Management of healthcare organizations peter c olden pdf

HUMAN RESOURCES HUMAN RESOURCES IN HEALTHCARE Managing for Success

THIRD EDITION

Bruce J. Fried and Myron D. Fottler, Editors

Fried Fottler

Human Resources in Healthcare: Managing for Success, Third Edition, presents the techniques and practices behind effectively managing people—the healthcare industry’s most important asset. It provides the concepts and practical tools necessary for meeting the unique challenge of managing healthcare employees.

New in this edition: n An expanded chapter on health and safety in the workplace, highlighting

disaster preparedness and management n A chapter on globalization and the mobile workforce n A chapter focusing on employee benefits and benefit design n An expanded chapter on training and career development n A new section with cases that emphasize the organization-wide impact of

human resources decisions

This book covers fundamental topics as well as timely issues.

About the Editors: Bruce J. Fried, PhD, is an associate professor and director of the Residential Master’s Program in the Department of Health Policy and Administration in the School of Public Health at the University of North Carolina at Chapel Hill. He teaches and has written in the areas of global health, human resources management, unionization, and strategic planning and marketing. Dr. Fried is also coeditor of and contributor to World Health Systems: Challenges and Perspectives (Health Administration Press, 2002).

Myron D. Fottler, PhD, is a professor and executive director of Health Services Administration Programs at the University of Central Florida, where he teaches courses in healthcare human resources management, service management and marketing, and dissertation research. He has written and published 16 books and more than 130 journal articles.

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M anaging for Success

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One North Franklin Street, Suite 1700 Chicago, Illinois 60608-3529 Phone: (301) 362-6905, Fax: (301) 206-9789 www.ache.org/hap.cfm

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HUMAN RESOURCES IN HEALTHCARE Managing for Success

THIRD EDITION

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AUPHA HAP

Editorial Board

Sandra Potthoff, PhD, Chair University of Minnesota

Simone Cummings, PhD Washington University

Sherril B. Gelmon, DrPH, FACHE Portland State University

Thomas E. Getzen, PhD Temple University

Barry Greene, PhD University of Iowa

Richard S. Kurz, PhD St. Louis University

Sarah B. Laditka, PhD University of South Carolina

Tim McBride, PhD St. Louis University

Stephen S. Mick, PhD Virginia Commonwealth University

Michael A. Morrisey, PhD University of Alabama–Birmingham

Dawn Oetjen, PhD University of Central Florida

Peter C. Olden, PhD University of Scranton

Lydia M. Reed AUPHA

Sharon B. Schweikhart, PhD The Ohio State University

Nancy H. Shanks, PhD Metropolitan State College of Denver

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HUMAN RESOURCES IN HEALTHCARE Managing for Success

THIRD EDITION

Bruce J. Fried and Myron D. Fottler, Editors

Health Administration Press, Chicago Association of University Programs in Health Administration, Arlington, Virginia

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Your board, staff, or clients may also benefit from this book’s insight. For more informa- tion on quantity discounts, contact the Health Administration Press Marketing Manager at (312) 424-9470.

This publication is intended to provide accurate and authoritative information in regard to the subject matter covered. It is sold, or otherwise provided, with the understanding that the publisher is not engaged in rendering professional services. If professional advice or other expert assistance is required, the services of a competent professional should be sought.

The statements and opinions contained in this book are strictly those of the author(s) and do not represent the official positions of the American College of Healthcare Executives, of the Foundation of the American College of Healthcare Executives, or of the Association of University Programs in Health Administration.

Copyright © 2008 by the Foundation of the American College of Healthcare Executives. Printed in the United States of America. All rights reserved. This book or parts thereof may not be reproduced in any form without written permission of the publisher.

