Oct 26, 2011 - 1 Comments - healthcare, industry -

Bad human resources equals bad health care

Stressed businesswoman

Stressed businesswoman

In any company the human resource department has to perform many functions within the organization. The field itself can be divided into its traditional roles and its expanded roles. Its traditional roles, includes job design, staffing, compensation, benefits, labor relations, employee relations, recognition and now information systems management. Also under the discipline of human resources are non-traditional functions such as workplace learning and any related performance disciplines. These human resource sub-departmental tasks include personnel administration, performance management, compensation and succession planning. The educational department of a company must manage the organizations learning initiatives, the companies organizational knowledge, be able to design new learning material, be able to deliver various training’s to its employees, improve human performance, facilitate organizational change, provide carrier planning, talent management and provide employee coaching. Other disciplines that interact with human resources would be the company’s marketing department, the company’s operations department, their legal, financial, research and development departments, and finally the company’s customer service and distribution services department. All large and mid-sized corporations have human resources departments. Organizations, now operating in this economic environment and competing on a global scale are asking their human resources departments to expand further into their non-traditional roles, asking them to find dynamic, flexible employees who will be able to manage well in the future. Firms in many industries have come to this conclusion, from the automobile industry, the airplane industry, to other manufacturing fields, the service industries, to retail and their supplier’s. The health care industry is not immune to these economic and global forces. Although change in this field has been slow, their managers and human resource departments much change as well. If a hospital, or hospital system, or ambulatory health care system fails to do so it will either be bought or become bankrupt. Real world forces are reaching health care in America just as in other industries.

A health care organizations adjunct departments operate within and in conjunction with the organizations human resources department, all with the goal of driving business performance forward by way of a unified business strategy. Driving business performance can be achieved by maintaining a positive work environment and through effective talent management. This is not an easy task in health care because the industry has been heavily insulated by market forces, although now not immune to the it, having to change to meet regional performance requirements. Many organizations begin as smaller corporations and if successful, develop specialized departments, merge with other businesses, expand nationally or become multinational. Hospitals and clinics, in many respects develop organizations structures similar to companies in other industries, they merge with other hospitals, other clinics and partner with other facilities. In any sector as a corporation grows, the need for effective leadership increases, health care conglomerates and health care systems are no different.

When, in any organization C-suit executives eventually find a dearth of talent within the ranks of their company’s middle management, a call better career management within their existing system is seen as necessary. This sense of need is then transferred to the human resources department, which often is required to expand its limited original role into workplace learning and employee performance tracking. Subsequently, they are required not only to hire new talent, but to uncover the talented employees they already have, develop them and eventually promote them. Frequently, new talent management strategies are built upon previously existing strategies, incrementally, over time. These revised strategies usually take quite some time to implement and their success may or may not be realized, in part depending on that company’s capacity to accept change and whether their corporate culture can continue on the path of unification under a common business strategy. As mentioned, career planning and talent management is only one of the several adjunct functions of a company’s human resources department. Once a company’s upper management realizes there is a talent issue in their organization their concern gets pushed down to human resources. Their concern with employee skill sets, their ability to cross departmental lines, their ability to lead other staff, their education and performance, is then justified.

Bound in bureaucracy

Bound in bureaucracy

The issue with health care organizations is that that they are behind the curve. Whereas, in other industries the effects of competing in a global economy has pushed them toward efficiency, for the last twenty years health care organizations have only had their local neighbors to be concerned about. Now that the best health care organizations have bought up their local rivals, they now find they must compete regionally, nationally and soon internationally. Formally, C-suit executives of larger health care organizations facing management and staff talent difficulties could ignore them because they had a captive market, patients had little choice and insurance paid market rates with little requirements other that fee-for-service. Now transparency, evidence based treatment, capitation and cut’s in Medicare and Medicaid are changing how they must operate and hire.

Over time, as a growing health care organization ages, becoming more complex over time, experienced managers retire taking with them their knowledge and leadership skills. New managers with the same dynamics and flexibility are then required to replace those who had previously left. Frequently the first place human resources looks for new potential managers are those in the company that are at the staff supervisor level. But, as a health care organization grows, it requires further departmentalization and specialization of those it hires for it to remain efficient. The employees they hired then fit their new roles, not the old flexible roles the original team of leaders had. But, as the health care organization once was competitive through being horizontal in organizational structure and then bureaucratic in nature, it then once again needs to unfreeze and once again focus on flexibility. This third change in corporate culture forces the human resources department to find new employees more like those that once were working for the company, the perfect employee may be specialized, but they are not necessarily dynamic.

Changes in worker demographics, local and national legislation, corporate tax structure, and both political and social turmoil are putting stress on health care organizations ability to maintain profitability and thus viability. The need to be competitive in the global marketplace is finally catching up even to the American health care system. Younger workers are entering the workforce with millennial based tactic skills, with a sense of allegiance to the group as opposed to the larger organization, with a priority on family and with a desire for lifetime learning. Older workers are leaving the workforce with experience and wisdom; they are taking all their corporate shrewdness with them into retirement. Thus, health care companies must find a way to maximize both the knowledge of their older workers with the skills of their younger employees. No company in this troubled economy can wall off either age group from the other, or hire only those perfect candidates that are specialists in their field but cannot manage or will not be able to cross departmental lines due to lack of skills in another field.

