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Managing Health Organizations for Quality and Performance
L. Fleming Fallon, Jr., MD, DrPH Distinguished Teaching Professor of Public Health
Bowling Green State University Bowling Green, Ohio
James W. Begun, PhD James A. Hamilton Professor of Healthcare Management
University of Minnesota School of Public Health Minneapolis, Minnesota
William Riley, PhD Associate Dean
University of Minnesota School of Public Health Minneapolis, Minnesota
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Fallon, L. Fleming. Managing health organizations for quality and performance / L. Fleming Fallon, James Begun, William
Riley. p. ; cm.
Includes bibliographical references and index. ISBN-13: 978-1-4496-1471-3 (pbk.) ISBN-10: 1-4496-1471-X (pbk.) I. Begun, James W. II. Riley, William Joseph. III. Title. [DNLM: 1. Health Facility Administration. 2. Ef iciency, Organizational. 3. Quality of Health Care—
organization & administration. WX 150.1]
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To my wife, Marie, and to longtime friends, Charlie and Shay Colgan and Sue and Blair Janes.
LFF
To the memory of my mom, Eunice Sander Begun.
JWB
To my wife, Alvina, and children, Keven and Erinn.
WR
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Preface
Two overarching themes of this book are delivering quality products, programs, and services in addition to providing memorable customer and client service. The importance of both quality and customer service cannot be overemphasized. Quality (or its absence) is always remembered by people who receive or use an organization’s output, whether they are consumers, customers, patients, users, or other companies or organizations. Good quality is appreciated. At best, poor quality may be tolerated in the short run.
Customer or client service evokes reactions that are similar to those associated with quality. Good customer service is rewarded by customer loyalty. Poor customer service often triggers a search for alternatives. If none can be identi ied, customers often feel trapped. Such feelings can trigger rudeness and discourtesy toward organizational personnel. This is a variant form of road rage that is slowly permeating American society. Good customer service is accompanied by patience. People who are treated with courtesy, respect, and patience are likely to overlook occasional errors or instances of poor customer service. Customers who are treated well demonstrate their appreciation by ignoring occasional problems (“Everyone is entitled to have a bad day”). Customers who are not treated well have very different reactions and take their business elsewhere.
Quality and good customer service require time to be established. Providers of services must remember the importance of the irst impression. The nature of the irst impression establishes a baseline upon which subsequent opinions are formed, and provides a powerful reason for all workers to strive for quality in output and interpersonal relationships.
The three of us are currently employed in academia and work in academic environments. We have followed different paths to arrive at similar jobs. Each of us has real-world experience in situations requiring managerial expertise. Our previous experiences have provided us with different examples that we drew upon as we created this book. In discussing this project, we agreed that although we have different experiences, our vision and approach to teaching principles of management are sound and continue to gain acceptance. We have striven to re lect current trends and developments in the realm of health (both clinical care and public health) and management.
This book is written for students, practitioners, and others interested in the operation and administration of health organizations. Although the chapter topics sometimes discuss theoretical models, they are focused on day-to-day responsibilities and realities. Supplemental resources are provided at the conclusion of each chapter. Relevant books and journal articles are listed, as well as information on Internet websites.
Case studies enable readers to focus on a topic as well as provide a context for discussion. Each chapter opens with a brief case study. Questions for initial re lection are posed. The case studies are resolved at the conclusion of each chapter. The material presented within the chapter provides the basis for the suggested resolution to the case study. Case studies have been a standard item in the curriculum of management programs for many years. Students have endorsed case studies in written
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comments about their courses.
We wrote chapters and then shared them. Every chapter has been edited for consistency of grammar and presentation. The ideas and concepts remain. If we have done our jobs well, this book reads as if a single person wrote it.
This book was written for a broad array of potential readers. These include students, academics, established professionals, and new graduates who are seeking their irst so-called real jobs. We consulted with many individuals from each of these constituencies as we planned and developed this book. Their comments were invaluable. Although the irst phase of this project is completed (the book is inished), our ears remain open to your comments. More to the point, we welcome them. We live by our own advice and strive to produce a quality product. In short, we welcome your feedback and ask for any comments that you might care to offer.
We wish to thank the ine professionals at Jones & Bartlett Learning. Mike Brown has been a supporter of this project. For that, we thank him. We want to acknowledge Maro Gartside and Rebekah Linga for their attention to detail and rapid responses to our questions during this project. In Minneapolis, Valerie Mitchell always knew where we were, even when we tried to hide from each other. Thanks.
We accept responsibility for errors that have eluded the sharp eyes of many reviewers. We also look forward to receiving any comments or suggestions about this book to improve future editions. We can be contacted at 234 Health Center, Bowling Green State University, Bowling Green, OH, 43403 or [email protected] (mailto:[email protected]) . May the book be a useful tool for all readers.
L. Fleming Fallon, Jr. James W. Begun
William Riley
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Contributor
Todd M. Cash, BS
Finance Rotational Analyst SPX Corporation Charlotte, North Carolina
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About the Authors
L. Fleming Fallon, Jr., MD, DrPH
Fleming Fallon is a Distinguished Teaching Professor of Public Health at Bowling Green State University, Bowling Green, Ohio, where he teaches courses in management and international health and, in 2008, received the President’s Award for Collaborative Research and Creative Work. He is a Co-Director of the Northwest Ohio Consortium for Public Health, an accredited MPH degree program that is offered jointly by Bowling Green State University and the University of Toledo.
Dr. Fallon’s recent research has focused on emergency preparedness and succession planning. He has authored 81 peer-reviewed publications and two other books on managerial topics. He recently participated in the National Conversation on Public Health and Chemical Exposure, where he served as a committee chair and member of the Chemical Emergencies Work Group. He has many years of experience as a management consultant. He has chaired the Editorial Advisory Board of the Journal of Controversial Medical Claims.
Dr. Fallon is a physician with residency training in occupational and environmental medicine. He received a DrPH degree in environmental health science from the Columbia University School of Public Health, New York, New York; his MD degree from St. Georges University School of Medicine, St. Georges, Grenada; and an MBA from the University of New Haven, New Haven, Connecticut. He is a graduate of Colby College, Waterville, Maine.
James W. Begun, PhD
James W. Begun is the Hamilton Professor of Healthcare Management in the Division of Health Policy and Management, School of Public Health, University of Minnesota. Dr. Begun teaches management and leadership in the School of Public Health, where he received the Leonard M. Schuman Award for Excellence in Teaching in 2009.
In his research, Dr. Begun studies the strategies and performance of health organizations and health professions, authoring over 100 publications, including two books. He has been active nationally in promoting competency-based education, serving as Chair of the Accrediting Commission on Education in Health Services Administration. In 2008, Dr. Begun was awarded the Gary L. Filerman Prize for Innovation in Healthcare Management Education by the Association of University Programs in Health Administration. He serves on the Science Advisory Board, Plexus Institute; Board of Commissioners, Commission on Nurse Certi ication; Board of Directors, Commission on the Accreditation of Healthcare Management Education; and editorial advisory board of Health Care Management Review.
Dr. Begun received his PhD in sociology from the University of North Carolina at Chapel Hill and previously served on the faculties of the University of North Carolina, Cornell University, and Virginia Commonwealth University. He is a graduate of the University of North Carolina at Chapel Hill.
William Riley, PhD
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William Riley is Associate Dean, School of Public Health, and Associate Professor, Division of Health Policy and Management, at the University of Minnesota at Minneapolis. He is the former CEO of Paci ic Medical Center, Seattle, Washington, and Aspen Medical Group, Minneapolis, Minnesota. Dr. Riley teaches quality improvement and management at the School of Public Health and is a recipient of the School’s Charles N. Hewitt Creative Teaching Award.
Dr. Riley is the author of over 50 peer-reviewed articles and one book. He is an expert in quality improvement in health care and public health. Dr. Riley is the principal investigator on major research projects related to safety and simulation training in perinatal units and quality improvement projects in state and local public health departments. He has served as an Interim Executive Director of the Public Health Accreditation Board, Washington, DC, as well as two terms as Chair of the Public Health Accreditation Board.
Dr. Riley received his PhD degree from the University of Minnesota at Minneapolis.
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About the Contributor
Todd M. Cash, BS
Todd Cash is a Finance Rotational Analyst with the SPX Corporation, which is headquartered in Charlotte, North Carolina. He received the Academic Excellence Award in Accounting for superior academic achievement and potential for intellectual and professional growth. Mr. Cash contributed material on business planning and understanding inancial documents that appears in the discussion on managing inance and budgets (Chapter 15 (chapter15.html) ).
Mr. Cash is a graduate of Elon University, Elon, North Carolina.
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CHAPTER
1
Introduction: Managing for Quality and Performance
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Be familiar with the framework of this book. • Understand the importance of sound managerial practices in contemporary organizations that
provide programs and services related to health. • Appreciate the advantages of applying systems thinking to management. • Understand the importance of improving quality and performance while demonstrating value. • Appreciate that quality management and quality initiatives contribute to organizational success.
CHAPTER SUMMARY
This chapter introduces the concepts of management, systems thinking, and quality. It reviews their importance and emphasizes their interrelationship. This introduction provides the basis for the other chapters in this book.
CASE STUDY
Elizabeth was visiting a prospective graduate school and was talking to Dr. Lombard, an academic advisor.
Dr. Lombard broke the ice by saying, “So, Elizabeth, please tell me a little about your schooling to this point and about your career goals.”
“I inished college last spring,” Elizabeth replied. She continued, “My grade point average was above 3.64. I majored in liberal studies because I was not sure what I wanted to do with my life. I had a part- time job during college and worked for a bank sorting checks and routing papers at night. I talked my way into an internship at a local health organization. I shadowed the chief executive of icer and then completed a data analysis project. That was really interesting. I was evaluating the results of a year- long quality initiative. Productivity in one department increased by 19%. Nobody asked me for my opinion, but if they had, I would have said that the increase could have been greater if they had also worked at improving customer service.”
“Have you reached any conclusions as a result of your studies and working experiences so far?”
Elizabeth hesitated and then spoke, “Concerning a career, no conclusions yet. However, I liked the
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work and the environment in the health organization. Doing something that helps others is appealing. I noticed some similarities in the way employees were handled at different locations within the same organization. I ind that intriguing but am not sure where to begin. I guess that is where you come in.”
If you were Dr. Lombard, what advice would you offer to Elizabeth?
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1.1 INTRODUCTION
Managers are found in every organization. They apply principles of management to address basic organizational needs. Systems thinking provides a useful paradigm and structure for managerial activities. Quality initiatives and good customer service enhance the operations and potential for success of any organization. This chapter introduces all three subjects: management, systems thinking, and quality improvement.
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1.2 MANAGEMENT
Management evokes images of control, motivation, and operations—internal activities that are essential in organizations. Referring to the individuals who perform those activities, one contemporary source de ines management as “those in charge of running a business” (Princeton University 2010). Another offers the following de inition: “the person or persons that are in charge of running a business establishment, organization or institution” (American Heritage 2006). Traditionally, the primary activities (also referred to as functions) of managers have been categorized as planning, organizing, leading or motivating, and controlling (Schermerhorn 2009). In this book, we use the term facilitating to encompass the motivational and leadership activities emphasized in health organizations. We also add the activity improving to each of the four functions to emphasize the foundational importance of continuous quality improvement in all management activities. The chapters of this book are grouped around the four management functions of: planning for improvement, organizing for improvement, facilitating improvement, and control and improvement. Managers and the four categories of management activities are essential to ensure the smooth operation of an entity.
Management has many experts (both by reputation and by self-proclamation) who have published books on the subject (see references and resources at the end of the chapter). The common thread is the need to guide an organization toward its goals. A related common element of a manager’s job is providing guidance and suf icient resources for employees to be productive. Other important aspects of managing that have emerged more recently include applying systems thinking, continuously improving the quality of services and programs, and providing excellent customer service. These are discussed in greater detail later in this chapter.
Competencies are de ined as effective applications of knowledge, skills, attitudes, and values in complex situations (Calhoun et al. 2002). A diverse range of managerial competencies is needed in all working milieus. Work that is related to health is undertaken in a wide variety of settings, including private organizations that are classi ied as for-pro it or nonpro it and public (government-funded) organizations. The governance and inancial guidelines that apply to for-pro it, nonpro it, and public organizations are different. The managerial competencies are, however, quite similar. There are some differences depending on the size of the organization. Managers of small organizations tend to be generalists who must be able to meet a variety of demands that emerge in their day-to-day activities. In comparison, managers who work in large organizations may become specialists who focus on a category of complex issues, such as inance, human resources, strategic planning, or program evaluation.
All managers need to understand people. They must understand leadership, evaluation, motivation, personalities, and communication styles. Successful managers are able to apply these basics to the people that they work with and supervise. They must be able to adjust their expectations of individual employees. They must also be adroit at helping their employees develop their competencies and prepare them for advancement.
Management is challenging but is rarely boring. Achieving success as a manager requires the ability to modify plans on short notice. Managers must trust their employees and give them opportunities to grow. Management also includes accepting the knowledge that employees will occasionally fail and being able to help them learn from failure. Successful managers have open and prepared minds. Finally, managers must be committed to their employees, their employer, and themselves. In addition to commitment, they must respect all three. Despite the challenges of management and the hard work
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that is required to complete many tasks, the satisfaction that accompanies success is highly rewarding.
Although full-time managers have the primary responsibility for carrying out the management activities of an organization, in fact, all employees contribute to their ful illment and, by extension, to organizational success. All employees of an organization, whether they are managers or not, contribute to planning, organizing, facilitating, and controlling their organizations for improvement and performance. All employees bene it from having some of the competencies of management and from understanding the managerial functions. No matter what their role in the organization, employees make choices about how to manage their own work and often assist in managing the work of several team or project members. In effective organizations, employees both identify with and contribute to the activities of management rather than viewing managers as members of a different group or, worse, as adversaries or enemies.
If employees understand and support (in addition to challenging and trying to improve) the management activities of their employer, then the organization is better able to move quickly and ef iciently to improve processes and outcomes. Employees also feel more invested in their organization and more empowered in their work. Employees become allies, rather than victims, of management. For these reasons, it is important that individuals understand and participate in ful illing the management functions of their employer’s organization. This applies to all persons in a given organization and is independent of their positions.
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1.3 SYSTEMS THINKING
A key advance in modern management practice was the realization that managerial decisions are rarely, if ever, made in a vacuum. Each decision has implications for other parts of the organization and often for suppliers and customers. For example, the decision to reorganize a department is likely to affect how employees interact with workers from other departments and with external stakeholders. In addition, every management decision has consequences (some of which are unanticipated) that unfold over weeks, months, and even years. A decision to reorganize has long-term consequences for employee morale, retention, and performance, and for community relations. Better decisions result when the interdependent effects and long-term consequences of managerial actions are considered in advance.
Generically, this approach to decision making can be referred to as systems thinking. Systems thinking can be de ined as “a general conceptual orientation [that is] concerned with the interrelationships between parts and their relationships to a functioning whole, often understood within the context of an even greater whole” (Trochim et al. 2006, 538). Systems thinking has been characterized as forest thinking rather than tree-by-tree thinking. This highlights the importance of understanding the context of relationships in addition to their details. Systems thinking has also been described as dynamic thinking rather than static thinking because it pushes people to consider the consequences of their actions over time (Richmond 2000). Systems thinking has been advanced as a basic competency for all public health practitioners (Association of Schools of Public Health 2010), and it has received widespread application in the study of public health policy. Almost by de inition, preventing health problems and promoting population health through public policy require systems thinking because the consequences of promotion and prevention unfold over long periods of time and involve complex interrelationships. Systems thinking also is promoted as a basic competency for managers in hospitals and other providers of clinical health services through the competency models of major professional associations such as the American College of Healthcare Executives, the American Organization of Nurse Executives, and the Healthcare Financial Management Association (Healthcare Leadership Alliance 2011).
A classic review and application of systems thinking (Senge 1993) in the early 1990s prompted interest in more widespread applications of systems thinking in management decision making. To encourage application of systems thinking, each chapter following this one concludes with an example of applied systems thinking in situations and organizations related to management. Several terms and ideas that underlie systems thinking for managers in organizations that provide programs and services related to health will be introduced next.
Systems are groups of interacting or interdependent elements that form a uni ied whole. Organizations clearly are systems. They are comprised of inputs (employees, managers, and inancial resources) and processes (policies, procedures, and production activities) that interact to produce outputs (products, programs, and services). An organizational system is open to in luences from its environment, particularly suppliers of inputs and recipients or purchasers of outputs. To visualize changes in a system over time, the concept of a causal loop is very useful. Causal loop diagrams portray cause-and-effect linkages within a system. Causal loops are circular, rather than straight lines. They encourage thinking about changes that occur over time and about feedback effects. Feedback is information about change that leads to further modi ications. Performance reviews of employees are examples of a common feedback mechanism that exists within organizational systems. Causal loops can either be reinforcing, where change in one direction causes even more change in that same direction, or
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balancing, where change in one direction creates resistance in the opposite direction. The result of a balancing loop is a stable situation or equilibrium.
Organizational growth is an example of a positive reinforcing loop (also referred to as a virtuous cycle). Often, organizational growth creates new revenues or other sources of support, which spurs further growth. In contrast, a negative reinforcing loop (also referred to as a vicious cycle) leads to unwanted change. Organizational downsizing is an example of a negative reinforcing loop. Downsizing can reduce the quality of organizational outputs, decrease demand for organizational services, and stimulate further downsizing. Monitoring budgets by using variance analysis (reviewing deviations from expected expenditure allocations) is an illustration of a balancing causal loop. A negative variance causes managers to reduce spending or cut expenses, causing the budget to move back into equilibrium.
Causal loops form the building blocks for visualizing systems as they change over time. Management scholars have identi ied several (approximately 10) common types or storylines of system change. System archetypes are patterns that occur repeatedly in different settings (Pegasus Communications 2010). System archetypes are useful for training people to think dynamically about complex interrelationships.
Fixes that fail is an example of a system archetype. In the ixes that fail storyline, a solution ( ix) is applied to a problem and has immediate positive results. However, the ix has unforeseen long-term consequences that eventually make the problem worse. A balancing loop in the short run is offset by the outcomes of a negative reinforcing loop that appears after some delay and eventually overwhelms the balancing loop. “Win today, lose tomorrow” summarizes the ixes that fail scenario. The tobacco industry in the United States “won today” for many decades by denying that smoking caused serious health problems. Those denials had the unintended long-term consequence of stimulating development of convincing scienti ic evidence that increased the liability of tobacco companies for damages, harming the industry in the long run. An example of a ix that fails in the realm of management is rewarding a single employee who is vocal about needing a pay raise, without considering the more subtle, long-term demoralizing effects that such a single reward can have on the rest of the workforce.
A second systems thinking archetype is drifting goals, wherein a gradual downward slide in performance goes unnoticed, threatening the long-term future of a system. Suppose, for example, that managers in an organization tolerate rude behavior by an employee toward other employees and customers. Over time, the organization’s acceptance of that behavior frees other employees to behave in the same rude manner. Levels of customer service and internal collaboration drift downward. Customers or clients gradually turn to other sources for services, threatening the organization’s existence.
In addition to system archetypes, more formal systems thinking tools for management include simulation modeling, learning laboratories, and diagrams that portray organizational performance over time. Many quality improvement tools, including those covered elsewhere in this book, draw on systems thinking because they require that analysts uncover the truth (often, the story behind the story) by tracing quality problems back in time to discover their systemic root causes.
Systems thinking simpli ies managerial life by helping managers to see meaningful, underlying patterns. With mastery of a few basic concepts and some practice, managers can make better decisions by foreseeing the system-level consequences of their actions.
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1.4 QUALITY IMPROVEMENT
Quality improvement (QI) encompasses a set of methods and techniques that can be used to improve programs, services, products, or output of any organization. They can also be used to decrease organizational costs. The approach and scope of quality improvement programs can vary.
Two QI approaches are relatively common, top down and bottom up. In top down, senior leaders in an organization support QI as a method for improving performance, create a vision that provides one or more goals, and supply needed resources. In bottom up, lower-level workers are trained in basic QI methods and techniques and then encouraged to apply their training. The scope of QI can vary from relatively modest to extreme. Transformational change is de ined as a radical alteration that involves a complete rethinking about the way an organization is structured or managed.
One speci ic example of a QI approach is process engineering, a methodology that analyzes operational sequences (Bonem 2008) and is used to improve operational ef iciency. The ultimate goal of process engineering is to eliminate or modify activities that do not add value. Others examples will be introduced in later chapters.
Manufacturing and service industries have been using QI methods and techniques for over 90 years. Although QI has been adopted extensively in many industries throughout the world, health organizations have lagged. Health care delivery organizations began adopting QI methods and techniques in the 1990s. Public health departments have only recently begun to use QI methods and techniques (Riley et al. 2010). The underlying premise behind improving the performance of health organizations and public health departments is that doing so will result in more affordable and higher quality health-related services and, ultimately, healthier people.
Applying Quality Improvement
The American health system has sophisticated care delivery capability, featuring complex technology and very committed providers. However, serious questions exist regarding quality, performance, and value. The health care system accounts for the largest sector of the economy. Americans currently spend almost $2.5 trillion per year on health care, comprising approximately 17.6% of the total gross domestic product (Centers for Medicare and Medicaid Services 2011). This is the highest level of per capita spending in any country of the world. Despite this level of spending, the United States does not have the best health status measures or indices. Moreover, individuals receive approximately one-half of the services that should be delivered when they visit health care organizations (McGlynn et al. 2003). Approximately 25% to 35% of the services delivered have no effect on the outcome. Evidence suggests that many treatments and services are provided when less expensive care options would yield comparable results (Orszag and Ellis 2007).
The focus of the acute care sector is delivering individual care services with the primary goal of restoring health and caring for sick and dying persons. The public health sector focuses on communities with the goals of protecting health, enhancing health promotion, and improving the health of the general population.
Critics assert that the health care industry is ineffective and inef icient. Effectiveness means achieving high-quality results, whereas ef iciency is de ined as maximizing outcomes while minimizing costs. For example, from a inancial perspective, hospitals are better off being full rather than empty.
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Physicians are paid when they interact with patients, independent of their health status. The delivery system is biased toward delivering services, independent of their value.
Questions regarding value and performance have been directed at the public health system. Approximately 5% of health care expenditures are made for public health services. The rest are directed to hospitals, physicians, and prescription drugs. Lifestyle issues such as poor nutrition and inadequate exercise have resulted in an obesity epidemic involving approximately 40% of adults, and 20% of American adults routinely use tobacco products. These two public health issues alone put tremendous upward pressure on health care spending. It is now estimated that three-quarters of all health care expenditures are made for chronic diseases that are related to diet (US Department of Agriculture 2011).
QI programs might be used to address several problems that have just been described. A review of treatment protocols could identify opportunities for procedural changes. A review of service delivery might reveal gaps in applications of existing service standards. A review of outcomes could help to identify unneeded treatments or services. Reviewing current programs has the potential to identify less expensive options. An analysis of treatment and service activities or needs might suggest potential modi ications to the existing goals of restoring health and caring for sick and dying persons. Reviewing how the salaries of physicians and other care providers are determined might lead to changes in professional responsibilities and compensation that are more closely linked to the health status of their patients.
Analyzing the programmatic goals of public health might identify programs that have limited utility or uncover opportunities for new services. Such activities might lead to savings that could be reallocated to yield better results or improve productivity.
Although QI programs have great potential, they are not universal panaceas. Research has highlighted several risk factors for obesity in the American population. Inappropriate nutrition and inadequate exercise are two important examples. Modifying these behaviors will require more personal commitment and effort rather than organizational activities. The experience gained with addressing tobacco usage may provide some guidance that can be generalized to other personal activities that contribute to less than optimal health.
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CONCLUSION
This chapter has introduced management, systems thinking, and QI. These three concepts are synergistic. Organizations and agencies that provide programs and services related to health bene it when the three concepts are applied. With the concepts of management, systems thinking, and quality explained, readers will have a better understanding of the rest of this book.
CASE STUDY RESOLUTION
After thinking for a few moments, Dr. Lombard turned to Elizabeth and said, “Have you ever considered a career in management? The ield needs people with inquisitive but open minds. After learning some fundamentals, you should have options. Before you make a commitment for additional training, let me give you something to read. After you have inished the material, come back, and we will continue this conversation.”
“Thanks,” Elizabeth said as Dr. Lombard handed her a copy of this book.
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understanding of competency identi ication and assessment in health care management. Quality Management in Health Care 11 (1): 14–38.
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Healthcare Leadership Alliance. 2011. Overview of the HLA Competency Directory. http://www.healthcareleadershipalliance.org /Overview%20of%20the%20HLA%20Competency%20Directory.pdf (http://www.healthcareleadershipalliance.org
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Orszag, P. R., and P. Ellis. 2007. The challenges of rising health care costs: A view from the Congressional Budget Of ice. New England Journal of Medicine 357 (18): 1793–5.
Pegasus Communications. 2010. The systems thinker: Glossary of terms. http://www.thesystemsthinker.com/tstglossary.html (http://www.thesystemsthinker.com
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/tstglossary.html) (accessed November 10, 2010).
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Richmond, B. 2000. The “thinking” in systems thinking: Seven essential skills. Toolbox reprint series. Waltham, MA: Pegasus Communications.
Riley, W. J., J. W. Moran, L. C. Corso, L. M. Beitsch, R. Bialek, and A. Cofsky. 2010. De ining quality improvement in public health. Journal of Public Health Management and Practice 16 (1): 5–7.
Schermerhorn, J. R. 2009. Management. 10th ed. Somerset, NJ: Wiley. Senge, P. 1993. The ifth discipline. New York: Random House Business. Trochim, W. M., D. A. Cabrera, B. Milstein, R. S. Gallagher, and S. J. Leischow. 2006. Practical challenges
of systems thinking and modeling in public health. American Journal of Public Health 96 (3): 538–46.
US Department of Agriculture. 2011. Dietary guidelines for Americans, 2010. http://www.cnpp.usda.gov/dietaryguidelines.htm (http://www.cnpp.usda.gov /dietaryguidelines.htm) (accessed February 2, 2011).
RESOURCES
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Baker S. L., L. Beitsch, L. B. Landrum, and R. Head. 2010. The role of performance management and quality improvement in national voluntary public health accreditation system. Journal of Public Health Management and Practice 216 (1): 427–9.
Carriere, B. K., M. Muise, G. Cummings, and C. Newburn-Cook. 2009. Healthcare succession planning: An integrative review. Journal of Nursing Administration 39 (12): 548–55.
DelliFraine, J. L., J. R. Langabeer, and I. M. Nembhard. 2010. Assessing the evidence of six sigma and lean in the health care industry. Quality Management in Health Care 19 (3): 211–25.
Erwin, D. 2009. Changing organizational performance: Examining the change process. Hospital Topics 87 (3): 28–40.
Goldman, E., T. Cahill, and R. Filho. 2009. Experiences that develop the ability to think strategically. Journal of Healthcare Management 54 (6): 403–16.
Goren lo, G. 2010. Achieving a culture of quality improvement. Journal of Public Health Management and Practice 16 (1): 83–4.
Green, L. W. 2006. Public health asks of systems science: To advance our evidence-based practice, can you help us get more practice-based evidence? American Journal of Public Health 96 (3): 406–9.
Grif ith, J. R. 2009. Finding the frontier of hospital management. Journal of Healthcare Management 54 (1): 57–72.
Leischow, S. J., A. Best, W. M. Trochim, P. I. Clark, R. S. Gallagher, S. E. Marcus, and E. Matthews. 2008. Systems thinking to improve the public’s health. American Journal of Preventive Medicine 35 (2S): S196–S203.
Porter, M. E., and M. R. Kramer. 2011. Creating shared value. Harvard Business Review 89 (1/2): 62–77.
Riley, W. J., H. M. Parsons, G. L. Duffy, J. W. Moran, and B. Henry. 2010. Realizing transformational
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change through quality improvement in public health. Journal of Public Health Management and Practice 16 (1): 72–8.
Scutch ield, D. G., M. L. Zuniga de Nuncio, R. A. Bush, S. H. Fainstein, M. A. LaRocco, and N. Anvar. 1997. The presence of total quality management and continuous quality improvement processes in California public health clinics. Journal of Public Health Management and Practice 3 (3): 57–60.
Shea-Lewis A. 2009. Teamwork: Crew resource management in a community hospital. Journal of Healthcare Quality 31 (5): 14–8.
Sterman, J. D. 2006. Learning from evidence in a complex world. American Journal of Public Health 96 (3): 505–14.
Van Deusen, L. C., and S. K. Holmes. 2007. Transformational change in health care systems: An organizational model. Health Care Management Review 32 (4): 309–20.
William, J. C., J. Costich, W. D. Hacker, and J. S. Davis. 2010. Lessons learned in systems thinking approach for evaluation planning. Journal of Public Health Management Practice 16 (2): 151–5.
Yuan, C. T., I. M. Nembhard, A. F. Stern, J. E. Brush, H. M. Krumholz, and E. H. Bradley. 2010. Blueprint for the dissemination of evidence-based practices in health care. Issue Brief (Commonwealth Fund) 86: 1–16.
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Berkowitz. New York: Academic Press. Baker, E. L., A. J. Menkens, and J. E. Porter. 2009. Managing the public health enterprise. Sudbury, MA:
Jones and Bartlett. Bialek, R., J. W. Moran, and G. L. Duffy. 2009. The public health quality improvement handbook.
Milwaukee, WI: American Society for Quality Press. Burke, R. 2010. Fundamentals of public health management and leadership. Sudbury, MA: Jones and
Bartlett. Chalice, R. 2007. Improving healthcare using Toyota lean production methods: 46 steps for
improvement. Milwaukee, WI: American Society for Quality Press. De Savigny, D., and T. Adam, eds. 2009. Systems thinking for health systems strengthening. Geneva,
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Jones and Bartlett. Foster, S. T. 2009. Managing quality. 4th ed. Upper Saddle River, NJ: Prentice Hall. George, M., J. Maxey, D. Rowlands, and M. Price. 2004. The lean and six sigma pocket toolbook. New
York: McGraw-Hill. Hoyle, D. 2007. Quality management essentials. Burlington, MA: Butterworth-Heinemann. Institute of Medicine. 2009. Leadership commitments to improve value in health care: Finding
common ground. Washington, DC: National Academies Press. Kim, D. H. 1999. Introduction to systems thinking. Waltham, MA: Pegasus Communications. McGregor, D. 1967. The professional manager. New York: McGraw-Hill. Meadows, D. H. 2008. Thinking in systems: A primer. White River Junction, VT: Sustainability Institute. Moran, J. W., G. L. Duffy, and W. J. Riley. 2010. Quality function deployment and leansix sigma
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applications in public health. Milwaukee, WI: American Society for Quality Press. National Cancer Institute. 2007. Greater than the sum: Systems thinking in tobacco control.
Washington, DC: US Department of Health and Human Services. Pande, P. S., R. P. Neuman, and R. R. Cavanagh. 2000. The six sigma way: How GE, Motorola, and other
top companies are honing their performance. New York: McGraw-Hill. Peters, T., and R. Waterman. 1982. In search of excellence. New York: HarperCollins. Rowitz, L. 2008. Public health leadership: Putting principles into practice. 2nd ed. Sudbury, MA: Jones
and Bartlett. Senge, P. M., C. Roberts, R. B. Ross, B. J. Smith, and A. Kleiner. 1994. The ifth discipline ieldbook:
Strategies and tools for building a learning organization. New York: Doubleday. Sterman, J. D. 2000. Business dynamics: Systems thinking and modeling for a complex world. New York:
McGraw-Hill. Taylor, F. W. 1998. Principles of scienti ic management. New York: Engineering & Management Press
(reprint of 1911 edition). Zimmerman, B., C. Lindberg, and P. Plsek. 1998. Edgeware: Insights from complexity science for health
care leaders. Irving, TX: VHA Inc.
Web Sites • Academy of Management: http://www.aomonline.org (http://www.aomonline.org) • American Health Information Management Association: http://www.ahima.org
(http://www.ahima.org)
• American Society for Quality: http://www.asq.org/ (http://www.asq.org/) • Applied Systems Thinking: When Smallpox Becomes a Threat Again:
http://www.pegasuscom.com/aar/model3.html (http://www.pegasuscom.com/aar/model3.html) • Centers for Disease Control and Prevention Syndemics Prevention Network:
http://www.cdc.gov/syndemics/ (http://www.cdc.gov/syndemics/) • Institute for Healthcare Improvement: http://www.ihi.org/ (http://www.ihi.org/) • Journal of Healthcare Management: http://www.ache.org/PUBS/jhmsub.cfm
(http://www.ache.org/PUBS/jhmsub.cfm)
• National Institute of Standards and Technology, Baldrige National Quality Program: http://www.nist.gov/baldrige/ (http://www.nist.gov/baldrige/)
• One Health Initiative: http://onehealthinitiative.com/ (http://onehealthinitiative.com/) • Robert Wood Johnson Foundation: http://www.rwjf.org/ (http://www.rwjf.org/) • Society for Human Resource Management: http://www.shrm.org (http://www.shrm.org) • Systems Thinking: http://www.answers.com/topic/systems-thinking
(http://www.answers.com/topic/systems-thinking)
• Systems Thinking: http://thesystemsthinker.com/ (http://thesystemsthinker.com/)
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SECTION I
Planning for Improvement
As discussed in Introduction: Managing for Quality and Performance (Chapter 1 (chapter01.html) ), management involves four sets of activities or functions: planning, organizing, facilitating, and controlling. This book adds an emphasis on using each management function to improve the organization. Each management function is covered in a section of the book. Planning for Improvement (Section I (section01.html) ) covers competencies (knowledge, skills, attitudes, and values) related to managers’ responsibility to plan ahead to improve their units and organizations.
The Policy Context for Management (Chapter 2 (chapter02.html) ) describes the interdependence between managing and public policy in the health sector. Strategic Planning (Chapter 3 (chapter03.html) ) describes tools and resources for organizational and community-wide planning. Marketing Health (Chapter 4 (chapter04.html) ) shows how health organizations can use marketing and media to shape their plans and messages and to meet their organizational missions. Preparing for Emergencies (Chapter 5 (chapter05.html) ) covers the critical area of preparing for emergencies, a planning responsibility of all health organizations.
Competencies commonly used by health organization managers can be identi ied by inspecting competency frameworks developed by professional associations of educators and practitioners. The Association of Schools of Public Health (ASPH) has compiled an inventory of core competencies expected of graduates of Master of Public Health (MPH) degree programs (Association of Schools of Public Health 2010). The Healthcare Leadership Alliance (HLA) is a consortium of professional organizations with more than 140,000 members across the major health care management sectors. A compilation of the HLA member competency frameworks is available (Healthcare Leadership Alliance 2010).
Planning for Improvement (Section I (section01.html) ) contributes to strengthening six competencies in the ASPH competency framework for Health Policy and Management:
• Identify the main components and issues of the organization, inancing, and delivery of health services and public health systems in the United States.
• Discuss the policy process for improving the health status of populations.
• Apply principles of strategic planning and marketing to public health.
• Communicate health policy and management issues using appropriate channels and technologies.
• Explain methods of ensuring community health safety and preparedness.
• Apply “systems thinking” for resolving organizational problems.
Planning for Improvement (Section I (section01.html) ) also contains material related to selected
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ASPH competencies from three cross-cutting domains: Program Planning, Systems Thinking, and Communication and Informatics. From the HLA competency framework, Planning for Improvement (Section I (section01.html) ) emphasizes the competency domain of Knowledge of the Health Care Environment, as well as the competency cluster of Strategic Planning and Marketing from within the competency domain Business Skills and Knowledge.
REFERENCES Association of Schools of Public Health. 2010. MPH Core Competency Model. Final Version 2.3.
http://www.asph.org/document.cfm?page=851 (http://www.asph.org /document.cfm?page=851) (accessed February, 22, 2011).
Healthcare Leadership Alliance. 2010. Overview of the HLA Competency Directory. http://www.healthcareleadershipalliance.org /Overview%20of%20the%20HLA%20Competency%20Directory.pdf (http://www.healthcareleadershipalliance.org
/Overview%20of%20the%20HLA%20Competency%20Directory.pdf) (accessed July 13, 2011).
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CHAPTER
2
The Policy Context for Management
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Understand the interdependence of health management and public policy. • Be able to describe the US governmental policy-making process. • Understand key distinctive features of health policy in the United States. • Be able to identify key policy issues relevant to health management.
CHAPTER SUMMARY
Laws and regulations affecting health organizations are diverse and plentiful in the United States, at the local, state, and federal levels. Managers of health organizations are responsible for assuring that their organizations and units comply with laws and regulations. Proactive managers keep informed of likely changes in relevant laws, regulations, and other expressions of health policy. Managers should understand the legislative process so that they can participate in it and anticipate changes in public policies. Key health policies affecting health organizations include policies on access to services and reimbursement of services, health information technology support and security, emergency preparedness, quality improvement, prevention, and health promotion. Performance-driven health organizations seek to shape health policies so that quality and value are motivated and rewarded.
CASE STUDY
Sandra and Madeline were introduced at one of the new employee orientation sessions. They began a dialogue over lunch that day.
“The new owners have given us the task of purchasing an electronic health record system,” said Sandra. “The CEO reminded me to acquire a system that is the least expensive for the organization to purchase and operate.”
Madeline responded, “That is a reasonable goal, but the CEO has a inancial background and is not familiar with electronic record systems in health. I think we have a responsibility to ensure that any system that we install is fully compatible with all laboratories, of ices, diagnostic centers, and billing operations here as well as being able to import and export data to insurance carriers and health
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providers in this part of the state.”
“That is a tall order, but I agree with you,” replied Sandra. “What do you think should be our next step?”
While Madeline thinks, what advice would you offer?
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2.1 INTRODUCTION
Management inside of organizations is undertaken within the larger context of laws and regulations governing commerce in the United States. Laws are rules developed and approved by legislative bodies and enforceable in the courts. Regulations are rules developed by governmental agencies or by private organizations that have been assigned authority by the government, usually to enact the provisions of laws. Still more rules are established by discretionary decisions of administrative agencies of the government, because all situations cannot be covered by laws and regulations. For example, the federal government’s Centers for Medicare and Medicaid Services (CMS) makes eligibility and reimbursement decisions for the highly complex Medicare health insurance program; those decisions essentially become rules.
Compliance with laws and regulations is a prominent task in larger and complex organizations, and management is responsible for ensuring that employees are aware of and follow relevant laws and regulations. Larger health organizations retain compliance managers and legal counsel to assist in compliance management. For example, management of human resources is subject to a host of laws and regulations. Financial laws and regulations govern inancial reporting. In this chapter, the focus is on laws and regulations that are speci ic to the health sector.
The concept of health policy is broader than laws and regulations. Health policy refers to the principles and activities guiding the allocation of resources that affect the health of patients and populations. Health policy is heavily in luenced by the laws and regulations formulated and implemented by governmental units. In addition to governmental action, private organizations affect health policy in the United States. For example, hospitals must be accredited by The Joint Commission (a private organization) or another similar accrediting body in order to receive federal funds from Medicaid and Medicare. In addition, the decisions made by large private insurance companies regarding reimbursement of speci ic health services shape health policy. Private nonpro it organizations, as well as private for-pro it organizations, are highly involved in formulation of US health policy.
Managers can bene it from an understanding of how health policy is formulated. The process of policy formulation is outlined, with an emphasis on governmental action.
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2.2 THE POLICY-MAKING PROCESS
Governmental policy making in the United States occurs at three major levels: federal, state, and local. Two principles undergird the policy-making process: federalism and the separation of powers. Federalism refers to the sharing of power between states and the national government. States are granted authority by the US Constitution to establish laws that protect the public’s health and welfare. States license health practitioners, health delivery organizations, and health insurance plans, for example. Federalism explains why managing in a health organization in one state may differ from managing in a health organization in another. As an example, for-pro it hospitals are banned in the state of Minnesota, but not in most other US states. Federalism also means that states are free to delegate powers to local and county governments, which they have done in most states for many public health services. Despite such delegation, the organization of public health services still varies substantially across states.
The second principle, separation of powers, divides government into three branches: the judiciary (courts); the executive, including the President at the national level and governors and mayors at the state and local levels; and the legislative, including the Senate and the House of Representatives at the national level and similar entities at the state level. Allocating power among the three branches in an equitable manner is referred to as the system of checks and balances. The legislative branch has authority to safeguard the public health, which includes such areas as waste and water management, vaccination requirements, and emergency preparedness. The legislative branch also has authority to shape the delivery of and payment for health services, although the limits of that authority have been disputed, for example, by challenges to the Patient Protection and Affordable Care Act of 2010 (discussed in more detail later in this chapter). The judicial branch enforces laws made by the legislative branch, with criminal and civil sanctions and adjudication of legal disputes, for example, between providers and patients or insurance companies and patients. The judicial branch decides whether legislation is consistent with principles in the US Constitution. The executive branch proposes and implements legislation and regulations that low from legislation.