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Library of Congress Cataloging-in-Publication Data

Human resources in healthcare: managing for success / Bruce J. Fried and Myron D. Fottler, editors.—3rd ed.

p. cm. Includes bibliographical references and index. ISBN 978-1-56793-299-7 (alk. paper) 1. Health facilities—Personnel management. I. Fried, Bruce, 1952- II. Fottler, Myron D. [DNLM: 1. Personnel Management—methods. WX 159 H91807 2008] RA971.35.H864 2008 362.1068’3—dc22

2008013657

The paper used in this publication meets the minimum requirements of American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials, ANSI Z39.48-1984. ™

Project manager: Jane Calayag; Acquisitions editor: Audrey Kaufman; Cover designer: Anne LoCascio; Composition: Putman Productions, LLC

Health Administration Press Association of University Programs A division of the Foundation in Health Administration

of the American College of 2000 14th Street North Healthcare Executives Suite 780

One North Franklin Street Arlington, VA 22201 Suite 1700 (703) 894-0940 Chicago, IL 60606 (312) 424-2800

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BRIEF CONTENTS

Foreword .............................................................................................. xiii William K. Atkinson, PhD

Preface ................................................................................................... xv

1 Strategic Human Resources Management ......................................... 1 Myron D. Fottler, PhD

2 Healthcare Workforce Planning ...................................................... 27 Thomas C. Ricketts, III, PhD

3 Globalization and the Healthcare Workforce .................................. 47 Leah E. Masselink

4 Healthcare Professionals ................................................................. 71 Kenneth R. White, PhD, FACHE; Dolores G. Clement, DrPH, FACHE; and Kristie G. Stover, PhD

5 The Legal Environment of Human Resources Management ........... 99 Beverly L. Rubin, JD, and Bruce J. Fried, PhD

6 Workforce Diversity ..................................................................... 145 Rupert M. Evans, Sr., DHA, FACHE

7 Job Analysis and Job Design ......................................................... 163 Myron D. Fottler, PhD

8 Recruitment, Selection, and Retention ......................................... 197 Bruce J. Fried, PhD, and Michael Gates, PhD

9 Organizational Development and Training ................................... 237 Rita Quinton, SPHR

10 Performance Management ........................................................... 257 Bruce J. Fried, PhD

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11 Compensation Practices, Planning, and Challenges ....................... 281 Howard L. Smith, PhD; Bruce J. Fried, PhD; Derek van Amerongen, MD; and John D. Laughlin

12 Employee Benefits ....................................................................... 319 Dolores G. Clement, DrPH, FACHE; Maria A. Curran; and Sharon L. Jahn, CEBS, CMS

13 Health Safety and Preparedness .................................................... 347 William Gentry

14 Managing with Organized Labor ................................................. 359 Donna Malvey, PhD

15 Nurse Workload, Staffing, and Measurement ................................ 393 Cheryl B. Jones, PhD, RN, and George H. Pink, PhD

16 Human Resources Budgeting and Employee Productivity ............ 433 Eileen F. Hamby, DBA

17 Creating Customer-Focused Healthcare Organizations Through Human Resources ......................................................... 451 Myron D. Fottler, PhD, and Robert C. Ford, PhD

18 Present Trends that Affect the Future of Human Resources Management and the Healthcare Workforce ................................. 479 Bruce J. Fried, PhD, and Myron D. Fottler, PhD

Integrative Cases

1 Reduction in Force at Sierra Veterans Affairs Medical Center ........ 501 Sarah Huth and Sara Hofstetter

2 Management Challenges of a Customer Service Center ................ 511 Andy Garrard and Heather Grant

3 Performance Feedback Now and Then ......................................... 523 Lee Ellis, Dawn Morrow, and Adia Bradley

Index ........................................................................................... 529

About the Editors ........................................................................ 537

About the Contributors ............................................................... 538

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DETAILED CONTENTS

Foreword.............................................................................................. xiii William K. Atkinson, PhD

Preface ................................................................................................... xv

1 Strategic Human Resources Management.......................................... 1 Myron D. Fottler, PhD

Learning Objectives, 1; Introduction, 1; Environmental Trends, 4; The SHRM Model, 6; Organizational Mission and Corporate Strategy, 11; Human Resources and the Joint Commission, 19; A Strategic Perspective on Human Resources, 20; Summary, 22; Discussion Questions, 23; Experiential Exercises, 24

