Strategic Management of Human Resources Chapter 10 Strategic Management of Human Resources

Definition Human Resources Management: Addresses the need to ensure that qualified and motivated personnel are available to staff the business units operated by the health service organization (Hernandez et al., 1998)

HR Example A large physician practice is in need of hiring someone to head up their information management area. The practice has grown from 7 to 23 physicians in the past 5 years, and the practice administrator has realized that the clinical and financial records needs of the practice have outpaced current administration expertise. The administrator wants to define the job and then recruit.

HR includes activities that are: Strategic Compete for labor and want to have an adequate supply and the proper mix of high quality staff HSO staff should be viewed as a “strategic asset” to gain competitive advantage Organizational performance depends on individual performance

….and…. Administrative There are a number of administrative functions and action steps carried out in support of the human resources of the HSO to ensure high levels of performance

Employees as Drivers of Performance Core services provided by HSOs—patient care services—are highly dependent on the capabilities and expertise of the employees of the organization

Employees as Drivers of Performance (Cont’d) HSOs are service organizations, unlike traditional businesses or manufacturing firms They are highly specialized organizations that provide a range of care using individual employee expertise Health care workers from different departments and units must work together to provide the overall service for each patient

Environmental Forces Affecting HR Declining reimbursement Declining supply of workers Increasing population needs Increasing competition among HSOs External pressure on HSOs for accountability and performance

Impact of Environmental Forces Less resources to recruit, compensate and develop workforce Shortage of skilled workers, changes in recruiting and staffing specialized services, lower satisfaction of workers Increased volumes of patients and workload for HSOs Competition for healthcare workers and pressure for higher wages/benefits HR must ensure high performance in HSO

Selected Key Federal Legislation Affecting HR 1938: Fair Labor Standards Act 1964:Civil Rights Act 1967:Age Discrimination in Employment Act 1973: Rehabilitation Act of 1973

Selected Key Federal Legislation Affecting HR (Cont’d) 1974: Employee Retirement Income Security Act 1986: Immigration Reform and Control Act 1993: Family Medical and Leave Act 2003: Health Insurance Portability and Accountability Act

HR Domains Workforce Planning/Recruitment: Employee Retention: Determine the future staff needed and acquire them Employee Retention: Care, support and development of the staff

HR Functions: Workforce Planning/Recruitment Job Analysis Manpower Planning Establishing Job Descriptions Recruitment Interviewing, Selection, Negotiation and Hiring Orientation

HR Functions: Employee Retention Training and Development Compensation and Benefits Assessing Performance Labor Relations Employee Assistance Programs Employee Suggestion Program

Responsibilities of HR Staff and Line Managers in Recruitment Prepares Position Description Job Pricing Prepares advertisements/recruitment materials Keeps track of applicants/maintains HR info system Checks applicant references Keeps personnel files Narrows candidate pool

Responsibilities of HR Staff and Line Managers in Recruitment Line Staff: Clarifies job function/provides input into Position Description Interviews candidates Ranks candidates Selects candidate Negotiates with and hires candidate

Compensation Base pay: Incentive compensation: Tied to knowledge, skills, experience and basic expectations for a specific job Incentive compensation: Designed to improve organizational performance by motivating employees to higher levels of achievement and performance

Benefits “Benefit” is defined as compensation provided in a form other than salary or direct wages, paid for totally or in part by employer (Jenks and Zevnik, 1993)

Major Types of Benefits Sick leave Vacation Holidays Health Insurance Life Insurance Retirement plan Flexible spending accounts

Uses of Performance Appraisals Compare absolute and relative performance of staff Determine a plan for improving performance for those employees in need of improvement Determine what additional training and development activities are needed to improve employee performance

Uses of Performance Appraisals (Cont’d) Use the findings to clarify employee’s interests and desires Document performance in those cases where termination or re-assignment is necessary Determine adjustments to compensation based on performance Determine promotional or other advancement opportunities for the employee

Conclusions Performance of HSOs is tied directly to the motivation, commitment and skills of clinical, administrative and support staff HR actions are undertaken for both strategic and administrative reasons HR staff are responsible for coordinating HR management; serve as a support for line managers

Conclusions (Cont’d) HR management is being assessed for contribution to organizational performance HR management will increase in importance in the future due to heightened external and internal pressures to recruit and retain committed and high performing staff

Discussion Questions 1. Describe why the human resources function is comprised of strategic and administrative actions. 2. Two key domains of HR are workforce planning/recruitment and employee retention. Describe several HR activities that fall under each, and describe their importance in HR management. 3. Identify and describe some environmental forces that affect HR functions in HSOs.

Discussion Questions (Cont’d) 4. Define and contrast “Employee Assistance Programs” and “Employee Suggestion Programs.” 5. Why do HSOs offer incentive compensation programs? How do these programs differ from base compensation programs?