The Legislative Branch
At the national level in the United States, laws originate in the US House of Representatives or the Senate. Laws approved by the House or Senate move to the other body. If identical bills are approved, the law moves to the President for approval or veto. If the bills are not identical, a conference committee comprised of members from the House and Senate constructs a compromise bill, which is then processed through the two bodies. A two-thirds vote of the legislative branch (House and Senate) can override a Presidential veto. Similar processes guide most state legislatures.
Health organizations and their interest groups, such as professional associations, can be directly involved in proposing legislation and participating in hearings on health laws. Large health organizations and associations frequently employ communications or lobbying specialists to engage in this activity. Key groups in the legislative process are the committees of the US House and Senate that process health laws under consideration. The Senate Finance Committee and the House Committee on Ways and Means, which have jurisdiction over Medicare and Medicaid legislation (described in more detail later in this chapter), are two key committees. Legislative committees often hold public hearings on controversial proposals. The hearings give health organizations opportunity for input. Similar processes at the community and state levels provide opportunities for in luence on state and local laws
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as well.
In luencing the Policy Process
To further in luence public policy in the health care arena, managers can develop or participate in coalitions of like-minded individuals and advocate for their viewpoints before, during, and after the legislative process. Longest (2010) suggests ive stages at which public policy can be in luenced:
1. Agenda setting stage
2. Legislation development stage
3. Rulemaking stage
4. Policy operation stage
5. Policy modi ication stage
To help establish agendas, managers can urge their organizations to de ine and document problems, develop and evaluate solutions, and lobby politicians. Members of health organizations can participate in drafting legislation and testifying at legislative hearings. At the rulemaking stage, health organizations can provide formal comments on draft rules and serve on rulemaking advisory bodies. At the policy operation stage, health organizations can share their knowledge and concerns with policy implementers. Finally, managers and others, including consumers of health organization services, can document the case for modifying laws and regulations through communication to government of their experiences and evaluations of laws and regulations.
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2.3 DISTINCTIVE FEATURES OF US HEALTH POLICY
In the United States, the government is less involved in the direct provision of health services than any other industrialized country in the world (Greenwald 2010; Jonas, Goldsteen, and Goldsteen 2007). Health care workers are less likely to be employed by the government. Managers in health organizations may work in a variety of settings, including private nonpro it, private for-pro it, and public (including local, county, state, or federal government; Veterans Administration; and armed forces). If managers cross organizational settings in their careers, they must be prepared to adapt their style and knowledge base to the different settings.
In contrast to most national health systems, no central agency governs the US health system. Further, there is no universal access to health care. The existence of multiple sources of payment for health services increases administrative costs to the US system. Countervailing forces struggle to promote their own interests in the political arena. The major forces are typically identi ied as government, large private employers, labor, insurance companies, physicians, and hospitals (Shi and Singh 2008). Gaining consensus to change the system in fundamental ways is very dif icult. As a result, most changes in health policy are incremental and fragmented.
Decentralization and fragmentation of health policies in the United States do not mean that health organizations are unregulated. In fact, many health organizations complain that they are overregulated through micromanagement in the form of laws and regulations that add to organizational costs and sometimes con lict with each other. For example, government is heavily involved in regulation due to the inancing of health services through the Medicare and Medicaid programs. Medicare, established in 1965, inances medical care for persons age 65 and older, certain permanently disabled workers and their dependents, and persons with end-stage renal disease. Medicare is a critical factor in the inancial condition of many health organizations, because it accounts for 20% of national health expenditures (US Department of Health and Human Services 2011). Medicaid, also established in 1965, funds medical care for some of the poor who qualify for eligibility, based on state criteria. Medicaid funding is shared by the national and state governments. Medicaid accounts for 15% of national health expenditures (US Department of Health and Human Services 2011). Both Medicare and Medicaid are in a precarious inancial condition. Managers in health organizations that depend on those sources must be attuned to the need for increased ef iciency in services to recipients.
Government also funds a wide array of health research, training of health workers, and a variety of direct delivery services, such as the Veterans Health Administration. The Department of Health and Human Services, which includes the Centers for Disease Control and Prevention and the Agency for Healthcare Research and Quality, is the largest of the governmental departments administering health- related laws at the national level. At the state level (in most states), a state board of health oversees public health services, including vital statistics, public health laboratories, communicable disease control, environmental sanitation, maternal and child health, and public health education. In most states, local health departments implement many of these services.
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2.4 KEY HEALTH POLICIES AFFECTING MANAGEMENT
As already noted, organizational activities are subject to many laws that regulate inancial reporting and human resources. Legislation has been enacted to regulate organizations that provide programs and services that are related to health. This section reviews policies that are speci ic to the health sector, focusing on those that impact the ability of health organizations to improve the quality of their programs and services and increase their value to consumers and clients.
Health Information Technology Support and Security
Health information technology has been targeted by recent legislation designed to modify existing policies and practices. These efforts have been driven by the slow adoption of information technology by organizations in the health sector and the fragmented delivery system in the United States. Health care service providers have begun to implement a wide range of different brands of information systems. Information systems are often selected for their inancial advantage to the purchasing organization rather than considering their utility to customers, clients, or patients. A consequence of this approach is that individuals who use different provider organizations often do not have integrated health records.
To address these issues, recent changes in health policies have supported investment in information technology and standardization of the diverse technologies so that they can be interconnected. A National Coordinator for Health Information Technology was mandated by the Health Information Technology for Economic and Clinical Health Act (HITECH Act). This legislation was included in the American Recovery and Reinvestment Act (ARRA) of 2009. The Of ice of the National Coordinator is responsible for promoting a nationwide health information technology infrastructure that improves health quality and reduces costs. The ARRA also authorized nearly $20 billion over 5 years to assist physicians in adopting electronic health record (EHR) technology. Beginning in 2015, physicians not using EHRs will be penalized in their Medicare payments.
Privacy and security of health data are of critical concern to US health policy, again related to the many different sources of health information already in existence. The Health Insurance Portability and Accountability Act (HIPAA) of 1996 set standards for the security of certain protected health information. Health care providers and supportive personnel in a variety of settings now receive training on enforcement of the HIPAA guidelines. Privacy and security continue to be critical national policy issues in implementation of a health information technology infrastructure.
Access to Health Services
As noted earlier, the federal Medicare health insurance program and the joint federal–state Medicaid health insurance program have served elderly and disadvantaged populations for decades in the United States. A major expansion in the federal role in access to health services occurred in 2010, with the Patient Protection and Affordable Care Act. The law unfolds over the 2010–2014 period. The constitutionality of the law is being challenged in the courts as this book is written, with undetermined outcome.
Immediate effects of the Patient Protection and Affordable Care Act include a prohibition on denial of health insurance coverage for children due to preexisting conditions and requirements for full
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coverage of selected preventive services in health insurance plans. Later effects include an individual mandate for health insurance—individuals not covered by government insurance programs must maintain health insurance or pay a penalty. Access to affordable insurance will be increased through the use of health insurance exchanges operating in each state. Minimum standards for health insurance policies will be introduced. The law also funds a major expansion of Community Health Centers, which largely serve inner city poor populations, and increases payment levels to rural health care providers. Providers (primarily hospitals and clinicians) are given incentives to join in community-based accountable care organizations (ACOs). ACOs are integrated groups of providers responsible to care for a population of Medicare enrollees who are rewarded for reducing costs and improving quality.
Quality Improvement
US health policy is strongly behind efforts to improve the quality of health services, with increased expectations that health organizations will report and enhance the quality and value of their services. This trend is demonstrated by several provisions of the Patient Protection and Affordable Care Act. This legislation requires increased linkages between Medicare payments and quality outcomes. The Act establishes a Patient-Centered Outcomes Research Institute that is independent from the government. The Institute will examine the relative effectiveness of different medical treatments. The HITECH Act requires physicians to document clinical quality measures.
As of 2008, 26 states had enacted mandatory reporting laws requiring provider organizations to report instances of serious adverse events that occurred in hospitals on an annual basis (US Department of Health and Human Services 2008). In most states, root cause analysis is required to develop action plans for preventing similar events.
A movement to accredit public health departments, formally launched in 2011, is another example of the growing inclusion of quality improvement in US health policy. The Public Health Accreditation Board is dedicated to advancing the continuous quality improvement of state, local, tribal, and territorial public health departments.
Emergency Preparedness
Government is heavily involved in health policy for emergency preparedness. At the national level, the US Department of Homeland Security, established by the Homeland Security Act of 2002, and one of its units, the Federal Emergency Management Agency, develop and deploy national strategies for prevention and response to emergencies, including terrorist attacks and natural disasters. States and many localities have similar emergency preparedness units, and health managers should be familiar with their organization’s responsibilities to the community, state, and federal governments during emergencies.
Prevention and Health Promotion
US health policy has gradually increased recognition of the importance of prevention and health promotion. Building on the Healthy People initiatives, which set national health goals for 1990, 2000, 2010, and 2020, the Patient Protection and Affordable Care Act of 2010 creates a $15 billion Prevention and Public Health Fund and a council to develop and promote stronger national prevention, health promotion, and public health strategies. As already noted, the Act also creates requirements for health
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insurance plans to cover selected preventive services.
Another area of growing health policy concern is health disparities. Health disparities are population-speci ic differences in health. Many different populations are affected by disparities including racial and ethnic minorities, residents of rural areas, women, children, the elderly, and persons with disabilities. The Minority Health and Health Disparities Research and Education Act of 2000 authorized several US Department of Health and Human Services programs to address disparities. The Patient Protection and Affordable Care Act of 2010 expands services to low-income populations, broadens initiatives to increase racial and ethnic diversity in the health care professions, and strengthens cultural competency training for health care providers.
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CONCLUSION
Informed and involved managers will not be surprised by most changes in US health policy. Changes in health policy re lect the fragmented, pluralistic structure of the health system in the United States. Incremental shifts toward health information technology support and security, increased access to services, quality and value improvement, emergency preparedness, and prevention and health promotion are long-term policy trends that provide opportunities for many health organizations. Managers familiar with the policy context of health management can better position their units and organizations for coming changes in health policies, take advantage of new service markets, and comply with laws and regulations.
Systems Thinking about the Policy Context for Management
Most health organizations tackle complex challenges to improve patient or population health. The health challenges inevitably have a health policy component, creating long-term interdependence between health organizations and health policies. As health policies change, so do the roles of organizations.
A good example of this connectedness over time is the health challenge of tobacco control. For several decades in the United States in the 1900s, tobacco control was not viewed as a salient health policy issue. Individualistic values and the American free enterprise economic system combined to limit the creation of policy interventions to control the use of tobacco. Tobacco users were free to make their own choices to use tobacco, and tobacco manufacturers were free to pursue pro it.
Eventually, accumulating research on the negative health effects of tobacco on users and the harmful impact of secondhand smoke on nonusers, along with the huge cost of tobacco-induced illness to health insurance programs, altered health policy to promote decreased use. Individual- level interventions such as telephone quit lines and nicotine substitutes emerged. Community-level and population-level interventions, including bans on smoking in public places, higher taxes on tobacco products, and warning labels on tobacco products, were implemented. Successful suits against tobacco companies by state governments re lected changing health policy and resulted in large endowments for tobacco use prevention campaigns and research. Over time, a multitude of stakeholder organizations emerged, including government (e.g., the National Cancer Institute, Centers for Disease Control and Prevention) and private organizations (e.g., Robert Wood Johnson Foundation, American Cancer Society, Campaign for Tobacco-Free Kids).
As a whole system, the changes in tobacco health policy re lect the interdependence of private nonpro it organizations, researchers, government, consumers, and product manufacturers. Whole systems thinking about tobacco control involves reducing duplication of effort among disparate programs, encouraging multipartner efforts, developing better evidence on the effectiveness of tobacco control efforts, and integrating research and practice (National Cancer Institute 2007). The whole systems approach to tobacco control is a constructive attempt to address the pluralistic and fragmented health system, the incremental nature of policy change, and the complexity of most health challenges.
CASE STUDY RESOLUTION
Returning to the discussion about electronic health record systems, Madeline began to speak.
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“Financial ef iciency is important, but, in my opinion, customers or clients should come irst. If we opt for ef iciency, the organization and owners bene it. If we install a system that can interact with other electronic health systems in the region, our costs will be marginally greater. However, the people that we serve will bene it. The increase in customer satisfaction and goodwill should more than offset the extra cost. The federal government has recognized the value of integrated record systems, too. We should check into that.”
“I agree,” replied Sandra.
REFERENCES Greenwald, H. P. 2010. Health care in the United States: Organization, management, and policy. San
Francisco: Jossey-Bass. Jonas, J., R. L. Goldsteen, and K. Goldsteen. 2007. An introduction to the U.S. health care system. 6th ed.
New York: Springer. Longest, B. B. 2010. Health policymaking in the United States. 5th ed. Chicago: Health Administration
Press. National Cancer Institute. 2007. Greater than the sum: Systems thinking and tobacco control.
Bethesda, MD: Department of Health and Human Services. Shi, L., and D. A. Singh. 2008. Delivering health care in America: A systems approach. 4th ed. Sudbury,
MA: Jones and Bartlett. US Department of Health and Human Services. 2008. Of ice of the Inspector General. Adverse events
in hospitals: State reporting systems. http://oig.hhs.gov/oei/reports/oei-06-07-00471.pdf (http://oig.hhs.gov/oei/reports/oei-06-07-00471.pdf) (accessed July 28, 2011).
US Department of Health and Human Services. 2011. Centers for Medicare and Medicaid Services. National health expenditure fact sheet. https://www.cms.gov/NationalHealthExpendData /25_NHE_Fact_Sheet.asp (http://https://www.cms.gov/NationalHealthExpendData /25_NHE_Fact_Sheet.asp) (accessed July 28, 2011).
RESOURCES
Periodicals
Carter-Pokras, O., and C. Baquet. 2002. What is a “health disparity?” Public Health Reports 117: 426–34.
Freudenberg, N., and S. Galea. 2008. The impact of corporate practices on health: Implications for health policy. Journal of Public Health Policy 29: 86–104.
Keehan, S. P., A. M. Sisko, C. J. Truffer, J. A. Poisal, G. A. Cuckler, A. J. Madison, J. M. Lizonitz, and S. D. Smith. 2011. National health spending projections through 2020: Economic recovery and reform drive faster spending growth. Health Affairs 30: 1594–605.
Meyer, H. 2011. Accountable care organization prototypes: Winners and losers? Health Affairs 30: 1227–31.
Raphael, D., and T. Bryant. 2006. The state’s role in promoting population health: Public health concerns in Canada, USA, UK, and Sweden. Health Policy 78 (1): 39–55.
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Books Bodenheimer, T. S., and K. Grumbach. 2009. Understanding health policy: A clinical approach. 5th ed.
New York: McGraw-Hill. Harrington, C., and C. L. Estes. 2011. Health policy. 6th ed. Sudbury, MA: Jones and Bartlett. Jacobs, L. R., and T. Skocpol. 2010. Health care reform and American politics: What everyone needs to
know. New York: Oxford University Press. McLaughlin, D. B. 2011. Responding to healthcare reform: A strategy guide for healthcare leaders.
Chicago: Health Administration Press.
Web Sites • Agency for Healthcare Research and Quality: www.ahrq.gov/ (http://www.ahrq.gov/) • Health Disparities, Centers for Disease Control and Prevention: http://www.cdc.gov
/omhd/Topic/healthdisparities.html (http://www.cdc.gov/omhd/Topic/healthdisparities.html) • Health Information Privacy: http://www.hhs.gov/ocr/privacy/hipaa/understanding
/consumers/index.html (http://www.hhs.gov/ocr/privacy/hipaa/understanding/consumers /index.html)
• Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009: http://www.hhs.gov/recovery/reports/plans/onc_hit.pdf (http://www.hhs.gov/recovery /reports/plans/onc_hit.pdf)
• Healthy People: http://www.healthypeople.gov/2020/default.aspx (http://www.healthypeople.gov/2020/default.aspx)
• Henry J. Kaiser Family Foundation: http://www.kaiseredu.org/ (http://www.kaiseredu.org/) • Homeland Security Act of 2002: http://www.dhs.gov/xabout
/laws/law_regulation_rule_0011.shtm (http://www.dhs.gov/xabout /laws/law_regulation_rule_0011.shtm)
• National Academy for State Health Policy: www.nashp.org/ (http://www.nashp.org/) • National Association for Public Health Policy: www.naphp.org/ (http://www.naphp.org/) • National Healthcare Disparities Report, 2003: http://www.ahrq.gov/qual/nhdr03
/nhdrsum03.htm (http://www.ahrq.gov/qual/nhdr03/nhdrsum03.htm) • Patient Protection and Affordable Care Act of 2010: http://www.healthcare.gov
/law/introduction (http://www.healthcare.gov/law/introduction) • Public Health Accreditation Board: http://www.phaboard.org/index.php/about/
(http://www.phaboard.org/index.php/about/)
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CHAPTER
3
Strategic Planning
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Identify the purposes of strategic planning. • List the six steps of strategic planning. • Describe the importance of a mission, vision, and values. • Describe how to use analysis of strengths, weaknesses, opportunities, and threats (SWOT). • Explain the strategic uses for Healthy People 2020. • Describe Mobilizing for Action through Planning and Partnerships (MAPP).
CHAPTER SUMMARY
The basic components of planning for improvement are described and reviewed. These include assessing the internal organization and the external environment, deciding on strategic priorities, and implementing the priorities through operating plans, goals and objectives, and budgets. The strategic priority document Healthy People 2020 is summarized, as well as a prominent planning model used in public health work, Mobilizing for Action through Planning and Participation (MAPP).
CASE STUDY
Stan and Ollie were debating the iner points of planning. Both had been working at the health department for many years, were near retirement, and considered themselves to be experts. After all, they had been constructing plans for a long time.
“Hey fellas,” said Brett as he approached the two men. “Are you familiar with MAPP?”
“Sure,” replied Ollie. “I carry a book in my car that is full of them.”
“Well, in that case, you should be able to help me out. I have been assigned to design a program to improve the cardiovascular health of senior citizens.”
“No problem,” said Stan. “Let me get my triangle and T-square and we can draw up plans for some exercise equipment.”
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Sensing a problem, Brett calmly asked, “Can we resume this conversation after lunch? I did not have breakfast.”
“All right,” agreed Ollie.
“The schools must not teach mechanical drawing anymore. Good thing we are here to help out with planning,” said Stan.
Could you help Brett? What would you say to him?
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3.1 INTRODUCTION
Strategic planning is a discipline that is well understood and used in many businesses and competitive health care organizations. However, strategic planning is not as widely used in many nonpro it and public health organizations. This is unfortunate because nonpro it and public health organizations, like other health organizations, can bene it signi icantly from the strategic planning process. All health organizations face competition for limited resources, and all have the capability to make better use of those resources and produce more quality and value for consumers and the public.
Strategic planning helps an organization develop an overall sense of direction for the future. This is essential because an organization that does not identify and make strategic choices loses opportunities to learn about its market and its capabilities to serve and endangers ful illment of its organizational mission. Strategic planning is an important competency for managers because it stimulates new ideas and emphasizes continuous improvement in quality and value relative to alternative or competing organizations.
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3.2 STRATEGIC PLANNING
Two de initions are necessary to understand strategic planning. Strategy addresses the question of how to position an organization in its environment. A strategy is a major course of action an organization uses to pursue its mission and vision. Strategic planning is the process of developing strategies. As a result of conducting a strategic planning process, an organization will make signi icant, nonrecurring decisions about its nature and the directions it will take in the future. As a irst step, an organization must irst clearly articulate its mission.
Mission
An organization’s mission statement delineates its purpose and reason for existence. It establishes boundaries for the organization’s activities, programs, and services. It creates focus, assuring that the organization does not attempt to be all things to all people. Mission statements are as important for what they exclude as for what they include.
A mission statement is typically brief, usually not exceeding two or three sentences. It communicates the current intentions of the organization. Mission statements are often accompanied by statements of vision and values.
Vision and Values
Decision makers in many organizations develop a targeted description of the future outcomes expected if the organization is successful. This description is called a vision. Visions are somewhat idealistic because they are intended to motivate people and enroll the hearts, as well as the minds, of organizational stakeholders. Many organizations also produce a written statement of the values upon which an organization is built. This is especially true in organizations with a religious af iliation or foundation. They may rely on explicit values to a greater degree than their secular counterparts. Strategic planning activities are based on the mission, vision, and values of the organization.
Guiding statements (the mission, vision, and values documents) from two different organizations provide useful examples. Fairview Health Services (FHS) is a large, nonpro it integrated health delivery system in Minnesota. FHS is comprised of 7 hospitals, has over 2000 employed and af iliated physicians, and is supported by more than 21,000 staff. The mission of FHS is to improve the health of the community and support research and education efforts (Fairview Health Services 2010). The vision of FHS is to be the best health care delivery system in America. The values of FHS—dignity, integrity, service, and compassion—re lect beliefs regarding ways to serve individuals.
A second example of a guiding statement comes from Healthy People 2020, which lists strategic priorities for national health promotion and disease prevention efforts to improve the health of people in the United States by 2020. It is used as a tool for strategic planning by all levels of government and the health system to prioritize targets and to measure progress for health issues in speci ic populations (US Department of Health and Human Services 2010). The mission of Healthy People 2020 is to identify priorities for improving health nationwide and engage multiple sectors to take health actions based on scienti ic evidence. The vision of Healthy People 2020 is to help promote a society in which all people live long, healthy lives. The values of Healthy People 2020 are embedded in its overarching goals—the values emphasize a desire to improve community health, nurture healthy behaviors, and
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eliminate health disparities.
Both guiding statements (FHS and Healthy People 2020) set stretch goals—becoming the best health care delivery system in America (FHS) and creating a society where all people live long, healthy lives (Healthy People 2020). Stretch goals are important to the improvement process because they challenge employees and stakeholders to perform at even higher levels. The mission, vision, and values of each organization create the foundation for aspirations and strategic plans of the organization.
Strategic Planning Steps
The strategic planning process is depicted in Figure 3–1 (http://content.thuzelearning.com/books /Fallon.9852.17.1/sections/24# ig31) and consists of six steps that proceed from the mission, vision, and values. Note that the mission, vision, and values have two roles in the strategic planning process. First, they form the foundation of the planning efforts. Second, the results of the planning effort should serve to validate the continuation of the mission. The mission of the organization (and more rarely, the vision or values) is occasionally changed as a result of the strategic planning process, as shown by the feedback loop in Figure 3–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/24# ig31) . Although not a common occurrence, it is important for an organization to alter its mission when the environment, the people, or the community it serves changes, or when it undergoes a major transformation.
The six steps of strategic planning include the following:
1a. Analyze the internal organization 1b. Analyze the external environment 2a. Analyze internal strengths and weaknesses 2b. Analyze external opportunities and threats 3. Identify and evaluate strategic issues and options 4. Select strategic priorities
FIGURE 3–1 The Strategic Planning Process
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Although the steps in the process are presented in a linear fashion for simplicity, in reality, they are interdependent. Identi ication of key strategic issues can result in a reassessment of external opportunities and threats, for example. A selection of priorities can mean changes in internal operations that alter the internal strengths and weaknesses of the organization. The strategic planning process is more realistically described as an interdependent cycle than a series of discrete steps (Begun and Heatwole 1999).
Steps 1a and 1b: Analyze the Internal Organization and the External Environment
Strategic planning begins with an analysis of the internal environment of the organization and the external environment in which the organization operates. Because the internal and external environments of organizations are constantly changing, regular review is essential in order to identify and assess the impact of changes and how they affect an organization. Factors that typically are reviewed to assess changes include laws, regulations, payment mechanisms, competitors, workforce supply, trends in quality and safety, demography of the service area, and customer or client satisfaction.
An internal organizational analysis consists of a review of the health organization’s resources and performance. An internal analysis typically includes measures of productivity, staf ing ratios compared to industry standards, key inancial ratios, patient and client satisfaction rates, employee morale, and other performance measures.
An external environmental analysis looks at the key factors outside the organization such as economic, political, and legal trends that affect the service area and the health care organization. It is also important to examine the demographics and disease risks in the community carefully. Conducting an external environmental analysis is an extensive activity undertaken to gain a complete understanding of relevant external forces affecting the organization. At a minimum, this component of the environmental audit should include key demographic trends, employment data, poverty data, workforce supply, and health status of the community. It also should include characteristics of the client or customer populations served by the organization, where they come from, and market penetration trends.
Steps 2a and 2b: Analyze Internal Strengths and Weaknesses and External Opportunities and Threats (SWOT Analysis)
The analysis of the internal and external environments forms the basis for determining the organization’s internal strengths and weaknesses as well as external threats and opportunities. Taken together, these two steps are often referred to as SWOT analysis. This acronym refers to the Strengths and Weaknesses inside the organization and the Opportunities and Threats outside the organization.
A SWOT analysis uses the indings from the environmental audit to perform a critical self- assessment of the organization. Step 2a analyzes the list of factors identi ied in the internal organizational assessment performed in Step 1a, identifying those factors that represent strengths of the organization (what the organization does well) or weaknesses of the organization (what the organization does not do well). For example, strengths of a health organization may include the high quality of services it delivers to its constituents, a highly committed staff, and low staff turnover. In contrast, weaknesses may include productivity problems, inancial dif iculties, falling client base, and
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aging physical plant.
Step 2b analyzes the list of factors identi ied in the external environmental assessment, identifying those factors that represent opportunities for the organization (favorable trends outside the organization) and threats to the organization (unfavorable trends outside the organization). For example, opportunities for a health organization may include improving community economic growth, increased governmental funding, and grant opportunities. In contrast, threats may include potential funding decreases, the opening of a new organization that serves the same needs and may encroach on the organization’s activities, or deteriorating socioeconomic trends in the constituent group.
Step 3: Identify and Evaluate Strategic Issues and Options
Analyzing the internal and external environments of a health care organization in terms of the strengths, weaknesses, opportunities, and threats (SWOT) enables the organization to recognize speci ic areas where improvement is necessary and development is possible. The ifth component of the strategic planning model (Step 3) is to identify and evaluate major strategic issues and choices. Managers of health organizations have the responsibility to understand all the issues facing their organization completely in order to prioritize their importance and make decisions to address the priority issues adequately. This process of prioritizing is essential for health organizations, which often have limited resources to meet the seemingly unlimited needs of their stakeholders. The strategic issues must be monitored continually and choices must be identi ied so that the organization stays responsive to the patients and population it serves. An organization that tries to do everything will end up doing nothing.
Once the most important issues facing a health organization are identi ied, strategic choices must be made to guide the organization’s attempts to address them adequately. First, the SWOT analysis can be used to identify strategies to (1) take advantage of strengths and to maximize opportunities (max- max strategies); (2) take advantage of strengths to reduce vulnerability to threats (max-min strategies); (3) minimize weaknesses by taking advantage of opportunities (min-max strategies); and (4) minimize weaknesses and avoid threats (min-min or defensive strategies). Strategies in the irst category, which draw on strengths and opportunities, are ideal and usually involve growth and expansion. Strategies in the last category, which address weaknesses and threats, often involve downsizing and retrenching.
Two other techniques assist in the process of making strategic choices: key issue analysis and forecasting. These techniques help an organization analyze its priorities in the context of the changing external environment to make useful strategic choices for the future.
Key Issue Analysis A key issue is an event that, if it occurs or does not occur, will have an important impact on the organization. In a strategic planning process, it is important to identify and prioritize all key issues in the context of the internal and external environment of the organization, which is constantly changing. For example, emergency preparedness is often identi ied as a key issue for public health departments. Until September 11, 2001, however, concerns regarding emergency preparedness would normally have received a low priority in an issue analysis. Today, it receives a much higher priority. Among hospitals, implementation of the Affordable Care Act of 2010 is a key current issue.
Assumptions are often made when identifying key issues. An assumption is an estimate of an important future event over which an organization has little or no control. For example, as a result of the economic downturn that began in 2008, state and local governments face substantial problems in
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balancing governmental budgets. Assumptions need to be made by publicly funded health organizations regarding the impact of these budget reductions on health programming.
Identifying how changing external circumstances and events will in luence or alter the priority issues of health organizations in the future is an important component of key issue analysis.
Forecasting Forecasting consists of predicting or estimating future events in the environment. Forecasting is usually based on extrapolation of past or present trends into the future. Many trends in public health are readily subject to forecasting techniques. This includes forecasts of population trends, death rates and their causes, health behaviors and risk factors, and economic predictors.
However, forecasting trends can also be inexact and elusive. Some events are the result of discontinuities or turbulent developments in the environment and may not be identi ied through a forecast of past trends. For example, the outbreak of an epidemic or an unexplained plant closure of a major employer in a community is an event not likely to be anticipated or included in a forecasting exercise.
Step 4: Selecting Strategic Priorities
The last activity of the strategic planning model (Step 4) is selecting strategic priorities, in which managers decide what an organization must do in order to capitalize on strengths and opportunities, improve areas of weakness, and respond to threats. As a result of the environmental audit, the SWOT analysis, and evaluating major strategic issues, the organization makes strategic choices. Building on the priority issues identi ied in step 3 of the strategic planning process, decision makers select strategies to address these priorities and provide a focus for the organization. The resulting strategic priorities should answer three essential questions:
1. Where is the health organization at present?
2. Where does it want to go?
3. What actions must take place to achieve the goal from the previous question?
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3.3 OPERATIONAL PLANNING
As shown in Figure 3–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/24# ig31) , the strategic planning process is followed by planning at the operational level of the organization. Operational planning requires setting goals and objectives at the tactical level, usually the departmental and subunit levels, for carrying out the organization’s strategies. Plans of the operating units of the organization then form the basis of the goals and objectives of the operating units and the workforce of the operating units. Operational plans typically are revised annually, whereas strategic plans have a longer shelf life, usually 2 to 5 years.
A business plan is a common type of operational plan. Business plans describe new services, products, or programs and their markets and make projections concerning the personnel and other resources needed to implement the new items. A key element is the inancial analysis, which often includes projected expenditures and revenues and a breakeven analysis (analysis of volume required so that the new service does not lose money for the organization).
Ideally, departmental goals and objectives are also translated into individual employee objectives by managers and workers as part of the employee performance evaluation process. With evaluation of results and continuous feedback to the strategic planning process, individual and departmental goals and objectives may be incrementally adjusted but still are expected to maintain consistency with the organization’s strategy.
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3.4 BUDGET PLANNING
Finally, as depicted in Figure 3–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections /24# ig31) , operational plans require funding. Budget plans, in the form of a capital budget for major purchases, an operating budget for annual revenues and expenses, and a cash budget to predict the in low and out low of cash, are common planning mechanisms in organizations. Budgeting is covered in more detail later in this book.
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3.5 STRATEGIC PLANNING FOR COMMUNITY HEALTH: MOBILIZING FOR ACTION THROUGH PLANNING AND PARTNERSHIPS
Mobilizing for Action through Planning and Partnerships (MAPP) is a strategic planning process for improving public health services and outcomes in local communities. Similar to the organizational strategic planning model in Figure 3–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections /24# ig31) , MAPP is a community-wide strategic planning tool developed speci ically for public health by the National Association of County and City Health Of icials (NACCHO) and the Centers for Disease Control and Prevention (CDC). A work group of local health of icials, CDC representatives, community representatives, and public health experts developed MAPP between 1997 and 2000. MAPP “helps communities improve health and quality of life by identifying and using their resources wisely, taking into account their unique circumstances and needs, and forming effective partnerships for strategic action” (NACCHO 2010).
The MAPP process assesses all levels of organizations, including public, private, and voluntary organizations, as well as individuals, involved in public health activities in the community. This assessment creates a complete picture of the resources available to the local public system. MAPP is based on a community-driven and community-owned approach designed to assess and enhance a community’s strengths, needs, and desires, which will in turn drive the strategic process (NACCHO 2010).
Compared to the strategic planning steps outlined in this chapter, the MAPP model places a greater emphasis on the external environmental assessment in order to identify opportunities for public health organizations to more effectively secure resources, align needs and assets, respond to external circumstances, anticipate and manage change, and establish a long-term direction for improving the health of the community. MAPP uses assessment tools to determine the health status and community perceptions of health needs.
MAPP Process
The MAPP process includes six steps (NACCHO 2010):
1. Organizing for Success: This step involves organizing the planning process and developing partnerships.
2. Visioning: The visioning step engages stakeholders in a collaborative, creative process of developing a shared community vision with common values.
3. Conducting Community Assessments: Four community assessments provide information about internal and external environmental trends relevant to the community:
• Community Themes and Strengths Assessment: Identi ies local community interests, perceptions about quality of life, and assets.
• Local Public Health System Assessment: Appraises the capacity of the local public health system to conduct essential public health services.
• Community Health Status Assessment: Analyzes data about health status, quality of life, and risk
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factors. • Forces of Change Assessment: Identi ies changing external forces and dynamics of the
community and the local public health system. 4. Identifying Strategic Issues: Similar to the “identi ication and evaluation of major strategic
issues and options” step in the planning model presented earlier, in this step, participants develop a prioritized list of the most important issues facing the community based on the results of the four MAPP assessments and the shared community vision.
5. Formulating Goals and Strategies: In this step, participants take the strategic issues identi ied in the previous phase and formulate goal statements and broad strategies for addressing issues, resulting in the development and adoption of an interrelated set of strategy statements.
6. Action Cycle: In this inal step, the local public health system develops and implements an action plan for addressing priority goals and objectives. The plans are implemented and evaluated, with ensuing adjustments in the earlier steps as necessary. The inal step in the MAPP process is similar to operations planning and implementation in an organization.
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CONCLUSION
Strategic planning is a formal process used to establish an organization’s goals and the strategies for achieving them. Strategic planning involves an assessment of an organization’s status, a de inition of where it wants to be, and a de inition of the set of actions needed to implement change (or maintain its current position). Organizational missions or visions should create stretch goals for organizations to signi icantly improve the quality of their outputs and/or their performance. The strategic choices made by a health organization must be consistent with its mission, vision, and values. Once the strategic choices are made, they become the basis upon which to develop operational plans. As a result of the strategic planning process, strategies are developed to ensure that all of the efforts of the health organization and its resources are aligned to serve the identi ied needs. Healthy People 2020 helps public health organizations align their strategic priorities with those of the US government. MAPP is one strategic approach that is useful in public health planning at the community level.
Systems Thinking about Strategic Planning
Strategic planning can work well when the future is somewhat predictable. What about when the environment is so complex or dynamic that managers are unable to see very far down the road?
Under such conditions, strategic planning in its traditional form may not be useful, but organizations are not helpless. To the extent that the future is emergent rather than predictable, McDaniel, Jordan, and Fleeman (2003) urge that organizations cultivate creativity and learning. To do so, scenario planning is one popular technique. Scenario planning means imagining a range of different futures that are plausible and thinking through strategic responses to them. Although each scenario is plausible, no single speci ic scenario is actually likely to ensue. However, the scenario planning process alerts the organization to build lexibility into its strategic actions.
Another useful management style in uncertain environments is mindfulness. Mindfulness means paying close attention to the way that events are noticed and interpreted as well as being open to new information and ways to notice and interpret. Encouraging an open system and listening to feedback from stakeholders, including employees and customers, are ways for managers to be more mindful of change in their organizational environments.
CASE STUDY RESOLUTION
Brett skipped lunch. Instead, he made a telephone call to a Dr. Lombard. Dr. Lombard’s Internet biography said that he directed the public health program at the university and was an expert in planning. After exchanging pleasantries, Brett asked Dr. Lombard the same question that he had posed to Stan and Ollie. The response he received was quite different. Dr. Lombard explained the MAPP process and its applications. He invited Brett to come to his of ice to discuss how to use MAPP for designing his cardiovascular health program.
After spending the afternoon with Dr. Lombard, Brett returned to his of ice.
He met Stan and Ollie in the hall. “How was your lunch?” asked Ollie as he left the building to go home.
That night, Brett started his application for admission to Dr. Lombard’s public health program.
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REFERENCES Begun, J. W., and K. B. Heatwole. 1999. Strategic cycling: Shaking complacency in healthcare strategic
planning. Journal of Healthcare Management 44 (5): 339–51. Fairview Health Services. 2010. Our mission, vision, and values. http://www.fairview.org/About
/Missionvisionvalues/index.htm (http://www.fairview.org/About/Missionvisionvalues/index.htm) (accessed December 6, 2010).
McDaniel, R. R., M. E. Jordan, and B. F. Fleeman. 2003. Surprise, surprise, surprise! A complexity science view of the unexpected. Health Care Management Review 28 (3): 266–78.
NACCHO. 2010. MAPP basics: Introduction to the MAPP process. http://www.naccho.org/topics /infrastructure/mapp/framework/mappbasics.cfm (http://www.naccho.org/topics /infrastructure/mapp/framework/mappbasics.cfm) (accessed November 24, 2010).
US Department of Health and Human Services. 2010. Healthy People 2020 brochure. http://www.healthypeople.gov/2020/TopicsObjectives2020/pdfs/HP2020_brochure.pdf (http://www.healthypeople.gov/2020/TopicsObjectives2020/pdfs/HP2020_brochure.pdf) (accessed December 6, 2010).
RESOURCES
Periodicals
Begun, J. W., and A. A. Kaissi. 2005. An exploratory study of healthcare strategic planning in two metropolitan areas. Journal of Healthcare Management 50 (4): 265–74.
Ginter, P. M., W. J. Duncan, and S. A. Capper. 1991. Strategic planning for public health practice using macroenvironmental analysis. Public Health Reports 106 (2): 134–41.
Ginter, P. M., and L. E. Swayne. 2006. Moving toward strategic planning unique to healthcare. Frontiers of Health Services Management 23 (2): 33–7.
Kaissi, A. A., and J. W. Begun. 2008. Strategic planning processes and hospital inancial performance. Journal of Healthcare Management 53 (3): 197–208.
Zuckerman, A. M. 2006. Advancing the state of the art in healthcare strategic planning. Frontiers of Health Services Management 23 (2): 3–15.
Books Harrison, J. P. 2010. Essentials of strategic planning in healthcare. Chicago, IL: Health Administration
Press. Mintzberg, H. 1994. The rise and fall of strategic planning. New York: Free Press. Porter, M. E. 1980. Competitive strategy: Techniques for analyzing industries and competitors. New
York: Free Press. Swayne, L. E., W. J. Duncan, and P. M. Ginter. 2008. Strategic management of health care organizations.
6th ed. San Francisco: Jossey Bass. Zuckerman, A. M. 2005. Healthcare strategic planning. 2nd ed. Chicago: Health Administration Press.
Web Sites
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• American Public Health Association: http://www.apha.org/ (http://www.apha.org/) • Fairview Health Services: http://www.fairview.org/ (http://www.fairview.org/) • Healthy People: http://www.healthypeople.gov/ (http://www.healthypeople.gov/) • National Association of County and City Health Of icials: http://www.naccho.org/
(http://www.naccho.org/)
• National Association of Public Hospitals and Health Systems: http://www.naph.org/ (http://www.naph.org/)
• SWOT Analysis: http://www.netmba.com/strategy/swot/ (http://www.netmba.com/strategy /swot/)
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CHAPTER
4
Marketing Health
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Be familiar with traditional concepts of marketing. • Understand frames and branding. • Know about marketing challenges and opportunities that impact organizations that provide
health care services and public health agencies. • Be able to integrate social media Web sites into organizational marketing programs.
CHAPTER SUMMARY
This chapter discusses the application of marketing strategies as they relate to organizations that supply health-related programs, services, and products. Key principles of traditional marketing are reviewed and applied to social marketing theories and strategies. Framing and branding are also discussed.
Social media sites use Web-based technologies to transform and transmit media messages. Because social media is interactive, it allows one-directional marketing messages to become two-directional conversations. Social media allows people to participate in marketing activities. Interested individuals can interact with organizations to help shape goals and comment on programs. Facebook, YouTube, and Twitter are three of the largest social media sites in the United States. Costs associated with social media sites are often hidden. Organizations should have policies to guide their social media activities. Achieving success with social media requires advance preparation and planning as well as a commitment to supply the resources needed to ensure continued operations.
CASE STUDY
Karen, the chief executive of icer (CEO) of Courage Rehabilitation Services, was at her desk, staring off into space. Soumya, her organization’s Information Specialist, recognizing the look, stopped and spoke from the door. “You wanted to see me. Is this a good time?”
