Hi Praveena,
Leave encashment in one's service is availed by them due to many reasons. Since you wish to have our views from the employers' point of view, they are like this-
1) Leave Encashment means, an employee surrenders certain days of leave and exchange these days for cash with his/her employer. Such encashment would result in reduction of same No.of leave days in the leave a/c of respective employees. Which means such employees are available in their work places despite having encashed leave. The 'available mandays' will increase, in turn, production & productivity goes up.
2) Encashment means payout from the kitty of the organisation thus the Cost of employees in an organisation'bound to go up.'
3) If employees not availing leave or refusal of leave applied for (instead allowed to encash), for whatsoever reasons, if would affect the mental state of such employee and thus discontentment in them increases causing psychological problems which might affect overall productivity/ active participation in activities of the firm.
4) Work-life-balance in work places/social life of employees will have adverse effect. Disadvantages to employer when leave availed:
1.In some places, if any employee avail leave, it's the primary duty/responsibility of HoD/HR as the case may be to find suitable person in 'leave vacancy' in order to ensure production/services to be rendered doesn't suffer due to the absence of regular employee(s).
2. In some instances, if an employee who might man key operations in an establishment, is absent on leave, it's sure the production/output would suffer partially or totally and there are chances of the plant & other activities comes to standstill. Therefore it's obvious that employer will have to face problems if personnel avail leave particularly those in key positions and if there are no substitutes.