I. Problem Statement
What course of action should African Gold Inc. take to balance the interests of its stakeholders, in light of the criticisms against it regarding its human resource policies on HIV/AIDS infected workers, without compromising its profit?
1. To assess the existing health benefit package of African Gold Inc. employees, and consequently, identify whether there is a need to revise the package in due consideration of the HIV/AIDS infected personnel of the company; 2. To assess the underlying costs and benefits in the current health benefit package offering of African Gold Inc in relation to HIV/AIDS infected personnel of the company; 3. To address rising company costs related to absenteeism, productivity losses, recruitment, and training; 4. To validate the company’s limitations in terms of compensation benefits among its miners; 5. To identify courses of action that best balances the interests of employees and the company; and 6. To establish the stand of the company regarding its role in protecting the legal rights of its employees and diminishing the impact of HIV and AIDS within the workplace.
African Gold, Inc. is a mining company in South Africa, where 49 % of its shares had been recently acquired by US-based company, Newton Mining Inc. As part of the acquisition, Newton has designated some of its staff to work in the management and technical division of the South African office to ensure increase in gold production and global acquisition of gold properties. One of the major challenges that the new management team is faced with is the increasing number of employees who are dying of HIV/AIDS-related diseases, cause of which is identified not to be related to mining.
Harry Goldstone, head of the Human Resources department, and other colleagues at African Gold, found the company faced with two-pronged challenges: on the one hand, the company’s expenses related to medical aid and disability programs had been increasing because of HIV/AIDS related diseases. Implicitly causing these costs to balloon are high absenteeism, productivity losses, and expenses on recruitment and training. On the other hand, the gold mining industry has been experiencing decreasing profits due to the strength of the rand (i.e. South African currency).
In this light, Goldstone and his team are working to review and revise human resource policies, where financing medical aid of all HIV/AIDS-related cases will be stopped, while education program to increase awareness on HIV/AIDS will be continued. African Gold, Inc. extensively employs inexpensive migrant workers from neighbouring countries like Lesotho, Botswana, Malawi, Zimbabwe, Swaziland and Mozambique. Some health experts attribute the rise of HIV/AIDS to the fact that many of these workers live in the mine site and away from their respective families.
The pulling out of the medical related finance of HIV/AIDS infected workers resulted in negative media coverage, pointing out that most families cannot afford to pay medication and funerals since the average mine worker earns about 2,000 rands per month (USD 250 approximately). Moreover, The National Union of Mine Workers threatened further action if the company would not reinstate the benefits.
IV. Areas of Consideration
* Economic and Social Cost-Benefit Analysis – deciding whether to pursue a reinstatement in the policies should give due consideration of potential costs and benefits, i.e. profits, company image/credibility, labor productivity, cost efficiency * Legal liability – deciding whether to pursue a reinstatement in the policies or not, particularly on HIV/AIDS cases, must make sure that all legal bases are fully covered to avoid more costs and credibility as a company.
* Employee Morale – the new HR policy on Health benefits particularly on HIV/AIDS cases must not only benefit the company, but must also look into their workers and their family. * Environmental & Social Obligation – aside from making profits, the HR policy on Health benefits particularly on HIV/AIDS cases must ensure that their obligations in the environment and society is also their top priorities * Media – the new HR policy on Health benefits particularly on HIV/AIDS cases must stop or reverse any negative media coverage they have gotten