Karen returned from her reverie and replied, “Yes, please come in. Let’s talk.”
After Soumya sat down, Karen continued, “I am concerned about the organization’s ability to reach
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the people of Washington County. I think we offer good programs and services. Lately, I have begun to think about the ways we promote them. I ran into Fred Furlough at a conference last week. He told me about his agency’s marketing plan. His agency has a presence on the Internet. I think he mentioned Facebook. Should we be on Facebook, too?”
While Soumya gathers her thoughts, what advice could you offer to Karen?
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4.1 INTRODUCTION
An ongoing challenge for all health providers and organizations with an interest in personal or population well-being is persuading people to modify behaviors that harm their health. Compounding this challenge is the reality that the outcomes of programs and services intended to improve health may not be readily apparent for many years. When individuals or organizations try to persuade people to change their behaviors, they have entered the realm of marketing health improvement.
Social marketing is one approach that has great promise for improving individual, group, or population health. The approach can be broken down into a sequence of steps that form a cycle. The main activities of the cycle are planning, developing, implementing, and evaluating the programs and services that are developed. The overarching goal is modifying the social norms of the people who are served by an individual practitioner or by an organization.
Successful marketing strategies should begin with a clear de inition of purpose. They should satisfy both the public’s objectives and the goals of the entity (individual or organization) that provides programs or services. A vision of public health in America was presented in The Future of Public Health (Institute of Medicine 1988), which placed the de inition of public health at the very top of the conceptual elements necessary for successfully coordinating federal, state, and local health improvement efforts. The Institute of Medicine subsequently published a status report, The Future of the Public’s Health in the 21st Century (2003).
An analogous progression of materials has been used by health providers and practitioners. The Healthy People Program was launched in 1979. Elements of the mission of the program are to identify nationwide health improvement priorities; increase public awareness and understanding of the determinants of health, disease, and disability and the opportunities for progress; and provide measurable objectives and goals that are applicable at the national, state, and local levels (About Healthy People 2011). The Healthy People Program periodically revises its goals and objectives.
Virtually all organizations, including public health agencies and health care delivery organizations, promote their activities through market exchanges. Marketing professionals de ine a potentially successful exchange as involving two or more parties who have something that is valued, wanted, or needed by at least one other party. The exchange is successful when each is willing to give up something of value to receive something of value in return (Kotler and Armstrong 2007). In other words, successful marketers ensure they have something that appeals to people, appears to have bene it, and is worth sacri icing something to obtain it.
Individuals and organizations that provide health services must clearly identify goals and objectives and strive to ind the most cost-effective ways to deliver their programs and services. Marketing provides a process to create and maintain relationships that will satisfy the objectives of both individuals and organizations.
Whether traditional or nontraditional, marketing is designed to plan, price, promote, and distribute products and services designed to satisfy the needs and desires of consumers. The key principles of marketing include knowing one’s consumers, creating products or services that they want or need, inding ways to deliver the products or services to consumers, and making a commitment to continue
to change and adapt the products or services to meet consumers’ ever-changing desires, needs, and preferences.
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4.2 TRADITIONAL MARKETING CONCEPTS
Basic marketing concepts are similar and independent of the venue or milieu in which they are applied. Potential consumers must be clearly understood, and products or services that address customer demands must be created or procured. These offerings establish a link between providers and consumers.
Understanding Consumers
Successful marketing efforts always remain focused on consumers with the goal of promoting products and services. Such efforts are enhanced by a plan, called a marketing strategy. To achieve success, organizations or individuals must know as much as they can about their target audiences.
For a target audience to be considered a potential market, the individuals comprising it must want or need the product or service and be willing and able to acquire it. The next step in developing a marketing strategy is to determine if the product or service should be offered to the entire audience, or total market. Alternatively, it may be advantageous to divide potential consumers into subgroups or segments (for example, individuals, groups, or organizations) on the basis of characteristics they have in common.
Individuals and organizations that provide services and programs that are related to health have a responsibility to serve all members of a community and to provide a mix of programs that address the needs of individuals and re lect their values and the core essential services of an organization. However, problems exist. All individuals do not necessarily want or need every program or service that is offered. Further, the demand for services is constantly changing. A community health assessment is a valuable tool to identify, in a quantitative manner, the demographic pro iles for speci ic target populations and their health concerns. Individual practitioners and health organizations can use such objective information to develop products and services that address key health concerns within a community. A commitment to a systematic health assessment process greatly reduces the guesswork associated with health planning and marketing strategies. It also helps to de ine customer service needs.
Creating Products and Services
A product can be an idea, a service, a good, or any combination of the three. Consumers do not just purchase products. In reality, people buy the bene its and satisfaction they believe products or services will provide. The needs and desires of people in a potential market must be identi ied. This requirement underlies the process of product research and development. The result is a product mix or a listing of all the products and services that an organization makes available. Programs or services that are related constitute a product line.
The product mix of a health department, for example, is typically diverse and is mandated by the 10 Essential Services (Centers for Disease Control and Prevention 1994). The product mix of a large health care delivery organization typically includes inpatient and outpatient services in a variety of disease categories. Long-term care, preventive services, and community health services may also be in the mix. The product mix of an individual health provider is limited by the scope of activities for which the individual has been licensed. Research is conducted to determine which products are relevant for a
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given population or segment. Companies that produce consumer goods label such an activity as market research. Public health agencies and health providers use an analogous process and call it community health assessment.
Linking Consumers with Products and Services
Marketing strategies depend on delivery systems and effective promotional campaigns to deliver products and services to consumers. Marketing channels, or distribution systems, deliver products and services to consumers who want or need them. They help to make product acquisition or service utilization as simple as possible by minimizing marketplace contact. Print ads often provide toll-free phone numbers to help potential consumers obtain additional information or locate local suppliers for a desired product or service. The Internet provides continuous access. Health providers and organizations should consider emulating for-pro it organizations by providing multiple channels of communication for potential consumers at the least possible cost.
Promotional campaigns are designed to inform, persuade, or in luence consumer decisions concerning products, services, or programs. For a promotional message to be effective, it must irst get the attention of potential consumers. The next step is to engage their interest in a particular product, service, or program. The message must also convince potential consumers that they want the product or need to experience the program or service being promoted. Once potential consumers’ needs or desires have been established, the inal step should be acquiring the product, enrolling in the program, or using the service being offered. At the very least, a promotional message should create a positive attitude toward acquiring a product or using a service or program at some time in the future.
Promotional campaigns typically contain a mix of personal and nonpersonal elements to achieve speci ic marketing objectives. Personal promotions include two people speaking on the telephone, using videoconferencing, or communicating through interactive computer links. Nonpersonal promotions include advertising, direct marketing, public relations, and other techniques. Advertising strategies feature paid communications in newspapers, television, radio, magazines, and billboards. Direct marketing approaches include direct mail, product and service catalogs or brochures, telemarketing, direct-response ads on television or radio, and the use of electronic media. Many organizations in the health or health care industry are turning to electronic media by developing Web applications that have links to Internet sites.
Marketing and Health Organizations
Leaders of health organizations may be reluctant to allocate funds for marketing activities if the trade- off is a decrease in direct services to consumers. Cost-ef icient measures must be used to promote the day-to-day activities of a health organization. Effective local media partnerships can be invaluable marketing assets.
Many health organizations develop and maintain their own Web sites. Web sites should be designed to be colorful and inviting, provide information that is clear and concise, maintain consumer privacy and security, and above all, be easy to navigate. Key information should be available on the site’s opening or homepage (Fallon, Schmalzried, and Hasan 2011). Once the Web site is operational, it must be maintained by frequently updating its information and appearance. Delegating this responsibility to existing staff members who may be familiar with or have an interest in Web page design is a tempting
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option to reduce costs. Those chosen are likely being asked to assume these duties in addition to their normal responsibilities. Work overload may keep them from attending to the Web page in a timely manner. Assuming that funding is available, an alternative is to contract this service out or create a new position of Webmaster.
Advertising is often the target of criticism, particularly when it is done by nonpro it or publicly funded organizations. Promotion provides information and education that are necessary for health improvement and personal well-being in contemporary society. Public health has the unique challenge of trying to change unhealthy, but well-established, social norms. Health practitioners face similar changes among individuals. A useful alternative is social marketing. It incorporates the basic principles of marketing to modify individual behaviors, improve social and economic conditions, and reform social policy.
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4.3 MARKETING TOOLS AND TECHNIQUES
Framing
A frame is a method for packaging and positioning an issue in order to convey a particular meaning (Andreasen 2006). The political equivalent is spin. A marketing frame is de ined by a principle or basic belief (Ryan 1991). Frames establish boundaries in much the same way as a mission statement establishes limits on the activities of an organization. Without a frame, objectives can lose their focus and become confused.
Framing is a useful method for packaging and positioning policies or programs so that they resonate with principles and beliefs of members of a target audience. Frames provide guidance when developing marketing strategies. Framing offers other advantages. It allows the person or organization that creates the frame to establish any initial standards. Frames can be used to assign responsibility, credit, or blame. They can hint at desirable solutions.
Knowledge of frames is not limited to health care providers and public health practitioners. When others develop frames for opposing positions, health organization leaders must be able to nullify their effects. Two techniques are commonly used: reframing and ignoring. Reframing involves revising an existing frame. The objective is to realign the existing frame so that instead of con licting with the core values of the opposing frame, it reinforces them. This reduces the apparent differences between the two positions. Ignoring an opposing position compels opponents to increase the volume of their message. This approach has some degree of risk. The risk is reduced as the strength of the organization’s position increases. The risk is also reduced as the values espoused in the organization’s position become strongly anchored and aligned with health provider responsibilities.
Reframing is strengthened when the revisions align with societal values and health organization responsibilities. Reframed positions that advance societal goals typically have added strength. In general, framed positions that enhance personal freedom and autonomy are more likely to be accepted or adopted than those that do not.
Branding
A brand is a trade name or other name given to a product or service (Princeton University 2010). Brands are intended to be visual reminders that trigger thoughts of a product, program, or service associated with the brand. Health care providers, hospitals, and public health organizations recently have begun to develop brands (Andreasen 2006). A notable public health example is the logo that has been developed by the National Association of County and City Health Of icials (2010). The Mayo Clinic logo displays three overlapping shields, with the larger center shield representing patient care and the two adjacent shields representing education and research. When viewed by members of the public, well-developed brands have the potential to evoke memories of particular programs or services. The brand becomes a shorthand description. By using brands, health organizations and professionals have the potential to forge strong associations with their programs and services for the people that they serve. Brand loyalty is useful when organizations and agencies seek additional resources.
Brand loyalty can be strengthened when programs and services are consistently of high quality. The association is usually signi icantly enhanced by excellent customer service. The associations that are
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part and parcel of brand loyalty transfer when an agency frames issues. Branding uni ies promotional campaigns.
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4.4 CHALLENGES AND OPPORTUNITIES
Marketing Challenges
All managers working for organizations that deliver health-related programs or services or promote health in populations face the challenge of marketing health in an environment of reduced resources. The demand for many community and public health programs and services is reduced because the anticipated bene its may not be apparent for years. Potential funders and taxpayers are reluctant to support programs and services that cannot deliver results in a timely manner. In recent years, some politicians have become interested in public health. This interest has been linked with funding requests. The result has been pressure to adopt programs having political rather than strictly health goals.
The demand or desire to receive clinical services is considerable and has slowly increased in recent years. However, actual utilization has begun to decline as people lose their health insurance bene its or copayments increase for individuals who still have health insurance. Some politicians have attempted to turn health into a political issue.
Health care providers, both individuals and organizations, have competed for resources and patient pools. This competition has intensi ied in the past two decades. Changes in professional guidelines related to advertising have led to intense, and often subtle, marketing competition. Expressed differently, the importance of marketing has increased for providers of health care services.
Historically, many health practitioners did not experience the intense public scrutiny and competition for resources that are common today. Because they have not had to compete for funding, those health organization managers are not adept at self-promotion. When competition for funding intensi ies, health organization leaders must refocus their goals and objectives, rede ine their services and programs, and revise their marketing plans if health care is going to lourish in future decades. Understanding and applying marketing principles bestows power.
Marketing Principle 1. The needs and wants of the target audience must be de ined. This is a prerequisite for designing programs and services that actually address their needs. Reality dictates that the program objectives and funding priorities of policy makers and resource providers (funders) also be considered. Education may be a necessary component of this effort.
Marketing Principle 2. Goals and objectives for the marketing campaign are established next. Goals tend to be broad and may be general. Objectives are more speci ic and feature de initions that can be evaluated using empirical data. The objectives provide focus when developing speci ic messages. They will also be used during periodic evaluations.
Marketing Principle 3. Programs and services that address the objectives just de ined must be developed. During this phase, health practitioners and professionals must be sensitive to cultural practices and preferences among the people who they seek to serve. Two or more similar but parallel programs may be required if these differences are signi icant. Developers must also be alert to suggestions that are intended to further political ambitions. First and foremost, the health aspects of programs and services must be well established and have merit. Political goals should be secondary to those of any aspect of health. Maintaining this distinction is often dif icult but is necessary if organizations that provide health programs or services are to retain their independence.
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Marketing Principle 4. New promotions are tested before being released for widespread use. This process is called test marketing. The messages are released in a small area. Their effectiveness is assessed. If they are successful in achieving preestablished objectives, they are released for widespread use. If they are not successful, they may be revised and retested, or they may be abandoned. Field tests are conducted to improve the inal product, maximize the return on invested resources, and avoid embarrassment.
Marketing Principle 5. Once ield tests are completed and adjustments are made to messages, full-scale or widespread promotions begin. Marketing professionals continually monitor the effectiveness of their messages, using techniques similar to those employed during ield testing.
Marketing Principle 6. Marketing professionals periodically evaluate the effectiveness of their messages. They use the goals and objectives developed earlier (Marketing Principle 2). Data relative to individual objectives may be collected randomly or periodically at de ined intervals. The data are used to make decisions about the effectiveness of the marketing campaign as well as decisions about continuing or stopping the program.
Marketing Principle 7. Using the conclusions obtained on the basis of analyzing data (Marketing Principle 6), marketing professionals make decisions about the future of their marketing campaigns. The options are similar to those considered after test marketing. If the marketing campaign has achieved the objectives established prior to the onset of the program, the campaign is judged to be a success. Two options are available: termination and retirement of the materials or extension of the campaign. Occasionally, new materials may be produced. These replacement materials maintain freshness in the campaign. If campaign objectives have not been met, two similar options are considered but with different outcomes: extension or termination of the campaign. Before a decision is made, the objectives are reviewed. If the objectives are judged to be sound, the materials may be revised before the marketing campaign is resumed. If the campaign objectives are now judged to be in error, the objectives may be revised and the campaign resumed, the marketing materials may be revised before the campaign is resumed, or the campaign may be terminated. The overarching goals do not change. The organization seeks to maximize the return on the resources it invests and tries to avoid embarrassment.
Marketing Opportunities: Health Care
Health care providers face competition. Compared to most consumer products, this competition is limited. Hospitals compete with each other, vying for patients. Because hospitals are highly regulated and must be accredited to operate, they seek to differentiate themselves by using other criteria such as ratings by external agencies, new or innovative equipment, or waiting times. One method of differentiation used commonly by marketers of consumer goods, price, is rarely mentioned.
Professional canons of behavior usually limit individual health care professionals in providing information to consumers. They may provide information about the services that they deliver or their hours of availability. Professionals may provide general information about health that is related to their own area of expertise. Their marketing messages may mention outcomes in general terms (for example, ophthalmologists may discuss advantages of laser-based eye surgery such as being free of having to wear glasses) or aspects of the procedures that they use (for example, dentists may discuss reduced pain during dental procedures). Including information about price is uncommon but is increasingly demanded by consumers.
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Pharmaceutical companies face a different problem. Only licensed practitioners can prescribe many medications. Government regulations limit how pharmaceutical manufacturers can provide information to health professionals. Drug companies provide product information directly to consumers. This is accompanied by the suggestion that consumers ask their health providers for more information about products of interest. Put another way, pharmaceutical companies enlist consumers to be their marketing agents. Manufacturers of consumer products such as toys or foods or service providers such as restaurants use a similar approach by aiming their marketing messages at children, thus enlisting them as agents. Although such an approach is legal, there is debate concerning its ethical basis.
Marketing Opportunities: Public Health
Public health has few competitors. This lessens background noise that can obscure positive marketing messages that are intended to inform individuals about ways to improve their health. Public health is not locked into a single type or form of message. Public health professionals have an opportunity to change how they approach their jobs. The traditional approach is to create programs based on what they (public health professionals) think is best for the general public. Quality improvement theory suggests that a better approach might be to allow members of the general public to suggest topics of interest and relevance to themselves. Such a course of action should increase acceptance (or buy-in) by members of the public.
Public health professionals ask people to do things that do not feel good, are inconvenient, or have unpleasant tastes. Three examples include the following: “I like the feeling of wind in my hair” is a common reason given by motorcycle operators to avoid wearing helmets; “Let’s not stop now” is an excuse often given to avoid using a condom; and “I prefer the taste of pizza over broccoli” re lects the fact that taste is often more important than nutritive value when decisions are made concerning food. When public health programs try to compete with cultural mores or family traditions, they (the public health programs) frequently inish in second place. Such confrontations create signi icant challenges.
Critics of public health programs often note that treatment by health care providers usually improves the options open to the person being treated while, in contrast, many public health programs restrict individual freedoms as well as interfere with the autonomy of businesses. Providers of public health programs are often accused of placing undue economic burdens on businesses. Many critics of public health are really complaining that the economic cost of prevention is excessive.
The challenge for public health managers is to increase the demand for programs and services. Policy makers and members of the public must understand the value of prevention. Experts usually agree that every dollar invested in public health programs leads to savings by reducing or avoiding treatment costs. Public health leaders must ensure that the programs and services are consistent with the core values held by the population groups that they seek to serve. The programs and services must also be aligned with the core values of public health—the 10 Essential Services (Centers for Disease Control and Prevention 1994). Finally, they must provide quality components that are accompanied by outstanding customer service.
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4.5 SOCIAL MEDIA
Social media Web sites are widely used throughout the United States. Individuals who participate in social media communications (postings and replies) tend to be young, providing an access portal to communicate with people who are traditionally dif icult to reach. Maintaining an organizational presence on a social media site requires thought and planning. A policy should guide operations, backed by adequate resources to sustain operations. Social media is a marketing tool. E-mail has limitations. In comparison, social media sites have reduced limitations to a point where the free low of concepts and ideas requires only that data be downloaded before being posted.
Social media sites were developed to provide channels of communication for social interactions. Because social media is interactive, the one-directional messages of advertising have the potential to become two-directional conversations. Social media allows people to participate in marketing activities. Organizations are able to incorporate the comments of social media users in their advertising messages.
Traditional marketing channels are unidirectional. Further, they quickly become dated (stale) and lose their utility to both marketers (providers of products, programs, or services) and recipients (potential users or purchasers). In contrast, social media channels are bidirectional, offering opportunities for exchanges of information. These exchanges promote freshness and help to extend the utility or useful life of marketing materials.
Brief descriptions of three widely used social media sites follow.
Facebook has essentially formalized informal networks. Numerous organizations use Facebook because it is so familiar to many individuals and groups that organizations hope to attract as customers or to whom they may provide information.
Twitter is a site that features brief messages. Users and critics have characterized Twitter as an electronic grapevine. A variety of organizations use Twitter to announce new products, updates, and services, as well as sponsor discussions about products and services.
YouTube is a site that allows users to share photographs and video clips. Public health organizations and agencies, hospitals and other health providers, and individual practitioners are beginning to use YouTube to promote their programs.
Users of social media sites must carefully select them. The irst consideration is the percentage of individuals of a particular age that an organization wants to reach. As a group, younger people tend to use the Internet more than older persons. The demographic pro iles of target audiences should be developed. Then demographic pro iles of potential social media sites should be reviewed. The pro iles of target audiences and users of social media sites should be aligned.
Social Media Demographics
Basic demographic pro iles of two widely used social media sites illustrate differences among users (Pew Research Center 2010). Facebook users tend to be young (52% are between the ages of 18 and 25) and female (63%). Typical Twitter users tend to be younger (40% are under the age of 18) and female (53%). Because typical users of social media Web sites are young, they tend to earn less than $30,000 per year, have not completed high school (43%), and live in urban areas (34%) (Pew Research
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Center 2010).
Users of social media Web sites comprise two different groups. The irst group includes individuals who submit (post) comments to Web sites. The second group includes people who respond to postings that they receive from the homepages of the Web sites on which their organization maintains a presence. Both groups are necessary because communications involving social media Web sites are bidirectional.
Monitoring a social media site encompasses more than replying to postings from the public. The operation and impact of a social media site should be closely monitored. Preparing and evaluating impact reviews may involve organization executives. All activities that support a social media program should be guided by a policy.
Social Media Policy
A social media policy should specify who will coordinate the program, what Web sites will be included, who will monitor the chosen sites, and who will respond to postings.
A social media policy should begin with a statement of purpose, followed by a discussion of goals and objectives. The statement of purpose is analogous to an organization’s mission statement. The goals and objectives establish boundaries and provide guidance for future activities.
The policy should provide general guidelines regarding postings from members of the public. Good manners and decorum should govern all communications using social media. More explicit guidelines should be created for employees who respond to posted questions or comments.
Responders should consider the reading audience associated with a particular social media site as they compose their postings. Offensive language or inappropriate remarks may seem cute but have a great risk of alienating others reading the post. The goal of marketing is to increase knowledge and usage of an organization’s programs and services. Posting comments on Internet sites is merely a different form of marketing. The fundamental goal remains unchanged. For similar reasons, responders must adhere to language guidelines included in the social media policy. Responses should occasionally be sampled and reviewed to ensure that the organization is being appropriately represented.
Maintaining a social media presence should be viewed as an important task for any organization. The resources allocated to the task must be aligned with an organization’s goals and objectives and result in a positive contribution. If these objectives are not met, organizational leaders should review the social media presence and make revisions as needed. Organizations that do not respond promptly to postings on social media sites lose the advantages of interaction. Expressed differently, not providing timely responses reduces social media sites to venues for testimonial advertising.
Incorporating social media in an organization’s marketing efforts has both advantages and disadvantages. Heightened levels of exposure reinforce the organization’s image and the reputation of its programs. Conversely, all visitors to a particular social media site may not agree with the objectives or methods used in an organization’s programs.
Any social media site that is being used must be closely monitored. Comments posted to social media sites require responses that are both truthful and made in a timely manner. As time elapses between a negative posting and a rebuttal, the potential for adverse consequences increases. When
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considering the use of social media, organizations must remember that monitoring requires resources. Responding to comments that challenge organizational values may lead to other potential consequences. Organizational leaders may have to be interrupted to approve replies. Interruptions can be avoided if a limited number of employees are authorized to make replies. This requires training and trust. Simply removing a negative comment is not recommended.
Social media sites provide channels for the free low of information. The public can ask questions and receive answers in a timely manner. To be successful, a program involving social media requires advance preparation and planning as well as adequate resources.
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CONCLUSION
Marketing by health organizations is important and is necessary for survival of organizations and improvement of health. Members of the public often ignore the need for public health services until there is a public health crisis. They often ignore health care providers until they become acutely ill. Sound marketing strategies have the potential to help health practitioners and program providers shift from being reactive to being proactive. Marketing presents challenges and opportunities. Framing and branding are useful marketing tools.
Creating and maintaining a social media presence is a relatively new development in marketing. Organizations interested in providing programs or clinical services should become familiar with social media Web sites before including social media in their marketing programs. Integrating social media sites into an organization’s marketing plans has advantages and disadvantages.
Social media interactions offer opportunities to rapidly identify and resolve customer-related problems. Ignoring this aspect of social media can squander chances to improve customer service. As the time interval between receiving a comment and posting a response increases, the likelihood of a negative customer perception of the agency also increases.
Social media sites must be constantly monitored so that postings can receive timely replies. Employees must receive adequate training. Organizational homepages on social media sites should occasionally be modi ied. Results of social media Web site interactions should be periodically evaluated. Social media has signi icant potential for health organizations. Organizational leaders must remember that social media sites do not operate automatically. Achieving success requires effort and resources.
Systems Thinking about Marketing
This chapter has focused on marketing in general and social marketing in particular. The effectiveness of marketing programs can be enhanced by applying concepts from systems thinking. The logical irst point of inserting a systems thinking application is when developing a marketing program. Treating a marketing program as a system results in a program with components that are integrated and logically connected. This bene it is apparent during planning, operation, and evaluation of a marketing program. The bene its of systems theory are especially apparent (and appreciated) when evaluating a program. Troubleshooting and program modi ications tend to become easier.
Branding reinforces systems thinking: A single image is applied to all materials produced and services provided by an organization. A brand becomes a symbol of a whole system. Systems thinking reduces the time needed to reframe one component of a program because all components were created as interdependent parts of a system.
Systems thinking demands that comments made on social media Web sites receive timely responses. Delays disrupt the systematic nature of the marketing exchange and its evolution over time.
CASE STUDY RESOLUTION
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Returning to the meeting between Soumya and Karen, the CEO, Soumya replied, “I think that a new promotional or marketing plan is a good idea. However, we should not rush into it without some serious thought. An effective marketing plan has many components. We should approach it as an integrated system. I read some articles on social marketing and think that may be a useful starting point. As for Facebook, the Internet may provide an excellent vehicle for communicating with younger people in the communities that we serve. We must be prepared to provide adequate resources to support any social marketing effort. People using the Internet are accustomed to speedy replies. Would you like me to arrange a meeting to discuss this topic?”
“Yes, let’s do that,” replied Karen.
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Fallon, L. F., H. D. Schmalzried, and N. Hasan. 2011. Communications between local health departments and the public during emergencies: The importance of standardized Web sites. Journal of Public Health Management and Practice 17 (1): E1–6.
Institute of Medicine. 1988. The future of public health. Washington, DC: National Academy Press. Institute of Medicine. 2003. The future of the public’s health in the 21st century. Washington, DC:
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http://www.naccho.org/advocacy/marketing/ (http://www.naccho.org/advocacy/marketing/) (accessed September 20, 2010).
Pew Research Center. 2010. Internet and American Life Project. http://www.pewinternet.org/ (http://www.pewinternet.org/) (accessed August 25, 2010).
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RESOURCES
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Carr, E. R. 2008. Quality of life for our patients: How media images and messages in luence their perceptions. Clinical Journal of Oncology Nursing 12 (1): 43–51.
Fortenberry, J. 2010. Is billboard advertising bene icial for healthcare organizations? An investigation
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of ef icacy and acceptability to patients. Journal of Healthcare Management 55 (2): 81–96. Hall, W. 2008. Marketing health: Smoking and the discourse of public health in Britain, 1945–2000.
Addiction 103 (3): 515–6. Kapp, J. M., J. W. LeMaster, M. B. Lyon, B. Zhang, and M. C. Hosokawa. 2009. Updating public health
teaching methods in the era of social media. Public Health Reports 124 (6): 775–7. Marsh, A., D. Carroll, and R. Foggie. 2010. Using collective intelligence to ine-tune public health
policy. Studies in Health Technology and Informatics 156: 13–8. Munro, G., and J. de Wever. 2008. Culture clash: Alcohol marketing and public health aspirations.
Drug and Alcohol Review 27 (2): 204–11. Nambisan, P., and S. Nambisan. 2009. Models of consumer value cocreation in health care. Health
Care Management Review 34 (4): 344–54. Nelson, W. A., W. B. Weeks, and J. M. Camp ield. 2008. The organizational costs of ethical con licts.
Journal of Healthcare Management 53 (1): 41–53. Sapp, L., and K. Cogdill. 2010. Blogging in support of health information outreach. Medical Reference
Services Quarterly 29 (3): 240–8. Squazzo, J. D. 2010. Best practices for applying social media in healthcare. Healthcare Executive 25
(3): 34–6, 38–9. Stellefson, M., and J. M. Eddy. 2008. Health education and marketing processes: Two related methods
for achieving health behavior change. American Journal of Health Behavior 32 (5): 488–96. Vance, K., W. Howe, and R. P. Dellavalle. 2009. Social internet sites as a source of public health
information. Dermatology Clinics 27 (2): 133–6.
Books Cheng, H., P. Kotler, and N. R. Lee. 2009. Social marketing for public health: Global trends and success
stories. Sudbury, MA: Jones and Bartlett. Fortenberry, J. L. 2009. Health care marketing: Tools and techniques. 3rd ed. Sudbury, MA: Jones and
Bartlett. French, J., C. Blair-Stevens, D. McVey, and R. Merritt. 2009. Social marketing and public health: Theory
and practice. New York: Oxford University Press. Hastings, G. 2007. Social marketing: Why should the devil have all the best tunes? Maryland Heights,
MO: Butterworth-Heinemann. Kabani, S., and C. Brogan. 2010. The Zen of social media marketing. Dallas, TX: BenBella Books. Kotler, P., and N. R. Lee. 2007. Social marketing: In luencing behaviors for good. 3rd ed. Thousand
Oaks, CA: Sage. Meerman, D. 2010. The new rules of marketing and PR: How to use social media. 2nd ed. Indianapolis,
IN: Wiley. Sa ko, L., and D. K. Brake. 2009. The social media bible: Tactics, tools, and strategies for business
success. Indianapolis, IN: Wiley. Sterne, J. 2010. Social media metrics: How to measure and optimize your marketing investment.
Indianapolis, IN: Wiley. Zarrella, D. 2010. The social media marketing book. Sebastopol, CA: O’Reilly Media.
Web Sites
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• American Marketing Association: http://www.marketingpower.com/ (http://www.marketingpower.com/)
• Facebook: http://www.facebook.com/ (http://www.facebook.com/) • Johns Hopkins University: http://www.hopkinsbrand.org/guidelines/
(http://www.hopkinsbrand.org/guidelines/)
• National Housing Institute: http://www.nhi.org/online/issues/129/fundraising.html (http://www.nhi.org/online/issues/129/fundraising.html)
• Population Services International: http://www.psi.org/ (http://www.psi.org/) • Social Marketing.com (http://Marketing.com) : http://www.social-marketing.com/
(http://www.social-marketing.com/)
• Social Media Answers: http://socialmediaanswers.com/niche-socialnetworking-sites/ (http://socialmediaanswers.com/niche-socialnetworking-sites/)
• Social Media Today: http://www.socialmediatoday.com/ (http://www.socialmediatoday.com/) • Twitter: http://twitter.com/ (http://twitter.com/) • YouTube: http://www.youtube.com/ (http://www.youtube.com/)
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CHAPTER
5
Preparing for Emergencies
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Appreciate the importance of planning for emergencies. • Be familiar with the elements and use of the National Response Framework and the National
Incident Management System. • Appreciate the necessity for maintaining communication channels during an emergency. • Understand the importance of educating members of the general public regarding emergencies. • Know the impact of emergencies on mental health. • Appreciate the importance of volunteers. • Understand the importance of after-action reports and other postevent activities.
CHAPTER SUMMARY
High-performing organizations are prepared for surprises and catastrophes. Preparing for emergencies is a process that begins with developing emergency plans. Evaluation triggers the next cycle of planning and preparation. Evaluation after use in an actual emergency or crisis is similar. Professionalism, preparation, and communication are the keys to managing an emergency response in a timely and competent manner.
The planning process can be summarized. The initial step is to identify stakeholders in the community who can respond to an emergency. Stakeholders include traditional emergency service responders, health care providers, government agencies, support groups such as the Red Cross, and community organizations such as service and youth groups. By meeting with leaders of the stakeholder organizations well in advance, the various personalities that in luence decision-making processes and the potential extent of resources can be adequately understood.
Preparing for emergencies requires cooperation from many constituent groups. Planning, exercising, and evaluating remain the hallmarks of preparation. Educating professionals and members of the general public is required. Natural disasters and human-initiated emergencies will occur. Planning and preparation can lessen their impact. From a national perspective, emergencies are a part of life. From the perspective of a single community, emergencies are essentially random events that cannot be accurately predicted in advance. Preparation is the best form of defense.
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CASE STUDY
Anton and Valerie were discussing their recent 3-day ield deployment to assist with the containment of a chemical spill.
“What did you think of our time in the ield?” asked Anton.
“Not much,” Valerie replied. She continued, “The irst incident commander did not know her job. She did not know how to delegate work, which slowed down operations. The only break we got was being dismissed without having to complete an after-action report. How about you, what did you think?”
If you were part of the conversation, how would you reply to Valerie?
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5.1 INTRODUCTION
Many managers and employees in health organizations, regardless of their day-to-day activities, are expected to assist their communities in coping with health emergencies. Many health organizations have direct responsibilities for preparing for such emergencies, as well as assisting communities in recovery.
Disasters can be divided into two categories: natural and human-caused. Examples of natural disasters include hurricanes, loods, tornados, blizzards, earthquakes, and volcanic eruptions. Examples of disasters caused by humans include train derailments, chemical releases, aircraft crashes, bombings, and terrorist attacks.
Health and emergency response of icials should review the extensive material available at local, state, and national levels on disaster preparedness planning, response, recovery, and other issues associated with disasters. Individual municipalities and health agencies and organizations should design plans that re lect their particular needs and vulnerabilities. Successful plans include lists of speci ic disasters that could occur in their regions, estimates of the personnel and resources needed for responses to anticipated disasters, and contingencies to protect against unanticipated emergencies such as infectious diseases and biologic terrorism. The plans should be tested using realistic exercises and then critiqued so that they can be improved.
It is tempting to assume that the federal government will protect local communities from acts of terrorism by using intelligence and other defensive activities. Given the size and openness of American society, such assumptions are unrealistic. Local governments and elected leaders must participate in keeping their communities as safe as possible. Terrorist acts can affect large portions of a population by contaminating the water supply, food, or air. Although large-scale attacks should be considered, experts believe that releasing biologic agents in a smaller area, such as a building’s ventilation system, or contaminating water systems at public venues, such as sporting events, shopping centers, or schools, is much more likely to occur.
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5.2 PREPAREDNESS PLANNING
Health practitioners and organizations are vital components in the much larger system of emergency providers and responders who protect the health and safety of people and property during times of crisis. Responses to major emergencies, whether they are due to human or natural causes, must be made in a timely manner. Responders must be well trained and able to protect the health and well- being of residents in a given location. Once people are safe, they will turn their attention to structures and the environment. By applying the principles of assessment, policy development, and assurance, health practitioners can ensure that their communities are prepared for natural disasters or attacks. Such training should enhance their responses to more common events.
Identifying relevant stakeholders is an important task that is time consuming. Essential organizations must be identi ied. Many individuals are vitally interested in protecting and maintaining the well-being of the people and communities they serve. These include police, ire ighters, emergency medical responders, health commissioners, hospital administrators, environmental health directors, and heads of agencies that provide relief services. Effectiveness is based on trust, which follows after personal relationships have been established. The ability to provide and accept assistance during an emergency is greatly facilitated after relationships and channels of communication (both formal and informal) have been established and solidi ied. A plan has the best chance for success when all community agencies and organizations clearly understand their roles and limitations and have participated in joint training exercises. Under these conditions, they should be able to work together and successfully respond to emergencies.
An important aspect of developing an emergency plan is identifying available resources. Organizations that are involved in plan development should create an inventory of the resources that they have to offer. Typically, this is completed using data from an internal assessment of available employees and their skill sets along with a listing of available equipment. Emergency contact information for potentially available personnel should be included. An inventory of resources that are external to potential partner agencies should be completed. The purpose of such an inventory is to assess other resources that may be available in the community.
Having knowledge of available resources does not provide suf icient information. Formal agreements are needed to allow other people or agencies to use them in emergency situations. These must be written documents. Two types of agreements are typically developed: an agreement of mutual aid and a memorandum of understanding. With formal, written agreements to ensure access to resources during times of emergency, responders will have the equipment and resources to do their jobs when called upon.
When preparing for an emergency, staff members who are well-trained and highly motivated are essential for success. Training activities should include discussions about topics such as the proper use of personal protective equipment, the composition of biologic agents, and how to report during an emergency. During emergency responses, responding employees may be expected to perform their everyday duties in addition to undertaking their disaster-related responsibilities.
A well-trained and prepared public information of icer (PIO) is a critical asset when an organization must communicate with members of the media or the public. A PIO does not have to be the designated spokesperson for an organization. The roles of a PIO may vary. For instance, a PIO may speak for a single organization or for several related organizations. PIOs may prepare messages and coordinate the
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low of information for others to deliver, or they may speak directly to the public. PIOs use several different channels to deliver information to members of the general public. Independent of the exact role of a PIO, members of the media appreciate having a single point of contact for information. Relationships involving any organization that serves the community and the media should be established well in advance of an emergency.
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5.3 THE NATIONAL RESPONSE FRAMEWORK
Nationally, the response to all types of emergencies is guided by a National Response Framework (NRF) (US Department of Homeland Security 2011). The NRF speci ies best practices and responsible authorities for incidents ranging from local weather emergencies to large-scale terrorist attacks. Five key principles underlie the nation’s response to emergencies:
1. Engaged partnership: All relevant organizations should be engaged in the response effort.
2. Tiered response: Incidents generally are handled at the lowest jurisdictional level possible.
3. Scalable, lexible, and adaptable operational capabilities: Resources must be able to expand rapidly to meet needs associated with an incident.
4. Unity of effort through uni ied command: An incident commander is assigned to coordinate responses to the emergency (as discussed in more detail in the next section of this chapter).
5. Readiness to act: Decisive and speedy responses at the scene of an emergency are emphasized.
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5.4 THE NATIONAL INCIDENT MANAGEMENT SYSTEM
The National Incident Management System (NIMS) is complementary to the NRF. It provides a means for coordinating and controlling resources and activities during emergencies. The predecessor of NIMS, the Incident Command System, was developed after a series of ires destroyed large portions of wilderness land, including structures, in southern California in the 1970s. While assessing the aftermath of those ires, agencies appreciated the need to create a system that would enable them to work together in an emergency, focusing on a common goal in an effective and ef icient manner. In the years since its initial creation, the formal command system has been revised several times to improve its operational ef iciency.
NIMS is designed to gain and then maintain control of the activities associated with responding to an emergency from the time the event begins through the time a response is concluded and an after- event report has been submitted. The title of incident commander or incident manager is usually assumed by the irst of icial to arrive on the scene. In matters involving the military, it is often assigned to a designated individual in advance. The title and responsibilities of an incident commander are then transferred to other individuals as they assume overall responsibility for managing the emergency response. The structure of the incident command system can be established and modi ied (expanded or contracted) as the changing conditions of an emergency require.
NIMS is designed to be a comprehensive resource management system. It ensures that resources and controls are available when and where they are needed. The system is very lexible, allowing it to be used for any type or size of emergency, ranging from a minor event involving a single group of local responders to a major situation involving many agencies that are drawn from multiple jurisdictions. NIMS ensures that resources and procedures to establish command and control can be obtained and rapidly deployed. This minimizes the time needed to obtain, stage, and use resources after an event has occurred. By using common terminology, operating procedures, and radio frequencies, NIMS facilitates communications among participating organizations.
Because operating protocols have been standardized, command and control responsibilities can be easily transferred to new persons. This not only saves time, but also promotes continuity during an emergency.
With the possible exception of providing irst aid for a hiking companion’s sprained ankle along a forest trail, one person working alone cannot realistically be expected to handle or accomplish all of the tasks that accompany an emergency. An incident commander or incident manager is trained to manage an emergency situation by delegating tasks as well as delegating the authority to requisition the resources needed to accomplish them. Assigning responsibility without also providing the authority to acquire needed resources has a high probability for failure.
An incident commander directs all elements associated with a response, secures resources, and coordinates the activities of participating groups. The initial incident commander must establish a command post in the ield before ensuring that communication links are established with participating organizations (assets). If permission is needed to secure a building prior to opening an emergency operations center, the incident commander has that authority. Incident commanders are trained to identify potential leaders possessing critical knowledge and skills. Ideally, this is done before an emergency occurs. When circumstances dictate, however, selections may be made in the ield. The NIMS operating structure has four sections: operations, logistics, planning, and inance.
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An operations section leader assumes direct control of all actions focused on resolving an emergency situation. An operations leader is trained to resolve relatively common problems such as communication failures, personnel problems, and technical and infrastructure malfunctions. An operations section leader must constantly evaluate events during and after an emergency.
