Case Study

Novo Nordisk is Danish- based international group listed on the stock exchange in Copenhagen, Zurich, London, and New York. Novo Nordisk develops, manufactures, and markets pharmaceutical products and industrial enzymes, and has approximately 14,000 employees. As part of the companys staff and policy, several years ago Novo Nordisk adopted the following rehabilitation policy: Those of Novo Nordisks employees who, for reasons of ill health, are unable to manage their current job are, in so far as possible, to be guaranteed continued employment with Novo Nordisk.

 Guidelines have been laid down for the handling of rehabilitation cases establishing, for instance, that cases are to be handled as close to the employees department as possible; which budget centre is to take on the rehabilitation costs; and what is o be done if the case cannot be resolved within the business area in question.

 Novo Nordisks compensation and labor relations department is following and charting developments in the area. Among its conclusions for 1997 are the following: The number of cases has decreased by 20% compared to 1996 Two out of three cases concerned woman both in 1997 & 1996. Muscular and skeletal diseases still constitute the main reason for employment rehabilitation. There is no difference in the age or seniority of cases in 1997 compared to previous years. Fewer cases tend to be solved through voluntary early retirement. There is continued cooperation with external parties and the increased use of the grants.

 It is evident that most cases of rehabilitation arise in the basic production department, the finished goods area, and the laboratories. In 1997, there were 93 new rehabilitation cases, equivalent to approximately 1 % of the employees. Of these, approximately 60% were resolved at the beginning of 1998.The number of cases in both absolute and relative terms, is down compared to 1996.

 The outcome of cases resolved in 1997 is as follows: 33% continued in their own department of Novo Nordisk. 25% continued in a different department of Novo Nodisk. 33% took early voluntary retirement. 9% were resolved in other ways.

 With this initiative, Novo Nordisk has assumed active social responsibility for its employees. Although no calculations are available,it must be assumed that this policy has had a positive results for the employees in question, for the enterprise and for society. The individual employees who got the opportunity to continue his employement, for instance, in a less demanding job at Novo Nordisk, maintain their quality of life, since they keep their job and social network. In addition, the individual secures a better financial situation by maintaing the job rather than receiving social welfare.

 Without actively making effort, Novo Nordisk would have suffered reduced efficiency due to more sick leaves taken and reduced performance in the longer term until the employees had to leave the company. In addition, more employees would have left the company, resulting in lost production during the period between one employees resignation and another taking up the position, and the company would have suffered the direct costs relating to hiring and training of new employees.

 For society, Novo Nordisks policy will result in reduced costs, as the number of people on social security income will be lower. Due, to the higher standard of living and quality of life for most employees, society will also have reduced expenses relating to the resulting effects on family and relatives.

Critically analyze the rehabilitation policy adopted by Novo Nordisk for the retention of its employees? Can an HR audit provide a solution to the problems faced by the organization? Suggest corrective steps using the technique/ methodology of HR audits?