Human Resources Management

Facing Business Challenges at Johnson & Johnson

Does a healthier work force translate into healthier profits? This was one of the key issues facing Johnson & Johnson CEO Ralph S. Larsen and his predecessor, James E. Burke, as they considered the challenge of managing the company\'s human resources and keeping employees satisfied and productive. Johnson & Johnson operates throughout the world, employing more than 70,000 people to research, manufacture, and market health-care products in dozens of countries.

Employee health was a major concern for several reasons. Company studies showed that over 30 percent of Johnson & Johnson\'s employees were smokers, and one internal report revealed that smokers had a 45 percent greater rate of absenteeism than nonsmokers. Smokers also contributed disproportionately to the company\'s medical expenses (30 percent higher than nonsmokers), an ominous statistic at a time when health-care costs were rising at nearly twice the rate of inflation.

Another problem confronting J&J was how changing demographics were affecting employees. Employees increasingly fell into one of three groups: They were part of two-career couples with children; they were responsible for an aging parent; or they were single mothers or fathers. A survey of 10,000 J&J employees revealed that they were frustrated by their inability to meet all their obligations, both to their families and to their employer. `````