A logistics section leader has the responsibility of ensuring that needed resources, supplies, and personnel are available for the operations section. An operations section usually cannot work without resources. Unless alternative resources can be secured, most emergencies cannot be resolved. Long- term sustainability is a critical issue that is assigned to logistics. Responses can continue for months. The responses to the World Trade Center attacks (2001), Hurricane Katrina (2005), and the BP oil well spill into the Gulf of Mexico (2010) continued for months. Logistics has the responsibility for feeding and supporting personnel as well as providing replacement equipment and supplies. Conscientious planners assume that primary sources of needed equipment and other resources may be delayed, unavailable, or used up. These will have to be procured or replaced as appropriate. Identifying alternate sources for placement or backup supplies is an integral component of logistics.
A planning section leader is responsible for developing guidelines that will be implemented by the operations section. Individuals typically have broad areas of knowledge and expertise. Other experts and contributing agencies should be consulted for this activity. Involving a group of people ensures that planning encompasses all relevant topics and areas of responsibility. Computer models and other electronic planning aids are used extensively.
A inance section leader should have training in accounting, budgeting, inance, and inancial planning. Without such training, establishing inancial guidelines and allocating costs to several participating agencies can create confusion. Associated problems tend to increase geometrically as the number of participant organizations increases. Government guidelines may allow reimbursement of expenses related to emergencies. These require accurate records. A inance section leader has the responsibility to record expenses for supplies and to track hours for personnel and the locations where they worked. These records are needed to calculate salary payments as well as provide data that can be used to calculate exposure to hazardous or toxic substances. Long periods of time may elapse before exposures may be evaluated. Written documentation is much more accurate than human memories. The value of written records increases as time elapses.
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5.5 USING THE NATIONAL INCIDENT MANAGEMENT SYSTEM
NIMS is activated during emergencies. During periods when NIMS is in operation, response objectives and the tactics used to achieve them are regularly evaluated. An incident commander has three immediate priorities. The irst and highest priority is preserving and saving life. The second priority is stabilizing the environment immediately surrounding the event. This includes preventing the crisis from escalating. The third and lowest priority is protecting property.
An incident commander has the responsibility to develop objectives, guide response activities, and develop an action plan that addresses threats associated with the ongoing emergency. The optimal approach for the emergency should be developed by command staff personnel working together. Responses may be offensive (for example, organizing an immunization or mass antibiotic prophylaxis campaign) or defensive (for example, sheltering in place during an outbreak of a disease). Sharing the speci ics of a newly created plan with members of the public frequently reduces fear. After an emergency has been resolved, members of the public may ask for justi ication of the activities that were associated with the plan.
Any course of action must be aligned with existing emergency preparations and must consider safety. Standard operating practices and organizational response guidelines must be embedded in response preparations as they are made. Decision making is a critically important skill for incident commanders. Decisions must frequently be made on the basis of limited information. Because of the potential for serious or unintended consequences, a systems-based approach should be used. The DECIDE method provides a convenient example of such a system: Detect the presence of a hazard; Estimate the likely degree of harm without intervention; Choose the most appropriate response objective(s), Identify options for action; Do the best option; and Evaluate progress.
By implementing the uni ied command structure associated with NIMS, emergency response leaders can effectively use the resources of neighboring agencies and organizations. An interagency approach to response is preferred to a single agency or organization because one entity cannot effectively respond to all types of emergencies. Important goals can be achieved and the health of the public can be protected during an emergency when all responding units and personnel work together as a team.
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5.6 COMMUNICATIONS
Reliable communications are critically important in any emergency situation. The need for reliable modes of communications increases as the size or scale of an emergency grows. A range of communication modalities are available during an emergency. These range from high-tech equipment such as radio linkages and satellite telephones to relatively primitive approaches such as handwritten messages that are delivered in person. More common communications equipment includes regular and cellular telephones, e-mail, and facsimile equipment. The overlap and redundancy of these communications equipment are deliberate. Communications capability must be maintained throughout an emergency. Because conditions in an emergency can change rapidly, multiple methods for communication must be maintained. Although informal or personal communications are desirable and useful, their use should be limited during an emergency.
Many contemporary communication modalities require support from an intact infrastructure. Telephones, facsimile machines, and e-mail all require equipment that is functioning normally, electricity to power the equipment, and wires or satellites to carry signals. Emergencies that cause any of these elements to malfunction also disrupt communications that use them. Even when the elements are working, overuse can overload them, leading to delays at best and broken links at worst. Alternative methods for communications are needed.
When electrical networks are interrupted, normal communications become impossible. Amateur radio operators often provide alternate communication channels during emergencies. Battery power can be substituted in radios and other electronic equipment. This option requires foresight. Organizations must stock spare, fresh, and fully charged batteries.
Runners have been used to carry messages for millennia. They become irreplaceable when all other means of communications fail. While runners are slow, they have minimal support requirements. Runners may be the only available means of communication in some emergency conditions.
The ability to communicate is critical for success. Communication channels are often dif icult to keep open during an emergency. Each additional communication channel provides backup and helps to ensure continuity. Preparing different modes of communication and acquiring full operational knowledge before a crisis occurs will improve response capabilities during an emergency.
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5.7 INVOLVEMENT OF HOSPITALS
Hospitals are integral components of the health system during both normal and crisis times. During an emergency, their importance increases. Hospital capacity and occupancy data in luence evacuation, containment, quarantine, treatment, and other decisions. All emergency planning should include hospitals and other care-providing institutions. Informal and formal meetings with hospital staff can help to develop the relationships that may be needed in an emergency.
To protect residents of the community and reduce the risk of spreading disease, an early warning system should be developed that uses the information obtained from hospitals and other sources. The warning system should be created and tested prior to a disaster to evaluate the accuracy of data and the ability to cope with injuries and illnesses that may accompany an emergency.
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5.8 POPULATION EDUCATION
Education must be an integral component of any preparedness planning. By de inition, preparedness education must be provided prior to any disaster. Recipients of training should understand basic de initions of likely and unlikely emergencies for a given region, precautions that should be taken, what to expect during the course of each potential emergency, and what needs are likely to exist in the aftermath of each emergency.
Before an emergency occurs, time and resources for education and preparation will be available. A wealth of educational materials and resources has been developed by groups such as the Federal Emergency Management Agency, the American Red Cross, and the Centers for Disease Control and Prevention. These agencies have developed fact sheets, procedural guides, readiness checklists, operating protocols, and other information that can assist potential responders such as health agencies in their efforts to educate the general public. Developing messages requires time and considerable thought and effort. Identifying delivery channels and transmitting the messages can be challenging. A variety of methods, approaches, and information are likely to be needed for different communities, population subgroups, and types of emergencies. All materials should be pretested and reviewed to ensure that they are complete and can be understood by potential recipients. Delivery channels should be regularly reviewed to ensure that they are ready.
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5.9 MENTAL HEALTH
Stress and problems related to mental health are present in all emergencies and disasters. As a consequence, mental health or stress management becomes important for both responders and members of the public during and after a crisis event. Experienced planners remember that all members of a community, including rescue workers and members of the public, are affected. Most communities have mental health professionals. Many national mental health organizations often have local af iliate of ices that can provide resources. Most communities have mental health boards that can assume active roles in helping with education and responses during a crisis.
Mental health professionals must continually adjust their messages as a crisis or emergency evolves or simply continues. As the duration of an event increases, the types and forms of support that are required for victims and response personnel change. Long-term problems associated with posttraumatic stress disorder have been well documented. The conclusion is that mental health services must be as readily available as other emergency services during an event. Their importance continues for a long time after an incident has been concluded or resolved.
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5.10 SHELTERS
Providing shelter for affected people is a need that accompanies most emergencies. The nature of the emergency will de ine the services that are required. Shelters that simply provide temporary housing for individuals and families also require staff, food, water, clothing, and sanitary services. Sites that offer health-related services such as dispensing antibiotics or immunizations or providing clinical care typically require greater numbers of staff.
The responsibility for managing and staf ing a shelter is often delegated to the Red Cross. Volunteers from a health organization may be assigned to assist other personnel in a shelter. Surveillance is an important activity associated with shelters. Diseases and injuries that occur while shelters are in operation must be documented and reported. Births and deaths are reportable events whenever and wherever they occur.
Locations that will provide immunizations or dispense drugs must be designated. Such sites must provide space for waiting, dispensing pharmaceuticals, and performing administrative duties. Rest, water, and sanitary facilities are needed. Recognizable locations such as schools, churches, recreation centers, or other public buildings are often good locations for shelters. Dispensing sites should be usable for both mass immunizations and distributing antibiotics. Assigned staff members and volunteers must be lexible and trained to undertake both missions.
Providing medications or treatment can be dif icult in the best of times. When prophylaxis or immunization dispensing for large segments of the population is considered, how will the health system ensure that members of the general population receive the proper treatment? An important health concern is that people who have been infected with a biologic agent may leave the area. If such persons leave, they have the potential of spreading the disease to people in other areas. Individuals who leave an area where medication is being dispensed may not receive the proper treatment in a timely manner. Although imposing a quarantine may appear to provide a solution for this problem, maintaining (enforcing) it may be impossible.
A potentially useful alternative in some emergency situations is sheltering in place. This is usually synonymous with staying home. If the public is adequately and effectively educated prior to an emergency event, they will understand why sheltering in place is necessary. People can prepare for the possibility of sheltering in place by assembling the food and supplies needed to support themselves for the expected duration of the sheltering. An aspect of sheltering in place that is often overlooked is boredom. This is especially important with children. Preparations should include resources and supplies to counteract boredom. While alternative forms of shelter may be needed, they are also likely to be stressful.
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5.11 VOLUNTEERS
Professionals are not likely to be available in suf icient numbers to manage a crisis in an adequate manner. Trained volunteers can provide the additional help that is needed. Volunteers must be ready before a disaster or crisis occurs. They must be identi ied, organized, trained, credentialed, engaged, evaluated, and recognized.
Potential volunteers can be identi ied on the basis of having needed skills. Fundamentally, all volunteers must be willing to help. Publicity and word of mouth are common methods used to identify and attract potential volunteers. Once enlisted, volunteers must be organized into working units and trained for their roles. During training, the philosophy, goals, and objectives of the organization for which they have volunteered are presented. After training has been completed, volunteers should be credentialed. At the minimum, this should include an identi ication card and certi icate of completion for the training that they have received. When they are called upon to serve, trained volunteers should be engaged and assigned responsibility for meaningful tasks. Volunteers who are not used quickly lose interest and ind other outlets for their spare time. Volunteers should be periodically evaluated. Finally, they should be recognized for volunteering their efforts and time.
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5.12 SURVEILLANCE
In addition to speci ic information and intelligence data developed by the federal government, health surveillance is an important component of the warning system for a natural disaster or terrorist attack. Vulnerable populations and potential targets should be identi ied during the planning process. Once a surveillance system becomes operational, it should be tested and evaluated (and modi ied if necessary) prior to an actual emergency.
Surveillance activities during and after an emergency are similar to those undertaken prior to an event. Data are needed to provide accurate estimates of the number of affected individuals and the types of problems and needs with which they were confronted during the emergency. Data on the size and extent of affected areas are also needed. Such data are required so that appropriate precautions can be taken and accurate evaluations can be made before reconstruction can begin.
After a threat or emergency has been contained, an initial evaluation has been made, and emergency assistance has been rendered, concern shifts to recovery. This may involve evaluating structures and repairing or demolishing them. These actions are taken to preserve individual safety or control the spread of disease after an outbreak or biologic attack. Decontamination procedures may be required after a chemical emergency. Recovery often begins with identifying and repairing or taking other needed actions related to making working conditions safe. Effective postevent surveillance protocols require that redundancies be present for gathering and reporting information. Depending on the number of affected individuals, nonhealth personnel may be required to conduct interviews and follow up with affected people. These persons must be identi ied and adequately trained in advance.
Syndromic data collection is a method of surveillance that uses speci ic codes for different symptoms related to the nature of an emergency. The approach is currently used by hospitals, laboratories, responders, and other organizations. Sentinel site surveillance is another useful form of data collection. Routine reporting data for health care facilities are automatically compared using a program that has preestablished thresholds for diseases or conditions of interest. When the thresholds are exceeded, personnel are noti ied to investigate the situation.
The laboratory of a local hospital is frequently able to make an initial identi ication of a suspected biologic agent such as plague, anthrax, or tularemia. State, regional, or federal reference laboratories are equipped to make more precise analyses. Laboratory facilities in health organizations and local hospital laboratories are essential for surveillance and early detection of pathogens. Time is saved when a local laboratory makes the initial identi ication. The Centers for Disease Control and Prevention has organized and funded a laboratory response network to assist with surveillance and identi ication activities.
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5.13 POSTEVENT ACTIVITIES
Concluding a disaster response or emergency operation is almost as important as undertaking it. Planning should include objective criteria for making a decision to stop an operation. Agreement on when and how to end an operation helps to avoid future problems. All activities included in an emergency response should be reviewed and evaluated. Documentation generated by the event should be collected, reviewed, and iled.
Demobilization encompasses the removal of equipment, responding personnel, and organizations. Personnel are typically withdrawn when operational goals have been achieved. Fatigue may precipitate the withdrawal of personnel. Lack of resources may limit the usefulness of response workers. Restrictions on the time of personnel and resources that have been provided by cooperating agencies must be respected. Demobilization should be included in practice drills and exercises.
Demobilization is the formal conclusion of a group’s involvement in response to an emergency or disaster. However, many people or agencies may continue working at the site. This involvement can continue for months or longer. Recovery operations in the aftermath of Hurricane Katrina (2005) and earthquakes in Pakistan (2009) and Haiti (January 2010) provide convenient examples. As this chapter is being written (late 2010), volunteers are continuing to work at all three sites.
Periodic formal evaluations must be made. Informal evaluations are likely to be offered for years after the emergency period. Expended supplies and resources must be replaced. Other paperwork must be completed. Posttraumatic stress syndrome is often overlooked. Depending on the nature and magnitude of an emergency, posttraumatic stress has the potential to create personal problems for years. It affects volunteers and professionals as well as victims.
The critique phase of postevent activities provides an opportunity to evaluate response efforts. Important questions to ask include: What actions and operations were undertaken and concluded in a satisfactory manner? Were any handled in a less-than-satisfactory manner? Were the lives of responders put at risk? How were they at risk? What aspects of the operation could be improved in the future? What approaches could be modi ied? Were commands given and carried out in a timely manner? Individuals conducting a critique must be honest with each other. The goal is improving both the process and the team. Appendix 5–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1 /sections/53#con.65a) at the end of this chapter contains an example of an after-event assessment.
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5.14 AFTER-ACTION REPORTS
After-action or after-event reports are essential. Such reports enable organizations to identify and improve their de iciencies. By being honest, organizations are able to critically evaluate and improve poor performance areas. As part of their training, volunteers should be told about completing after- action reports and why they are needed. After-action reports should discuss aspects of operations that are performed well as well as document problem areas. After-action reports enable organizations to review the effectiveness of their preparedness. Outside reviewers often provide new insights that identify subtle problems or increase the understanding of de iciencies.
Standardized forms or formats should be developed for after-action reports. Brevity is appreciated but has the risk of overlooking important aspects of an operation or activity. Conversely, long reports often provide highly detailed data but may not be submitted because of the effort required to complete them. Experienced organizations take after-action reporting seriously and spend time developing useful tools.
An after-action report should contain three main components: a debrie ing, an analysis, and a critique of the plan. Debrie ings should be conducted immediately after an emergency response is concluded. In the event of a long-term response, incident commanders or senior assistants should attempt to debrief workers and volunteers at the conclusion of their shift or rotation. Data from debrie ings are used to determine what objectives were accomplished. The data also provide ongoing progress evaluations of the incident action plan. During debrie ings, emergency personnel should be advised of potential environmental exposures and their consequences.
In the analysis phase of postevent activities, data from debrie ing sessions are reviewed. Evaluating progress is a primary goal of analysis. When debrie ing occurs prior to the conclusion of an emergency, incident commanders use the interim results of analysis to determine their next objectives. After the response phase of an event is concluded, planners should review their entire emergency plan. Revising plans using actual experience is a positive step that improves future responses.
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5.15 DOCUMENTATION
Gathering data, records, and assessments concerning an incident is important. Such activity should be an ongoing task. Some incident commanders assign this responsibility to a single individual. If data collection is not made during the incident, it should be addressed as soon as possible and practical after demobilization. This approach minimizes the opportunities for relevant data to be overlooked or lost.
Accuracy of recalled information tends to decline with the passage of time. Waiting to collect data potentially reduces opportunities to learn from an incident, impairs the quality of collected data, and may adversely affect future preparations. Interview data also contribute to the paper record of an event, often by including subtleties that cannot otherwise be captured. From a legal perspective, proper documentation is essential and can in luence future rights to compensation for exposure to environmental agents or other hazards during the event for workers, volunteers, and members of the public.
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CONCLUSION
This chapter has reviewed issues related to managing disasters and other emergency situations. Adequate planning, appropriate training, and suf icient resources should ensure that incident commanders can manage an emergency with success. Emergency or crisis management is a process that begins with planning and preparation. The plan is then tested and evaluated. If necessary, it may be modi ied. Ideally, this should occur before the plan must be implemented during an actual emergency. The process of evaluation initiates the next cycle of planning and preparation. Evaluating plans after being used in an actual emergency or crisis is critically important. Professionalism, preparation, and communication are the keys to managing an emergency response in a timely and competent manner.
The initial step in the planning process is identifying stakeholders in the community who can provide resources or volunteers during an emergency. Stakeholders include traditional emergency service responders, health care providers, government agencies, support groups such as the Red Cross, and community organizations such as service and youth groups. By meeting with leaders of stakeholder organizations well in advance, the personalities of leaders that can in luence decision- making processes and the potential extent of available resources can be adequately understood and personal relationships can be developed.
Emergency preparations require cooperation from many constituent groups. Planning, exercising, and evaluating provide the foundation for preparation. Educating professionals and members of the general public is essential. Two aspects of emergencies can be predicted in advance: Natural disasters will occur, and terrorist attacks will continue. Planning and preparation can lessen their impact. From a national perspective, emergencies are part of life. From the perspective of a single municipality, emergencies are essentially random events that cannot be accurately predicted in advance. Adequate preparation is the most effective form of defense. Learning from the events through documentation, surveillance, after-action reports, and other postevent activities is essential to developing robust and continuously improving emergency response systems.
Systems Thinking about Preparing for Emergencies
This chapter asserts that terrorist attacks and natural disasters are inevitable for the foreseeable future, because their root causes are dif icult to address. Some researchers argue that we can predict the volume and timing (over an extended period) of large, unpredictable, infrequent events. When the frequency of an event varies as a mathematical power of an attribute of that event (typically its size), the frequency of the event follows a power law.
In a region susceptible to earthquakes, for example, there will be a very large number of small earthquakes, a smaller number of medium-sized earthquakes, and very few large earthquakes. The Gutenberg–Richter relationship refers to the power law distribution between frequency and magnitude for earthquakes. If there is an average of 1 magnitude 9 earthquake every 10 years somewhere in the world, then on average, there should be 1 magnitude 8 earthquake every year, 10 magnitude 7 earthquakes every year, and 100 magnitude 6 earthquakes every year. Records of earthquakes from recent decades con irm these predictions.
The power law seems to be a fundamental property of natural and social processes of many types. City sizes, for example, are distributed according to the power law. There are a few extremely large cities, more medium-sized cities, and very many smaller towns. Researchers have even identi ied a power law distribution of insurgent violence based on a model that views each insurgent population
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as “an ecology of dynamically evolving, self-organized groups following common decision-making processes” (Bohorquez et al. 2009, 911).
The power law is not useful for predicting exactly when or where an emergency will occur, but it does help us prepare for the likelihood of extreme events in the future.
CASE STUDY RESOLUTION
Returning to the conversation between Anton and Valerie, Anton offered the following assessment.
“I agree that the irst incident commander lacked training. Delegation is an important skill. Not collecting after-action reports was a serious mistake. Her error will preclude an overall analysis of the response. It also has the potential to cause problems if chemical exposures of respondents are reviewed. I wonder if she ever identi ied the chemical that was spilled.”
After a few moments of silence, Anton and Valerie turned to begin their work. Coworkers reported that both were observed wiping their hands on their pants, apparently trying to remove an invisible substance.
REFERENCES Bohorquez, J. C., S. Gourley, A. R. Dixon, M. Spagat, and N. F. Johnson. 2009. Common ecology
quanti ies human insurgency. Nature 462 (7275): 911–4. US Department of Homeland Security. 2011. National response framework. http://www.fema.gov
/pdf/emergency/nrf/nrf-core.pdf (http://www.fema.gov/pdf/emergency/nrf/nrf-core.pdf) (accessed July 8, 2011).
RESOURCES
Periodicals
Begun, J. W., and H. J. Jiang. 2004. Changing organizations for their likely mass-casualties future. In Advances in Health Care Management, eds. J. D. Blair, M. D. Fottler, and A. C. Zapanta, vol. 4, 163–80. Oxford, United Kingdom: Elsevier.
Margolin, G., M. C. Ramos, and E. L. Guran. 2010. Earthquakes and children: The role of psychologists with families and communities. Professional Psychology Research and Practice 41 (1): 1–9.
McEntire, D. A. 2010. Revolutionary and evolutionary change in emergency management. Journal of Business Continuity and Emergency Planning 4 (1): 69–85.
Schneider, R. B., J. G. Benitez, A. D’Angelo, and K. Tyo. 2010. Pandemic in luenza: Antiviral preparedness and health care workers. Disaster Medicine and Public Health Preparedness 4 (1): 55–61.
Stafford, E. 2010. The importance of disaster planning. Journal of the Michigan Dental Association 92 (3): 22–6.
Vasquez, M., O. Jordan, E. Kuper, D. Hernandez, M. Galmarini, and A. Ferraro. 2010. Management of
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acute traumatic stress in nuclear and radiological emergencies. Health Physics 98 (6): 795–8.
Books Haddow, G. 2010. Introduction to emergency management. 4th ed. Burlington, MA: Butterworth-
Heinemann. Jha, M. K. 2010. Natural and anthropogenic disasters: Vulnerability, preparedness and mitigation. New
York: Springer. Landesman, L. Y. 2005. Public health management of disasters: The practice guide. 2nd ed.
Washington, DC: American Public Health Association. Levy, B. S., and V. W. Sidel. 2006. Terrorism and public health: A balanced approach to strengthening
systems and protecting people. Cary, NC: Oxford University Press. McGlown, K. J., and P. D. Robinson. 2011. Anticipate, respond, recover. Chicago: Health Administration
Press. Phelan, T. D. 2008. Emergency management and tactical response operations: Bridging the gap.
Burlington, MA: Butterworth-Heinemann. Pinkowski, J. 2008. Disaster management handbook. Deland, FL: CRC Press.
Web Sites • Alert SF: http://www.72hours.org/ (http://www.72hours.org/) • American Red Cross: http://www.redcross.org/ (http://www.redcross.org/) • Centers for Disease Control and Prevention–Emergency Preparedness and Response:
http://www.bt.cdc.gov/ (http://www.bt.cdc.gov/) • Department of Health and Human Services–Disasters and Emergencies:
http://www.hhs.gov/disasters/ (http://www.hhs.gov/disasters/) • Federal Emergency Management Agency: http://www.fema.gov/areyouready/
(http://www.fema.gov/areyouready/)
• Ready.gov (http://Ready.gov) : http://www.ready.gov/ (http://www.ready.gov/)
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Appendix 5–1
AFTER-EVENT EVALUATION OF H1N1 INFLUENZA PREPARATIONS AND ACTIVITIES: EXECUTIVE SUMMARY1
(http://content.thuzelearning.com/books/Fallon.9852.17.1
/sections/53#fn_1)
This report brie ly summarizes the activities of a Midwestern health district as it planned for the potential arrival of swine in luenza (H1N1). Information was obtained from after-action reports and compiled by a committee that included key personnel2 (http://content.thuzelearning.com/books /Fallon.9852.17.1/sections/53#fn_2) from the activities undertaken in response to the recent increase in the number of cases of in luenza in the county. The authors note that an in luenza epidemic has been discussed and expected for years.
History. In luenza has been known for centuries. Outbreaks of in luenza occurred in Europe in 1510 and 1580. More recently, Russian in luenza (H2N2) killed 1 million people from 1889 to 1890, Spanish in luenza (H1N1) caused an estimated 30 to 100 million deaths worldwide from 1918 to 1919, Asian in luenza (H2N2) killed 1.5 to 2 million people from 1957 to 1958, and Hong Kong in luenza killed 1 million people from 1968 to 1969. The index ( irst) case of avian in luenza (H5N1 or bird lu) was reported in China in February 2005. It has not become a pandemic. The index case of swine in luenza (H1N1) was reported in Mexico in April 2009. As of March 2011, the number of deaths is fewer than 15,000 worldwide.
Actions taken. Planning began within a month after the index case of H1N1 lu was identi ied. A committee was assembled and charged with preparing for an epidemic of H1N1 in luenza. The 26th case of in luenza automatically triggered the decision to open the three temporary community shelters. This action was automatically triggered by exceeding the capacity of the hospital to treat sick persons. The shelters operated for 6 weeks. Their closure was automatically triggered when the volume of patients declined to a rate that could be safely processed by the hospital working alone.
Statistics: Persons treated in the hospital:
144
Persons processed in temporary community shelters:
1,210
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Deaths attributable to in luenza:
3
Volunteers: 233 Total volunteer hours worked:
2,410
Days of temporary shelter operation:
47
In luenza immunizations administered:
645
Cost: NA3 (http://content.thuzelearning.com/books/Fallon.9852.17.1 /sections/53#fn_3)
Clear successes. The following actions and conclusions were judged to be successful.
• Planning worked. The department was prepared to process up to 10,000 persons and hospitalize 500 (5% of the population) over the course of a 10-week epidemic. With a population of approximately 100,000 in the county, this was based on an overall attack rate of 10%. The maximum number of persons that could be treated at any point in time was 50 in the county hospital and 200 in the three neighborhood shelters that were prepared.
• Full shelter capacity was never reached. This was due to natural forces or factors that attenuated the severity of the disease’s attack rate. These forces remain under study.
• The preliminary costs associated with opening, operating, and closing the three community shelters was less than the amount that was budgeted.
Problems identi ied. The following problems were encountered as the committee reviewed materials.
• The committee struggled to assimilate and keep current with the volume of guidance documents that arrived on an irregular but near-constant basis.
• Not only was the volume of incoming advisory documents overwhelming, but they seemed to change their advice with irritating regularity.
• Many volunteers (estimated to be as many as 20%) asked to leave early, citing family obligations and other personal issues as reasons for early departure.
• Resistance was encountered by residents when professionals and volunteers tried to educate them about what they should or should not do to keep themselves and their families safe.
• Some volunteers complained that the media did not provide suf icient support for health during the epidemic.
• Vaccine delivery was delayed. Once delivery began, vaccine supplies were limited. Mass vaccination was not possible.
Proposed changes. The committee members compiling this report offer the following recommendations.
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• Read incoming expert advice but wait before implementing it. This will allow time for of icial changes to be made without generating extra work for committee members and volunteers.
• Recruit additional volunteers. The number should be suf icient to allow all volunteers to have breaks from duty so that they can return to their homes and families.
• Develop an information campaign on personal and family safety that is targeted at residents. Use different approaches to present the material on an annual or semi-annual basis for several years.
• Modify materials used in training volunteers to reduce their perceived reliance on the media.
• Develop a campaign to improve the relationship between members of the media and health leaders (professionals, board members, and volunteers).
• Work with leaders from the state health department to explore ways to improve the timeliness of vaccine development and delivery.
Notes
1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/53#fn1) . A longer and more complete report is under development and scheduled for completion in 4 months.
2 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/53#fn2) . Committee members included the President of the Board of Health, the Health Commissioner, the Health Department Public Information Of icer, and the Health Department Emergency Coordinator.
3 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/53#fn3) . Cost data were not available at the time this report was being compiled; a separate report will follow.
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SECTION II
Organizing for Improvement
In Organizing for Improvement (Section II (section02.html) ), the managerial activities of organizing are covered, with an emphasis on using structure, human resources, and culture to improve the quality and value of goods and services. Structuring for Improvement (Chapter 6 (chapter06.html) ) gives options for working with the formal organizational hierarchy. Managing Organizational Dynamics (Chapter 7 (chapter07.html) ) delves into the informal side of organizations and the competency of addressing intergroup and interpersonal con lict. In Organizing Human Resources (Chapter 8 (chapter08.html) ), the responsibilities of management to equitably and effectively equip the organization with a quali ied workforce are explained. Building a Culture of Improvement (Chapter 9 (chapter09.html) ) focuses on the organizational dimension of culture, detailing how managers and employees can redirect culture to drive improvement in organizational performance.
From the Association of Schools of Public Health (ASPH) inventory of core competencies (Association of Schools of Public Health 2010), this section on organizing for improvement (Section II (section02.html) ) contributes to ful illing the systems thinking competency in the disciplinary area of Health Policy and Management (“Apply ‘systems thinking’ for resolving organizational problems”). Organizing for Improvement (Section II (section02.html) ) also addresses selected ASPH competencies from the cross-cutting domains of Program Planning, Systems Thinking, and Diversity and Culture. Interestingly, the ASPH model does not include core competencies directly related to managing human resources and organizational cultures. Other management competency models, such as the Core Competencies for Public Health Professionals (Council on Linkages Between Academia and Public Health Practice 2010), typically include human relations skills. The Healthcare Leadership Alliance (HLA) competency framework does include human relations competencies (Healthcare Leadership Alliance 2010). From the HLA framework, Organizing for Improvement (Section II (section02.html) ) focuses on two clusters within the competency domain of Business Skills and Knowledge: Human Resource Management and Organizational Dynamics and Governance. In addition, the HLA competency domain of Leadership includes a cluster of competencies on Organizational Climate and Culture that is addressed in Building a Culture of Improvement (Chapter 9 (chapter09.html) ).
REFERENCES Association of Schools of Public Health. 2010. MPH core competency model. Final Version 2.3.
http://www.asph.org/document.cfm?page=851 (http://www.asph.org /document.cfm?page=851) (accessed February 22, 2011).
Council on Linkages Between Academia and Public Health Practice. 2010. Tier 1, tier 2, and tier 3 core competencies for public health professionals (Adopted May 3, 2010). http://www.phf.org /resourcestools/Documents/Core_Public_Health_Competencies_II.pdf (http://www.phf.org /resourcestools/Documents/Core_Public_Health_Competencies_II.pdf) (accessed February 22, 2011).
Healthcare Leadership Alliance. 2010. Overview of the HLA competency directory. http://www.healthcareleadershipalliance.org
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/Overview%20of%20the%20HLA%20Competency%20Directory.pdf (http://www.healthcareleadershipalliance.org
/Overview%20of%20the%20HLA%20Competency%20Directory.pdf) (accessed February 22, 2011).
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CHAPTER
6
Structuring for Improvement
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Understand the need to differentiate work roles and tasks and different ways to achieve this goal. • Appreciate the need to integrate work roles and tasks. • Be familiar with structural contingency theory. • Be able to discuss different types of structures (simple, machine bureaucracy, professional
bureaucracy, organic, and mechanistic). • Understand structuring options that promote organizational improvement.
CHAPTER SUMMARY
Decisions that managers make about structuring units, work activities, programs, and processes affect organizational productivity and quality. First, managers differentiate roles; they distribute tasks to workers and work groups throughout the organization. Because most organizational work involves multiple tasks, workers, and work groups, the differentiated activities of several individuals, groups, or units must then be integrated to result in quality goods, programs, or services. Much management and worker time is spent on balancing differentiation and integration. Decisions about structure are made within the context of a unit or organization’s strategy, culture, technology, life cycle, size, and environment. Common choices for differentiating and integrating promote several types of organizational structures: simple, bureaucratic, mechanistic, and organic. Improvement-driven organizations implement forms of structure that are more organic and less bureaucratic whenever possible.
CASE STUDY
Penny and Ed were discussing their working environments.
“My boss is okay. He’s accessible and interested in hearing from me. He is easy to get along with,” said Penny.
“Mine is just the opposite,” Ed complained. “He sits in his of ice doing his work. Whenever I want to see him, I have to make an appointment at least a week in advance. You and I both have professional
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jobs. I wonder what is responsible for the difference in behavior.”
What do you think Penny will say to Ed?
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6.1 INTRODUCTION
Structures are de ined as relatively enduring con igurations or patterns in activities and relationships. Structures are clearly evident in most physical entities, such as the wood framing for a house or the skeleton of a human being. However, structures are present but less visible and more intangible in organizations. The organizational structures implemented by managers are among the most important decisions that they make. Workers also make structuring decisions as they go about their duties. These structuring decisions create the foundation or framework for the production of goods and services.
Like many management competencies, structuring is both art and science. Decisions about hierarchy and reporting relationships, integration of diverse work processes, and a host of other structural issues should be based on a careful evaluation of the environment and capabilities of an organization. However, the ultimate decision often involves a fair amount of intuition and informed guesswork. This chapter will provide guidelines for decision making that can help managers to make better structuring decisions.
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6.2 DIMENSIONS OF ORGANIZATIONAL STRUCTURE
There are an in inite number of ways to characterize the structures of teams, groups, units, and organizations and agencies. Two key dimensions of structure—differentiation and integration—are embedded in most of the important management decisions involving structuring. Managers and workers are continuously trying to balance the need to split activities into separate components assigned to different workers, largely for reasons of ef iciency, and put them back together in the form of an integrated product or service.
Differentiation
Differentiation is the degree to which tasks and workers are separated into different subunits. Differentiation allows organizations to bene it from specialization. This occurs when workers develop extensive knowledge and experience around one particular task or activity. Economies of scale and synergies emerge in differentiated units when workers of the same type, doing similar work, are able to back each other up (cross-training), educate coworkers, and understand each other. In this way, differentiation helps an organization add quality and value to goods and services.
Organizations generally make key long-term decisions about differentiation that are re lected in job descriptions and the groupings of tasks and workers on an organization chart. The decisions about differentiation help form the skeleton of an organization or unit. Issues of differentiation are faced by workers and managers in small groups and teams as well.
In structures with low levels of differentiation, where employees or groups of employees can accomplish most or all of the production processes by themselves, the organization consists of a collection of generalists. A small legal services clinic, for example, may employ lawyers who handle their own scheduling and billing. The clinic would have low levels of differentiation—all workers essentially perform the same activities. If the clinic adds staff to handle scheduling, staff to handle billing, custodians to maintain cleanliness, or assigns one of the lawyers to handle leasing of space, the level of differentiation within the organization increases. In a highly differentiated group or unit, workers’ tasks are specialized. One worker may keep the facility clean, while another ensures that supplies are current. One may greet and prepare customers for various services. Another worker may deliver the services, while a different worker bills for the services.
In small-and medium-sized organizations, employees are typically assigned to units based on the skill or knowledge that they bring to the work setting. This includes their profession and discipline or area of training such as a medical or nursing specialty, epidemiology, or environmental services. Traditionally, this form of differentiation has been called a functional structure. The building blocks of an organization are its functional experts, in areas such as inance, human resources management, or clinical laboratory sciences. Workers typically belong to only one formal functional group.
In health organizations, working groups are often comprised of differentiated groups of highly professional employees, such as pharmacists, social workers, physicians, epidemiologists, or maternal and child health specialists. Professional workers generally are distinguished by advanced expertise acquired through formal education that serves as a barrier for entry to the profession. Sometimes, licensure or certi ication adds another entrance barrier. The exact level of advanced formal education that quali ies an individual for professional status varies. (In some countries, the concepts of
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professions and professionals do not exist.) In the United States, baccalaureate or master’s level education is typically the end point for preparing many health workers, such as nutritionists, occupational therapists, and community health educators. This is in comparison with the doctoral level for physicians, dentists, optometrists, and several other types of workers. Many occupations, health management among them, often are referred to as quasi-professional, because they exist in a gray area between nonprofessional and professional.
Integration
A second important dimension of units and organizations is the extent to which activities are integrated. Integration is the degree or extent to which seamless coordination is achieved among subunits of a system. Generally, if units are highly differentiated, there is more need to pay attention to integration, so that all of the differentiated parts are working toward a joint goal.
Organizations respond to the need for integration in a variety of different ways. All but the simplest organizational settings are faced with ongoing and challenging issues about how best to achieve integration. In small organizations that use routine and stable technology, integration may not be a big issue. A solo practitioner dental practice with one dentist, one receptionist/clerk, and one dental assistant, for example, faces relatively simple issues of integration compared to a community health center. The delivery of clinic services in a community health setting calls for integrating the activities of multiple clinical and clerical staff. Schedules of patients and workers must be coordinated, patient records have to be current and accessible, laboratory and other diagnostic services must be available, and reimbursement forms have to be iled.
Another way to integrate workers is to aggregate together all the workers producing a particular product, program, or service. This form of structure is common in health organizations, because many organizations are structured around particular services or programs. For example, a state or community health department may have a unit that is organized to provide refugee services. Such services might require contributions from workers assigned to several different departmental areas, including social work, community health, and nursing. Health care delivery facilities are often structured around service lines such as oncology services or women’s health. The service lines include all of the departments required to support program elements, ranging from information technology, marketing, inance, strategic planning, and human resources management to all of the clinical health workers and clinical support staff. Product grouping also satis ies a need to integrate departments around a single product or service, allowing more control over the quality of that product or service.
Larger organizations may add new divisional groupings based on product or client categories or on geographic areas served. A community service agency, for example, may have Elderly, Adult, and Youth Service divisions. A health care delivery system may have separate divisions for Hospitals and for Outpatient Clinics. The US Federal Emergency Management Agency (FEMA) has 10 Regional Operations divisions based on geographic clusters of states.
The use of product or service line or client program groupings often helps organizations be more responsive to particular groups of consumers. Workers are more easily able to use mutual adjustment as a mechanism for integrating their work. Mutual adjustment is the achievement of coordination by the simple process of exchanging information, including through informal channels of communication (Mintzberg 1983).
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6.3 BALANCING DIFFERENTIATION AND INTEGRATION
Managers balance the need for differentiation with the need for integration in their decisions about how to structure their organizations and units. Structuring tools include hierarchy, standardization and formalization, centralization, and coordinating mechanisms such as committees.
Hierarchy
The hierarchy of formal authority in a unit or organization is an effort not only to divide responsibilities and roles (differentiate) but also to integrate work by holding employees accountable to higher authorities. A senior manager assigns work tasks among multiple employees and coordinates their output. Questions about the hierarchy of formal authority involve relationships (“Who reports to whom?”). Even in small groups, issues of hierarchy or power inevitably emerge (“You can’t tell me what to do!”), because positional authority (power) based on hierarchy is often an ef icient method for accomplishing objectives.
The formal hierarchy of an organization is illustrated by the vertical relationships in an organizational chart, with employees on lower levels being accountable to managers on higher levels. In a clear structure, everyone knows who their manager is, and everyone has one and only one supervisor. In turn, each manager reports to a supervisor, up the hierarchy to the chief executive of icer of the organization. The chief executive of icer, in turn, reports to a governing board that is directed or headed by an elected chairperson.
The governing board is the top of a formal hierarchy of authority for most organizations. Public entities, such as a department of public health, often are governed by boards that are appointed by elected city or county of icials. Private for-pro it and nonpro it organizations and agencies are governed by boards of directors, usually consisting of volunteer supporters and experts. For-pro it entities often pay their governing board members.
Most employees do not directly interact with governing boards, but instead with the appointed head of the organization and with other managers in the organization. Still, it is critical that everyone in the organization realize that the governing board exists and that the governing board has ultimate authority over and responsibility for the organization. Often, the actions of senior managers make more sense when individuals realize that top management is responding to demands made by the governing board.
Example: Hierarchy in a Public Health Agency
The formal hierarchy in a public health agency can be described. The structure usually re lects the statutes under which the agency operates, but all agencies have a governing board. Controlling boards have ive important general responsibilities. They must provide general guidance for the organization that they oversee. They must ensure that resources are adequate to allow the organization to address its mission. They are responsible for one employee: a chief executive of icer (hiring, supervising, evaluating, disciplining, and discharging [if necessary]). They review and approve annual budgets. They periodically review products, services, and programs offered by the organization.
An expert in public health policy (Citrin 2001) listed some important responsibilities related to
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public health boards. Well-functioning boards of health communicate with staff members of a local public health agency through the chief executive of icer. Local boards of health can explain and promote an understanding of public health and the role of a public health department among elected of icials as well as members of the general public. Board of health members are advocates for public health support. A board provides stability by securing long-term political support for health agency operations when elected administrative of icials undergo changes in party or leadership.
The title of the agency chief executive of icer varies. Common titles include health of icer, health commissioner, and director. Employees at the highest level in an agency (for example, directors) below the chief executive of icer typically comprise a management team that provides guidance for the usual responsibilities of the agency. The management team sets the tone for the entire organization and is ultimately responsible for its success or failure. The management team is headed by the chief executive of icer.