2 Healthcare Workforce Planning....................................................... 27 Thomas C. Ricketts, III, PhD

Learning Objectives, 27; Introduction, 27; The History of Healthcare Workforce Planning, 29; The Rationale for Healthcare Workforce Planning, 31; Overview of Workforce Planning Methodologies, 32; Challenges and Difficulties of Workforce Planning, 37; International Perspectives, 38; Workforce Supply Metrics, 40; Summary, 40; Discussion Questions, 41; Experiential Exercise, 41

3 Globalization and the Healthcare Workforce ................................... 47 Leah E. Masselink

Learning Objectives, 47; Introduction, 47; History and Current Trends, 48; Causes of International Migration, 50; Sending Country/Region Trends, 50; Consequences for Receiving Countries, 53; Issues for Managers, 58; The Future of International Health Workforce Migration, 64; Summary, 65; Discussion Questions, 66; Experiential Exercise, 66

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4 Healthcare Professionals.................................................................. 71 Kenneth R. White, PhD, FACHE; Dolores G. Clement, DrPH, FACHE; and Kristie G. Stover, PhD

Learning Objectives, 71; Introduction, 71; Professionalization, 72; Healthcare Professionals, 74; Considerations for Human Resources Management, 86; Changing Nature of the Health Professions, 88; Summary, 94; Discussion Questions, 94; Experiential Exercise, 95

5 The Legal Environment of Human Resources Management ............ 99 Beverly L. Rubin, JD, and Bruce J. Fried, PhD

Learning Objectives, 99; Introduction, 100; Employment Laws, 102; Employment Discrimination, 104; Equal Employment Opportunity Legislation, 106; Implementing EEO Principles, 114; Employment-at- Will Principle and Its Exceptions, 128; Termination Procedures, 132; Grievance Procedures, 135; Other Employment Issues, 136; Summary, 137; Discussion Questions, 138; Experiential Exercises, 139

6 Workforce Diversity ...................................................................... 145 Rupert M. Evans, Sr., DHA, FACHE

Learning Objectives, 145; Introduction, 145; A Definition of Diversity, 146; The Business Case for Diversity, 148; Diversity in Healthcare Leadership: Two Major Studies, 151; The Impact of Diversity on Care Delivery, 155; Components of an Effective Diversity Program, 157; Summary, 159; Discussion Questions, 159; Experiential Exercise, 160

7 Job Analysis and Job Design.......................................................... 163 Myron D. Fottler, PhD

Learning Objectives, 163; Introduction, 163; Definitions, 164; The Job Analysis Process, 165; Job Design, 178; Specialization in Healthcare, 178; Summary, 184; Discussion Questions, 185; Experiential Exercises, 186; Appendix A, 189

8 Recruitment, Selection, and Retention .......................................... 197 Bruce J. Fried, PhD, and Michael Gates, PhD

Learning Objectives, 197; Introduction, 197; Recruitment, 198; Selection, 210; Turnover and Retention, 224; Summary, 229; Discussion Questions, 229; Experiential Exercises, 230

9 Organizational Development and Training .................................... 237 Rita Quinton, SPHR

Learning Objectives, 237; Introduction, 237; Designing Training for Sustainability, 239; Training Methods, 244; Employee Socialization, 245; Succession Planning, 247; Trends in Organizational Development and

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Training, 249; Summary, 251; Discussion Questions, 251; Experiential Exercises, 252

10 Performance Management ............................................................ 257 Bruce J. Fried, PhD

Learning Objectives, 257; Introduction, 257; The Role of Performance Management, 261; The Cynicism About Performance Management, 271; Conducting Effective Performance Management Interviews, 274; Summary, 277; Discussion Questions, 277; Experiential Exercise, 278

11 Compensation Practices, Planning, and Challenges........................ 281 Howard L. Smith, PhD; Bruce J. Fried, PhD; Derek van Amerongen, MD; and John D. Laughlin

Learning Objectives, 281; Introduction, 281; The Strategic Role of Compensation Policy, 283; Intrinsic Versus Extrinsic Rewards, 287; Determining the Monetary Value of Jobs, 292; Variable Compensation, 297; Special Considerations for Compensating Physicians, 303; Future Directions for Physician Compensation, 311; Summary, 314; Discussion Questions, 314; Experiential Exercises, 315

