Danielle RegoniIndividual Project Presentation

November 5, 2016Dr. Deloach

CVS Health Corporation and Current Concerns

CVS Company Background▪ Established in 1963, but did not begin offering pharmaceuticals until 1967 CVS Health, 2016

▪ By 1990’s, CVS contained over 100 stores and began acquiring smaller pharmacies and insurance companies

▪ In 2007, CVS merged with Caremark Rx to become CVS Caremark (now CVS Health), the nation’s largest pharmacy/benefits provider MarketLine, 2015

▪ As of 2015, CVS:

– Contained over 7800 locations across the US, and including Puerto Rico & Brazil

– Employed over 218,000 workers

– Serves approximately 65 million customers and fills 1.7 billion prescriptions annually CVS Health, 2016

Major competitors include: Walgreens, Wal-Mart, Rite-Aid, & individual providers

Current Company Growth▪ CVS has experienced tremendous growth in the past several years

▪ Factors leading to company growth include:

– Greater accessibility (more store & MinuteClinic locations) “CVS 2014 Annual Report,” 2014

– Greater low-cost, generic pharmaceutical drugs available to consumers Trefis Team, 2015

– Greater expansion of specialty drugs (such as drugs for Hepatitis C & cancer treatments) Trefis Team,

2015

– Continuing offers of a myriad of health, beauty, seasonal, hygiene, & food products “CVS Health Corporation,”

2015

– More Americans have health insurance than ever before Trefis Team, 2015

CVS Health, 2015 CVS Health, 2015 “CVS 2014 Annual Report,” 2014

CVS Health, 2016

Company Structure

▪ 3 distinct lines of business:

– Corporate HQ in Rhode Island

– Pharmacy Services

– Retail Departments

Store General Management

Lead Pharmacist

Salaried Pharmacists

Hourly Pharmacy Technicians

Retail Department Manager

Hourly Retail Employees

General Structure Within Store Locations

MarketLine, 2015

Current Company Concerns▪ A study conducted by the 24/7 Wall St. group Frohlich, Sauter, & Stebbins (2015) named CVS as one of the “12 worst companies to work for”

– The data for their study was retrieved from over 400,000 company reviews on Glassdoor.com

▪ Consistent employee concerns across states & store locations include:

Work Within a High-Stress EnvironmentPerceptions of Being “Undervalued” Within the

Company

12-13 hour work shifts without appropriate breaks Concerns have not been heard/are disregarded

Scheduling inflexibility No employee/store recognition programs

Inadequate numbers of employees to handle largevolumes of customers & other daily tasks

Management/corporate executives “do not care about employees”

Inadequate training &/or training requirements completed at home, “off the clock”

Unrealistic expectations set forth by management

High turnover rates

Table compiled from Frohlich, Sauter, & Stebbins, 2015; A. Bernardo & B. Makowski, personal communication, September 24, 2016

Current HR Practices: Recruitment & Selection▪ Current selection process already includes:

– Online applications (for general background information)

– Online applications also include personality/ethics tests & work-sample assessments

– Telephone interview for basic information (such as work availability)

– Interview with at least 2 managers, includes situational and conflict-resolution questions

– Thorough reference checks

– Drug screenings

▪ CVS partners with various colleges/technical schools to recruit students in Pharmacy & Pharmacy Technician programs

▪ No recommendations for change

A. Bernardo & B. Makowski, personal communication, September 24, 2016

▪ Wellness programs with opportunity to earn bonuses for reaching health targets

▪ Bonus opportunities for all employees based upon goal completion

▪ Free yearly health screenings & use of MinuteClinics

▪ Tuition reimbursement & scholarship opportunities

▪ Store discount (all purchases)

▪ Resources for child/elder/dependent care

▪ Sessions for stress reduction (yoga, massage therapy, techniques for handling stressful environment, discount gym memberships

Additional Benefits

▪ Competitive salary

▪ Opportunities for advancement & pay increases

▪ Flexible scheduling (including compressed work weeks)

▪ Full health, dental, & vision benefits

▪ 401(K) retirement plans (with company contributions)

▪ Generous paid vacation/sick days per year

▪ Paid maternity & paternity leave & for adoptive parents

▪ Employee stock options

Core Benefits

Current HR Practices: Compensation & Benefits

All benefits should be extended to part-time employees

Artz, 2010; CVS Health, 2016; Noe, Hollenbeck, Gerhart, & Wright, 2015

Current HR Practices: Performance Management▪ Annual performance review, slight pay increase for achieving “Outstanding Performance,” action plans if expectations are not met

▪ More open communication to provide more informal feedback/assessments throughout the year

▪ During 1st year of employment, more than one formal evaluation is necessary

▪ Involve employees in goal-setting (individual, department-level, store-level)

▪ Employee recognition programs (i.e., Employee of the Month)

▪ Rewards when goals are achieved (other than pay increase)

– Additional paid day off

– Bonuses

– Other “out-of-the-box” gifts

Blizzard, 2014; West & Blackman, 2016

Current HR Practices: Training & Development▪ CVS currently practices “rapid on-boarding” in which employees are expected to become highly productive within a very short period of time Tabvuma, Georgellis, & Lange, 2015

▪ However, many employees have complained that the current training process does NOT adequately prepare them for work expectations

▪ Training process should include:

– Company orientation (including explanation of benefits)

– More extensive job-task & customer service training

– Utilize a variety of training methods, including classroom instruction, on-the-job training/mentorships, & online modules

– Periodic reviews of company policies & procedures to reinforce training

▪ Employee development should include increased opportunities for career & educational advancement, especially for Pharmacy Technicians