There are several common organizational or functional areas in public health agencies. Each is led by a department head or director who reports to the chief executive of icer in the hierarchy. Administration commonly coordinates iscal issues including budgets and accounting operations. Environmental Health coordinates restaurant inspections, private well and septic system inspections, and other related programs. Community Health provides instructional programs throughout the community. Nursing coordinates home nursing services and provides staff for clinics operated by the Health Department. Epidemiology Services may be in a separate department or may be a part of Nursing. Human resource requirements may be outsourced in small agencies, handled as a part-time component of one person’s job in mid-sized agencies, or provided by a single or multiple employees in large agencies. Human Resources coordinates personnel, payroll, bene its, and some reporting to the federal government. In smaller public health agencies, a municipal prosecutor or external counsel provides legal services on a part-time basis. A medical director provides advice and answers medical questions as needed.
Example: Hierarchy in a Hospital
A hospital, like a public health agency, is governed by a board of directors that selects and evaluates the organization’s chief executive of icer, sets strategic direction, and reviews annual budgets. In a public or nonpro it hospital, board members often serve as advocates for the hospital in the community. A management team led by the hospital chief executive of icer typically includes a chief operating of icer and director-level administrators such as the medical director, director of nursing, and director of inance. The hierarchy of a hospital is more complicated than most other health organizations because
the medical staff of a hospital also has its own governing structure (the medical staff organization), which is linked to the hospital by the reporting relationship of the medical staff organization to the governing board and delegation of authority for credentialing of clinical staff by the governing board to the medical staff organization. The hospital’s medical director typically serves as a formal liaison between hospital administration and the medical staff organization.
The majority of hospitals in the United States also are joined into larger networks or systems that include multiple hospitals (referred to as horizontal integration—combination under common ownership of similar entities) as well as other health service organizations, such as outpatient clinics and nursing homes (referred to as vertical integration—combination under common ownership of entities serving different stages in a production process, such as the production of health). The integrated health systems or networks have their own governing board and administrative hierarchy,
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which often replace some of the governing boards and administrative hierarchy of the composite entities.
Flat and Tall Hierarchies
Hierarchies of authority having few levels are characterized as being lat. In contrast, adding more levels to a hierarchy creates a steep or tall structure. Information can be transmitted using formal channels that are associated with a hierarchical structure. The formal channels constitute a chain of command. Flat structures allow for much quicker movement of information and formal approval because their chains of command involve fewer people. When the number of people is increased in a steep hierarchy, information transfer is slower, and formal approval requires more time.
Span of control is de ined as the number of workers reporting to a single manager. In organizations with latter structures, managers often have larger spans of control. Larger spans of control are made possible by decentralizing decision making to workers or by similarity among the workers being supervised (controlled). Organizations with steeper hierarchies usually have smaller spans of control.
In more complex structures, employees may report to two or more different supervisors. Even in small organizations like a solo dental or medical practice, staff commonly report to an of ice supervisor, but they also may report to (or be held accountable by) the dentists or physicians, particularly for activities or issues that have a clinical impact. In matrix structures, workers report to a departmental supervisor as well as a supervisor of a product or service line or a program. A nurse in a hospital may report to the director of a clinical service, such as oncology, but also to the hospital’s director of nursing. In such cases, workers must balance their efforts and reconcile competing demands. Matrix structures are very lexible. However, employee evaluations often create con lict. Which supervisor completes the evaluation?
Hierarchical structure is the most common means of coordinating the activities of employees, but it only goes so far. A variety of other structural tools aid the integration process.
Standardization and Formalization
Standardization is the degree of uniformity in the inputs, work processes, and outputs of units and organizations. Inputs, for example, are standardized when all workers receive the same training or when certain types of training are required for illing a position. Processes are standardized by the use of guidelines, rules, and policies. Outputs are standardized when the dimensions of the output are speci ied and de ined, such as a range of grades that are allowed for sanitation ratings (for instance, a facility might receive a grade of A, B, or C, and each grade is de ined).
As already noted, both managers and workers face situations involving standardization on a daily basis. Common examples include, “What is the policy for this issue?” and “Who says this is the rule?” Rules and policies are often intended to create equity and ef iciency. Similar problems do not need to be debated over and over, and the decision rules can be applied to all situations. Standardization is particularly important in highly regulated arenas, such as waste management and hazardous material handling, where deviations from standards can cause death or disease. Standardization in the form of patient care protocols and guidelines is increasingly used in clinical health care delivery organizations.
Standardization of the workday is common in organizations. Employees must be accountable for
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their time. Whether in the ield or in an of ice, beginning work at a set time is important. Members of the public and customers of health organizations expect services to be available at established times. If managers permit staggered starting and ending times for employees ( lextime), organizational services must be available and customer service cannot be compromised. Flexible starting or ending times depend on management style, staff responsibilities, the nature of the services being delivered, and any stipulations in a union contract.
Breaks and meal time are important to employees and contribute to quality in an organization. The Fair Labor Standards Act requires employers to provide time for a meal and for breaks. Management can determine the timing of these breaks. In organizations with unions, the length and timing of breaks are usually de ined in the contract. Overtime guidelines should be clearly de ined and understood by both staff and management. The Fair Labor Standards Act determines overtime policies and pay rates for all nonexempt employees. An organization’s policy manual should contain guidelines for overtime. Managers must be careful when tracking overtime. Unexpected or unauthorized overtime can create budget problems. If a union is involved, the contract must be followed. Compensatory time can be used in lieu of overtime.
Formalization is the degree to which organizational policies and norms are codi ied. Questions about formalization often take the form, “Should this be written down?” or “Don’t we have a policy that covers this?” Highly formalized units have many documented procedures and policies. For example, job descriptions may be highly detailed. All organizations should have written policy manuals with guidelines for vacation time, sick leave, bene its, separation, iling grievances, performance review, whistle-blower protection, and a variety of other issues. Most larger organizations have developed policy manuals. Not having a policy manual is an invitation to problems.
Documentation and record keeping are among the important responsibilities of management. Without proper documentation for travel, mileage, time off, overtime, services rendered, and consultation, an organization has no way of con irming the legitimacy of funding requests or deciding which fund should be charged. Funding or reimbursement for many programs is based on the amount of time spent doing the work. Documentation supports the activities of employees. Without accurate records, appropriate cost centers cannot be charged for completed work. Another important reason for accurate and complete documentation is legal defense. Without documentation, an organization is unlikely to prevail in court.
Filing correspondence, inspections, and con idential information requires time and space. However, maintaining documents is an important responsibility of any organized entity. Although some organizations allow individuals to keep noncon idential information at their desks, this practice is not recommended. Maintaining a central iling system is recommended. Advantages of a central records retention system include having all iles stored in one location and iled according to a single indexing system. With this approach, the chances of losing iles are reduced. Central iling systems usually improve document security. Access to a central iling system should be controlled, and all activity (document deposits or withdrawals) should be recorded. Electronic support is recommended: input, indexing, iling, and activity.
Other examples of formalization in organizations include the recording and dissemination of mission, vision, and values. Groups or teams also may have formalized charters or missions, as well as procedural guidelines, such as, “Come to group meetings on time.” Formalizing guidelines aids in communicating them clearly and applying them equitably. However, formalization reduces lexibility and the ability to customize guidelines for particular situations.
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Formalization has been found to be an effective antidote to high variability that can lead to death or injury. Pilots use checklists when they inspect their aircraft prior to taking off. In hospitals throughout the world, checklists for procedures to be followed before and during surgery are recommended as a way to make surgery safer (Haynes et al. 2009).
Centralization
Organizations can integrate procedures by centralizing decision-making activities and information low. Centralization is the degree to which decisions and information low are controlled by a single
individual or unit in an organization. Decisions of a strategic nature are often centralized at the top of the hierarchy of an organization. As discussed later in this chapter, too much centralization can slow down decision making to unacceptable levels.
Liaisons, Committees, and Task Forces
Another way to coordinate activities is to exchange information in committees or task forces. Cross- functional committees are a common way to exchange information involving different departments or functional areas. For example, representatives of major clinical providers in a health services facility may sit on a permanent quality improvement council in order to improve interdependent processes. Units of organizations may appoint liaison personnel to relate to other interdependent groups or departments. For example, a representative from each service line of an agency acting as a liaison with an organization’s marketing department could align and coordinate marketing activities with changes in internal production processes.
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6.4 STRUCTURAL CONTINGENCY THEORY
Managers and workers practice the art and science of structuring by making decisions about structure within larger contexts. What works in one context may not be appropriate or successful in another. Wise managers assess the context and then make their decisions, rather than relying on one style or one way of doing things. Academics refer to this as structural contingency theory. Figure 6–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/59# ig61) depicts the elements of structural contingency theory.
The context for structuring decisions includes six key variables: strategy, culture, technology, size, life cycle, and environment. If the chosen structure of the organization its well with those variables, or contingencies, then the organization will perform well.
First, a unit or department’s structure should be compatible with the strategy of the organization in which it is embedded. In growth-driven organizations, for example, structures are more likely to be lexible than those encountered in mature organizations. Second, a group or department’s structure
should be compatible with the culture, or underlying norms and values, of the organization of which it is a component. Organizations that claim to value learning and innovation, for example, typically feature structures that are lexible and encourage information low.
Third, an organization’s production technology is a major determinant of structuring decisions. If the technology is routine and mechanistic (for example, a unit that dispenses building permits or conducts routine laboratory tests), structures should be highly formalized and standardized. If the technology varies within the service or program being delivered, such as responding to disasters, structures must be able to adapt and accommodate surprise and variation.
FIGURE 6–1 Structural Contingency Theory
Another way to distinguish types of production processes is by the degree of interdependence among the parts of the process. Three major types of interdependence have been identi ied (Thompson 1967). Pooled interdependence exists when the outputs of separate units can be combined without having to share information among the units. Faculty members operate largely independently in meeting the teaching needs of a college or university, for example. The teaching output of an institution is the result of pooled interdependence. Sequential interdependence exists when one unit must complete its assigned tasks before the next unit can start its work. Hospital admissions must be handled before a patient can be treated, for example, and the patient must be discharged prior to release. The three stages—admission, treatment, and discharge—are sequentially interdependent. Reciprocal
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interdependence exists when units must exchange feedback during the production process. The situation where ire ighters and emergency medical services personnel exchange information while responding to a chemical spill is an example of reciprocal interdependence. Reciprocal interdependence requires the most integration among units.
Fourth, size in luences decisions about structure, with a primary guideline being that larger size typically results in the need for greater formalization and integration. This is one reason why many small organizations suffer growing pains and why some people enjoy working in smaller organizations much more than larger ones. An organization’s stage in its life cycle, the ifth element, is closely related to its size. As organizations mature, they tend to become increasingly in lexible as they develop highly formalized roles, rules, and policies. At this stage, managers must work hard to avoid the sti ling effects of overformalization.
The state of the environment is the sixth element. A key environmental dimension is its uncertainty, which can be de ined as the complexity and dynamism of its elements. Many health organizations exist within a relatively uncertain environment, particularly regarding funding. Health organizations routinely cope with new scienti ic evidence, multiple stakeholders, diverse organizational partners, and new or emerging diseases. The sum of these factors creates complexity in the environment.
Theorists describing structural contingency theory and practicing managers making structuring decisions both work from the same assumption, namely that effective managers are sensitive to context. If the contingencies (context) and the structure are aligned well, an organization’s structure will contribute to better performance.
A inal piece of the decision-making puzzle is recognizing the cost of structuring decisions. For example, after considering contextual variables, a manager may decide that it makes sense to appoint a cross-functional committee. However, implementing a cross-functional committee is costly in terms of workers’ time and patience. The value of the integrating activity should outweigh the costs of participants’ time and any other tangible or intangible expenses.
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6.5 TYPES OF STRUCTURES
Structuring decisions tend to cluster because dimensions of structure are interdependent. A steep hierarchy, for example, is often accompanied by high degrees of formalization and standardization. A few key concepts that usefully characterize types of organizational structures have emerged.
Simple Structures
Simple structures have few levels of hierarchy ( lat), wide spans of control, and low levels of differentiation and formalization. There is usually one person in charge. Issues of integration are relatively simple to resolve, as the hierarchy of authority is clear. Decisions are made quickly because they are processed and communicated through few individuals and few levels. Examples of organizations having simple structures include many new or start-up operations, small businesses, and professional practices supporting a small number (typically fewer than ive) of practitioners. Many nonpro it organizations serving particular and limited needs in communities adopt a simple structure. A small but signi icant proportion of health organization employees work in organizations that have simple structures.
Bureaucracies: Machine and Professional
Bureaucracies are organizational types that are typically characterized by clear and stable differentiation, steep hierarchies, centralized control, extensive rules, and standardized procedures governing performance. Consistency, equity, and uniformity are hallmarks of bureaucracies, but these characteristics often are accompanied by a maelstrom of negative traits that led one management consultant to urge managers to become avowed and public haters of bureaucracy (Peters 1988). Foremost among the criticisms of bureaucracies is that they are slow in responding to the need for change. Bureaucratic structures tend to be rigid, self-perpetuating, and insulated from external pressures. Further, bureaucracies can be alienating to workers, customers, and clients, particularly those who are atypical. Because work in most health organizations is conducted in bureaucracies, health managers must be attentive to and often confront these important criticisms.
All bureaucracies are not highly centralized, however. Mintzberg (1983) distinguishes two different types of bureaucracies: machine and professional. A machine bureaucracy is characterized by a high degree of centralization and extensive reliance on formal channels for communication. The name re lects the fact that decisions tend to be made by senior managers and mechanically implemented by workers at lower levels.
Professional bureaucracies are highly decentralized. In professional bureaucracies, the presence of a large proportion of professional workers means that centralized control is ineffective. Managers typically do not fully understand the core production and service protocols (procedures) that are used by the people that they supervise. To have in luence, managers must become facilitators, coordinators, and supporters rather than directors of professionals. Monitoring of quality is generally left to the professionals. This means that educational preparation and peer review are the main components of quality control. This is the case in many health organizations, because most of these organizations include professionals or quasi-professionals (for example, nurses, pharmacists, physicians, epidemiologists, nutritionists, community health educators, and sanitarians).
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The steep hierarchy of a machine bureaucracy is also compromised in a professional bureaucracy. This occurs because professionals do not recognize the absolute authority of managers who do not share their professional background and training. For many professionals, allegiance to their professional values competes with allegiance to the organization that employs them. Managers do not have the same hierarchical control over professionals that they have over nonprofessionals.
Virtual, Network, and Self-Organized Structures
Other approaches to organizational structure are more dif icult to label. Their structural framework or skeleton is luid, and the parts of their organizational schemes are more loosely connected. Some would say that such organizations exhibit an absence of structure. Virtual teams, units, and organizations link together their parts through distance communication, typically using the Internet. Their appeal is simplicity and low cost. This is often offset by a much less cohesive connection than that obtained by physical presence (propinquity). The pressures for integration are more extreme, but they can be successfully overcome if managers have the time and resources to work on integration.
Networks of units or organizations comprise another loosely connected structure. Networks typically have few or no levels of hierarchy. Components of the network can come and go with relative ease. Units are often linked for speci ic purposes and time periods before being rearranged or disbanded. Coalitions of organizations that are formed to address a common problem (for example, decreasing crime in a neighborhood) or to achieve a shared goal (for example, building a bicycle trail) are examples of network structures. Institutions may form consortiums to provide a needed program or service without formally merging. In these structures, a hierarchy often emerges and changes depending on the needs of the situation. Authority may be rotated among members.
Self-organized teams, units, and organizations are another structural form that is occasionally encountered, particularly at the team level. Workers in self-organized teams are given an assignment, often with a deadline, resources with which to operate, and the autonomy to chart their path to complete the assignment. They must discover their own ways to organize, divide tasks, monitor progress, and collaborate. Such teams are often quite adept at adapting to changing situations, because they do not have to wait for external approval. Self-organized teams often allow for extensive utilization of all members’ talents. Information lows among team members informally rather than being channeled through the formal channels that are found in traditional hierarchies.
Mechanistic versus Organic Structures
One inal concept has emerged as a useful way to summarize key structural characteristics of organizations. Mechanistic or machinelike structures exhibit low differentiation, centralized decision making, and high standardization and formalization. Manufacturing plants that produce a product by combining several materials or parts typically are mechanistic in structure. This assures ef iciency and consistency in production. Organic structures have opposite characteristics. They exhibit high differentiation, decentralized decision making, and low standardization and formalization. Integration occurs through the use of mutual adjustment rather than centralization. A community health clinic is an example of an organization with an organic structure. Programs and services are customized in response to individual needs. Production processes, output, and delivery depend on the speci ics of each particular problem. Shared goals and values in the clinic and general but lexible guidelines create cohesion and consistency of behavior among providers and support staff.
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6.6 STRUCTURING FOR IMPROVEMENT AND VALUE
Guidelines for managers and workers interested in energizing their units and organizations and seeking new ways to improve services and add value are summarized in Table 6–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/61#tab61) . Structuring decisions are highly leveraged because their impacts are widespread and long-lasting. It is critical that managers experiment with new structuring options in order to ind the best mix for their situation and organization.
Encourage Mutual Adjustment
Mutual adjustment achieves coordination through continuous feedback among interacting employees and units. Each unit adjusts its activities based on information about the activities of other units. Integration among units can be signi icantly increased through mutual adjustment if units and individuals share information about their activities and if each unit understands the challenges faced by other units. Cross-training and liaisons increase information sharing, as do lat hierarchies. Organizational values of transparency and sharing are important to establishing a culture of information sharing. Finally, mutual trust is critical for achieving integration through mutual adjustment. Developing trust among different units requires time, effort, and reinforcement. Shared values, vision, and mission contribute to trust and to units being willing to take the risk of integrating while operating instead of relying on more rigid (and traditional) structural devices such as rules and policies.
Table 6–1 Guidelines, Characteristics, and Tactics for Energizing Organizational Structures
Guideline Characteristics Tactics Encourage mutual adjustment
Flat hierarchies
Organizational values of transparency, sharing, and trust
Shared values, vision, and mission
Continuous feedback
Cross-training
Liaisons
Experiment with client-centered structures
Information sharing from consumers throughout the organization
Structure according to products, service lines, or programs
Consumer representatives on governing boards
Push for more organic structures
High differentiation
Low standardization
Low formalization
Decentralize decision making to the lowest possible level
Retain some vigorous mechanistic structural elements to be responsive to safety, quality, and regulative concerns
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Use informal hierarchies and social networks
Open-door policies
Organizational values of openness and respect
Eliminate or downplay formal hierarchy and titles
Experiment with Client-Centered Structures
Traditionally, organizational charts have focused attention on an organization’s employees and production processes rather than on consumer responses to the programs, products, or services that are offered. Consumers have not been represented in the formal hierarchy of authority. Such an approach assumes that the organization is well informed and well structured to make decisions that best serve consumers and customers. This assumption is often wrong. As a result of such an error, organizations and their subunits become insulated from feedback and input from their consumers, clients, and customers.
Innovative organizations have challenged this assumption by using a variety of tactics. They may design their structures on the basis of programs, services, or product lines rather than on professional specialty or traditional departments. Leading health care delivery organizations use service lines as their main organizing feature. This typically requires cross-functional teams that are integrated and focused on patient needs. Teams of nurses, physicians, pharmacists, and administrators typically manage such service lines. Performance improvement teams and a guiding performance improvement council conduct and monitor the organization’s learning activities. By de inition, these teams and councils are cross-functional.
Another recent, innovative concept that is being introduced in health care delivery organizations is designed to deliver coordinated and patient-centered care. This approach places patients and collaborative practice teams (CPTs) at the apex of an organization’s structure. CPTs are composed of administrators, clinical providers, and data managers. They are supported by others such as inancial and information systems analysts and quality improvement experts, as needed (Cowen et al. 2008).
Another tactic, frequently used in public health agencies, is to involve consumers in the strategic planning and oversight of the organization. Many public health agencies and groups have consumer representatives on their governing boards. On some governing boards, such as federally quali ied health clinics, consumers comprise the majority of members. Some governing boards include formal presentations by consumers in their ongoing agendas. Others have consumers make presentations to workers in the organization, or they collect and distribute consumer feedback information throughout the organization or relevant unit.
Push for More Organic Structures
Traditionally, organization theorists have argued that organic and self-organizing structures are more appropriate for dynamic and uncertain environments. Many would agree that the environment of most health organizations is quite dynamic and uncertain. That claim, though, varies over time and by sector and may be prone to exaggeration (Begun and Kaissi 2004). In many health organizations, adherence to regulations and a mechanistic structure are prerequisites to high-quality performance and organizational improvement. Accrediting, licensing, and certi ication standards in luence a wide variety
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of health care and public health work activities.
Researchers have reported that some structure is valuable even in entrepreneurial start-up companies (Sine, Mitsuhashi, and Kirsch 2006). The lost ef iciencies due to a lack of structure can destroy an organization in a competitive environment. This occurs because alert and responsive competitors can use their greater differentiation, role formalization, administrative experience, and resources to exploit newly discovered task domains and do so quickly and ef iciently if they choose.
Many mature organizations, on the other hand, may bene it from introducing more organic structures and experimenting with self-organization. Therefore, it is important that managers have open minds to the use of both mechanistic and organic structures and align their decisions to the situation (structural contingency theory). Decentralizing decision making to the lowest possible level is a guideline followed by many lexible and responsive organizations. Employees who interact with consumers or members of the community should have some authority to make decisions. Because elements in their working environments often affect decisions, empowered employees can often make better decisions than managers who work in of ices. In some patient care organizations, custodians are empowered to arrange prepaid hotel rooms for families of patients who are distraught and in need. This is an example of an innovative step to decentralize decision-making authority to those who are most informed about consumer needs. Most health organizations include professionals such as physicians, epidemiologists, nutritionists, and community health educators. In these settings, administrators should consider making extra efforts to respect autonomy of decision making, while at the same time maintaining organizational values, vision, and mission. The combination of broad centralized guidelines but loosely decentralized operational decisions provides an effective option for most health organizations.
Use Informal Hierarchies and Social Networks
A formal hierarchy of authority is often not followed, particularly if it is steep and slow to respond. Employees know how to work around formal structures to get things done. When formal hierarchies interfere with service quality and delivering value to consumers, the use of informal hierarchies and social networks should be encouraged.
Some innovative organizations have tried to eliminate hierarchies altogether. They trade in their organization charts in favor of their telephone or e-mail listings. They also eliminate titles like chief executive of icer that connote hierarchy in favor of neutral titles such as facilitator or executive. Keeping of ice doors open rather than closed helps to minimize remaining hierarchies that cannot be fully eliminated. Promoting open doors is an example of reorienting organizational norms. A bene it of reducing barriers and increasing openness is usually an improvement in employee satisfaction. This usually translates into increased productivity and improved attitudes toward customers.
Most people believe that power within an organization comes from a person’s position within a hierarchy. This ignores the impact of informal groups. In reality, power often comes more from the degree to which an individual within a network is at the center of many relationships. Social networks may allow for more ef icient responses to quality and value concerns. They can be used to communicate information quickly, particularly if key individuals in the network can be identi ied.
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CONCLUSION
Managers set the tone for their units, departments, divisions, and organizations through their decisions about differentiating and integrating tasks, workers, and working units. Hierarchy, rules and policies, centralization, standardization, and formalization are options that are available in the toolboxes of managers as they work to strengthen unit structures. Many of the programs and services provided to constituents by health organizations would bene it from senior managers deciding to embrace openness as an organizational policy. Increasing the number of organic structures and decentralizing decision-making activities as much as possible promotes this goal. The result is empowering frontline workers who interact with consumers and members of the community on a regular basis. Members of the health organization workforce, particularly those in professional or quasi-professional positions, ind that the resulting structures contribute to a higher quality working environment and increase their
commitment to their unit and the entire organization.
Systems Thinking about Structure
Systems theorist James Miller (1978) wrote that living systems exist at eight hierarchical levels, from low to high: cell, organ, organism, group, organization, community, society, and supranational system. Each system level is nested within the next higher level. At each level, subsystems of the same type process matter, energy, or information so that the system will survive. In an abstract and generic sense, the structures of all systems are the same.
A simpli ied view of the structure of a living system has ive elements: inputs, throughputs, outputs, feedback, and environment. Inputs are resources obtained from the environment, such as human labor, inancial support, and buildings. Throughputs are the production processes that transform the inputs into outputs, such as counseling or clinical services. Outputs of a system are exported back into the environment to be received by consumers, customers, clients, and patients. Feedback from consumers and stakeholders about the output allows a system to adjust its inputs and processes in order to survive and grow. The inal element re lects the fact that living systems are open to their environments. Changes in the environment can elevate or devastate organizational systems.
Seeing organizations structured as systems allows managers to move among different types of organizations and still feel comfortable and perform competently. The basic building blocks are the same for small or large, for-pro it or nonpro it, and public or private entities. They also apply to organizations in different communities and societies. In all of these different systems, managers select inputs; plan, organize, facilitate, and control throughput; distribute outputs; and improve the system based on feedback from the organization’s environment.
CASE STUDY RESOLUTION
Returning to Penny and Ed’s conversation, Penny offered the following comments.
“I don’t think the difference in attitude is due to their personalities. Rather, I think the organizational environments in which we work are different,” Penny said. “Your organization is traditional in its approach to structure. Its managers are consistent in the way they treat their subordinates. You have formal structures, and your managers respect the formal channels of
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communications that follow the organization chart. They also derive their power from their position on that chart. In my organization, senior management made a decision to reduce barriers, disperse power, and promote informal channels of communication. That required trusting their employees and having faith that that their decision would be successful.”
“You may be correct,” replied Ed. “If so, why are your customer ratings so much better than ours?”
“Simple,” Penny did not pause for a breath before continuing, “Because the employees in my organization appreciate the con idence of senior management, they work harder now than in the past. They also talk to each other more. Output is up, programs have improved, and customers receive better treatment.”
“Lucky you,” said Ed wistfully.
“Before you complain,” Penny began. She continued, “Apply the lessons you seem to have learned and treat the workers you supervise as my organization does all of its employees. Little steps, especially those that set good examples, add up over time.”
“I will,” Ed promised. “In the meantime, I owe you a glass of the adult beverage of your choice.”
“Deal,” replied Penny.
REFERENCES Begun, J. W., and A. A. Kaissi. 2004. Uncertainty in health care environments: Myth or reality? Health
Care Management Review 29 (1): 31–9. Citrin, T. 2001. Enhancing public health research and learning through community–academic
partnerships: The Michigan experience. Public Health Reports 116 (1): 74–8. Cowen, M. E., L. K. Halasyamani, D. McMurtrie, D. Hovffman, T. Polley, and J. A. Alexander. 2008.
Organizational structure for addressing the attributes of the ideal healthcare delivery system. Journal of Healthcare Management 53 (6): 407–18.
Haynes, A. B., T. G. Weiser, W. R. Berry, S. R. Lipsitz, A. H. Breizat, E. P. Dellinger, T. Hebrosa et al. 2009. A surgical safety checklist to reduce morbidity and mortality in a global population. New England Journal of Medicine 360 (5): 491–9.
Miller, J. G. 1978. Living systems theory. New York: McGraw-Hill. Mintzberg, H. 1983. Structure in ives: Designing effective organizations. Englewood Cliffs, NJ: Prentice
Hall. Peters, T. 1988. Thriving on chaos: Handbook for a management revolution. New York: Harper
Perennial. Sine, W. D., H. Mitsuhashi, and D. A. Kirsch. 2006. Revisiting Burns and Stalker: Formal structure and
new venture performance in emerging economic sectors. Academy of Management Journal 49 (1): 121–32.
Thompson, J. D. 1967. Organizations in action. New York: McGraw-Hill.
RESOURCES
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Periodicals
Leavitt, H. J. 2003. Why hierarchies thrive. Harvard Business Review 81 (3): 96–102. Mays, G. P., F. D. Scutch ield, M. W. Bhandari, and S. A. Smith. 2010. Understanding the organization of
public health delivery systems. The Milbank Quarterly 88 (1): 81–111.
Books Donaldson, L. 2001. The contingency theory of organizations. London, UK: Sage Publications. Gawande, A. A. 2009. The checklist manifesto: How to get things right. New York: Metropolitan Books. Hilmer, F. G., and L. Donaldson. 1996. Management redeemed: Debunking the fads that undermine our
corporations. New York: Free Press. National Association of Local Boards of Health. 2007. National pro ile of local boards of health.
Bowling Green, OH: National Association of Local Boards of Health.
Web Sites • Mintzberg’s Organizational Con igurations: http://www.mindtools.com/pages/article
/newSTR_54.htm (http://www.mindtools.com/pages/article/newSTR_54.htm) • World Health Organization Surgical Safety Checklist: http://www.who.int/patientsafety
/safesurgery/ss_checklist/en/index.htm (http://www.who.int/patientsafety/safesurgery /ss_checklist/en/index.htm)
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CHAPTER
7
Managing Organizational Dynamics
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Understand the strength of informal groups. • Appreciate the nature and structure of informal channels of communication. • Know how to work with informal groups in occupational settings. • Apply organizational theory to resolving con lict. • Apply organizational politics to increase organizational effectiveness.
CHAPTER SUMMARY
Much of management occurs outside of the formal hierarchy. The strength and mores of informal groups are often underestimated, as are informal channels of communication within organizations. Understanding and appreciating the nature of organizational behavior provides useful insights for managing employees. Astute managers will study their workers as individuals and in groups; discern the structure, idiosyncrasies, and strengths of informal groups within their organizations; and use those insights to achieve organizational goals. Doing so requires confronting and managing interpersonal and intergroup con lict and politics.
CASE STUDY
The Wednesday departmental employee luncheon was getting out of hand. The departmental supervisor, Haslina, had suggested the event, ostensibly to celebrate the fact that her employees had gotten through the irst half of a dif icult workweek. Three employees had organized a potluck lunch. The food was exceptional. The three organizers asked Haslina if the event could be continued. Haslina agreed, thinking that it might generate some departmental pride. The single lunch had become a weekly event.
However, some problems had begun to emerge. The lunch was lasting for more than the allotted hour. The last one had topped 90 minutes. One of the organizers, Beth, seemed to be emerging as an informal leader.
“Beth is okay,” Haslina re lected, “but she doesn’t take direction well. And she can get the workers all
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stirred up. They really listen to her.”
In your opinion, what was Haslina experiencing? What advice would you offer to Haslina? Why?
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7.1 INTRODUCTION
Although managers oversee structures and processes, they must manage people to achieve success. A successful manager must understand people and the ways they interact. Formal organizational structures in luence interactions and friendships among employees who work within them. Interpersonal and intergroup factors affect organizations. Groups establish and reward their own patterns of behavior. Group norms are often highly luid, and con lict and politics play a part in group and individual behaviors. However, simply understanding will not change people’s behavior. Successful managers must be familiar with different methods for shaping the behavior of individuals and the groups to which they belong.
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7.2 INFORMAL GROUPS
Informal groups exist within most formal organizations. These are often peer groups. In health organizations, informal peer groups often form around professional identity, based on the distinctive cultures of professions like nursing, pharmacy, and medicine, or around work role, such as secretary. Each informal group has its own norms for status and prestige that have implications for managers. Peer groups provide four bene its for members. They satisfy complex needs, offer emotional support, help to shape personal identities, and assist in meeting personal goals.
Research has shown that employees who work alone often ind their jobs to be unsatisfying (Festinger, Schacter, and Back 1950; Mayo 1946; Roy 1960). The organizational cost of this lack of satisfaction can be measured in terms of low productivity, excess rates of absenteeism, and high turnover rates. Personal self-image is derived, in large measure, from social feedback. A group provides its members with norms (guidelines) for correct behavior. The correctness is not necessarily aligned with organizational policies and expectations, but rather in terms of group norms.
Groups usually refer to aggregations of small numbers of individuals. A classic de inition is provided by Berelson and Steiner (1964, 47):
A group is an aggregate of people, from two up to an unspeci ied but not too large a number. These individuals associate with each other in face-to-face relations over an extended period of time. They differentiate themselves in some regard from others around them. Finally, they are mutually aware of their membership in the group.
Group membership is often related to both technology and the pace of work. Some level of psychological or physical closeness and an opportunity to communicate must exist before people can form mutually satisfying groups. Sayles and Strauss (1966) described the progression of group development and how informal patterns of behavior (group norms) evolve. Employee groups often begin with friendships based on contacts at work, equipment used, or common interests. These groups arise within organizations. However, once these groups are established, they develop lives of their own. At this point, groups are often independent of the working situations from which they emerged.
This process is dynamic and self-generating. Increasing opportunities for interaction tend to create favorable sentiments toward fellow group members. In turn, these attitudes become the foundation for an increased variety of activities that are not related to job duties. Increased opportunities for interaction reinforce group solidarity. The group becomes something more than simply a collection of people. It develops norms or customary behaviors. It evolves a set of stable characteristics that become very dif icult to change or modify. In other words, groups become organizations.
Identi ication with a group is important. Most individuals have dif iculty in holding out against the weight of an otherwise unanimous group judgment even when the group is clearly in error (Maslow 1943). In organizational settings, groups can assist individuals to solve speci ic problems and to protect them from making mistakes. Individuals prefer to receive guidance, advice, and assistance from peers rather than supervisors or managers. As a bonus, the ability to render assistance often becomes a source of prestige for the giver. Nonconformity with group norms is usually punished by withholding acceptance.
Members of many professional groups are able to differentiate themselves on the basis of clothing or other signs of group membership. Physicians frequently display stethoscopes prominently around
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their necks or wear surgical scrubs outside of a hospital. Nurses often wear their nursing school pins as decoration on clothing other than uniforms. Most group members use professional jargon as a means of establishing and maintaining group identity.
Informal channels of communication also develop within groups (Fallon, Covitch, and Rothenberg 1974). Informal channels are independent of formal, organizational channels. They tend to be both effective and long lived. Individuals use them to discuss ideas, discoveries, and common problems. Informal channels tend to be much more ef icient than formal channels of communication. Data travel more rapidly over informal channels.
Managers assign duties and job responsibilities to individuals and teams. In theory, managers should only be concerned that assigned tasks are effectively and ef iciently accomplished. However, other forces and factors can and do emerge. Individuals usually like or dislike the people with whom they work; they are rarely neutral. These feelings often lead people to establish communication links and perform activities with others in a variety of informal and usually unplanned patterns. Astute managers must understand and interact with these patterns to be optimally effective.
The need for af iliation and group membership has been well established. However, after groups have been established, many individuals become competitive and want to be perceived as having a higher status than their peers. Most people talk about equality, but as George Orwell (1946) wrote, “Some want to be more equal than others.” Sets of unwritten rules about expected conduct frequently de ine prestige and status. Subtle differences in status begin to emerge as informal groups become established.
Two classes of factors are relevant to status: external and internal. External factors refer to attributes that are brought to the workplace from the outside. These commonly include age, gender, race, education, and seniority. Internal factors may be created consciously when senior management establishes and de ines an organization. Internal factors often include titles, job descriptions, perquisites, of ices, work schedules, mobility, and methods of evaluation. The title “Doctor” may suf iciently differentiate physicians from other employees of a health care organization. It does not perform this function in a university setting. Within many organizations, traditional indications of power and prestige are usually encountered: of ice size, windows and their view, access to executive dining rooms, and reserved parking.
Effective managers understand informal groups. If a group’s basic attitude toward an organization is positive, informal expectations can greatly assist management. This is particularly important when managers strive to enroll employees in improvement projects and in the pursuit of stretch goals. Managers experience dif iculties when the goals or structures of the formal organization con lict with those of informal groups. This can occur when management’s evaluation of positions or jobs does not correspond with the opinions of group members. When this occurs, managers must select between one of two extreme positions. The irst is to rearrange the formal organization, including policies and procedures, to accommodate the desires of an informal group. The second is to change the norms or composition of the informal group. Compromise is easier to accomplish. This type of con lict is less common in professional settings than in blue-collar environments. Nevertheless, managers must be alert for it and seek methods of resolution that will have a minimal impact on accomplishing organizational goals and objectives and on the employees involved.
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7.3 CONFLICT
When resources must be shared or collaboration is needed to offer or deliver services (that is, when interdependence is high), the parties involved must establish relationships with each other, crossing boundaries that exist between individuals and among groups. Stress and con lict frequently accompany such interactions. Three distinct types of con lict are of interest to professional managers: interpersonal, intergroup, and specialist versus generalist.
Interpersonal Con lict
Interpersonal con lict is the least important but most exaggerated type of friction. Managers often blame organizational problems on individual personalities or general worker incompetence. The traditional psychological explanation for interpersonal con lict is frustration. Individuals who feel ignored or undervalued seek alternative methods to overcome their frustrations. In this process, they disrupt the normal activities of an organization. Poorly structured formal channels of communication frequently contribute to interpersonal con lict.
Organizational structure de ines the low of communications. A conscientious manager with employees who have interpersonal problems will bene it from a review of the organization’s structure and patterns of work low. Individuals resent communications that low in only one direction. Similarly, workers are slow in adjusting to unexpected changes in routine that they cannot control.
Unpredictability can result from technological innovations as well as from changes in organizational structure and policy. Stress is increased and employees become aggravated if organizational changes alter their informal status from what was previously accepted. Stress is ampli ied when change is unilaterally imposed without prior notice or consultation or if individuals perceive no functional or technological reason for changing. When changes are necessary, prudent managers inform employees early in the process and, if feasible, allow them to participate in decisions that affect their jobs or working conditions.
Intergroup Con lict
Intergroup con lict develops when clusters of employees belonging to different informal groups must interact with each other. Groups can be categorized as apathetic, erratic, strategic, or conservative. Apathetic groups are least likely to exert concentrated pressure on management. Their members are usually not very cohesive, and any group leadership is widely distributed. Erratic groups display inconsistent behavior toward management. Strategic groups tend to be shrewd and calculating when applying pressure. They never tire of objecting to unfavorable management decisions or seeking loopholes in contract clauses or existing policies that will be bene icial to them. They continually compare their bene its to those of other informal groups within the organization. Conservative groups are composed of elite members who are secure and powerful. They typically possess skills that are critical to their organization.
The success of informal groups that bargain with management re lects the internal strength or cohesion of the group. Cohesion assists the members who are pursuing group goals. Cohesion has six dimensions: homogeneity, communication, isolation, size, outside pressure, and group status. Homogeneity reinforces a basic reason for the existence of many groups. Individuals seek out others
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who are like themselves. Group members with different backgrounds and interests are frequently ineffective in promoting their own particular agendas. Competition between individuals usually reduces group cohesion; uni ied group membership increases it.
Group members must be able to talk with each other. A lack of privacy and opportunities for discussion hinders group development. Both researchers and cartoonists have noted this when they discuss cubicles. The widely used partitions of contemporary of ices are less expensive than permanent walls. They also tend to reduce group development and solidarity. Isolating all group members from other workers promotes group solidarity, whereas isolating group members from each other reduces group solidarity. Small departments tend to be more closely knit than large ones, because larger groups tend to have fewer opportunities for informal communication and are more heterogeneous. This encourages fractionation of informal groups into smaller cliques. This has the effect of creating new small groups that offer more opportunities for membership and interaction.
When organizations exert pressure on employees, communication among peers (lateral communication) tends to increase. Concurrently, communications between different levels of management (vertical communication) tend to decrease. Personal differences among group members are minimized when presented with the threat of a common danger such as a tough supervisor. Strong management policies toward workers may encourage the formation of strong informal groups to resist the pressure.
Specialist versus Generalist Con lict
The increasingly complex nature of contemporary health organizations, the use of complex technological tools and concepts, and the need to increase productivity have contributed to the emergence and importance of specialists. By de inition and training, these individuals have advanced skills and speci ic knowledge. When supervisors lack these technical skills, they must carefully manage their subordinates. Managers must rely heavily on specialists to be successful in their own supervisory positions.
In contrast is the generalist. This is an individual who knows something about many positions but frequently not enough to displace a specialist. A generalist may not be a member of the specialists’ group due to a lack of esoteric knowledge. A generalist usually has less job security. A generalist may have to use means other than technical knowledge to succeed. Often this translates to relying on the output of subordinates or politics. Subordinates are often unable to go to their supervisor for assistance with technical problems. This can lead to resentment and feelings that the boss is incompetent. This chain of events was initially suggested almost a half century ago: The most symptomatic characteristic of a modern bureaucracy is the growing imbalance between ability and authority (Thompson 1963).
It is interesting to note the role reversal of specialists and generalists in contemporary health agencies or organizations. In clinical care situations, generalists often have greater value to managed care systems than do specialists because they are the gatekeepers. Yet, they continue to be paid at lower rates than specialists.
