proposed by Corporate Gym Membership(2011), this is beneficial to the members who will have more focused instructors ready to give their best quality services thus promoting customer satisfaction. This will translate to a better reputation for the gyms that may get more memberships after information about the high quality of services provided spreads. It will also be important in keeping current members loyal and thus give the organization competitive advantage over its rivals. This promotes longevity and survival of the business with additional financial gain and sustainability.

Demerits. There is some amount of money lost by the gyms when paying benefits to full-time instructors under this payment mode apart from the wages they receive on a weekly basis. This is not favorable to the finances of the business, since it takes away a part of the revenue acquired.

Under this mode of payment, lazy instructors will get same pay as the hard-working ones, who will not be fully rewarded for their services, as it would be if the fee were eliminated and instructors were paid as per the amount of effort they put in and how good they are at their jobs.

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Figure 1. Workers servise fee opinion poll.

Recommendations

After careful consideration and analysis of the data collected from the assessment of random facilities and workers under the three chains of Better Health Enterprises, one can come up with some observations that lead to drawing informed conclusions about the business. These observations enable one to develop recommendations that will help in the decision-making process regarding the system that will be most beneficial to the business.

Considering the merits and demerits of both choices, it will be more beneficial to the organization to kept the original service fee, since it obviously has more merits compared to the method proposed by the CEO. From the statistics acquired from the assessment, it is clear that implementing the change proposed by the CEO will not be the best course of action for the business, since it does not consider the instructors and members and how they are affected by the change.

Apart from the many benefits of the service fee method in comparison to a few minor demerits, it is obviously the preferred system since it is supported by the higher number of workers, many of whom are instructors. It would be unwise to ignore the instructors concerns about the proposed change, since they bring in the most revenue for the gyms as argued by Pride, Hughes, & Kapoor (2015).

The CEO should consider all the opinions paying more attention to those of the instructors, who will be most affected if the change is implemented.

 

From the analysis of the assessment results, it is evident that there exists a division between the employees of Better Health Enterprises, specifically between instructors and non-instructors who are on opposing sides regarding the idea to implement a new method of fee collection and wage payment proposed by the enterprises CEO. The proposed change will see both parties affected in different ways. On the one hand, the managers mostly favor the new method, since, according to them, it will be beneficial to the organization. On the other hand, the instructors disagree with the managers arguing that the new system would not be beneficial to them and the gym members; they are skeptical of how the new change will affect their jobs.

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