Scotts Miracle-Gro is facing the dilemma of persuading employees to take better care of themselves without diminishing employee morale or getting hit with employee lawsuits. It’s on the leading edge of companies looking to monitor and change employee behavior.
Scotts’ CEO Jim Hagedorn (in photo) acknowledges that his company’s wellness program is controversial. In 2000, he, like many other CEOs, watched as his company’s health care costs skyrocketed. No help was in sight from either the government or from the health insurance industry, and the company’s employees were “bingeing on health care.” By February 2003, workers’ health care insurance premiums had doubled and employee morale had plummeted. 20 percent of the company’s net profits were going to health care. The company’s health-risk assessment showed that half of the 6,000 employees were overweight or morbidly obese and a quarter of them smoked.. He found a law firm that helped determine that in 21 states (including the company’s home base in Ohio) it wasn’t illegal to hire and fire people based on their smoking habits.
Today, Scotts’ employees are encouraged to take exhaustive health-risk assessments. Those who don’t, pay $40 a month more in premiums. All employees are assigned a health coach, who works closely with those who are moderate to high risk. Those who don’t comply pay an additional $67 a month on top of the $40. Many employees find the policy “intrusive.”
1. What do you think about Hagedorn’s approach to controlling employee health care costs? Do you agree with it? Why or why not?
2. Research company wellness programs. What types of things are companies doing to encourage employee wellness? Are there any things that you found that you might recommend that Hagedorn implement? Describe.
3. What benefits/drawbacks are there to this type of wellness program for
(a) Employees and
(b) The company?