12 Employee Benefits ........................................................................ 319 Dolores G. Clement, DrPH, FACHE; Maria A. Curran; and Sharon L. Jahn, CEBS, CMS

Learning Objectives, 319; Introduction, 319; Brief Historical Background, 321; Major Federal Legislation, 324; Overview of Employment Benefits, 325; Designing a Benefits Plan, 341; Summary, 344; Discussion Questions, 345; Experiential Exercise, 345

13 Health Safety and Preparedness ..................................................... 347 William Gentry

Learning Objectives, 347; Introduction, 347; Hazard Analysis for a Healthy and Safe Workplace, 348; Preparedness for Workplace Disasters, 350; Safety and Preparedness Requirements, 353; Measuring Workplace Safety and Preparedness, 354; Summary, 355; Discussion Questions, 356; Experiential Exercise, 356

14 Managing with Organized Labor .................................................. 359 Donna Malvey, PhD

Learning Objectives, 359; Introduction, 359; Overview of Unionization, 361; The Labor Relations Process, 362; A Review of Legislative and Judicial Rulings, 372; Developments in Organizing Healthcare Workers, 378; Management Guidelines, 383; Summary, 384; Discussion Questions, 385; Experiential Exercises, 385

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15 Nurse Workload, Staffing, and Measurement................................. 393 Cheryl B. Jones, PhD, RN, and George H. Pink, PhD

Learning Objectives, 393; Introduction, 393; Types of Nursing Personnel, 394; Definitions and Measurement, 396; Measurement of Nurse Staffing, 401; Key Issues in Managing Nurse Staffing and Workload, 406; Future Directions and Challenges, 417; Summary, 419; Discussion Questions, 420; Experiential Exercises, 420; Appendix B, 428

16 Human Resources Budgeting and Employee Productivity ............. 433 Eileen F. Hamby, DBA

Learning Objectives, 433; Introduction, 433; Linking Budgeting with Human Resources Management, 434; Linking Human Resources Budgeting to Employee Productivity, 439; Other HR Practices Related to the Labor Budget, 442; Using Labor Budget Metrics for Measurement, 445; Mergers, Acquisitions, and Strategic Alliances, 447; Summary, 447; Discussion Questions, 448; Experiential Exercises, 448

17 Creating Customer-Focused Healthcare Organizations Through Human Resources .......................................................... 451 Myron D. Fottler, PhD, and Robert C. Ford, PhD

Learning Objectives, 451; Introduction, 451; An Emerging Customer Focus, 453; The New Paradigm, 459; Summary, 473; Discussion Questions, 474; Experiential Exercises, 474

18 Present Trends that Affect the Future of Human Resources Management and the Healthcare Workforce .................................. 479 Bruce J. Fried, PhD, and Myron D. Fottler, PhD

Learning Objectives, 479; Introduction, 479; Ten Healthcare Trends, 479; SHRM’s Survey Results, 485; Six Overall Challenges in Human Resources Management, 488; Summary, 497; Discussion Questions, 497; Experiential Exercise, 498

Integrative Cases

1 Reduction in Force at Sierra Veterans Affairs Medical Center......... 501 Sarah Huth and Sara Hofstetter

Background, 501; The RIF Order, 501; Process and Implementation, 504; Unexpected News, 507; The Outcome, 508; Discussion Questions, 508

2 Management Challenges of a Customer Service Center ................. 511 Andy Garrard and Heather Grant

Background, 511; Imaging Customer Service Center, 511; The Situation, 513; Initial ICSC Assessment, 515; Process Review, 517;

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Personnel Review, 519; Information Technology Review, 521; The Ultimatum, 521; Discussion Questions, 522

3 Performance Feedback Now and Then.......................................... 523 Lee Ellis, Dawn Morrow, and Adia Bradley

Introduction, 523; Background, 523; Current Situation, 525; Ms. Kopalski’s Performance, 527; Discussion Questions, 528

Index................................................................................................... 529

About the Editors ............................................................................... 537

About the Contributors ...................................................................... 538

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FOREWORD

uman resources management is one of the most dynamic and reward- ing responsibilities in healthcare delivery. Because a healthcare organi- zation cannot exist without the people who provide care, both directly

and indirectly, recruitment and retention of staff are critical. A healthcare organ- ization can only be as competent and quality-focused as its employees, physi- cians, leaders, and volunteers. To ensure the delivery of safe patient care, recruit- ment and retention of a highly skilled and qualified workforce are essential and must be a top priority.