The specialist, the dynamic hire, the young, the old, the perfect and the not so perfect hire will have to come together to keep the organization fiscally healthy. A typical human resources department pulls employee applications via their online application software, matches them to prospective open positions and then contacts those people for job interviews. It should be noted however that according to some assessment models, leadership and processes combined make up 24 percent of business performance results, people management makes up an additional 9 percent for 33 percent, while resources only account for 9 percent of the total effect on business effectiveness. This clearly shows that throwing more resources at internal corporate organizational issues does not necessarily have an overall greater positive effect on business outcomes, something that health care systems typically have been able to do. Unfortunately, or fortunately, the ability to continue to do this in health care is ending. So what can help increase a health care organizations effectiveness? Again, effective leadership and the hiring of those who are flexible enough to get the job done. Every high-performing organization must hire well-qualified, dynamically skilled employees. However, fundamentally, organizations find control better easier than empowerment. Unfortunately, under a command and control hierarchy dynamically skilled employees are not free to take on the fullness their position has to offer. Therefore most bureaucratic organizations, those larger organizations, including health care companies, will focus on hiring the perfect candidate, those with an exact match to the domain skills they view as essential to the job and not focus on hiring those who show the managerial competencies necessary to build and maintain a vibrant company. In many industries this truth is pushing companies to hire not the perfect candidate but one who can manage, one who has some competency in many domains. Another reason hiring is becoming more dynamic in various fields is because there is no more money to throw at internal organizational issues.

Paper chase
Paper chase

However, as mentioned before health care organizations have been insulated and until now. Many are still stuck in valuing expertise over competence, roll and rote over creative adaptability and as such, they cling to their decision criteria to the point where in their quest for the perfect candidate they miss the best one. This is unfortunate because they are hiring those potential supervisors who lack the competencies they want in their managers. They hire those with domain skills and then find they have to train them to be personable, to have composure, to have the ability to inspire commitment, to have the ability to lead employees, the ability to develop others, the ability to be a participative manager, to learn to have a balance between personal life and work, the ability to take the initiative, the ability to be self-aware and the ability to be a strategic planner.

No new building, no new pharmacy system, no integrated registration system, no new software package, valet parking, expanded visiting hours, new diner menu, or new fancy maternity ward can mitigate or re-mediate the damage of corporate atrophy, you either unfreeze your corporate culture and move it toward expectation and away from route expertise or it will ultimately fail. It is possible that the logic of hiring the most rigid candidate and pouring money into new IT or better equipment to fix what really is a social problem can be sustained in health care due to industry profit and the industries lack of regional competition from other health care systems, but in industries that are more competitive, they can’t afford it. These companies cannot afford spending excess money on ambiguous hardware/software solutions, while not investing in customer service and on talent. This type of strategy is just not possible in most fields. The health care industry will eventually, hopefully now, be forced to streamline as well, though how much time this will take remains to be seen. Many of the issues found in health care organizations, excessive bureaucracy, a rather large number of middle management professionals, competing corporate cultures, and union/management issues don’t exist in other industries, they can’t afford it. If, say a manufacture does take such a course, they go bankrupt or get bought out.

Health care organizations are faced with implementing the rapid regulatory changes brought about by new health care laws passed in Washington. They must bend to these new rules or break, as other health care systems have found out. Fear can be a good or bad motivator, it is how we react to it that shapes our future. The power of the purse is going to evaporate as health care costs continue to rise at multiples above inflation, thus profit will continue be constrained and finally, then only teamwork will separate those health care systems that succeed for those that will fail. Why, because there will be little money for health care companies, hospitals, hospital systems, clinics, hospital-clinic conglomerates to purchase their way out of difficulty, should it arise. In the end, health care companies are beginning to be stressed financially by cuts in two sources of funding they have come to rely on, Medicare and Medicaid. New Medicare billing procedures such as bundling and evidence based payment policies are pushing hospitals and clinics to be more efficient and focus on quality whereas before quantity insured profitability. The health care industry is facing changes that had occurred in other fields several years ago, the automobile industry, the airplane industry, in retail and service industries. Besides why should money be spent on an issues that are essentially people and personality based?

The fear of adjust or die through bankruptcy has gripped upper management in hospitals and ambulatory health care facilities. Those that managed hospitals and clinics during the first round of Medicare and Medicaid cuts in the early 1980‘s are now retiring. Human resources must change to help facilitate change in their organizations. Some health care organizations will stay in their paralysis, some will unfreeze and begin to hire dynamic individuals, not just seek out the perfect candidate to match a task based skill one hundred percent. A human resource department has to perform many functions within an organization. The human resources field can be divided into its traditional roles and its expanded roles. The human resources department of health care systems must now focus on its non traditional skills more than ever. Why? Because their are potential employees out there that are dynamic and will facilitate organizational change, that have potential managerial talent and can function cross departmentally. No, these potential employees may not have a perfect resume or ten years working in a specific domain, but they will be able to replace those leaders who have left the company and it is far cheaper that purchasing the latest top of the line equipment and hoping for the best.

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