Operational Risk

Andrew D. Lyons

MGMT 311

Dr. James Davis

10/2/2021

Cost/Benefit Analysis

Introduction

Cost-benefit analysis refers to the systemic procedure or comparing as well as calculating the cost and benefits related to the project. It quantifies, finds as well as adds all the optimistic aspects, whereas, it quantifies, identifies as well as subtracts all project-related costs. Being the manager of "Alpha", need to increase the motivation of the employee because the employees in the organization are highly demotivated (Moffitt, Neumann, & Williamson, 2018). Therefore, it is essential to motivate the staff members because it leads to an increase in their productivity. However, some methods would be utilized for increasing the staff member motivation level and those are recognizing and rewarding employees, and training. The purpose of cost-benefit analysis is that it will compare the cost as well as benefits of all the methods and help us in choosing the most cost-effective method.

Discussion

There are several benefits of the training and costs that come along with training. In the Alpha organization, when it utilizes the training methods then it helps the employees in understanding the jobs requirements, objectives as well as the purpose of the business. When workers will feel that how the employee's job plays a vital role then it positively influences the motivation level (Jabborov, 2020). This lead to improvements in the profitability of Alpha Company. The total estimated profits would be three thousand and five hundred dollars. On the other hand, the cost that is related to training is procurement, designers as well as different media including, handouts, gift, prizes, props, computers, and audiovisuals. Moreover, there is another cost that incurred in the training sessions and those are trainer's salary, fee, facility rental, and costs. Furthermore, another cost that is related to the training is traveling, lodging, training as well as boarding material that will not utilize in other training sessions of the company (Zhang, He, Li, & Abdous, 2021). So, the total estimated cost of training would be two thousand dollars. The estimated benefit of using the training system is fifteen hundred.

The second method is recognizing and rewarding employees. The benefit of using employee recognition is that it increases the productivity of the employee because when a leader or manager recognizes what an employee is doing then it positively influences the productivity of the employees. Because employees are likely to work in that environment where they are recognized by its leaders/managers. Moreover, it also increases the satisfaction of employees, teamwork as well as loyalty, whereas, it decreases accidents, turnover, stress as well as absenteeism (Boyko, Basystiuk, & Shakhovska, 2018). On the other hand, costs linked with employee recognition are time that utilizes in implementing and designing the program. Nevertheless, the benefits linked with the recognition system are huge whereas the cost is low. The benefits that will be incurred through a rewarding system are high productivity, and engagement, which contributes to a pleasant working environment and enhance retention. However, the cost that will be incurred is bonuses and gifts cost and the estimated cost is nine thousand and five hundred dollars (Sparer & Dennerlein, 2017). Nevertheless, the cost that will be incurred through implementing the recognizing program would be two thousand dollars. But the total benefit would be fifteen thousand and nine hundred dollars through high production in the production and sales. Further, the estimated benefit through utilizing the recognition as well as rewarding system is four thousand, four hundred dollars.

However, the most effective method is rewarding and recognition because that its estimated benefit is four thousand, and four hundred dollars whereas the training methods benefit is fifteen hundred. That is less than the rewarding and recognition method (Slemrod, Rehman, & Waseem, 2020). So, Alpha Productions Company should more focus on the rewarding and recognition method because it will highly increase the employee's motivation, satisfaction, engagement, and productivity, which leads to high profitability and production.

Summary

To sum up, Alpha productions company employees are highly demotivated, so as a manager, I need those methods that positively influence the motivation level of the employees. The two methods that can be utilized are the training method and rewarding & recognizing (Chalmers, 2011). These two methods will increase employee engagement, productivity, and satisfaction level, which leads to an increase in the company's profitability. But the most effective method is recognition and rewarding because it has a high benefit and incurred less cost as compared to training. Therefore, the manager needs to focus on implementing the rewarding and recognition approach.

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