Today’s healthcare organizations face many challenges, including sig- nificant shortages of physicians; nurses; respiratory therapists; radiologic, car- diovascular, and medical technologists; physical and occupational therapists; physician assistants; and nurse practitioners. Making recruitment particularly imperative is the fact that the population is aging and will be leaving the work- force in large numbers; consequently, more healthcare services will be de- manded in the years ahead. Never before has it been so important for health- care leaders and managers to understand employee satisfiers.

“Workforce development” is a relatively new term that refers to the con- tinuing education and training of employees for current, new, and/or changing jobs. Such a program also aims to recruit and prepare students for the jobs of the future. Healthcare organizations that do not have a strong, committed workforce development program and/or a partnership with local high schools, colleges, and universities will find themselves grossly understaffed in the com- ing years. In addition, healthcare organizations must help the educational institutions in their communities to solve problems such as limited classroom capacity, inability to fill instructor vacancies, aging instructors, and long wait- ing lists of qualified students for allied health and nursing programs.

For the first time ever, people from four different generations are work- ing together. Traditionalists, baby boomers, generation Xers, and millennials have differing work needs and expectations, challenging those who manage them to find appropriate ways to motivate, satisfy, reward, and recognize each group. The core values of one generation are also different from the other, so no longer will a one-size-fits-all approach to employee programs suffice. One theme that is common among members of these generations is the pursuit of

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work–life balance. No longer are employees interested in devoting their lives to their jobs. Time for friends, family, and self has become a significant worker value, making flexible work scheduling a must in contemporary organizations.

Workforce diversity and inclusion is another area of great challenge. There is fierce competition for talent with diverse backgrounds, and putting together a workforce that is diverse in culture, knowledge, perspective, and style is not easy. Many advances toward greater inclusion have been made, but major distances still need to be covered before the healthcare workforce can truly reflect the U.S. society as a whole.

Competitive compensation and benefit programs are especially essen- tial in this tight labor market. Of even greater importance is ensuring that these programs motivate or provide an incentive to employees to achieve op- timal performance. Performance management systems must be designed to clearly articulate expectations and to appropriately reward performance.

A recent addition to human resources challenges is disaster prepared- ness, and nowhere is this more important than in a healthcare organization. In the midst of a disaster, healthcare providers must be able to continue, and even expand, operations and services for their communities. At the same time, they must recognize and respond to the personal needs of their own staff, many of whom will be required to work during catastrophic events. Success- ful healthcare organizations are ready, willing, and able to respond when un- foreseen circumstances occur, and they will occur.

Healthcare organizations have tremendous opportunities to recruit, re- tain, develop, and coach their workforce when reimbursement and other fi- nancial pressures are high. That is the time to be strategic and to make solid cost–benefit human resources decisions that support the organization’s finan- cial goals as well as the long-term ability to staff with highly qualified individ- uals. Although getting caught up in day-to-day problem solving is easy, quick fixes cannot address long-term issues.

Human resources management and strategic planning should mirror the strategic priorities and goals of the organization. Positive outcomes in hu- man resources metrics are essential to financial health, patient satisfaction, and the ability to achieve goals each year.

This book provides a comprehensive discussion of these and other top- ics related to strategic human resources management. Whether you work in human resources specifically or management in general, you must understand and appreciate the connection between a positive workforce culture and out- standing patient care delivery. Human resources issues are complex, and the answers are not simple. Therefore, human resources thinking, planning, and execution must be strategic.

