Human Resources Fed Ex: Case

Human Resources

Fed Ex: Case study

Summary of the case

Providing employees with adequate healthcare is one of the challenges of any responsible American corporation, given that healthcare is largely employer-provided. For many years, the FedEx Corporation offered health-care packages through managed care programs such as HMOs and PPOs. HMOs came under widespread criticism in the 1990s, given that their limited array of providers, complex referral procedures, and denial of care deemed 'unnecessary' or experimental to insurance holders often meant that individuals had to pay out-of-pocket for treatments they desired.

FedEx is a large, diverse, internationally-focused company. To meet the needs of its workforce, which encompasses the young and the old, individuals who work physically laborious jobs and those who work desk jobs, and people in various life stages and states of health, it recognized that there was no 'one size fits all' health plan. Beginning in 2004, FedEx expanded its benefits programs and allowed its employees, for an increased fee, to use health-care providers in or outside of the existing networks. The company expanded its health benefits plan to have four different levels of coverage, so employees who do not wish to spend as much money on healthcare (such as young, single people) could opt to do so while employees with young children, or who were older and needed more comprehensive care and drug treatments could opt for a more expensive, extended plans.

Proposed solution: Why it worked for FedEx

Because of the current state of healthcare in America, benefit packages are a critical element of drawing top talent to an organization. Employees with chronic health conditions or with spouses who do not have coverage might choose to become a FedEx employee, based upon the organization's provision of high-quality healthcare. FedEx followed the lead of many forward-thinking companies. For example, the Google corporation was a pioneering organization regarding health and wellness benefits -- not only did it offer a wide array of benefits packages, it also offered an on-site health clinic to reduce wait time for appointments, and offered fitness and wellness classes to help employees live healthy lifestyles (Benefits, 2010, Google).

FedEx also strove to be a pioneer in offering wellness care, rationalizing that well-cared for employees would be less apt to become ill and cost the company money in sick days. Many FedEx employees are not simply 'desk jockeys' and work lifting boxes and packages. Having an ergonomics and lower back pain management program reduces back injuries and helps high-quality employees work harder for longer periods of time. This increases worker retention and reduces orientation and attrition costs. For all employees with chronic health problems such as arthritis, asthma, and diabetes, FedEx offered a disease management program to give them guidance. The emphasis is on health improvement and wellness maintenance, rather than treating on treating disease alone. Wellness promotion strategies reduce employee demand for higher-cost health-care services, improve productivity and reduce sick days. Employees get a sense that the company cares about them, which fosters loyalty. An employee will feel more favorably towards a company that supports him or her during a time of sickness with physical therapy and adequate services, so the employee does not have to worry him or herself 'sick' over wondering where he or she will get care.

FedEx offers a telephone hotline staffed by nurses 24-7 so employees can call with health-related questions. As it is a service-based, delivery organization FedEx is in operation around the clock, particularly during the holidays, and this service takes into consideration the reality of employee's lives.

Reasons that solution will work

FedEx as a company demands punctuality and regular attendance: its business focuses upon providing consistent, high-quality service. Its employees must be punctual -- and present 'on the job.' Employees who are sick or who are stressed about getting sick and lacking adequate healthcare coverage are less productive employees. Employees without coverage are more likely to take sick days, or need to take time off to care for themselves or family members. Having a strong healthcare policy that suits employee needs is in FedEx's interest.