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Reference the following Cascio (2000) equation to solve problem: Cost of alcohol-related reduced productivity = # of workers in age/gender group x proportion of workers

Reference the following Cascio (2000) equation to solve problem:

Cost of alcohol-related reduced productivity = # of workers in age/gender group x proportion of workers in age/gender group with alcohol abuse problems x annual earnings x productivity decrease attributable to alcohol.

Fogerty, Inc, a marketer of substance-abuse programs, is concerned about the cost of alcohol abuse among employees.

A. Based on the following data, what is the productivity cost associated with employees who abuse alcohol? Among all cohorts, the productivity decrease attributable to alcohol abuse is 20 percent.

Gender-Age Cohort # of individuals % with alcohol problems Average annual earnings of cohort($)
Males, 25 and under 48 12 26,000
Males, 26-44 49 9 41,000
Males, 45 and older 38 6 49,000
Females, 25 and under 40 6 26,000
Females, 26-44 65 9 41,000
Females, 45 and over 35 6 49,000

B. What strategy might you use as the HR manager to help reduce the level of alcohol abuse?

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