William K. Atkinson, PhD, president and chief executive officer, WakeMed Health & Hospitals,

Raleigh, North Carolina

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PREFACE

hange has become a staple of the healthcare system. It is omnipresent in our discussions about healthcare: A Google search for “healthcare change” yields more than 17 million results. In the previous edition of this book, we made the observation that

healthcare has undergone major transformations as a result of advances in technology, availability of information, and new forms of organizations and fi- nancing mechanisms. To this list we add the emerging impact of globalization not just on healthcare but also on the healthcare workforce, greater awareness of natural and man-made threats, and increased recognition of possible severe labor shortages because of the aging of the population and aging of the healthcare workforce.

An oft-repeated maxim is that “change creates opportunity.” In the present healthcare environment, change inspires feelings of uncertainty. How- ever, it does offer opportunities for honest people who seek solutions to healthcare problems, some of which have little precedent in terms of type or scope. This environment also creates opportunities for opportunists who, like snake-oil salesmen of days past, tempt us with quick fixes. Some of these fixes are merely repackaged and relabeled old strategies that are marketed effec- tively to a public desperate for new answers. Many of these fixes have little or no empirical support, but they are strongly promoted by “heroes of manage- ment.” Simply turn your attention to the business section of any bookstore to see the array of fixes for sale.

Pfeffer and Sutton’s (2006) book, Hard Facts, Dangerous Half-Truths, and Total Nonsense, provides an enlightening and amusing picture of the friv- olous, trendy nature of the management book market. Even the titles of these books read like fads, even contradictory: Love Is the Killer App: How to Win Business and Influence Friends and Business Is Combat: A Fighter Pilot’s Guide to Winning in Modern Business Warfare. With a few exceptions, the half-life of this genre of management “literature” is overall short but sufficiently long for its authors and publishers to reap a handsome profit and for business fol- lowers to jump on the next “revolutionary” method.

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This new edition of Human Resources in Healthcare takes the approach supported by Pfeffer and Sutton and by responsible leaders in the healthcare industry who advocate the use of evidence in management and clinical work. In a recent JAMA article, Shortell, Rundall, and Hsu make an eloquent case for linking evidence-based medicine (EBM) and evidence-based management (EBMgt) to improve quality of care:

Until both components are in place—identifying the best content (i.e., EBM) and applying it within effective organizational contexts (i.e., EBMgt)—consistent, sus- tainable improvement in the quality of care received by US residents is unlikely to occur (Shortell, Rundall, and Hsu 2007, 673).

Evidence-based management practices do not always have the shelf ap- peal of popular business methods contained in books sold at mall shops. How- ever, such practices are robust and long-standing, owing to the fact that they have empirical support, have led to a sustained record of success, and have been designated as best practices. This edition, like the last two editions, is filled with concepts and strategies that have, over the years, been repeatedly tested and refined by practicing leaders and managers in actual organizations.

A word about the general concept of management is in order, however. The success of management practices is considerably less certain than, for ex- ample, the well-proven effectiveness of the measles vaccine. After all, clinical trials are hard to come by in management. What works in management and human resources management often depends on a myriad of factors, codified in organizational contingency theories. This fact does not make our manage- ment theories, research findings, and practices invalid, however. In medicine, we know that patients with the same disease respond very differently to the same medication, but we do not yet fully understand why that is the case and we cannot yet personalize medications to the unique characteristics of the in- dividual. The same idea applies to management.

In light of this, our humble advice is for managers at all organizational levels to be aware of the unique contingent factors that may have an impact on the effectiveness of any recommended practice or strategy. We accept the fact that many people in our impatient society will be less than satisfied with strategies that do not work in every circumstance, every time. But then again, those people are more likely to purchase books at their local mall.

While we hope that this book imparts evidence-based knowledge, we also realize that having this knowledge alone does not guarantee that even the most studious reader will become an effective manager. We certainly would not expect someone who only carefully read and absorbed medical textbooks, but who never actually performed the procedures and obtained feedback, to perform any type of surgery, let alone a successful one. The point is that effectiveness takes a considerable amount of learning, practice, and time. Being an expert manager means getting to the point where book