1. Strategic Management of Human Resources
Chapter 10
Strategic Management of Human Resources

2. 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)

3. 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.

4. 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

5. ….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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

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

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

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

15. 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

16. 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

17. 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

18. 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)

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

20. 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

21. 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

22. 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

23. 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

24. 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.

25. 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?