Disputes over jurisdiction or turf have historically been common in service organizations as different specialty groups tried to decide which one would assume the responsibility for leading a particular initiative or program. The historical result has been an informal arrangement known as a
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consultation. In addition to providing specialized expertise, consultation serves an organizational need, allowing individuals to tread on the turf of others in a legitimate fashion. The contemporary reality is that members of the same organization often provide consultations to each other, thus reducing turf infringements.
Constructive Con lict
Con lict can be a constructive force in organizational life. In fact, suppressing con lict can create a signi icant barrier to improving internal processes and the quality and value of goods, services, and programs. If employees (and managers) fear retribution for delivering bad news or correcting their superiors, opportunities for improvement will be missed.
Con lict among individuals and groups can be identi ied and constructively addressed by encouraging honesty and frankness, within the bounds of organizational values of respect and integrity. Compromise and collaboration are two options for the processing of constructive con lict (Thomas 1977). Compromise requires that each side give up something for a solution that is not ideal for either party but that both parties are willing to accept in the interests of the organization. Collaboration requires more creativity, because it involves new ideas that are appealing to both parties (win–win solutions). Managers should encourage the identi ication of con lict around important issues and the development of compromise or collaborative solutions. Guidelines for improving collaboration among individuals and organizations in a broader sense (beyond con lict management) are covered elsewhere (Chapters 12 (chapter12.html) and 13 (chapter13.html) ) in this book.
Other common ways of processing con lict are competition (letting both sides battle to resolve an issue or disagreement, with the most powerful usually winning), accommodation (one side surrenders), and avoidance (both sides allow the con lict to fester). Although none of these three options sounds ideal on the surface, there are conditions when each should be used (Thomas 1977). For example, competition may be necessary when there is not time to compromise or collaborate. Avoidance may be advisable for trivial issues. Accommodation may be useful when harmony and stability are especially important. Experienced managers use all ive options for managing con lict, depending on the speci ic situation.
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7.4 POWER AND POLITICS
Organizations, including those in the health care and public health sectors, are infused with politics. Organizational politics involves the use of power to get things done in the organization. Managers are inevitably involved in organizational politics, particularly if they pursue a change and improvement agenda.
Power derives from formal authority, control over resources (which often comes with authority), expertise, and certain personal characteristics and social networks of individuals. Authority refers to legitimate power—power that is viewed as appropriate by the individual who holds power and by those subject to the power. In organizations, legitimacy is usually conveyed by formal documents such as a position descriptions, policies, and rules. In the absence of formal policies, those with power often create ad hoc rules. A decision made using ad hoc rules is either an interpretation of existing (standing) policies or is made because no explicit guidelines exist. In organizations built around authority, decisions are transmitted from managers to subordinates, who then implement them. If subordinates choose to disobey, then they will incur sanctions or pay a price for this privilege. Subordinates may obey because an individual holds a particular position or of ice, and power is perceived as emanating from the position (authority). Most cultures teach that individuals ought to obey both laws and persons of legitimate authority.
Another source of power for managers is control over rewards and punishments. Positive rewards make individuals feel good. They can also provide desirable options or objects such as money, status, prestige, position, special treatment, or advancement. Negative rewards (sanctions) tend to be given along a continuum of increasing degrees of coercion with repeated applications. For example, if an individual does not react to a verbal suggestion, at the next occurrence, the warning typically is repeated and accompanied by a written document. A ine or suspension may follow if suggestions or orders continue to be ignored. Expulsion is the ultimate sanction. Managers can use rewards and punishments, including the outplacement of opponents, to advance the organization’s agenda (Pfeffer 2010).
Expertise is a particularly common source of power in health organizations, and sometimes it is more important than formal position. Certain highly respected practicing clinicians or scientists may have more in luence over their peers than do other clinicians or scientists appointed to formal positions. It is important for managers to cultivate relationships with respected, powerful individuals regardless of formal position.
Social networks are another basis of power outside the hierarchy of authority. An individual’s connections with powerful others, whether based on culture, training, religion, or other factors, can give that individual power in organizational decision making. Astute managers keep a wide range of connections themselves and seek out employees who are widely connected.
Finally, personal characteristics can add to one’s power base in organizations, depending on the organizational and societal culture. In some cultures, gender (usually male gender) historically has been a source of power. Charisma, or the projection of positive energy and enthusiasm, is another personal characteristic that often yields power to the holder.
Constructive Politics
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Constructive politics among individuals and groups can be used in organizations to move controversial issues to decision points and to advance the agenda of the organization. Constructive politics means using power in ways that are moral, open, and caring, where all participants follow the same rules or guidelines (Bolman and Deal 2008). In most workplaces in the United States, for example, it is not ethical to use gender or religion as a source of power. Constructive politics would not include giving more power to individuals based on their gender or religion.
Constructive politics requires that power be exerted in the interests of organizational goal achievement. Effective managers use constructive politics to pursue the goals of their unit and the organization. Four competencies of constructive politics are useful for managers: setting agendas, anticipating resistance, networking and building coalitions, and bargaining and negotiating (Bolman and Deal 2008).
Using the power to set agendas is critical for managers interested in improving organizations and creating new value for consumers in products and services. The default agenda for many organizations involves maintaining the status quo. Managers can be proactive about seeking improvement both in their departments and the larger organization by making sure that organizational performance issues and improvement opportunities get raised and addressed at critical meetings.
Mapping the political terrain enables managers to forward their agendas more successfully. Anticipating and addressing resistance in advance of important decision-making forums is particularly useful. Likely opponents to action items can be co-opted, or enrolled in the process of change, by seeking their help and developing informal relationships with them. Proposals for change can be altered to accommodate opponents’ suggestions, if the suggestions improve the idea or only marginally damage it.
Networking and building coalitions recognize that power derives in part from mass and that individuals seldom succeed alone in organizations. Ideas for improvement need sponsors in other departments and at higher levels of the organization. Effective managers develop coalitions of supporters for their ideas before exposing the ideas to widespread testing.
Bargaining and negotiating are inal competencies of the constructive organizational politician, because getting something is often preferable to getting nothing or to imposing your will but losing the commitment of those imposed upon. Bargaining and negotiating skills are similar to those involved with collaboration and compromise, including a willingness to truly listen to and engage in dialogue with adversaries, to separate issues from personalities, and to be creative about innovative, win–win solutions when parties disagree (Fisher, Ury, and Patton 2011).
The essence of politics is achieving compromise or collaboration and getting results. Organizations constantly seek positive results. Politically astute managers understand the dynamics of groups and their rules of behavior. They use them for the bene it of their entire organization. This may involve establishing closer working relationships with informal leaders to improve the output of a group. Alternatively, it may mean promoting some group goals to generate support for a desired organizational goal. This must be done within permitted discretionary limits and guidelines. It may also involve working behind the scenes to create environments and situations in which their subordinates are allowed to shine. The possibilities are limited only by organizational guidelines, personal ethical standards, and individual imagination.
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7.5 OTHER WAYS TO INFLUENCE ORGANIZATIONAL DYNAMICS
Among other managerial options for increasing in luence with employees is development of personal participation and interest in the careers of employees. Successful managers and supervisors help to promote the careers of their employees. This involves ongoing training that is delivered at formal and informal venues. Managers should project clear career paths for their employees. Within the limits of opportunity allowed by an organization, formal career paths should exist. Successful managers understand that helping subordinates and peers to succeed will re lect positively on themselves.
Effective managers motivate their employees to think about problems they may encounter before they occur. As workers develop competence on their jobs, their self-esteem improves. Employees also learn to expect and receive respect from supervisors and peers. Successful managers promote good attitudes about the organizations in which they lead. Further, they continually review various aspects of their organization or department so that they can identify and address problems before they become insurmountable. Effective supervisors discuss the details of a new program or project in advance rather than allowing interns or inexperienced employees to look foolish at meetings involving senior executives.
Successful managers stress the need for quality and reinforce the importance of good customer service. They also regularly reward examples of quality and good customer service. If recognized and rewarded, employees will internalize the need for quality and the values of excellent customer service.
A inal class of options for in luencing organizational dynamics involves altering the existing formal structure of an organization. Such modi ications may involve changes in authority, job duties, or responsibilities; modifying formal communication channels; and remodeling and upgrading the physical conditions of work.
Traditional management theory states that the goal of managers is to achieve common objectives within their units, using available resources within an allotted amount of time. However, this view of management is changing. Experts are urging that managers also have more input into the development of organizational mission, strategy, and objectives and seek out and use any and all available resources within an organization (Rainey 2009). Other experts (Foster 2009; Goren lo 2010; Hoyle 2007; Institute of Medicine 2001) have noted the importance of quality and customer service in the role of the manager.
Consistent with this expanded view of the management role, contemporary managers must assume the task of absorbing and preventing stress. An important goal is to balance change and challenge with the need for some degree of organizational equilibrium. It is a managerial responsibility to design and adjust the working relationships of individuals so structural problems do not interfere with the effective performance of an organization. Frequently, simple changes of job responsibilities can resolve minor problems.
Finding an appropriate placement for a problem employee can be bene icial for both the sending and receiving groups. Simply handing an unwanted employee to someone else will generate a group or organizational reputation that is likely to outlive the individual doing the dumping. Managerial success can be improved by encouraging and maintaining open and appropriate communications between associates (laterally) and supervisors and subordinates (vertically). Observers have noted that poor
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managers are characterized by either very high or very low levels of interaction relative to the usual level for a given position and organization (Richardson 1961). Effective managers tend to spend a signi icant amount of time responding to their subordinates and associates. As a result, they are more readily available and receive more contact from their subordinates (Rainey 2009).
An important element of any manager’s duties is planning and modifying the structure and low of work to minimize any stressful patterns or factors that may deter effective performance by individual workers. This may involve placing organizational or physical buffers or barriers. If there are obvious external differences in the behavior or working conditions of two groups, it is sensible to limit interactions to the telephone, e-mail, or other electronic media. A manager must maintain a comfortable rhythm in the low of work among subordinates. This may involve scheduling, sheltering, or coaching subordinates. Workloads should be equitably designed and distributed. In the current climate of task specialization and electronic isolation, managers all too often react to the pressures of senior organizational leaders by demanding increased output from their employees. Successful managers are careful not to routinely expect levels of production from their employees that they would be unwilling or unable to produce themselves.
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CONCLUSION
The rhythm and cadence of work, as well as the administrative processes by which they are controlled, are fundamentally important for organizational success. Organizations have been characterized as being a system of relationships (Chapple and Sayles 1961). Organizing tasks involves applying systems thinking and using appropriate technologies. Every organization is a unique collection of processes, procedures, policies, controls, formal authority structures, and managerial techniques. Among related units of organizations, it is unusual that changes in sentiment precede changes in activities or organizational rearrangement. Technology and organizational structures must be modi ied before group norms and values are likely to be successfully changed or altered.
This chapter has outlined various patterns in interpersonal and intergroup relations in organizations. Many careers have been devoted to understanding and describing group dynamics and behavior. In addition to understanding their subordinates and peers, effective managers understand the organizational forces that exist in local working environments. Table 7–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/69#tab71) summarizes several lessons for dealing with personal and group dynamics in organizations. Being willing to listen to both subordinates and superiors, communicating through multiple methods, being open to innovation, and using constructive con lict and politics should result in both effective and rewarding experiences as a manager.
Table 7–1 Tools for Managing Organizational Dynamics
1. Listen to informal groups, outside the formal hierarchy. 2. Communicate through informal groups, in addition to the formal hierarchy. 3. Address con lict constructively with collaboration or compromise when possible rather than trying
to manage interpersonal and intergroup clashes. 4. Create an environment of constructive politics—open, moral, and caring. 5. Set an agenda—have a plan and pursue it. 6. Map the political terrain, addressing likely resistance. 7. Build coalitions. 8. Bargain and negotiate. 9. Show interest in and promote the careers of employees.
10. Design and distribute workloads equitably. Change job responsibilities to resolve minor problems.
Systems Thinking about Managing Organizational Dynamics
The many informal connections among employees can be critical to getting work done in organizations. Analysts of informal networks have classi ied employees into one of four roles: central connectors, who have the most connections; boundary spanners, who connect two or more departments in an organization; information brokers, who pass along information to others in subgroups; and peripheral people, who are the least connected (Cross and Parker 2003).
Central connectors are important to organizations, often in ways that are unrecognized by the formal hierarchy and formal job descriptions. Central connectors respond conscientiously to
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requests from others, engage in joint problem solving, provide personal support to others, and put people in contact with others. Managers can seek to identify, encourage, and reward central connectors. Sometimes, though, central connectors can be overwhelmed by their connecting activity, or they can abuse their roles and slow down the work of others. In those cases, their work may need to be reallocated.
Boundary spanners are critical to cross-functional collaboration (collaborating across two or more departments, such as disease surveillance and information technology). Information brokers are critical to making sure that communications are distributed to all persons throughout an organization. Peripheral people may be underused, and managers should make extra efforts to include them in group activities. Alternatively, peripheral workers may intentionally be isolated because their work is best done alone, as is the case with many specialists and researchers.
Managers can encourage informal connections among employees. Team, departmental, or organizational retreats, ideally held at off-worksite settings, are a common way to develop personal and work-related connections. Breaking down large groups into subgroups, and having the subgroups do work and report back, allows for more informal interaction in retreat settings. Brown- bag lunches in the worksite are another option for encouraging connections. Posting and disseminating inventories of employees and their contact information, including photos and some personal (but not too private) information, makes deeper connections more likely.
CASE STUDY RESOLUTION
Haslina seemed to be jealous of Beth and her leadership skills. Not only had Beth become an informal group leader, but Haslina was also threatened by Beth’s success.
Haslina considered challenging Beth but discarded the idea when she realized that such a move would only strengthen Beth’s informal position. Next, she considered transferring Beth to another department. That idea was discarded because Beth would become a martyr, and she has potential as a contributor. Remembering the advice of a movie character, Haslina decided to keep her friends close and Beth even closer. She started by delegating some responsibilities to Beth. At irst, the tasks were simple. As time passed, Beth took the responsibilities seriously and became a more skilled manager. She agreed that the lunches needed to keep to a schedule. Beth will be told of her promotion to supervisor next week.
REFERENCES Berelson, B., and G. Steiner. 1964. Human behavior: An inventory of scienti ic indings. New York:
Harcourt. Bolman, L. G., and T. E. Deal. 2008. Reframing organizations. 4th ed. San Francisco: Jossey-Bass. Chapple, E. D., and L. R. Sayles. 1961. The measure of management. New York: Macmillan. Cross, R., and A. Parker. 2003. The hidden power of social networks. Boston: Harvard Business School
Press. Fallon, L. F., S. C. Covitch, and D. H. Rothenberg. 1974. A study of informal information sources in an
academic community. Proceedings of the American Society for Information Science Annual Meeting 11: 260–3.
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Festinger, L., S. Schacter, and K. Back. 1950. Social pressures in informal groups. New York: Harper and Row.
Fisher, R., W. Ury, and B. Patton. 2011. Getting to yes. Updated revised ed. (originally published 1981). New York: Penguin.
Foster, S. T. 2009. Managing quality. 4th ed. Upper Saddle River, NJ: Prentice Hall. Goren lo, G. 2010. Achieving a culture of quality improvement. Journal of Public Health Management
and Practice 16 (1): 83–4. Hoyle, D. 2007. Quality management essentials. Burlington, MA: Butterworth-Heinemann.
Institute of Medicine. 2001. Crossing the quality chasm: A new health system for the 21st century. Washington, DC: National Academies Press.
Maslow, A. H. 1943. A theory of human motivation. Psychological Review 50 (4): 370–96. Mayo, E. 1946. The human problems of an industrial civilization. Cambridge, MA: Harvard University
Graduate School of Business Administration. Orwell, G. 1946. Animal farm. New York: New American Library. Pfeffer, J. 2010. Power play. Harvard Business Review 88 (7/8): 84–92. Rainey, H. G. 2009. Understanding and managing public organizations. 4th ed. San Francisco: Jossey-
Bass. Richardson, F. L. W. 1961. Talk, work and action. Society of Applied Anthropology monograph 3. Roy, D. F. 1960. Banana time: Job satisfaction and informal interaction. Human Organizations 18 (3):
158–68. Sayles, L. R., and G. Strauss. 1966. Human behavior in organizations, 89–104. Englewood Cliffs, NJ:
Prentice Hall. Thomas, K. W. 1977. Toward multi-dimensional values in teaching: The example of con lict behavior.
Academy of Management Review 2 (3): 484–90. Thompson, V. 1963. Modern organizations. New York: Knopf.
RESOURCES
Periodicals
Bourbonnias, R. 2007. Are job stress models capturing important dimensions of the psychosocial work environment? Occupational and Environmental Medicine 64 (10): 640–1.
De Rijk, A., A. van Raak, and J. van der Made. 2007. A new theoretical model for cooperation in public health settings: The RDIC model. Qualitative Health Research 17 (8): 1103–16.
Li, N., J. Liang, and J. M. Crant. 2010. The role of proactive personality in job satisfaction and organizational citizenship behavior: A relational perspective. Journal of Applied Psychology 95 (2): 395–404.
Probst, J. C., J. D. Baek, and S. B. Laditka. 2010. The relationship between workplace environment and job satisfaction among nursing assistants: Findings from a national survey. Journal of the American Medical Directors Association 11 (4): 246–52.
Stara, J. M., and R. McCarterm. 2007. Strategies to infuse trust in healthy work environments. Oklahoma Nurse 52 (3): 8–15.
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Books Cloquitt, J. S., J. LePine, and M. Wesson. 2010. Organizational behavior: Improving performance and
commitment in the workplace. New York: McGraw-Hill. Cross, R. L., and R. J. Thomas. 2009. Driving results through social networks. San Francisco: Jossey-
Bass. Fallon, L. F., and E. Zgodzinski. 2012. Essentials of public health management. 3rd ed. Sudbury, MA:
Jones and Bartlett. Hellriegel, D., and J. W. Slocum. 2010. Organizational behavior. 13th ed. Florence, KY: South-Western. Kreitner, R., and A. Kinicki. 2009. Organizational behavior. 9th ed. New York: McGraw-Hill. Ott, J. S., S. J. Parkes, and R. B. Simpson. 2007. Classic readings in organizational behavior. Florence,
KY: Wadsworth Publishing. Robbins, S. P., and T. Judge. 2010. Organizational behavior. 14th ed. Upper Saddle River, NJ: Prentice
Hall. Schermerhorn, J. R., J. G. Hunt, and R. Osborn. 2010. Organizational behavior. 11th ed. Somerset, NJ:
Wiley.
Web Sites • Donald R. Clark, Leadership and Organization Behavior: http://www.nwlink.com
/~donclark/leader/leadob.html (http://www.nwlink.com/~donclark/leader/leadob.html) • Human Resources Internet Guide: http://www.hr-guide.com/ (http://www.hr-guide.com/) • Organization Development Network: http://www.odnetwork.org/
(http://www.odnetwork.org/)
• Organizational Development Institute: http://www.odinstitute.org/ (http://www.odinstitute.org/)
• Society for Industrial and Organizational Psychology: http://www.siop.org/ (http://www.siop.org/)
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CHAPTER
8
Organizing Human Resources
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Understand the recruitment process. • Know key issues of compensation and bene its. • Be better able to retain valued employees. • Understand the importance of training and developing employees. • Have knowledge about identifying problem employees.
CHAPTER SUMMARY
Human resources (HR) departments in virtually all organizations generate no revenue but have many important duties and responsibilities. Selecting and retaining the right employees are critical activities for building a strong organization. Recruitment of new employees is an ongoing need for most organizations. Employees receive salary and bene its. The need for training, whether initial, ongoing, routine, or designed to meet special needs, rarely ceases. HR usually coordinates the delivery of all such organizational services. In addition, federal legislation has imposed many requirements for keeping records. These are often delegated to HR.
Problem employees and employees with problems are not the same. However, both require a disproportionate amount of a manager’s time. Successful managers learn to recognize both types of employees. They also know the options provided by their organizations. Individuals with problems often bene it from the services of an Employee Assistance Program, whereas problem employees may require progressive discipline.
CASE STUDY
“What a weird assignment,” David said to Alberto. “Dr. Lombard wants us to write an essay on the department or functional area that is the least important to an organization and then defend our choice.”
Alberto replied, “What are you going to write about?”
“I don’t know,” said David. “Have you decided yet?”
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Without hesitating, Alberto said, “Sure. Human resources because it generates no revenue for an organization. And it imposes rules that nobody likes to follow.”
If you had been listening to this conversation, what thoughts might you offer to David and Alberto?
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8.1 INTRODUCTION
Human resources is about people. It can be argued that organizing human resources is the most critical function for organizational success because recruiting and retaining talented, motivated employees is the foundation for an improvement-driven and high-performance organization. A smoothly functioning HR department offers signi icant assistance with recruiting and hiring new employees; training and evaluating employees; and addressing problems associated with dif icult, nonproductive, and dangerous employees. HR personnel assist managers by keeping records and iling reports that have been mandated by legislation. Detractors argue that HR does not generate direct revenue for an organization and burdens the organization with formal policies and procedures.
In most organizations, the total number of employees must exceed approximately 150 before an HR person is hired. In smaller organizations, managers must perform some HR duties or engage the services of an HR consultant or outsource some HR activities. This underscores the importance of individual managers being familiar with the basics of HR.
The basics of organizing human resources include compensation and bene its. HR employees also often coordinate bene its and prepare retirement documents. HR may supervise or coordinate an Employee Assistance Program or employee health clinic.
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8.2 ONGOING RESPONSIBILITIES OF HUMAN RESOURCES
Contemporary HR personnel must juggle a variety of responsibilities. Some of these responsibilities have been assigned by senior management, whereas others have been mandated by legislation. Despite producing no revenue, HR is an important and integral component in any size of organization.
Organizations with fewer than 150 employees typically cannot afford a full-time employee to coordinate all HR issues. A number of consultants and specialized agencies provide such services. Their services are used as needed, augmenting the efforts of one or more organization employees. The activities of HR consultants and agencies, like any other outside vendors, should be monitored.
Creating and maintaining accurate position descriptions is an important HR responsibility. Position or job descriptions should be reviewed annually and revised to re lect current conditions. All employees and their supervisors should have copies of their current position descriptions.
Managers are usually involved in recruiting because they have a vested interest in the outcome of searches. Associated activities must be conducted according to a set of procedural rules and guidelines. These have been established to ensure that all candidates are given the same treatment and to reduce discrimination. Managers must be thoroughly familiar with all organizational policies and procedures related to recruitment and follow them.
All employees should receive regular (typically annual) performance appraisals. The process and any instruments (forms or protocols) used should be fair and objective. Feedback to employees about their performance should be given continuously, as needed, throughout the time period preceding appraisal, so that the regular appraisal contains no surprises. Employees should meet with their supervisors to receive feedback. After discussing the impressions of supervisors, employees should have an opportunity to attach their own comments to their appraisals.
Responsibility for union activities is often assigned to HR. Protocols for interactions and handling many matters are usually de ined in union contracts, more correctly known as collective bargaining agreements. Depending on perspective, these can provide guidance or impede creativity in interpersonal affairs or organizational processes. Arbitrators often provide assistance for resolving disputes. Arbitration is governed by procedures described in a collective bargaining agreement.
Employee training occurs throughout an individual’s career. New employees must be trained for their particular jobs as well as being introduced to an organization’s values and integrated into its culture. Employees bene it from ongoing training. HR is usually responsible for providing some of the needed training and coordinating delivery of the rest from other sources.
Employees with problems present special challenges to supervisors and managers. Whether the problems are related to their jobs or are personal in nature, they often interfere with productivity. Managers are strongly advised to provide some form of assistance for troubled employees. Employee Assistance Programs are commonly provided by external vendors. Except for actions that pose an immediate threat to other employees, con identiality is essential when addressing employee problems. Supervisors may bene it from receiving training in listening skills, but they should not attempt to counsel employees on medical or psychological problems.
Effective managers should be able to identify employee behaviors that do not follow organizational policies before they become too dif icult to handle. Once identi ied, they should be addressed. Written
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protocols should de ine the steps for administering progressive discipline. The steps should be followed with rare exceptions.
Documentation is essential when trying to resolve virtually all employee problems. Prudent organizations have policies governing the creation, content, exchange, and retention of documents. HR or the HR portion of a procedural manual should include guidelines for document retention. All documents are the property of employers. Any documents that will be retained for more than a few months should be stored in a secure location.
Employees should never be terminated without carefully following established procedures that guarantee due process and taking time to consider alternatives. Any activity that involves employees and is accompanied by the possibility of legal actions should be carefully thought out before being undertaken.
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8.3 LEGAL CONSIDERATIONS AND RESPONSIBILITIES
A number of federal statutes have imposed requirements for record keeping and reporting on organizations in the United States. Most of the responsibility for complying with these requirements is delegated to HR.
The Social Security Act of 1935 initiated a mandatory retirement system for all employees. The Fair Labor Standards Act (1938) mandated a uniform 40-hour working week and required overtime pay for individuals who are paid on an hourly basis. Equal compensation for all employees performing the same job was required by the Equal Pay Act (1963). The Civil Rights Act of 1964 initiated equality in the treatment of all individuals by outlawing discrimination in all aspects of organizational life. Title VII of the legislation encompasses recruitment, selection, compensation, privileges of employment, bene its, or terms of employment based on race, color, religion, sex, or national origin. It created the Equal Employment Opportunity Commission. This legislation imposed reporting requirements that have been assigned to HR. All agencies or companies having 15 or more employees are subject to the requirements of this act. Employment agencies may not discriminate against applicants that they propose for clients.
The Age Discrimination in Employment Act (1967) prohibited discrimination against persons between the ages of 40 and 70 when making employment decisions. The Occupational Safety and Health Act (1970) was designed to ensure that American workers can work in safe environments. The objective of the Vocational Rehabilitation Act (1973) was to protect persons with disabilities from discrimination in the workplace. This statute was strengthened by the Americans with Disabilities Act (1990).
The Employee Retirement Income Security Act (1974) was enacted to protect retirement plans that are provided by employers. The Drug-Free Workplace Act (1988) provided rules for random drug testing and imposed record-keeping requirements related to drug usage on the job by employees. The Employee Polygraph Protection Act (1988) provided guidelines to protect employees from abuses related to lie detector tests administered by employers. The Immigration Reform and Control Act (1986) required employers to maintain records and ile reports related to employees who are not US citizens.
The Pregnancy Discrimination Act (1978) required employers to treat women experiencing pregnancy, childbirth, or related medical conditions as they would all other employees, this includes offering them equal bene its. The Consolidated Omnibus Budget Reconciliation Act (1986) addressed health insurance by giving discharged employees the option of continuing their health insurance coverage from their former employer (employees must pay the cost). Subject to some restrictions, the Family and Medical Leave Act (1993) guaranteed that employees can take time off (without pay) to address medical problems affecting members of their families. The Health Insurance Portability and Accountability Act (1996) further delineated methods to protect personal privacy regarding health records and health insurance.
Three major pieces of legislation, the Norris–LaGuardia Act (1932), the National Labor Relations (Wagner) Act (1935), and the Labor–Management Relations (Taft–Hartley) Act (1947), addressed the relationship between unions and management. These laws increased the responsibilities of HR departments. Organizations that have unionized employees often have a labor relations department. This may exist on its own or may be located within HR.
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Managers should be knowledgeable about the bene its and HR requirements that affect employees. Managers should have copies of the services and bene its that their subordinates receive. These will save time when questions arise from employees. However, managers must know their own limitations and avoid providing erroneous information.
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8.4 RECRUITMENT
New employees come from two major sources: within an organization and outside an organization.
Within an Organization
Word of mouth is generally quite informal and a very unscienti ic approach to recruitment, but it may be ef icient in a smaller organization. Many employers advertise positions through job postings. When a position becomes vacant, it is listed on one or more centrally located job-posting boards. The amount of information in a posting varies, depending on the size of the organization and the number of job openings. Employers generally post positions internally for 5 to 7 working days before initiating external recruitment. This gives employees a chance for promotion or change and encourages retention.
Current employees may be a good source of referrals for new workers. Because a current employee is a known entity, there is a good probability that a referral will be of the same quality. Some employers offer bonuses for successful employee referrals. Bonuses are paid after a new employee remains on the job for a minimum period of time, usually from 3 months to 1 year. The bonus amount depends on the organization, its needs and policies, general economic conditions, and the practices of other employers in the same area competing for the same employees.
Outside an Organization
There are two types of employment agencies: those that are free (to the organization) and those that are not. In general, state employment agencies (including civil service) and union referral halls are available without cost. State employment agencies are listed under each state’s department of labor. Union referral (sometimes called hiring halls) will be known through an organization’s collective bargaining agreement.
Private employment agencies, including search irms, will screen and interview quali ied candidates prior to referring them to an organization. This can save time, especially if there is a small pool of applicants or if a position must be quickly illed. An employment agency’s fee is generally paid by the new employer. Individuals contemplating engaging the services of a search irm are advised to review contract terms and fees. The usual fee is approximately 10% of an annual salary or 1 month’s salary (Renckly 2010).
Outside organizations, such as professional societies or special interest groups, often provide referrals. Typically, these referrals are free. Other sources of referrals include colleges, universities, programs and schools of health professions, chambers of commerce, and specialized trade schools.
Printed want ads may appear in newspapers, journals, or magazines or at a particular point of service such as a grocery store or a place where likely candidates may congregate. One employer reported great success posting job openings in local places of worship (Hammer 2003).
However, print advertising requires lead times. For example, an advertisement in a Sunday newspaper may not yield applicants until several days later. An ad placed in a professional journal or magazine may not be run for a month or more after it has been submitted. The cost of print advertising
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also can be high. A recent study estimated the cost per hire using print advertising to be $3,295 (Bolles 2010). The same study reported that the cost per hire using the Internet was $377. Jobs can be posted on a number of different Web sites. Some of these sites are listed among the resources found at the conclusion of this chapter. Both employers and prospective employees use Internet sites. If the hiring organization is very large, it may have its own Web site that can be used for recruitment.
Posting on the Internet can have several advantages. First, it is open to a wide range of applicants. Second, it is continuously available, whereas print media is only available for a limited period of time. Third, it is less expensive than print advertising. However, listing jobs on the Internet also has disadvantages. The pool of applicants may be so large that an organization may become overwhelmed. Resumes may arrive from areas so geographically distant that interviews are not feasible.
Walk-ins and write-ins are people who send in a resume or apply for a job without knowing of a speci ic employment opportunity. These people should complete a standard application for employment that should then be kept on ile. Some employers give walk-ins a brief interview as a courtesy and to assess applicants’ potential for future employment.
Organizations should consider contacting local colleges or universities to arrange structured internship programs. This is especially true of Master of Public Health (MPH) and Master of Healthcare Administration (MHA) degree programs, as well as many Master of Business Administration (MBA) programs. Academic credit can frequently be arranged. Potential employers bene it by having a chance to assess the performance of students in preparation for possible future employment.
Screening, Interviewing, and Selecting
Screening, interviewing, and selecting candidates creates a continuum of activities. Each step successively narrows the pool of applicants.
Screening
Before interviewing applicants, it is important to determine the key quali ications for the position. A position description must be used as a guide. Prudent organizations keep detailed records about the process, making notes about people who are retained in the pool as well as those who are rejected during the initial screening. Reasons for inclusion or exclusion from an initial pool should be noted. These data may be needed for later reports that document compliance with relevant legislation. This step may be performed by the HR department or by the hiring manager, depending on the size and policies of the organization.
Interviewing
An interview may be the irst exposure that an organization and applicant have with each other. The primary purpose of an interview is to determine the suitability and it of an applicant for the open position. The outcome of a good interview should be a mutual understanding of the interests, abilities, and needs of both the employer and the applicant.
In preparing for an interview, several steps are necessary before the conversation begins. The irst step is to review the current position description. Job duties should be clear. An interviewer should be
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able to discuss these duties with an applicant. A list of basic questions that will be asked of all applicants should be prepared. Having a list ensures that all applicants are treated in a similar manner. An interviewer should take the time to read each applicant’s resume. It is easy to skip this step and conduct an interview without adequate preparation. Reading a resume and application prior to an interview provides the interviewer with con idence and saves time by eliminating the need to ask questions that have already been answered on the resume or application.
Interviewing candidates for employment is often stressful. Start by setting the interviewee at ease. Then ask innocent but open-ended questions to encourage interviewees to talk. Honestly describe the position and the organization. Use the position description. Ask if the interviewee has any questions about the potential job or organization.
It is important to remember the guidelines provided by federal laws and regulations regarding what can and cannot be asked during a preemployment interview. Although sometimes dif icult for an interviewer, silence is important. This is sometimes referred to as the 80/20 rule (Larson 2000). Interviewers should talk about 20% of the time and listen about 80% of the time.
After completion, allow some time to re lect on the interview. What were the strengths and weaknesses of the applicant? How would such an applicant it into the organization? A formal post- interview evaluation sheet is helpful to ensure that all interviewees are treated in a similar manner.
Interviews can be conducted in a number of different ways. Interviewers may use unstructured interviews, semistructured interviews, or group interviews. An unstructured interview is free- lowing and unplanned. It is usually a one-on-one conversation between an applicant and a prospective employer. In a semistructured interview, the persons conducting the interview agree on the general topics or areas about which questions will be asked. In a group interview, several people may speak with a single candidate in one session. The obvious advantages are that everyone hears the same responses and members of the group can evaluate the candidate from various perspectives. Such a structured interaction can demonstrate a candidate’s ability to handle stressful situations and interact with a group of people.
Selecting
Once a candidate has been selected, the rate of pay must be agreed upon, the necessary paperwork must be completed, and a date for the new employee to start work must be scheduled. Employment is usually contingent upon several points. Is the applicant of legal age to work? Does the person have permission to work in the United States? Can the applicant pass minimum physical requirements for the job? Is the candidate able to pass a medical examination including drug and alcohol screening tests if these are used?
Do not forget unsuccessful candidates. Each should receive a letter conveying the decision of the interviewing department. Many organizations keep resumes and interview notes on ile for future use.
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8.5 COMPENSATION AND BENEFITS
“People only work for their paycheck” is a common myth. Although money provides considerable motivation, other factors provide more motivation. Elements of a total compensation program include both direct and indirect compensation. Direct compensation refers to salaries, bonuses, and other forms of incentive pay. Indirect compensation refers to employee bene its and perquisites, items that employees typically receive in forms other than cash payments. Workers who provide health services and programs typically are motivated to serve the public as well. Opportunities to do so on the job provide another source of employee motivation. Organizational objectives, legal considerations, and employee motivation are factors that shape a total compensation program.
Compensation
Compensation programs contain objectives. Compensation can be made in several forms. The most common form is direct compensation. Forms of indirect compensation include so-called bene its that are required by statute. Other forms of indirect compensation are limited only by an organization’s resources and collective imagination.
Objectives
Compensation programs are designed to attract, retain, and motivate competent employees. A compensation program should be designed and administered so that it provides adequate, equitable, and balanced treatment for all employees.
When de ining a compensation program, organizations must address several key questions. These are found in Table 8–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/75#tab81) .
The basis of a compensation program is what an organization can afford to pay. The goal of compensation is to use organizational resources most ef iciently to maximize employee productivity. Several factors affect the goal, including inancial resources (available and anticipated) and local prevailing wage rates for employees having needed skills. The list of questions in Table 8–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/75#tab81) is not all encompassing. Having developed a strategy or organizational philosophy for the direct (cash) portion of a compensation plan, an organization must then create a fair and equitable method for relating jobs to payment.
Table 8–1 Key Compensation Program Questions
• How much can the organization afford to pay its employees?
• Does the organization want to be a wage leader or a wage follower?
• What are the prevailing wages within the profession and the industry?
• What are the prevailing wages within the local geographic area?
• How will the organization respond to cost-of-living changes?
• What are the impacts of unions upon wages within the organization, area, and industry?
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• What form of compensation will result in the most ef icient use of the organization’s resources and maximize employee productivity?
• How will individual compensation rates be established?
Direct (Cash) Compensation
A fundamental requirement of any direct compensation plan is developing a base-salary compensation program. Every job or position must be described using a common set of parameters. Once all the positions in an organization have been analyzed, they must be evaluated. Incentive and merit pay plans are then prepared. General increases that re lect satisfactory completion of work responsibilities are given to all employees. Incentive plans are intended to reward outstanding performance. Two major factors are considered when establishing salaries: external equity and internal equity.
External equity means that rates of pay in an organization are reasonable compared with other similar positions in a given area for people performing the same or similar job duties. Internal equity means that all employees think that their pay is fair when compared to others with the same job title in the same organization. Motivation, performance, and incentive may be in luenced by an employee’s perceptions of organizational equity or inequity. Periodic surveys should be conducted to ensure that external and internal equity are maintained.
Bene its
Bene its fall into two categories. The irst includes bene its that are required by statutes. These required bene its are more correctly described as indirect or noncash compensation. The second category includes bene its that are provided to attract and retain the best available employees.
Employers use two different philosophical approaches to bene its: de ined bene it plans and de ined contribution plans. De ined bene it plans provide the same package of bene its to all employees. The extent of the bene its typically increases as years of service increase. Vacation time is a good example of increasing the reward for long service. De ined contribution plans allocate a ixed amount of money for bene its and provide a list of bene it options. Employees are free to use the allocated bene it money to address their own particular situations. For this reason, de ined contribution programs are often called cafeteria plans. Common bene it options include purchasing additional vacation time, electing coverage for legal services, and purchasing day care coverage for young children.
De ined bene it plans are easier to administer but often do not provide bene its that are totally relevant to all employees. Because costs are often unknown until a bene it period is over, de ined bene it plans may be costly and may exceed the amounts budgeted for them. De ined contribution plans are complex and more dif icult to administer. By having the lexibility to choose, the elected bene its are relevant for employees having a wide range of ages, interests, and individual needs. By de inition, the total costs for a bene it period are known in advance. Because bene it expenses cannot exceed the de ined contribution, these plans contain costs and improve iscal management.
Required Bene its: Indirect (Noncash) Compensation
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In addition to the cash compensation (paychecks) that employees receive, many employers provide additional indirect compensation in the form of fringe bene its. A widely quoted estimate is that for every dollar spent on direct compensation, another 35 to 40 cents is spent on bene its. Examples of bene its that employers are required to provide include Social Security, unemployment compensation insurance, and workers’ compensation insurance.
Social Security has expanded from a form of basic pension coverage for about 50% of the workforce to a full-scale social insurance program available to more than 90% of the total population. Although employees tend to equate Social Security with old age retirement entitlements, it also provides survivor, disability, and health insurance bene its. Social Security is a contributory program, with both employees and employers sharing the cost. In 2010, employees contributed 7.65% of their irst $106,800 of income. Employers also contributed 7.65%, up to the same dollar limit. The amount of income that is subject to Social Security taxes periodically changes.
Unemployment compensation insurance is administered by individual states. The cost of these programs is experience rated as a means of encouraging employers to avoid terminations. Employers are taxed according to their record of terminations. As of 2010, the average tax rate for unemployment compensation insurance in the United States was approximately 0.8% of payroll.
Workers’ compensation insurance is intended to provide health care, income maintenance, and survivor protection for employees who become disabled or are killed due to an occupational injury or illness. Like unemployment compensation insurance, employers are experience rated. Rates vary widely and are a function of job type, industry stability, and the state.
Optional Bene its: Indirect (Noncash) Compensation
Employers typically provide bene its that are not required. These are generally categorized as health protection, retirement, and time off with pay (vacation). Examples of these bene its include health insurance, payment for child care, tuition assistance, pensions, discounts, recreation programs, recognition awards, and other nonmonetary incentives intended to attract potential candidates and enhance the productivity of employees.
Health insurance plans have changed dramatically over the last decade. As of 2009, approximately one in six adults (16.0%) in the United States has no health insurance coverage (Gallup Poll 2009). Since 1991, the percentage of employees covered under a traditional indemnity or fee-for-service plan has dropped from 70% to less than 10%. Managed care plans such as health maintenance organizations, preferred provider organizations, and point-of-service plans have become the predominant forms of medical coverage. The need to control costs in this area has resulted in a greater degree of employee cost sharing. As the Patient Protection and Affordable Care Act of 2010 is phased in, health insurance coverage and costs are likely to change. The Consolidated Omnibus Budget Reconciliation Act (COBRA) mandates that insurance bene its be extended to terminated employees at some cost to the former workers. This increases an employer’s administrative costs.