HR Concerns: Employee Retention

▪ Based upon employee concerns of: long work shifts with inadequate breaks, little scheduling flexibility, inability to handle high volume of customers and tasks set forth by management, inadequate training or completing online training at home “off the clock”

▪ If no actions are taken by CVS leadership, the company will continue to experience high turnover as well as exposing employees to other detrimental effects of stress

▪ Effects of stress in the workplace include: lowered task performance, high absenteeism, burnout, job dissatisfaction, and possibly violence in the workplace

▪ Also may lead to greater medical and insurance expenditures for the company

1st Major Area of Concern: Work Within a High-Stress Environment

Greenberg, 2011; Mani, Sritharan, & Gayatri, 2014

HR Concerns: Employee Retention

Recommended Action Effect for Employees/Company

Extensive expansion in number of store workers

Employees should feel more equipped to handle high volume of customers; more adequate coverage for employees requesting time off and break coverage; longer work shifts can be segmented into shorter shifts; specific “other” tasks set forth by management can be accomplished as well as handle customers in a timely and thorough manner

Changes in training procedures

All training must be conducted during regular work hours or employees should be compensated for “off-the-clock” training completion; more comprehensive training to assist customers with over-the-counter product and general health questions

Enhance wellness and stress relief programs

Assist employees in achieving a healthier lifestyle and reducing stress; offer exercise or meditation classes, workshops with wellness consultants, or Employee Assistance Programs (EAPs); teach employees techniques for handling stress

1st Major Area of Concern: Work Within a High-Stress Environment

HR Concerns: Employee Retention

▪ If employees do not feel valued as part of the company, end results include: high absenteeism, high turnover, lack of motivation, decreased task performance, and overall job dissatisfaction Greenberg, 2011

▪ CVS leadership should mandate that all store locations implement employee recognition, reward, and incentive programs

– Can be accomplished in many successful ways:

▪ “Employee of the Month” programs

▪ Rewards incentives for entire stores or on an individual basis for excellence in customer service

▪ Goal-setting programs set forth by management to reward employees/departments/store locations

2nd Major Area of Concern: Perceived Lack of Value Within the Company

HR Concerns: Employee Retention

▪ Employees have reported a general sense of being disregarded or overlooked by management with regard to expressed concerns and feedback

▪ If the “EthicsPoint” firm is not able to relay information regarding employee concerns to CVS leadership to enact change, then this method of communication is ineffective

▪ Other proactive measures can be taken by company leadership, including:

– sensitivity and effective leadership training should be made available to management staff

– all CVS locations should institute an open-door policy and respond accordingly to employee concerns

– regular feedback should be provided to all employees

– Positive work relationships should be fostered between management and employees

2nd Major Area of Concern: Perceived Lack of Value Within the Company

Summary▪ Despite tremendous growth and admirable wellness visions for employees and customers, CVS has experienced some highly publicized, repeated concerns

– Employee concerns are relatively consistent across states and store locations

▪ Sadly, many of these concerns appear rather straightforward, yet without appropriate company responses and actions

▪ If concerns are addressed early enough, the company can possibly avoid any long-lasting or permanent harm to the company

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Artz, B. (2010). Fringe benefits and job satisfaction. International Journal of Manpower, 31(6), 626-644.

Blizzard, D. (2014). Effective performance management. Journal of Accountancy, 218(1), 18.

CVS Health (2016). Benefits. Retrieved from https://jobs.cvshealth.com/employee-benefits.

CVS Health. (2016). Our story. Retrieved from https://www.cvshealth.com/about/our-story.

CVS Health (2016). 2015 annual report. [PDF Document]. Retrieved from http://investors.cvshealth.com/~/media/Files/C/CVS-IR/reports/cvs-ar-2015.pdf.

Frohlich, T., Sauter, M., & Stebbins, S. (2015). The worst companies to work for. 24/7 Wall St. Retrieved from http://247wallst.com/special-report/2015/06/29/the-worst-companies-to-work-for/.

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Loeb, W. (2015). Why CVS’ new health initiatives are a winning strategy. Forbes Magazine. Retrieved from http://www.forbes.com/sites/walterloeb/2015/12/18/why-cvs-health-new-initiatives-are-a-winning-strategy/#734bbf5030f0.

Mani, K., Sritharan, R., & Gayatri, R. (2014). Effect of job stress on the employees’ performance. Annamalai International Journal of Business Studies and Research, 6(1), 47-55.

MarketLine. (2015). Company profile: The CVS Health Corporation. Retrieved from Business Source Complete database.

Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2015). Human resources management: Gaining a competitive advantage (9th ed.). McGraw-Hill-Irwin.

PayScale. (2016). Average hourly rate for CVS/pharmacy employees. Retrieved from http://www.payscale.com/reserach/US/Employer=CVS_/_Pharmacy/Hourly_Rate.

Roach, J. C. (2016). Would standardized job testing assist employers in hiring the right employee? Monthly Labor Review, 1.

Tabvuma, V., Georgellis, Y., & Lange, T. (2015). Orientation training and job satisfaction. Human Resource Management, 54(2), 303-321. doi: 10.1002/hrm.21650.

Trefis Team. (2015). CVS Health strongly placed to tap growth opportunities. Forbes Magazine. Retrieved from http://www.forbes.com/sites/greatspeculations/2015/02/05/cvs-health-strongly-placed-to-tap-growth-opportunities/#474d861876917a5e9ecf7691.

West, D. & Blackman, D. (2015). Performance management in the public sector. Australian Journal of Public Administration, 74(1), 73-81. doi: 10.1111/1476-8500.12130.