Hi,
If people are taking their "earned" leaves within the defined limits, then there should be no problem with that. Are you planning to reduce in the "1.5 leaves a month" rule itself?
If productivity is the only issue, then there are other ways to resolve it. You (supervisors) can give them target based work. E.g.: By the month end, they have to deliver the work worth 160 Hours. If they can manage the work around it by working late/weekend sometime, then it should be acceptable. You can also use the leave retention / encashment policy, so people can avoid taking leaves just because otherwise they would get lapse.
You should definately use some discretion for granting leaves, even request people to change their leave dates, when two people's leave is co-inciding & work is affected. But, if you do a little research, you will surely find more suitable ways of increasing productivity without restricting the earned benefits of employees.
Growing phase of company can only be sustained by dedication of employees. But if you make the rules very strict, so that restricts the basic rights of employees, then you cannot expect dedication from them.
Best Regards,
Amod Bobade.