In addition to health insurance coverage, organizations attempt to protect employees during times of illness or accident with a variety of other programs, including sick leave and disability insurance. Employers that provide sick leave generally allocate a set number of days per employee per year. The national average is slightly more than 5 days per year, although some employers allocate 12 days per year to every employee. Employers vary widely in the practice of allowing employees to bank, or
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accumulate, their sick leave time. Under a banking provision, employees are permitted to carry unused sick leave forward to the next year. For inancial reasons, this option has been signi icantly curtailed in recent years. In organizations where the accumulation of sick leave is permitted, it is common for many employees to have in excess of 60 sick days, representing a signi icant accrual expense for their employers. Many organizations annually buy unused sick days back from their employees. Other employers provide inancial incentives to employees who do not use their sick days, although the extent of this practice has not been accurately surveyed.
An Employee Assistance Program (EAP) is intended to provide short-term counseling services. In the 1970s, employers began to recognize that there was a mutual bene it to providing assistance to employees who had non-work-related types of problems. From the perspective of employers, outside- of-work problems reduced employees’ attention and productivity on the job. In response, employers arranged for access to services that could assist employees with their personal situations. Areas of assistance include problems with excessive use of alcohol, drug use, legal issues, dif iculties with children or spouses, and responsibilities for caring for elder relatives. This listing is not all-inclusive.
EAPs are commonly provided by external vendors. Two principles are paramount. First, staff members must voluntarily use an EAP. A supervisor can suggest and recommend that employees use EAP services, but program utilization cannot be mandated. Second, an EAP must maintain con identiality. A referring supervisor will not receive any information back from an EAP as to an employee’s progress or status.
Employers are increasingly adopting Paid Time Off (PTO) plans where employees accumulate an allotted number of days and then use them in a more discretionary manner. For example, employees may bank their sick days in a PTO account and then use them in the event of an illness of a child. This concept is becoming more popular because it provides lexibility to employees and recognizes that individuals face a variety of outside demands.
Long-term disability insurance is a common bene it designed to protect employees from the inancial devastation of a serious illness or accident. Plans usually provide covered employees with a
percentage of their wages during a period of disability. Typically, the bene its approximate 60% to 66% of an employee’s base compensation. Payment of this bene it begins between 3 and 6 months after the onset of the disability, depending on the terms of the coverage.
Life insurance provides employees with a level of coverage equal to some multiple (usually one to two times) of their annual compensation. Although this basic coverage is usually provided at no cost to employees, tax regulations require employees to pay taxes on the amount of premium provided to purchase coverage in excess of $50,000. In addition to basic life insurance coverage, many organizations provide employees with the opportunity to purchase a limited amount of additional life insurance coverage through a payroll deduction plan. This additional coverage tends to be restricted to one to two times a person’s base salary.
Employee retirement plans include de ined bene it and contribution plans. De ined bene it plans use a formula to determine the actual amount of bene its. Employees know what their periodic payout will be well in advance of retirement. De ined contribution plans set forth the amounts that employers and employees will each contribute. The actual amount of the periodic payout is not determined until an employee retires, because it will depend on investment income. Most contemporary retirement plans are vested. This means that after a certain period of employment, usually 5 to 10 years (occasionally more), an employee has a right to the contributions made by the employer and to the inal pension.
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Once vested, this right is not forfeited if an employee seeks other employment.
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8.6 RETAINING VALUED EMPLOYEES
Organizations usually want to retain valued employees. They can be given special assignments that provide variety as well as allow them to demonstrate their readiness for promotion. Valued employees can serve as mentors, allowing them to learn or practice supervisory skills. Organizations that ignore their valued employees run a risk of losing them due to boredom, stagnation, or loss of morale.
All managers have a responsibility to identify and develop new managers. This includes identifying and developing one or more potential successors. Many managers fall short on the latter need. These activities help to retain valuable employees by giving them opportunities to grow as leaders. Developing potential managers requires progressively more delegation of responsibilities. This requires time and planning by senior managers.
Some good employees are going to be lost regardless of what management does. Managers who invest time and effort to develop potential successors may see many of them eventually lost to other departments or other organizations as they take advantage of opportunities to advance their careers. However, these employees are more likely to be lost to another employer if they are not given opportunities to develop. Some will be lost even sooner if they remain unchallenged in their jobs. Prudent managers should take full advantage of the resources that are available in their groups by delegating tasks to the better and more promising employees and helping them to develop.
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8.7 TRAINING AND DEVELOPING EMPLOYEES
Most individuals in management believe or know intuitively that education ultimately saves money. Unfortunately, many managers eliminate training and development when budgets become tight and expenses must be reduced. As important as training and development are to every organization, they often receive minimal attention from senior managers. Training and development are important methods for keeping valuable employees interested and challenged. One way for department managers to increase the chances of retaining their better employees is by supporting training and development. A department that places no emphasis on training and development may seem to be standing still. In reality, it is going backward.
All organizations should have a new employee orientation plan. The plan should be lexible so that it can be used for all departments. Orientation plans are required by many accreditation and regulatory agencies. Orientations typically cover common matters such as the organization’s structure and leadership, employee bene its, the performance appraisal process, the dress code, employee parking, facility security, infection control, and universal precautions. Employee health and other bene its and the EAP, employee work rules, and generally applicable policies are usually included. A departmental orientation introduces colleagues and reviews the physical space, equipment, processes, and any special policies. Linking a new employee with a mentor is often helpful.
A manager’s top priority should be running a program area and producing the expected results. In assessing performance, managers should continually compare observed performance with expectations for an employee’s position. When performance does not meet expectations, supervisors may have to consider additional training. This instruction should provide clear expectations, necessary information and materials, and general guidance.
Cross-training is de ined as learning how to do one or more jobs normally performed by other persons. Such training provides lexibility for managers. Employees can be temporarily reassigned as needed, and resources can be shifted as workloads temporarily change, backlogs develop, or coverage is needed for vacations or illness. Cross-training will ultimately repay the time and effort involved. Individuals can expand their interests and knowledge associated with their work through increased task variety. Temporarily changing jobs often provides a welcome variation in routine for employees.
On-the-job training is occasionally appropriate and is best accomplished under the direct supervision of a manager or under the direct guidance of an experienced employee. Improper or inadequate on-the-job training can be dangerous or destructive. Employees may learn to perform their tasks in a highly inef icient manner, creating inappropriate work habits that may become dif icult to correct.
A common but inappropriate approach to training or to satisfying minimum annual in-service education requirements is to give employees iles or folders to review or to direct them to a Web site. Accreditation agencies or state regulations often specify documents that must be read. A folder of materials is circulated among the staff with instructions for all recipients to review the documents as required, check off their names to indicate that they have completed the task, and pass the entire package to the next person. This is a weak approach to training. Short of questioning each recipient in detail, there is no way to ensure that the material has been read or absorbed.
Including mentoring as a form of employee development sends a strong message to all employees
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concerning an employer’s commitment to their development. A mentor can be a valuable facilitator, sounding board, and source of advice and guidance for a new employee. Mentoring can provide a sense of ful illment and satisfaction, especially for a senior employee who is in need of additional challenges or a change in work activities.
Mentors should not be unilaterally assigned or forced to serve. Managers should discuss the possibility of mentoring privately and allow prospective mentors to make their own decisions regarding participation. New employees should also be given some latitude in participation. Careful thought should be invested before mentoring partnerships are announced. A poor decision regarding mentoring has the potential to cause discomfort for all concerned. A good match can be highly bene icial for people and the organization.
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8.8 PROBLEM EMPLOYEES
Employees with problems and problem employees are different. The former should be offered a referral to an EAP. The next section covers the latter.
Introduction
Mental health encompasses a wide range of issues and problems from relatively minor, short-lived events such as grief over a loss to major, lifelong conditions such as schizophrenia (American Psychiatric Association 2000). Most people experience mental problems at several times during their lives. The majority are able to work through them and then resume their normal or usual activities.
Mental problems can interfere with work and job duties. Three relatively common mental health problems include chemical dependency, depression, and abuse. Chemical dependency includes alcohol and drugs. Using alcohol on an occasional basis does not constitute dependence. Experts estimate that more than 17.6 million American adults (approximately 8% of the adult population) meet standard diagnostic criteria for an alcohol use disorder and approximately 4.2 million adults (roughly 2% of the adult population) meet standard diagnostic criteria for a drug use disorder (Grant et al. 2004). The same authors reported that 19.2 million adults (9.2% of the adult population) meet diagnostic criteria for problems that include depression.
Physical abuse and sexual abuse are common in the United States. Abuse can impact peoples’ lives for decades, including their work. Approximately one in ive males and more than one in four females are abused before becoming adults. Managers should be aware of these prevalence rates and should be familiar with referral protocols for EAPs. Managers are reminded not to attempt providing therapy.
Problem Employees and Those with Personality Disorders
At times, many employees exhibit problem behavior in the workplace that can be attributed to situational stressors including family or marital dif iculties, health problems, or inancial dif iculties. Such problems can affect their workplace behavior and performance. They are most effectively addressed by a referral to an EAP.
A small number of employees have mild versions of mental health problems called personality disorders. It is probably more accurate to refer to persons with personality disorders as dif icult rather than problem employees. It is important to note that most people occasionally behave in a manner that has inconvenienced others.
The difference between most people and dif icult employees is the frequency with which the undesirable behaviors are exhibited and their duration. Dif icult employees display problem characteristics over extended periods of time and in many situations involving a variety of other people. These episodes result in emotional pain for themselves, their coworkers, and managers. Employees with personality disorders tend not to respond well to traditional progressive discipline processes because they do not view their behavior as being problematic; their behavior is simply normal for them.
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Indicators of Employees with Personality Disorders
The purpose of managers being able to recognize behavior of employees with personality disorders is to help them to understand the kind of problems that they may be facing, not to treat employees.
Four common personality disorders that a manager may encounter include: (1) narcissistic, (2) borderline, (3) histrionic, and (4) paranoid. Characteristics that are common to all of these four personality disorders include dif iculties with interpersonal relationships and a lack of empathy. This interferes with feeling compassion for others. People with these disorders tend to be very rigid and cannot easily accept the needs, ideas, and values of others. Boundary problems cause them to disregard agency procedures, protocols, and organizational chains of command. Employees with personality disorders may be aware of the problems experienced by the people around them, but they are unable to make a connection between these problems and how their own behavior affects their coworkers and colleagues (Barlow and Durand 2007).
Narcissistic Personality Disorder
Employees with a narcissistic personality disorder tend to think very highly of themselves, often exaggerating their achievements and talents beyond their actual real abilities. They love to be in the limelight and may steal ideas and take credit for the accomplishments of others. They often demonstrate excessive self-promotion and attention-seeking behavior (Lubit 2003). Because they tend to be self-centered, they have dif iculty accepting other points of view. This often results in con licts, with coworkers and managers having to spend time ielding complaints from coworkers, consumers, and community stakeholders. They usually feel little loyalty to either supervisors or employers. Useful strategies for coping with persons having a narcissistic personality disorder include giving employees credit for their accomplishments, avoiding challenges, and not taking their criticism personally. Undesired behavior tends to worsen as people with a narcissistic personality disorder age (Cavaiola and Lavender 2000).
Borderline Personality Disorder
A borderline personality disorder is thought to be the most common personality problem that is observed in the workplace. Employees with borderline personality disorders are usually very intense and tend to have frequent outbursts of temper and exhibit constant anger. They can become physically abusive. Their relationships with coworkers and supervisors tend to be very dramatic and turbulent. These employees are prone to extreme mood swings ranging from cheerful and cooperative to angry and abusive. They are often impulsive and have dif iculty maintaining and respecting boundaries (Cavaiola and Lavender 2000). People with borderline personality disorders have dif iculty distinguishing between personal and professional roles, relationships, and duties. Useful strategies for coping with persons having a borderline personality disorder include not getting caught up in their personal problems and minimizing interactions by maintaining a clear, professional distance. Managers should avoid sharing details about their personal lives with the borderline personality employee (Cavaiola and Lavender 2000).
Histrionic Personality Disorder
People with a histrionic personality disorder frequently appear to be in a constant state of crisis. Their
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personal lives often over low into the workplace. They tend to be overly dramatic and pull anyone willing to listen or be used by them into their world. They are usually very engaging and seductive. Upon irst meeting them, most people like them. Managers often describe these people as taking days off on a whim without considering the consequences that their absence will have on their coworkers. These people lack the ability to take responsibility for their own actions and see themselves as victims. They will create hard luck stories to account for their absence and expect special treatment for missing work (Cavaiola and Lavender 2000). Useful strategies for coping with persons having a histrionic personality disorder include staying calm and not giving in to their demands or being pulled into their dramatics.
Paranoid Personality Disorder
People with a paranoid personality disorder are suspicious of others. They are often combative in their interactions with others, rigid, and critical of coworkers but unable to accept criticism. Harmless remarks can cause them to threaten legal action (Cavaiola and Lavender 2000). Useful strategies for coping with persons having a paranoid personality disorder include not giving constructive feedback because it will be perceived as criticism, not teasing them, and not assigning them to positions or projects that require collaborative work relationships. Instead, they should be placed in positions where they can work independently.
Prevention Strategies
Professional treatment is required for employees with personality disorders. Treatment is often unsuccessful because affected individuals may not recognize or admit that they have a problem. The most effective approach to identifying people with personality disorders is careful observation during interviews. Interviewers must know about the behaviors of personality disorders they wish to avoid and be alert for signs during interviews. The probationary period provides a inal opportunity to identify someone with a personality disorder. Guidelines governing most probationary periods allow probationary employees to be dismissed without cause. After the probationary period is over, progressive discipline procedures must be followed.
Employee Needs: Policies, Procedures, and Discipline
In time, every organization will encounter one or more problem employees. An effective and successful manager must recognize that problem employees and employee problems are not synonymous. Good management and effective policies usually minimize most employee problems. When problems do arise, management has the responsibility to resolve them in a satisfactory manner. Organizations must recognize the inevitability of problem employees and the need for discipline. Further, prudent organizations will create procedures to address such issues. At best, they may deter or prevent problem situations. At worst, they will provide procedures that are fair and understood by all affected parties when problems do occur.
Learning to respond to negative situations is typically very dif icult for new managers. Problem employees provide the most negative situations encountered in organizational life. New managers commonly react with anger due to the frustration associated with supervising a problem employee. As a result, upper management often irst becomes aware of an employee performance issue when the problem employee iles a grievance about an angry conversation that occurred with an inexperienced
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manager. Managers must always be aware of organizational policies when confronting employees with behavior problems. Ignoring rules, bending policies, or not applying the same standards to all employees usually results in problems. One of the most successful methods for shaping employee behavior and controlling many potential employee problems is establishing and supporting strong work ethics and values within an organization.
Progressive Discipline
All employees and their managers are necessarily required to report their activities and to discuss them in enough detail to ensure that work requirements are met and organizational policies are followed. These conversations typically occur on a regular (daily or weekly) basis and are a normal part of work. In particular, they are not part of a disciplinary approach to problem solving, although they may contribute to identifying problems. When normal discussions, training, or mentoring are not adequate to resolve a problem, managers must make two decisions regarding disciplinary measures. The irst decision centers on whether discipline is needed. The second involves the nature and severity of discipline that may be necessary.
All organizations should establish a policy of progressive discipline. This helps managers resolve small employee problems by initiating modest disciplinary action, rather than letting minor issues develop into major problems. Progressive discipline is a step-by-step process. After identifying an employee with a problem, the policy guides documentation, helps to determine an acceptable corrective action, and prescribes an appropriate level of discipline. The level of discipline becomes progressively more severe if the problem continues to occur.
The keys to progressive discipline are identi ication and documentation. Most employees occasionally make mistakes. If these are identi ied and discussed early on, they can often be resolved by an informal disciplinary discussion. Good employees usually learn from such experiences and typically do not repeat their error. However, most managers, especially new ones, ind this type of employee conference dif icult to initiate.
For an average employee, missing an initial opportunity for addressing a problem does not result in damage either to the employee or to the organization. However, if the employee continues to repeat the inappropriate behavior, and it gets worse, missing the initial discussion opportunity becomes critical. Major disciplinary action may be needed. Delayed actions are often accompanied by a counter charge from the employee who has a clean record and a legitimate claim that, “Nobody said anything about this before.”
Table 8–2 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/78#tab82) describes a progressive discipline model that can serve as a blueprint for most organizations. Minor adjustments may be required to accommodate organizational size, union contract agreements, or other local policies or rule requirements.
It is always prudent to ensure that, at each level of discipline, employees are treated fairly and their rights are maintained. To ensure that the problem does not become a personal struggle between an employee and supervisors at different levels of management, no disciplinary discussion or hearing should be conducted without a third party being present. In a disciplinary action, an overly aggressive manager or an overly defensive employee can make the situation worse than the problem originally warranted. A respected third party can help satisfy both entities and ensure that the disciplinary
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process is valid and effective.
Table 8–2 A Progressive Discipline Model
Event Action Discipline
First documented occurrence
Informal hearing with supervisor
Verbal or written reprimand from supervisor
Second documented occurrence
Informal hearing with supervisor and section or division head
Written reprimand from upper management
Third documented occurrence
Formal hearing with division head
Job action, time without pay, reduction in pay; action reviewed by the board of directors
Fourth documented occurrence
Formal hearing with division head and CEO
Signi icant job action, possible dismissal; action authorized by the board of directors
CEO, chief executive of icer. Source: Fallon, L. F., and C. R. McConnell. 2007. Human resource management in health care. Sudbury, MA: Jones and Bartlett. Used with permission.
Discharge
When the progressive discipline process does not result in employee improvement or when the problem is so severe that progressive discipline is not an option (e.g., criminal activity, job abandonment, gross insubordination), discharge from employment may be the only solution. This is a very dif icult response that must be legally precise; it is not justi ied for persons who simply “do not it in” or “do not belong.” After a probationary period is over, organizations cannot dismiss an employee without cause. This requirement can prolong the process of coping with a problem employee and usually forces management to provide overwhelming evidence for a dismissal.
Discharging an employee as a result of a well-documented problem or series of problems is a inal action that should be reviewed and conducted by an organization’s chief executive of icer and may involve the board of directors. It is not the sort of action that should be threatened by lower-level managers to intimidate an employee, although managers can say that they are recommending dismissal.
Once dismissed, an employee normally has the right to appeal the process in an appropriate court system. The purpose of review by these boards and the courts is to ensure that an organization’s process has been fair and that the dismissal is justi ied. Unfortunately, the appeals process is expensive, exacting, and time consuming. This is dif icult for both employers and dismissed employees. Complete documentation and a fair and thorough review prior to dismissal are necessary to ensure that an organization’s action is justi ied and that dismissal is the appropriate option.
Large organizations should consider retaining an attorney or consultant who has background and
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experience in labor law to prevent signi icant legal problems and to resolve them when they occur. Smaller organizations normally have access to prosecutors or law departments in their jurisdiction. They are strongly advised to discuss any job dismissal with their board prior to taking action.
Documentation
Throughout this chapter and the other chapters in this text, the importance of documentation is frequently discussed. Two guides are relevant: “A problem is never resolved until the paperwork is inished” and “Without documentation, a problem does not exist.”
Documentation of problem employees and those with disciplinary problems is an absolute necessity. Organizations must clearly describe a problem and be able to document why it is a problem. They must be able to link the current problem back to their established policies and procedures and be consistent with civil statutes.
All organizations must have a valid tracking mechanism for employee activities and behavior. This system must be able to provide reports or documents verifying that activities, policies, and procedural requirements have been met. Although most organizations have such systems in place, problems can and will arise if they are not used. Management’s appropriate use of these monitoring systems and the alertness of HR personnel should be assessed at least every 6 months. These activities should become an integral part of an organization’s work ethic and normal practices.
In addition to the basic records maintained by any organization, records regarding all discipline processes must be kept in an activities ile or in personnel iles. Documentation of any informal or formal hearings, or even very preliminary disciplinary discussions, should be kept in a secure location for some agreed-upon time (usually a year or more). Legal counsel should be sought to provide guidance in this area.
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CONCLUSION
In some organizations, a single person is responsible for coordinating all HR activities. The volume of government regulations has greatly increased in recent decades as has the scope of duties. Coordinating compensation and bene it programs, recruitment, training, and development are often ongoing and nearly continuous activities. Ensuring that employees with problems and problem employees receive fair treatment is an intermittent but important HR responsibility.
Systems Thinking about Organizing Human Resources
The case study for this chapter raises the point that HR departments and their employees often ind themselves in adversarial relationships with other departments in their own organization. Ramsey and Wells (2001) analyze this situation from the perspective of systems thinking, explaining how the adversarial relationships typically unfold over time.
First, HR responds to breaches of regulations in the organization (e.g., rules about what can be asked during job interviews) by instituting policies that restrict autonomy in decision making (e.g., by requiring standardized interview questions). HR does so for the good of the organization (e.g., to avoid costly legal suits). Individuals in other departments may view the restrictive policies as interfering with good decisions, so the individuals ind ways around the restrictions. HR then feels even more threatened by the policy breaches, leading HR to step up its enforcement and restrictions. Soon, HR and other departments are trapped in an ongoing power struggle, to the detriment of the system as a whole.
The pattern of back-and-forth actions that lead to antagonistic relationships among departments that should be sharing the same organizational goal is known as the accidental adversaries archetype. To manage it, departments need to avoid acting solely in self-serving ways, use dialogue to focus on joint goals, and avoid blaming or assigning bad intent to the other departments.
CASE STUDY RESOLUTION
Returning to the conversation about Dr. Lombard’s assignment, you might offer the following thoughts.
You would have agreed with Alberto that the HR department does not contribute to an organization’s bottom line because it generates no revenue while it does generate expenses. This reasoning is correct when only short-term inancial outcomes (pro it and loss) are considered.
You might have suggested to David that HR is not a good choice for the least important department on the basis of the following reasons:
1. HR maintains an organization’s workforce through recruitment and training activities.
2. If HR did not keep accurate employee records and ile reports that are required by law, the resulting ines and penalties would have the potential to bankrupt the organization.
3. HR coordinates and oversees disciplinary activities. By ensuring that the organization complies with legal guidelines, HR avoids ines and penalties.
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4. Compensation and bene its are very important to employees. If an organization misses a payroll or does not pay bene it claims in a timely manner, employees usually waste no time complaining to their managers. Senior managers dislike such problems.
5. HR coordinates training and career development activities and resources. Employees are more likely to commit to an organization that facilitates their growth and learning. Lower turnover and higher organizational commitment by employees generate inancial returns for the organization.
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revised. Washington, DC: American Psychiatric Association. Barlow, D. H., and V. M. Durand. 2007. Abnormal psychology. 5th ed. Florence, KY: Wadsworth
Publishing. Bolles, R. N. 2010. What color is your parachute? 2010: A practical guide for job hunters and career
changers. Berkeley, CA: Ten Speed Press. Cavaiola, A. A., and N. J. Lavender. 2000. Toxic coworkers: How to deal with dysfunctional people on the
job. Oakland, CA: New Harbinger Publications. Gallup Poll. 2009. About one in six US adults are without health insurance. http://www.gallup.com
/poll/121820/one-six-adults-without-health-insurance.aspx (http://www.gallup.com /poll/121820/one-six-adults-without-health-insurance.aspx) (accessed June 5, 2010).
Grant, B. F., F. S. Stinson, D. A. Dawson, S. P. Chou, M. Dyfour, C. W. Compton, R. P. Pickering, and K. Kaplan. 2004. Prevalence and co-occurrence of substance use disorders and independent mood and anxiety disorders: Results from the National Epidemiologic Survey on Alcohol and Related Conditions. Archives of General Psychiatry 61 (8): 807–16.
Hammer, M. 2003. Optimas award managing change: Almost curtains. Workforce Magazine August: 54–5.
Larson, W. W. 2000. Ten-minute guide to conducting a job interview. New York: Penguin. Lubit, R. H. 2003. Coping with toxic managers, subordinates and other dif icult people. Upper Saddle
River, NJ: Financial Times Press. Ramsey, P., and R. Wells. 2001. Managing the archetypes: Accidental adversaries. Williston, VT:
Pegasus Communications. Renckly, R. B. 2010. Human resources. 3rd ed. Hauppauge, NY: Barron’s Educational Series.
RESOURCES
Periodicals
Arnold, E. 2010. Managing human resources for successful strategy execution. Health Care Management (Frederick) 29 (2): 166–71.
Ashcraft, L., and W. A. Anthony. 2007. Turn evaluations into mentoring sessions. Behavioral Healthcare 27 (4): 8–11.
Cooper, C. 2007. Mental well-being at work. International Journal of Public Health 52 (3): 131–2. Lim, S., L. M. Cortina, and V. J. Magley. 2008. Personal and work-group incivility: Impact on work and
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health outcomes. Journal of Applied Psychology 93 (1): 95–107. Orlikoff, J. E., and M. K. Totten. 2009. Evaluating the board chair: Creating a process for assessing
leaders reinforces a commitment to governance accountability and continuous improvement. Healthcare Executive 24 (1): 60–2.
Seiler, S. 2007. Picking the best employees for the job. Maryland Medicine 8 (2): 32–5. Whitman, M. V., and D. Valpuesta. 2010. Examining human resources’ efforts to develop a culturally
competent workforce. Health Care Management (Frederick) 29 (2): 117–25.
Books Deeprose, D. 2006. How to recognize and reward employees: 150 ways to inspire peak performance.
2nd ed. Chicago: AMACOM. Delpo, A. 2005. The performance appraisal handbook: Legal and practical rules for managers.
Berkeley, CA: Nolo Publishing. Delpo, A., and L. Guerin. 2009. Dealing with problem employees: A legal guide. 5th ed. Berkeley, CA:
Nolo Publishing. Heckhausen, J., and H. Heckhausen. 2010. Motivation and action. 2nd ed. New York: Cambridge
University Press. Kinder, A., R. Hughes, and C. L. Cooper. 2008. Employee well-being support: A workplace resource. New
York: John Wiley & Sons. Martocchio, J. J. 2010. Employee bene its. 4th ed. New York: McGraw-Hill. Noe, R. A. 2007. Employee training and development. 4th ed. New York: McGraw-Hill. Pynes, J. E. 2009. Human resources management for public and nonpro it organizations: A strategic
approach. San Francisco: Jossey-Bass.
Web Sites • American Bene its Council: http://www.appwp.org (http://www.appwp.org) • American Management Association: http://www.amanet.org/ (http://www.amanet.org/) • HR-Guide.Com (http://HR-Guide.Com) : http://www.hr-guide.com (http://www.hr-guide.com) • Management Assistance Program for Nonpro its:http://www.managementhelp.org
/staf ing/specify/job_desc/job_desc.htm (http://www.managementhelp.org/staf ing/specify /job_desc/job_desc.htm)
• National Institute of Mental Health: http://www.nimh.nih.gov/health/index.shtml (http://www.nimh.nih.gov/health/index.shtml)
• Of ice of Personnel Management, Overview of the Fair Labor Standards Act: http://www.opm.gov/ lsa/overview.asp (http://www.opm.gov/ lsa/overview.asp)
• Problem Employees Personnel Management–Michigan State University: http://www.msue.msu.edu/msue/imp/modtd/33129602.html (http://www.msue.msu.edu /msue/imp/modtd/33129602.html)
• Progressive Discipline–Indiana University: http://www.indiana.edu/~uhrs/training /ca/progressive.html (http://www.indiana.edu/~uhrs/training/ca/progressive.html)
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CHAPTER
9
Building a Culture of Improvement
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Understand the meaning of organizational culture and indicators of organizational culture. • Be able to describe at least one way of classifying differences in national cultures. • Describe common but essential values of organizations in general and health organizations, in
particular: diversity, safety, learning, collaboration, and service. • Be able to discuss key strategies for culture change.
CHAPTER SUMMARY
Organizational cultures re lect the values, norms, assumptions, and beliefs of an organization. Organizational cultures can be identi ied by formal statements of values, ethical practices, policies, and procedures, and by symbols, such as stories and physical artifacts. Organizational cultures can range from being highly fragmented to highly cohesive and goal driven. In the health sector, high-performing cultures are built around the values of diversity, safety, learning, collaboration, and service. Achieving such cultures requires commitment from top leadership and credibility with workers, as well as recognizing and rewarding practices consistent with the organization’s culture.
CASE STUDY
“People have makeovers,” mused Moira, a senior manager for a mid-sized health organization. She continued, “Why not organizations? Why not this one?”
“What do you mean by a makeover, and what brought that on?” asked Nigel, her colleague.
“Taking your questions in reverse order,” Moira began, “I have been concerned about our standing within the community. Customer service ratings have been slowly declining for several years. It seems that despite the current economic climate, our employees have become inattentive toward customer needs and generally are slacking off. By makeover, I mean trying to energize our employees and revive their interest in the organization. I am at a loss about where or how to begin.”
If you had been part of this conversation, what advice would you offer to Moira?
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9.1 INTRODUCTION
Culture is fundamental to almost everything that goes on in an organization. Culture is dif icult to change because it is rooted in enduring personal and organizational values. Efforts designed to change organizational culture have the highest failure rate among common organizational change initiatives. (See the discussion on Managing Change [Chapter 17 (chapter17.html) ] for additional details.)
Although dif icult to change, culture has the greatest potential for transforming an organization. Historically, many managers and employees have avoided trying to understand and in luence their organization’s culture. As a result, culture has been underused as a means to move organizations to higher levels of performance. Today, culture is more fully understood. If an entire organization or a single department or subunit requires major transformation, altering the culture is an essential element of the process. In health organizations, improvement-driven managers are modifying culture to create organizations that respect diversity, scienti ic evidence, and transparency and that relentlessly pursue learning, safety, justice, and quality.
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9.2 MEANING OF ORGANIZATIONAL CULTURE
Organizational culture encompasses the assumptions, beliefs, values, and norms of an organization. Organizational culture is a very broad and fuzzy concept. Many people prefer de ining organizational culture as “the way we do things around here” (Deal and Kennedy 1982). The concept of organizational culture can be applied to groups, communities, and entire societies, as well as to subunits of organizations. Two adjacent subunits in an organization can have cultures that are different; both can have cultures that differ from the culture of the entire organization. For example, the marketing unit of an organization may value creativity more than the inance unit does.
Values are the ideals, customs, and institutions of an organization that its members hold in high regard. Personal values are individual judgments about what is important in life; the same is true for organizational values. The importance of values is re lected in the fact that they are an integral part of every society and organization. Being part of a culture that shares a common core set of values creates expectations and predictability for members of the culture. Without a common set of values, members of a culture would lose their personal identities and sense of purpose. Values remind people about what is good, important, useful, and appropriate. Values help to answer questions about why people and organizations act or behave as they do.
Social norms are related to values. Social norms are expectations about behavior. Social norms tend to be tacitly established and maintained through body language and nonverbal communication between people in their normal social interactions and activities. Deference and conforming to the social norms of a group maintains one’s acceptance and popularity within that particular group. Those who violate or ignore the norms risk becoming unacceptable or ineffective within their group or organization.
Assumptions and beliefs are also components of culture. Assumptions and beliefs that underlie an organization’s culture often include the conviction that the organization is pursuing ends that are worthwhile for the particular economy and society in which it exists. The underlying assumption is that what is good for the organization is good for society. This is particularly true of values-driven health organizations. Other common assumptions and beliefs relate to organizational structures and processes, such as incentives (“If I work hard, I will be recognized and rewarded”) and decision making (“The people making decisions here know what they are doing”).
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9.3 INDICATORS OF ORGANIZATIONAL CULTURE
How can the culture of an organization or unit be recognized? Examining a range of activities, artifacts, and behaviors in an organization or its subunits can provide insights into details of its culture. It is important to use multiple measures because culture is broad and sometimes internally inconsistent within organizations.
Espoused Values
Espoused values are expressed verbally or in writing and may be inconsistent with values that are revealed by behavior. For example, many organizations claim transparency as a value but are secretive with information about the quality of their services.
Espoused values often are explicitly stated in an organization’s guiding documents, including vision, mission, and value statements. These values statements are often derived by large-group planning processes, such as appreciative inquiry (see Chapter 17 (chapter17.html) ), or they may re lect the opinions or consensus of a small number or a coalition of individuals in an organization. Often the organizational values re lect the opinions of decision makers at the top of the formal hierarchy.
Espoused values also are formalized in the ethical guidelines of organizations, associations, and professions. In public health, for example, the Public Health Leadership Society has derived 12 principles to guide the ethical practice of public health. The ethical guidelines emphasize the commitment of public health workers to the communities they serve, sharing information, and collaboration and participation. The Society’s principles are grounded in 11 values and beliefs underlying the code. Those values and beliefs range from trust and collaboration to science and social– political action (Public Health Leadership Society 2002). The American College of Healthcare Executives (ACHE), the primary professional association of managers in the health care delivery sector, also has promulgated a code of ethics and ethical guidelines (American College of Healthcare Executives 2007). The ACHE Code stresses commitment to patients and the organization, illustrating some of the differences between cultures of public health organizations and health care delivery organizations.
There are a wide variety of less direct sources for information about an organization’s culture. Some values and norms are codi ied in organizational policies and procedures, in the form of guidelines for expected behavior. Many norms are enacted and transmitted informally through daily behavior and interpersonal feedback. Often, norms about such issues as open-door policies, length of lunchtime breaks, dress, and attendance at of ice social functions have to be learned informally.
Symbols
Symbols are indirect manifestations of norms, values, beliefs, and assumptions. Examples of symbols include stories, specialized language, rituals, ceremonies, and physical artifacts such as logos, artwork, of ice furniture and of ice space, and dress.
Stories
Stories about a unit or organization are particularly revealing, because they often re lect important
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values. Stories about an organization’s founder or past leaders are used to transmit important guidelines for attitudes and behavior. Stories about heroic behavior, such as service during emergencies or dif icult times, may promote the value of service to potential clients or customers. In one organization, for example, the chief executive tells stories about employees who drop everything to help clients in urgent need. The workers are portrayed as heroes and heroines for others to emulate. The value of transparency or openness is expressed in another organization by monthly open coffee breaks hosted by the chief executive for anybody who wants to talk.
Physical Artifacts
Physical artifacts (for example, artwork, dress, of ice furniture, and the arrangement of work space) convey information about an organization’s culture as well. Employees at all levels and lengths of service are reminded about customs and norms through a wide variety of tangible and intangible cues that re lect the organizational culture in the type and style of physical artifacts. Paintings from community members or customers, for example, may re lect the value of connecting with the community. Open doors and of ices that are similar in size may re lect the values of communication, access, and equality among employees.
Because people learn cues to organizational and unit cultures through a variety of indirect and formalized means, a useful way to assess culture is to ask people who work in an organization or unit to rate it on relevant criteria. One assessment instrument, for example, asks respondents to distribute points among descriptions of four types of organizational culture. The four culture types are labeled as personal, dynamic and entrepreneurial, results-oriented, or controlled and structured (Cameron and Quinn 2005).
Different researchers also classify organizational cultures into four groups: networked, mercenary, fragmented, or communal (Goffee and Jones 1998). Table 9–1 (http://content.thuzelearning.com/books /Fallon.9852.17.1/sections/83#tab91) summarizes characteristics of each of these cultures. The classi ication is based on the degree to which workers share goals (solidarity) and the degree to which they are friends (sociability). Fragmented cultures are lowest on both criteria, and communal cultures are highest on both. A university provides a convenient example of a fragmented culture. Faculty members tend to work independently and pursue their own goals. A communal culture, with both high shared goals and cohesiveness, is exhibited by many new innovative ventures. Mercenary cultures focus on goal attainment but are low on sociability. Organizations where sales are important, particularly when salespeople are commission-based, tend to fall in the mercenary culture category. Networked cultures focus on sociability but not on solidarity. Small organizations, or small units in large organizations, may re lect a networked culture.
Table 9–1 Four Types of Organizational Cultures
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Source: Data from Goffee, R., and G. Jones. 1998. The character of a corporation. New York: Collins.
Managers can help cultures of organizations change over time based on external conditions. For example, a greater focus on shared goals may be necessary during tough economic times, at the expense of sociability. Classifying cultures helps managers think about the appropriateness of their organization’s values and norms. This is especially true when an organization must work within con ining conditions or contingencies.
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9.4 ORGANIZATIONAL CULTURES IN HEALTH
Some organizational values are particularly important in the health sector. Improvement-driven health organizations are beginning to develop expertise in cultural transformation, creating cultures that emphasize cultural diversity, safety, learning, collaboration, and service.
Cultural Diversity
As already noted, the concept of culture applies to groups and systems other than organizations. Cultures can form around a variety of human characteristics and interests, including ethnicity, race, religion, socioeconomic status, country of origin and upbringing, sexual orientation, and physical or mental condition. Diversity in the cultures of client or customer populations and in an organization’s workforce is a reality for most health organizations. This is particularly true because health organizations often provide services to populations having large numbers of members from minority groups.
Respect for cultural diversity is imperative for effective organizational performance. That respect affects how organizations provide services that best meet the needs of different cultures or improve their collaborations with employees with diverse backgrounds. In most health management settings, respect for cultural diversity of fellow employees and clients or consumers is a key to the organization’s ability to deliver high-quality services, and it also is important to maintaining a high quality of work life for employees in the organization. The presence of long-standing disparities in the health of populations representing different cultures lends particular urgency to the need for health organizations to meet the needs of diverse clientele in an equitable fashion.
Respect for cultural diversity is a moral imperative for many people. They pay special attention to respecting differences among individuals and groups. Most health organization employees agree that respect for other individuals is a strongly held value.
Five dimensions of cultures that distinguish residents of different countries from each other have been identi ied (Hofstede and Hofstede 2004). Knowing about the dimensions helps to promote better understanding of intercultural differences. A limitation of the dimensions is that their ratings are based on entire countries and do not account for heterogeneity among different regions. However, the dimensions are useful in classifying and understanding groups and units within organizations as well as organizations as a whole. They reveal differences that have impacts on interpersonal, intergroup, and interorganizational relationships and cultures.
Power Distance
Power distance indicates the degree of equality among individuals. High power distance ratings re lect cultures in which inequalities between people are accepted and the differences are allowed to be perpetuated. In a high power distance culture, employees are more likely to expect clear guidance from upper management, and the relationships between managers and workers are rarely close and personal. Lower power distance is indicated by more teamwork and participative decision making. Inequality between managers and subordinates is relatively high in countries like the Philippines, Malaysia, Mexico, and Venezuela, and relatively low in Denmark, Israel, and Austria. The United States falls in the middle.
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Uncertainty Avoidance
Uncertainty avoidance encompasses the extent to which people are comfortable with ambiguity and uncertainty. A culture that has high levels of uncertainty avoidance is more rule-oriented, with well- established laws, regulations, and controls. Organizational change may be more dif icult to achieve, and proposals for change will be examined in detail. Individuals in countries that exhibit lower levels of uncertainty avoidance are more willing to take risks and accept change. The United States is moderate on this index. Belgium, Greece, Guatemala, and Portugal are high on the index, whereas Singapore and Sweden are low.
Individualism
Individualism re lects the importance of individuals versus collective populations. In countries with high levels of individualism, residents tend to have relationships with many other people, but the relationships are relatively weak. Individuals are more likely to express their own personalities at work, and individual rights such as freedom of speech are often brought into the workplace. In more collectivist societies, ties between individuals are very strong, and the family is given more weight. Teamwork is rewarded, and individual workers may be embarrassed if singled out for praise. Loyalty to their organization is expected, and feeling and emotions are suppressed in the interests of harmony. Countries with high levels of individualism include the United States, Australia, and the United Kingdom. Countries with low levels of individualism include Panama, Ecuador, and Taiwan.
Masculinity
Masculinity refers to the degree to which a culture emphasizes the traditional male work role model of ambition and achievement, versus caring and nurture. In masculine societies, males tend to dominate the power structure more than in less masculine societies. Workers are expected to sacri ice personal life for their jobs. Communication style is more direct, concise, and impersonal. Working overtime is common. Japan is a country high on masculinity, whereas Sweden re lects low levels. Other cultures with high levels of masculinity include the United States, Germany, Switzerland, and Italy.
Long-Term Orientation
Long-term orientation in a culture indicates respect for long-standing traditions and values. Showing respect for traditions, honoring social obligations, and avoiding loss of face are important in cultures with high levels of long-term orientation. In cultures with low levels of long-term orientation, creativity and self-actualization are valued more. Many Asian countries have high scores, while the United States and the United Kingdom have low scores.
Cultural dimensions are useful for thinking about differences in organizational environments and the values, norms, beliefs, and assumptions that employees bring to the workplace. For example, managing a group of workers composed of high achievers, who are willing to sacri ice personal time for overtime work (high on the masculine dimension), is quite different than supervising a group of employees who strive for work–life balance. It is important for managers to understand the culture of individuals, work groups, and organizations so that they can effectively motivate and get the best (and most) out of their workforce.
