Johnson & Johnson's Health and Wellness Program

Introduction Contd...

According to analysts, these prestigious awards were given to J&J in recognition for its continuous efforts to create a healthy work environment. The company not only offered employee assistance programs and benefits packages but also introduced several family-friendly policies and offered excellent professional development opportunities to its employees. All this was done under the Health and Wellness Program (HWP) that the company introduced in 1995. The program benefited both J&J and its employees. The company saved $8.5 million per annum in the form of reduced employee medical claims and administrative savings.

Moreover, within two years of implementing HWP, J&J witnessed a decline of 15% in employee absenteeism rate. Peter Soderberg, President, J&J explained the rationale behind implementing the program⁷, "Our research time and time again confirms the benefits of healthier, fitter employees.

They have fewer and lower long-term medical claims, they are absent less, their disability costs are lower and their perceived personal productivity and job/life satisfaction levels are higher."

Ron Z. Goetzel (Goetzel), Vice-President, Consulting and Applied Research, MEDSTAT Group⁸ added, "There's a growing body of data indicating that corporate wellness programs lower medical costs for employees."⁹

Background Note

The US industry spent approximately $200 bn per annum on employee health insurance claims, on-site accidents, burn-out and absenteeism, lower productivity and decreased employee morale due to health problems. Moreover, according to the estimates of Mercer¹⁰, the US industry expenditure on the medical and disability bills of employees was rising significantly. In 1998, companies had paid an estimated $4000 per annum per employee as healthcare costs, and that rose to $5,162 in 2001 and around $5,700 in 2002.

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7] In an article titled "Fitness in the Workplace," posted on the website www.2-fit.com.
8] A health care research firm based in Ann Arbor, Michigan, US. It specializes in providing knowledge-based systems, decision support systems, market intelligence, consulting and research information for enhancing the quality and value of healthcare.
9] In an article titled "Wellness programs help companies save on health costs" by Julie A. Jacob, dated March 11, 2002 in AM News.
10] Mercer is a human resources consulting company that provides consulting services in areas such as compensation, employee benefits, communication, HR, human capital strategy, investment and program administration. Its operations are spread across 40 countries and 140 cities, with over 13,000 employees.

Case Details

Case Code : HROB025
Themes: HR Practices and Policies
Case Length : 14 Pages
Period : 1998-2001
Organization : Johnson and Johnson's
Pub Date : 2001
Teaching Note : Not Available
Countries : USA
Industry : Consumer Goods

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