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Cost-effectiveness of an employer-sponsored recreational program: A case study

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  • Morey, Richard C

Abstract

There is currently a marked trend by corporations to provide an increasingly high percentage of an employee's total compensation in the form of tax-free benefits. The cost-effectiveness of such benefits is often based on the notion that they improve morale and retention. However, it is becoming increasingly more important to be able to quantitatively determine if the continuance of such benefits is warranted on an economic basis. In this paper the approach, findings, sensitivity analysis and caveats associated with a large scale economic analysis are presented. The case study examines continuance of access to Navy supported recreational activities, involving annual expenditures of over S100 million. A questionnaire component, involving about 11,000 responses, provided the inputs into a contingency model. Rankings for 14 recreational groupings of activities were derived as well as some bounds on the overall cost-effectiveness of the entire program. The results showed that continuance of the employer-sponsored recreation activities appeared to be economically warranted.

Suggested Citation

  • Morey, Richard C, 1983. "Cost-effectiveness of an employer-sponsored recreational program: A case study," Omega, Elsevier, vol. 11(1), pages 67-74.
    • Handle: RePEc:eee:jomega:v:11:y:1983:i:1:p:67-74
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