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. `````