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Cross-Understanding
Cross-understanding provides a way for organizations to develop an appreciation for all types of employee differences, including cultural diversity (Huber and Lewis 2010). Cross-understanding is the extent to which group members have an accurate understanding of one another’s mental models. Mental models are representations of systems and how they work. Groups with high levels of cross- understanding have more effective communications within their group, as members choose concepts and words that are maximally understandable and minimally irritating or unknown to other individuals with whom they work. Group members can more effectively probe the mental models of others and ask for information about other members’ knowledge, beliefs, sensitivities, and preferences. Group members also can more easily predict the behavior of their colleagues and then adjust their own behavior. Mutual adjustment, the most lexible form of integration, becomes easier in groups with high levels of cross-understanding. High cross-understanding contributes to higher quality group products and to increases in member learning.
Cross-understanding and personal intercultural competence can be developed through self- awareness, shifting of perspective, and adaptation of new behavior. (These are explained in more detail in the discussion on Developing Self and Others [Chapter 10 (chapter10.html) ].) Organizational competence in the intercultural arena can be improved by assessing the cultures of both employee and client populations, identifying the values and traditions of the cultural groups represented, and applying culture-speci ic knowledge and skills to deliver services and manage workers (Williamson 2007). Communication skills, including active listening and sensitive questioning, are particularly critical for effective management and service delivery involving people from different cultures. Interpreters may be necessary for effective communications with consumers from foreign countries. Recruitment of employees from key cultural groups, collaborative relationships with multicultural community groups, and involvement of multicultural workers in educational programs in the organization are other important steps that help build a culture of respect for diversity. The value of cultural diversity can be evidenced through artwork and other physical artifacts displayed in the working environment.
In delivering services to populations with strong cultures, health programs should be prepared to make accommodations for cultural differences. In one case, for example, a health promotion program for American Indian tribes was adjusted to respect the traditional use of sacred tobacco, while discouraging the use of commercial tobacco products (Edgerly et al. 2009).
Safety
The work of many health organizations includes interaction with clients in situations that can result in injury or death if safety is not a fundamental organizational value. Clinical health care facilities, hazardous material processing, and water quality processing are examples of settings where processes need to be as safe as possible. Fortunately, excellent guidelines for promoting cultures of safety are emerging in organizations that are committed to safe practices. These include applying labels such as “cultures of safety” and “fair and just culture.” The lessons from these cultures apply broadly to all health organizations to some extent. They are not restricted to highly hazardous settings.
Fair and Just Culture
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A fair and just culture is one that learns and improves by openly identifying and examining its own weaknesses. The fact that employees feel they are supported and safe when voicing concerns is a critical aspect. Employees are able to speak safely on issues regarding their own actions, the actions of others, and the surrounding system. They feel safe and emotionally comfortable while at work, performing at peak capacity but able at any moment to admit weakness, concern, or inability. Further, they are able to seek assistance when concerned that the quality and safety of the services being delivered are threatened. Employees are comfortable monitoring others, detecting excessive workloads, and redistributing the work. They feel as accountable for maintaining a safe environment as they do for excellence in their job duties. They know they are accountable for their actions but will not be blamed for system faults in their work environment that are beyond their control (Frankel, Leonard, and Denham 2006; Marx 2001). Other industries, particularly airlines, have adopted and worked within this culture for many years. Pilots are trained to understand and admit their weaknesses and acknowledge concerns and hazards to fellow workers. The result has been a strong record of safety for many years.
Organizational values of safety and learning are promoted at the departmental level in fair and just cultures. A behavioral norm in such departments is to look for risks and to report them because they are viewed as opportunities to learn and improve the services of the organization.
Some managers and employees raise the concern that too much reliance on a fair and just culture may diminish individual accountability to unsafe levels. However, punitive action is not abandoned in a fair and just culture, because workers are still held personally responsible if they purposefully cause harm or consciously take unjusti ied risks. The balance is shifted, though, toward addressing and then eliminating root causes at the system level that may lead to individual mistakes. Some organizations use the following algorithm to determine individual versus system responsibility:
1. Did the employee intend to cause harm?
2. Did the employee come to work drunk or equally impaired?
3. Did the employee knowingly and unreasonable increase risk?
4. Would another similarly trained and skilled employee in the same situation act in a similar manner?
If the answers to the irst three questions are no and the answer to the last question is yes, responsibility is investigated at the system level (Frankel et al. 2006).
Culture of Safety
A culture of safety provides guidance that is analogous to the fair and just culture but addresses a different organizational need. A culture of safety continuously seeks to minimize harm to customers or clients that may result from the processes used to deliver goods, programs, or services. Not acting when conditions are unsafe or safety protocols have been breached is unacceptable in a culture of safety. Teamwork and openness to innovation should be prominent values in the pursuit of organizational safety. At the same time, an organization must maintain clarity of goals and individual responsibility and accountability.
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High-Reliability Organization
The concept of a high-reliability organization is closely linked to a culture of safety. High-reliability organizations (HROs) strive to maximize reliability of organizational operations and services when the consequences of error can be disastrous. Examples of HROs include nuclear facilities, air traf ic control systems, many types of clinical health services, continuous processing irms, and ire ighting crews. Establishing and maintaining an underlying HRO structure constitutes an organizational commitment to values and behaviors that increase reliability, improve responses to surprises, and reduce the probability of errors.
A key trait of HROs is that they are mindful (Weick and Sutcliffe 2007). Workers in mindful organizations pay attention to the low of critical processes and have a rich awareness of discriminatory detail. Mindful organizations devote time to examining operational failures as well as observing normal operations and their effects. They identify and use experts to develop resilience and improve their ability to manage unexpected events.
Creating a culture of mindfulness requires organizational commitment and infrastructure in at least four areas. Top managers must make a clear commitment to mindfulness in their beliefs, values, and actions. Such a commitment must be consistently and credibly communicated to employees and service recipients (customers). The commitment must be perceived by workers as being consistent rather than hypocritical. Rewards (money, promotion, approval, or recognition) must low toward those who act mindfully and away from those who do not. Mindful culture guidelines emphasize the need to “walk the talk.” Employees are quick to recognize hypocrisy in organizational values if the values are not modeled by managers and if pursuit of the values by workers is not recognized and rewarded.
Learning
Learning is another important value of the improvement-driven health organization. Learning includes gaining new information based on science and from data and evidence generated from scienti ic research. When learning is valued in an organization, workers improve processes and structures in the ields for which they have been trained. Learning organizations create and capture knowledge,
disseminate it to all employees, and apply it in their products and services. Creating knowledge requires some understanding of the scienti ic method, data collection, and analysis, but knowledge creation or collection can be successfully undertaken by any individual or unit in the organization. Disseminating knowledge can occur through internal publications, Web sites, presentations, reports, databases, and libraries. Applying knowledge means using it to change structures and processes with the goal of improving the delivery and quality of products, programs, and services. Flexibility in approaches, protocols, and processes is an assumption underlying a learning organization.
Recent proposals for health system transformation include learning as the central feature of a value-driven system. In a transformed system, organizations practice transparency, evidence-based decision making, and continuous learning (Institute of Medicine 2009). Because many health organizations must be responsive to local government and community activists and leaders, transparency is an important internal value. In these organizations, proactive emphasis and focus on transparency counter the natural tendency of individuals to protect themselves by withholding negative information.
Movement toward learning as a cultural value is re lected by infrastructure support in the form of
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centers for learning and innovation and appointment of top leaders to guide learning activities. Many leading organizations are investing in such positions and centers.
The value of learning through scienti ic research and evidence is central to the mission of many health organizations. Evidence-based management is a movement that attempts to promote the better use of scienti ic evidence in strategic and operational decision making. Currently, relatively little use is made of scienti ic evidence in making managerial decisions. Managers typically have minimal preparation in statistics and rarely have training in epidemiology. Outcomes (success or failure) are often simply accepted. Reasons for administrative success or failure (causes) are not sought using the tools of statistics or epidemiology. As a result, conclusions may be lawed. Evidence-based management seeks to use a more scienti ic approach to determining how decisions are made and evaluating their correctness.
Proponents of evidence-based decision making suggest several strategies for building a culture that promotes the use of evidence. Strategies include organizing research rounds, management research journal clubs, and research seminars; analyzing the results of past decisions and comparing them with the performance of other organizations; conducting staff development training to enhance managers’ abilities to locate, assess, and apply research indings; linking compensation with measures (metrics) related to obtaining and using evidence in decision making; and developing guidelines for decision making that require assessment of evidence (Kovner and Rundall 2006). Astute managers can help organizations transition from making decisions based solely on political considerations to making decisions that include both politics and evidence derived from empirical research. Making such a shift requires that they expose their employees to new research and that they model evidence-based management.
Collaboration
Collaboration is another important attribute of most high-performing health organizations. Teamwork and collaboration usually occur together. Teamwork is de ined as sharing duties and responsibilities. Collaboration refers to sharing knowledge and information. Collaboration can occur internally and involve professionals from diverse or functional specialties, or it can occur externally and involve community stakeholders. Teamwork and collaboration are synergistic when both occur simultaneously.
Cultures of safety and cultures that respect diversity, in particular, cannot thrive unless individual employees collaborate, communicate, and mutually adjust to each other’s work practices. For example, interprofessional teams provide services in many health organizations. By understanding and appreciating differences and strengths of all applicable professional cultures, teamwork will be increased, and the quality of products, services, and programs produced or delivered by the team will be improved.
Service
Service is a inal salient feature of organizations that continuously strive to improve quality and performance. These organizations are successful because they are able to deliver value by focusing on service to inal recipients, be they consumers, customers, clients, or patients. Structures that support service in organizations oriented to the needs of consumers are discussed in Structuring for Improvement (Chapter 6 (chapter06.html) ). Promoting service as a cultural value requires managers
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who model, recognize, and reward workers who deliver high-quality service. These organizational leaders convey passion and inspiration through stories, presentations from consumers, and publicly recognizing consumer service heroes and heroines.
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9.5 STRATEGIES FOR CULTURE CHANGE
As noted at the beginning of the chapter, implementing new cultures is dif icult. To be successful, it requires both a commitment to goals and hard work. The discussion on Managing Change (Chapter 17 (chapter17.html) ) covers several strategies for organizational change. All of these can be applied to changing organizational cultures. When attempting to change underlying values, norms, beliefs, or assumptions, three strategies are especially relevant.
First, because culture change is so fundamental, the enthusiastic support of top management is essential. As noted earlier, the new values, norms, beliefs, and assumptions must also appear to be credible and real to workers, rather than luff and rhetoric. This is best conveyed by personal example.
Second, cultural change experts note the importance of developing a new or changed culture through the use of rewards, incentives, and public recognition. Recognizing individuals who report safety hazards is an example of such a change. Modifying a reward system is a statement that an organization is willing to spend resources to achieve the change. Again, it is unrealistic to expect attitudes and behavior to change solely in response to verbal exhortations. Expressed differently, only words that are supported by actions have credibility.
Finally, because values are so closely and deeply held by individuals, consideration of terminating or moving those who are uncomfortable with the new culture is often part of any process or program of cultural change. For example, if training and education fail to create an appreciation for customer service or cultural diversity, it may be necessary to move some individuals aside, through termination or transfer. This aspect of cultural change also emphasizes the importance of selecting new managers and employees who embrace the new values and socializing existing employees into the new culture.
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CONCLUSION
Culture gives meaning to the workplace. Health organization work is intensely meaningful to many managers and workers, and the culture of the workplace is critical to developing and tapping into that sense of meaning. Together, managers and employees can create health organization cultures that move employees to improve and add value on a continuous basis. In those cultures, managers model, reward, and enforce values such as safety, learning, transparency, collaboration, and service. Stories and other symbols of the cultural values and norms re lect and reinforce those values throughout the organization.
Systems Thinking about Culture
Cultures exist at all system levels. Within organizations, cultures form at the levels of teams or groups, subunits, units, departments, divisions, and the organization as a whole.
Managers are responsible for assessing and aligning, to some degree, the culture of their subunits with the culture of the organization and for promoting broad, organization-wide values and norms. This does not mean that subunit cultures must be standardized. In complex organizations, units may be pursuing different goals. Different subunits may require different cultures. Managers should take into account the local conditions of each subunit, including knowledge of the cultures that workers bring to the workplace. Using the Goffee and Jones (1998) classi ication, for example, it may be advantageous for units with large numbers of professional workers to establish a fragmented or networked (low solidarity) culture that recognizes differences in goals that are associated with a variety of professional cultures. A work unit with a high proportion of young employees may function better with a more networked or communal culture (high sociability).
Effective complex organizations are held together by a strong common culture but allow for internal diversity in both the activities (e.g., production, marketing, or distribution) and cultures of subsystems.
CASE STUDY RESOLUTION
Returning to Moira and her musings, a knowledgeable observer might suggest that she begin by assessing the values presently espoused by her organization and by its employees. Then, she should compare those values to the actual performance of the organization, pointing out where new values are needed or existing ones are not really followed. The next step is to create a plan to help employees accept and adopt the new organizational values. Valuing customer service provides a logical starting point. Good customer service is always appreciated. Poor customer service can cause any group or organization to fail.
Once customer service is accepted as an organizational value, performance targets can be set, employees can be trained, and incentives can be used to reinforce change. After customer service levels are improved, other changes can be introduced. Convening focus groups to get employee input should improve acceptance of changes. Moira should frequently monitor progress toward her goals. Employees who make signi icant contributions should be publicly recognized. The process will require time and effort, but the results should more than compensate for the work involved.
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REFERENCES American College of Healthcare Executives. 2007. ACHE code of ethics. http://www.ache.org
/abt_ache/code.cfm#profession (http://www.ache.org/abt_ache/code.cfm#profession) (accessed July 12, 2011).
Cameron, K. S., and R. E. Quinn. 2005. Diagnosing and changing organizational culture. San Francisco: Jossey-Bass.
Deal, T. E., and A. A. Kennedy. 1982. Corporate cultures. Reading, MA: Addison-Wesley. Edgerly, C. C., S. S. Laing, A. G. Day, P. M. Blackinton, N. L. Pingatore, R. T. Haverkate, and J. F. Heany.
2009. Steps to a healthier Anishinaabe, Michigan: Strategies for implementing health promotion programs in multiple American Indian communities. Health Promotion Practice 10 (2, Supplement): 109S–17S.
Frankel, A. S., M. W. Leonard, and C. R. Denham. 2006. Fair and just culture, team behavior, and leadership engagement: The tools to achieve high reliability. Health Services Research 41 (4, Part II): 1690–709.
Goffee, R., and G. Jones. 1998. The character of a corporation. New York: Collins. Hofstede, G., and G. J. Hofstede. 2004. Cultures and organizations. 2nd ed. New York: McGraw-Hill. Huber, G. P., and K. Lewis. 2010. Cross-understanding: Implications for group cognition and
performance. Academy of Management Review 35 (1): 6–26. Institute of Medicine. 2009. Leadership commitments to improve value in health care: Finding common
ground: Workshop summary. Washington, DC: National Academies Press. Kovner, A. R., and T. G. Rundall. 2006. Evidence-based management reconsidered. Frontiers of Health
Services Management 22 (3): 3–22. Marx, D. 2001. Patient safety and the “just culture.” http://www.mers-tm.org/support
/Marx_Primer.pdf (http://www.mers-tm.org/support/Marx_Primer.pdf) (accessed February 4, 2011).
Public Health Leadership Society. 2002. Principles of the ethical practice of public health. http://www.apha.org/NR/rdonlyres/1CED3CEA-287E-4185-9CBD-BD405FC60856 /0/ethicsbrochure.pdf (http://www.apha.org/NR/rdonlyres/1CED3CEA-287E-4185-9CBD- BD405FC60856/0/ethicsbrochure.pdf) (accessed August 15, 2010).
Weick, K. E., and K. M. Sutcliffe. 2007. Managing the unexpected: Resilient performance in an age of uncertainty. 2nd ed. San Francisco: Jossey-Bass.
Williamson, G. 2007. Providing leadership in a culturally diverse workplace. AAOHN Journal 55 (8): 329–55.
RESOURCES
Periodicals
Goffee, R., and G. Jones. 1996. What holds the modern company together? Harvard Business Review 74 (6): 133–48.
Lovelace, K. 2001. Multidisciplinary top management teamwork: Effects on local health department performance. Journal of Public Health Management and Practice 7 (1): 21–9.
Riley, W., S. E. Davis, K. K. Miller, and M. McCullough. 2010. A model for developing high-reliability
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teams. Journal of Nursing Management 18 (5): 556–63. Singer, S., A. Falwell, D. Gaba, M. Meterko, A. Rosen, C. W. Hartmann, and L. Baker. 2009. Identifying
organizational cultures that promote patient safety. Health Care Management Review 34 (4): 300–11.
Books Kovner, A. R., D. J. Fine, and R. D’Aquila. 2009. Evidence-based management in healthcare. Chicago:
Health Administration Press. Schein, E. H. Organizational culture and leadership. 2nd ed. San Francisco: Jossey-Bass.
Web Sites • Agency for Healthcare Research and Quality, Patient Safety Network:
http://www.psnet.ahrq.gov (http://www.psnet.ahrq.gov) • Centers for Law and the Public’s Health: http://www.publichealthlaw.net/
(http://www.publichealthlaw.net/)
• Geert Hofstede Cultural Dimensions: http://www.geert-hofstede.com/ (http://www.geert- hofstede.com/)
• Institute for Healthcare Improvement: http://www.ihi.org/IHI/Topics/PatientSafety (http://www.ihi.org/IHI/Topics/PatientSafety)
• Public Health Code of Ethics, Public Health Leadership Society: http://www.phls.org /home/section/3-26/ (http://www.phls.org/home/section/3-26/)
• Transcultural Nursing: http://www.culturediversity.org/ (http://www.culturediversity.org/)
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SECTION III
Facilitating Improvement
This section of the book covers the managerial activities classi ied as facilitating. Developing Self and Others (Chapter 10 (chapter10.html) ) addresses the growth and development of people in the workplace. Motivating for Improvement (Chapter 11 (chapter11.html) ) shows how managers can engage the hearts and the minds of employees. Collaborating Inside the Organization (Chapter 12 (chapter12.html) ) focuses on teamwork and collaboration, which are both increasingly necessary to produce high-quality and valued programs and services. Collaborating Outside the Organization (Chapter 13 (chapter13.html) ) continues the theme of collaboration, this time with external stakeholders.
From the Association of Schools of Public Health (ASPH) inventory of core competencies (Association of Schools of Public Health 2010), this section (Section III (section03.html) ) contributes to ful illing two competencies in the disciplinary area of Health Policy and Management:
• Demonstrate leadership skills for building partnerships.
• Apply “systems thinking” for resolving organizational problems.
As with the section on organizing for improvement (Section II (section02.html) ), this section also contributes to learning around selected ASPH competencies from the three cross-cutting domains of Program Planning, Systems Thinking, and Diversity and Culture. This section additionally contributes to building the two cross-cutting domain competencies of Professionalism and Leadership. From the Healthcare Leadership Alliance competency framework (Healthcare Leadership Alliance 2010), this section emphasizes the competency domain of Professionalism and the competency domain of Communication and Relationship Management.
REFERENCES Association of Schools of Public Health. 2010. MPH core competency model. Final Version 2.3.
http://www.asph.org/document.cfm?page=851 (http://www.asph.org /document.cfm?page=851) (accessed February 22, 2011).
Healthcare Leadership Alliance. 2010. Overview of the HLA competency directory. http://www.healthcareleadershipalliance.org /Overview%20of%20the%20HLA%20Competency%20Directory.pdf (http://www.healthcareleadershipalliance.org
/Overview%20of%20the%20HLA%20Competency%20Directory.pdf) (accessed July 13, 2011).
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CHAPTER
10
Developing Self and Others
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Understand the relationship between workplace performance and individual physiology, personality, emotional and social intelligence, and competencies.
• Identify four ways to pursue self-development. • Understand the importance of developing other employees. • Be able to describe three ways managers can develop employees. • Identify characteristic features of organizations that encourage employee development.
CHAPTER SUMMARY
Self-development begins with self-understanding. Learning more about their own physiology, personality, emotional intelligence, social intelligence, strengths, and competencies leads to insights that enable individuals to improve their performance, address weaknesses, and identify strengths. Competencies for collaboration and diversity management are particularly important in health organization work. Self-development occurs through soliciting and acting on feedback from others, addressing gaps in competencies, building around strengths, understanding and meeting the needs of the workplace, and continuing education in evidence-based management. Managers can develop employees by encouraging them to share self-assessments, exposing employees to growth opportunities in work, urging them to continue to learn (whether in formal or informal settings), and providing constructive and systematic feedback. Organizations can develop employees through performance review systems that include individualized development plans, education and training opportunities, and widespread coaching and mentoring.
CASE STUDY
The overcast, gray sky provided a itting backdrop. Henry and Josepha were having a discussion. To clarify, Henry was complaining about his job situation; Josepha was lending a sympathetic ear.
“My job is the pits. I can’t seem to make progress. My boss gives me assignments and expects miracles. The people who I have to work with don’t seem to know much about how to run an agency. You would think that they were all related to Jimmy Durango, the Health Commissioner. As a result, my
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career is stalled. I feel stuck and…”
“Enough!” interrupted Josepha. “You are repeating yourself. One rendition of your troubles is suf icient for today. You have been complaining for months now. It’s time to get some professional advice.”
“Who could help me?” moaned Henry.
“Dr. Lombard. You remember him, the director of our public health program at the university. He always seemed to have useful advice when we were students. Let’s call him and see what he says.”
“Good idea,” agreed Henry. “Do you have his number?”
“I think so. Let me look,” mumbled Josepha, looking into her briefcase.
While Josepha searches for the telephone number, what advice would you offer to Henry?
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10.1 INTRODUCTION
Most employees in health organizations intrinsically understand the value of self-development. Many of them have already pursued higher education in a specialized ield, such as nursing, nutrition, community health, or medicine, and take pride in keeping up with the latest technical knowledge. In a similar vein, managers require opportunities for continuing their education about the latest evidence- based management practices. But managers also need to engage in continuous learning of a different type—understanding their own strengths and weaknesses as supervisors and organizational leaders, improving their weak areas, and learning how to develop their employees.
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10.2 UNDERSTANDING SELF
A irst step in the development process, particularly as development pertains to interpersonal skills, is self-understanding. Self-improvement is dif icult, as is understanding and coaching others, without accurate insight into personal motives, strengths, weaknesses, and competencies.
Physiology
At a core physiological level, scientists are beginning to learn more about how chemical and neural responses both re lect and in luence behavior. For example, using brain scans, researchers have observed that compared to poor listeners, the neural activity in good listeners more closely mirrors the neural activity of the speakers to whom they are listening. The stronger the resemblance in brain activity, the better is a listener’s comprehension of a speaker’s message (Stephens, Silbert, and Hasson 2010). Being hungry and feeling physical pain can activate neural responses that are similar to feelings of being ostracized. Rock (2009) argues that the brain is a social organ. A threat response in the brain is actuated by feelings such as uncertainty, reduced autonomy, distrust, and inequity. Many experts feel that in the coming years, there will be an explosion of discoveries about how human physiology and workplace behavior interact.
Labeling and reappraising these natural responses is one way to control their effects. Managers who are pro icient at reading these physiological responses in themselves and others are better able to resist their own personal tendencies toward reactive behavior and convey feelings of psychological safety to others.
Personality
It also is important to understand typical human patterns of emotion, thought, and behavior in the workplace. A framework for thinking about key human characteristics that in luence cognition, emotions, and behavior is presented in Figure 10–1 (http://content.thuzelearning.com/books /Fallon.9852.17.1/sections/90# ig101) . At the core of human beings are personality traits that guide their individual reactions to everyday events. The concept of personality is nebulous; de initions and ways of classifying personality vary. However, in general, personality traits are relatively permanent and deep- seated and are formed through a combination of genetics and experiences, particularly in the early years of life. Personality traits are dif icult to change after the formative early years.
FIGURE 10–1 Key Dimensions of Self
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One popular classi ication of personality dimensions, known as the Big Five (Fiske 1949; McCrae and Costa 1987), identi ies ive key traits of the human personality:
1. Neuroticism: the tendency to be calm, secure, and self-satis ied versus being anxious, insecure, and moody
2. Extraversion: the tendency to be sociable, emotionally expressive, and assertive versus being retiring, somber, and reserved
3. Openness: the tendency to be imaginative, independent, and interested in variety versus being practical, conforming, and interested in routine
4. Agreeableness: the tendency to be altruistic, kind, and, trusting versus being ruthless, suspicious, and uncooperative
5. Conscientiousness: the tendency to be thoughtful, organized, and mindful of details versus being disorganized, careless, and impulsive
The Big Five personality dimensions often are useful in personal development through self-re lection and private counseling. They may be less useful in public or workplace contexts because they label people in ways that may not be socially acceptable.
A commonly used instrument for both self-understanding and understanding others is the Myers- Briggs Type Indicator (MBTI®), which summarizes an individual’s preferences for taking in information and then making decisions. Individuals are classi ied into 1 of 16 personality types based on scores related to the four dimensions. The dimensions are anchored by opposite preferences. People use all of the preferences at different times in their lives. Although the preferences are equally valuable and useful, most people ind one preference in each pair to be more interesting or comfortable. The four dimensions are:
1. Introversion ↔ Extraversion: This dimension assesses where people focus their attention—on the outer world of people or things or on the inner world of ideas and impressions.
2. Sensing ↔ Intuition: This dimension assesses the way people take in information—from their ive senses (smell, sight, touch, taste, and hearing) or from their imagination.
3. Thinking ↔ Feeling: This dimension assesses the way people make decisions—based on objective analysis and logic or based on values and people-centered concerns.
4. Judging ↔ Perceiving: This dimension assesses how people interact with the outer world—using a planned and orderly approach or being spontaneous and lexible.
Knowing personal tendencies on these key dimensions helps both managers and workers understand and better modulate their reactions to workplace activities. The MBTI® has been widely used for team development as well. This application helps team members to understand the contributions and behaviors of people who are different (as measured by their MBTI® categories).
Compared to the Big Five personality dimensions, there is less social pressure to be at a particular end of the continuum for the four MBTI® dimensions, although the introversion–extraversion
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dimension frequently provides an exception to this rule. In jobs that require interpersonal interaction, a social preference for extraversion often exists.
Emotional and Social Intelligence
Assessments of emotional and social intelligence also are useful to many managers seeking a better understanding of their behavior in the workplace. Emotional intelligence refers to how people behave in private and public situations. According to Goleman (1998), emotional intelligence is composed of personal competence for self-awareness, self-regulation, and motivation and social competence for empathy and social skills. Self-aware individuals know their internal states, preferences, resources, and intuitions. They accurately see themselves. They have a strong sense of self-worth. Self-regulating individuals can hold disruptive impulses in check. They are honest and trustworthy, as well as conscientious and lexible. In handling relationships, a socially competent individual is aware of others’ feelings, needs, and concerns, and values diverse perspectives. The social skills of in luencing others, communicating, managing con lict, leading, managing change, nurturing relationships, cooperating, and working well in teams are hallmarks of people who have high social intelligence. Several instruments exist to measure emotional and social intelligence, although many have not been empirically evaluated.
Another popular approach to self-assessment is based on the notion that a strengths-based development program is more likely to be successful than one that focuses on weaknesses. A variety of self-assessment instruments are available for identifying strengths, including the Gallup organization’s StrengthsFinder® (Rath 2007). Using 34 distinct themes, this instrument identi ies areas where an individual has the greatest potential for building strengths. Themes are comprised of categories of talents, which are de ined as recurring and consistent patterns of thought, feeling, or behavior. Examples of the themes include: Learner (having a great desire to learn and wanting to continuously improve), Positivity (having an enthusiasm that is contagious), Achiever (having a great deal of stamina and working hard; taking great satisfaction from being busy and productive), and Competition (measuring progress against the performance of others; striving to win irst place or inish irst).
Competency
Many self-assessments used in the workplace are based on competencies. A competency is an “effective application of available knowledge, skills, attitudes, and values in complex situations” (Calhoun et al. 2002, 18). It is common for organizations to de ine the competencies required to complete speci ic types of jobs and to set developmental goals for employees based on those competencies. Many formal educational programs, including those leading to a Master of Public Health (MPH) degree and Master of Healthcare Administration (MHA) degree, are moving toward competency-based curricula (Association of Schools of Public Health 2010; Commission on Accreditation of Healthcare Management Education 2011; Healthcare Leadership Alliance 2010).
Competency for collaboration is an area of self-assessment that is important in health organization work. For example, the Collaborative Leadership Program, sponsored by Turning Point and funded by the Robert Wood Johnson Foundation, offers six self-assessment instruments (along with training materials) that focus on the collaboration competencies of assessing a workplace environment, visioning and mobilizing, building trust, sharing power and in luence, developing people, and self- re lection (Leadership Development National Excellence Collaborative 2005).
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Many people ind that diversity management skills are useful to assess and develop because of the importance of sensitively and sensibly working with individuals from a variety of cultures and socioeconomic strata in the health workplace. An assortment of instruments, such as the Intercultural Development Inventory (IDI®), are available for self-assessment of diversity competencies (IDI 2010). The IDI® measures the capability of accurately understanding and adapting behavior to cultural differences and commonality. It also classi ies respondents along an intercultural development continuum.
Soliciting Feedback
Understanding one’s self requires soliciting feedback about strengths and weaknesses as a manager. Identifying weaknesses requires commitment, energy, and focus. Admitting to weaknesses can evoke feelings of inadequacy and failure. Identifying weaknesses requires soliciting feedback about personal behavior and performance. A irst place to start is collecting personal feedback, privately, by keeping track of plans, targets, and performance. Addressing the following questions may be helpful: “In what areas do I seem to perform effectively?” “What tasks do I look forward to tackling?” “What types of work or projects do I avoid, put off, or complete less than adequately?” “How do I relate to my employees and colleagues?”
The concept of 360-degree feedback is useful in developing self-understanding. Feedback from 360 degrees means gathering information from the full circle of work relationships—below (subordinates), beside (colleagues), and above (supervisors). It also includes soliciting feedback from customers or clients about work habits and outcomes. Personal development requires proactively soliciting feedback and honestly listening to it. After each presentation given to classes, professional associations, or people in other forums, one colleague of the authors asks, “How did that go? Is there anything you recommend I change?” This colleague has made a habit of developing himself by listening to others’ feedback. He pays attention, asks follow-up questions, and expresses his appreciation for the feedback. Of course, the source of any feedback must be considered. Filtering is sometimes necessary because not all feedback is representative, well informed, or constructive. The habit of iltering reinforces the habit of soliciting feedback.
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10.3 DEVELOPING SELF
After acquiring an understanding of self and personal competencies, addressing gaps in performance of key managerial competencies is the next required step in the process of personal development. Peter Drucker (1999, 69) advised, “Do not try to change yourself—you are unlikely to succeed. But work to improve the way you perform.” His advice speaks to the relative permanence of many of the human characteristics noted in Figure 10–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections /90# ig101) and the depth of energy and time that is required to transform those characteristics.
In many organizations, resources are available for improving competencies. In others, employees must be proactive about identifying resources. In the absence of such assistance, people must use their own time and resources to continue to learn and grow.
Developing and promoting one’s strengths are highly recommended as well. Some experts argue that, in general, developing strengths is more feasible and pays off more than addressing weaknesses. As already discussed, the Strengths-Finder® methodology is an example of the strength-based approach. It moves from identi ication of talents to investment in those talents through practicing, developing skills, and building knowledge. The resulting product is a strength, which is de ined as the ability to provide near-perfect performance on a consistent basis (Rath 2007).
In addition to building on strengths, Drucker (1999) noted one other tactic for self-development: understanding the requirements of one’s workplace and unit. To the extent that the primary goals and strategies of one’s organization are understood, it becomes easier to focus on developing the skills that will be rewarded in that organization. This tactic is particularly useful in organizations that are interested in continuous quality improvement and customer service. Managers can be proactive in identifying opportunities to improve their organization and positioning themselves and their units to make those improvements.
Personal development also includes keeping up with the growth in the knowledge base of one’s discipline. There is a new and growing interest in evidence-based management, or the “the systematic application of the best available evidence for the evaluation of managerial strategies” for improving performance (Kovner and Rundall 2006, 6). In the future, managers are more likely to be required to defend their practices based on scienti ic evidence, rather than relying on the rationale, “That’s the way we’ve always done it here.”
Keeping up with technical developments in health management is facilitated by joining and participating in professional organizations such as the American Public Health Association or the American College of Healthcare Executives, reading current literature, and attending related presentations. It can also mean enrolling in formal continuing education or degree coursework. University-based or commercial education and training programs in such areas as quality improvement are available in increasing numbers. Internal organization training programs are another source of continuing development for practicing managers in larger organizations.
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10.4 DEVELOPING OTHERS
Managers are responsible for helping employees understand and develop themselves. One way to do this is to sponsor, role model, and encourage sharing of self-assessments in discussion group forums. This is particularly useful for employees who work together closely in interdependent teams, because it facilitates cross-training and understanding. Sharing results of the MBTI® or another validated personality tool is one useful way of promoting more collaborative teams. However, some employees may consider such information to be too private to share, and their wishes should be respected. Instruments that focus on team-speci ic behavior are more palatable to many employees for group discussion than are individual personality inventories.
A second managerial strategy for developing others is to give employees successively challenging growth experiences on the job. This can happen through designing new tasks or delegating existing tasks. Delegation is an underused technique for developing employees, often avoided because managers do not prioritize development of their employees highly enough. It is important that managers assist employees to succeed though delegation, rather than dropping off a task and inal deadline and saying, “Good luck.” An assignment should be clear, and its importance should be clearly conveyed to the employee in a face-to-face meeting. Performance targets and deadlines should be speci ied, and employees should be given some autonomy in deciding how best to accomplish the task. Micromanaging the process is counterproductive to an employee’s development. However, a balanced approach to monitoring progress and suggesting potential ways to overcome barriers is appropriate. Finally, employees should be recognized for any accomplishments, to reinforce their work and set the stage for further development.
A third managerial strategy for development, providing constructive performance feedback, is expanded on in our discussion of organizing human resources (Chapter 8 (chapter08.html) ) in the context of effective human resource practices. Some of these preferred practices include the following:
• Make an appointment or ask a potential recipient of feedback whether the present is a convenient time to provide such information.
• Deliver feedback in a private place.
• Describe perceptions of the other person’s behavior using speci ic examples that have been personally observed.
• Provide feedback on both positive and negative behaviors.
• Be supportive and encouraging, focusing on desired behaviors.
• After giving feedback, give the recipient time to respond.
• Use the opportunity to develop a joint action plan.
• Identify ways to make positive contributions to improving the employee’s behavior.
Although some managers can be too blunt and insensitive in delivering feedback, others can be too sensitive, avoiding confrontation and understating an employee’s weaknesses. Both the employee and the organization are better served by clear and open communication. Direct statements are usually
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appreciated. Do not avoid important issues. If the problems are dif icult to discuss, seek support from human resources professionals to plan the meeting and role-play the session in advance. Remember that helping underperforming employees to improve or move on to better- itting positions is an important organizational responsibility.
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10.5 ORGANIZATIONAL STRATEGIES FOR EMPLOYEE DEVELOPMENT
It is relatively easy to identify organizations that put a priority on employee development. In those organizations, employee development is a critically important organizational activity. Managers are trained in employee development strategies and are assessed on the development of their employees. Everyone in the organization has an individualized development plan, there is an abundance of education and training programs that focus on leadership, and coaching and mentoring are widely used.
Individualized Development Plans
Performance review systems that mandate individualized development plans are integral to widespread employee development. Plans typically set goals for 90 days, 6 months, or 1 year. Managers set goals jointly with employees, agreeing on challenging but attainable targets. Monitoring progress at 30-day or other appropriate intervals helps to avoid surprises at the end of the speci ied period. Monitoring progress also allows for updating of goals along the way, as other priorities may arise or unforeseen complications may affect goal achievement.
Some experts advise classifying employees into high-, medium-, and low-performance categories, which allows for easier customization of development plans. The goal for low-performing employees is to raise them to the medium performance level; if that proves impossible, then the goal is to move them to other positions or out of the organization. The goal for medium-performing employees is to retain them and to move them to the high-performing level. The goal for high-performing employees is to retain them and to build their foundation for moving into higher positions in the organization. Although some high-performing individuals may leave the organization for better or more timely opportunities, they are likely to leave even sooner (or decrease their level of performance) if their contributions are not appreciated.
Not all development should be focused on individuals, as teams increasingly are the delivery units for many health services. Team development follows the same process as individual development, with key steps such as identifying performance goals, assessing team performance, and monitoring progress.
Management and Leadership Education Programs
If energized and well-trained employees are essential for organizational success, then their development must be an organizational priority. Many large organizations have internal development institutes that offer a wide range of learning opportunities and courses for employees. Often the coursework is developed based on an organization-wide framework of competencies expected of individuals and teams.
In organizations committed to employee development, budgets for internal training and support of external education of employees are the last to be cut, rather than the irst. Top-level executives, including the chief executive of icer (CEO), participate in teaching and taking courses.
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Coaching and Mentoring
The past decade has seen a rapid growth in the use of coaches and mentors for building management and leadership talent. Coaching is one-on-one advising from a professional coach, often offered only to high-potential employees. Coaching often combines interpersonal skills advising and development with advising about strategic organizational priorities.
Like coaching, mentoring is also typically a one-on-one advising activity. Mentoring involves a long- term relationship with a more experienced person, who usually serves without pay. Mentors facilitate personal and professional growth by sharing the knowledge and insights that they have learned through the years. Effective mentoring can create opportunities for collaboration with new partners, goal achievement, problem solving, and career growth.
Large organizations often have formal, internal programs for both coaching and mentoring. Smaller organizations may link managers to independent coaches or to external mentors.
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CONCLUSION
High-performance organizations are driven by high-performing employees. These employees understand themselves well and modulate their workplace behavior, particularly their interaction with others, based on their self-understanding. They exhibit high emotional and social intelligence and master the competencies required in their jobs. In health organization workplaces, they exhibit strong collaboration and diversity management competencies. Managers in high-performing organizations are committed to employee development through providing constructive feedback and learning opportunities, and creating individualized development plans. At the same time, employees must take responsibility for their own self-development, seeking out feedback and growth experiences, and continuously improving their knowledge base and competencies. This win–win synergy satis ies both organizational and individual needs.
Systems Thinking about Developing Self and Others
The effect of managers’ feedback on employee performance can be used to illustrate the systems thinking tools of reinforcing loops and balancing loops. Recall that reinforcing loops (see Chapter 1 (chapter01.html) ) illustrate when change in one direction causes even more change in that same direction. If performance feedback creates performance change, a reinforcing loop is operating. In balancing loops, change in one direction causes resistance in the opposite direction.
Also recall that reinforcing loops can be positive, with change in the desired direction, or negative, with change in the undesirable direction. When performance feedback is constructive and supportive and performance change is positive, the result is a positive reinforcing loop. Over time, though, the positive reinforcing loop may be coupled with a balancing loop, such that performance stops improving or even declines. For example, suppose that improved performance comes at the price of employee burnout, from working too hard for too long. In that balancing loop, constructive and supportive feedback leads to burnout, which in turn decreases employee performance. Over time, the strength of the balancing loop overwhelms the positive reinforcing loop.
Systems thinking leads managers to re lect carefully on the long-term consequences of efforts to improve productivity. If the productivity improvements come at the expense of employee burnout, they may be counterproductive in the long run.
CASE STUDY RESOLUTION
Returning to the earlier conversation, Josepha handed her cellular telephone to Henry.
“Hello Dr. Lombard,” Henry began. “Josepha explained my situation. What can I do?”
“Henry, you must assume the responsibility for developing yourself and your interpersonal skills. Remember the competencies we discussed in class? It’s time to implement them. Let’s start by thinking about your job assignments as systems. You must train your workers. If you don’t, they will not know how to respond to your requests. Tell them what you want them to do, then praise them when they correctly perform their work. The feedback you provide will reinforce their actions, and their performance will improve. In fact, they’ll likely contribute new ideas that wouldn’t have occurred to you. You will create a positive reinforcing loop. The fact that you and your workers will both achieve
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your goals is a bonus, sort of an extended but still positive reinforcing loop.”
“Thanks,” said Henry, and he handed the phone to Josepha.
“Yes,” thought Josepha as the sun broke through the clouds.
REFERENCES Association of Schools of Public Health. 2010. MPH Core Competency Model. Final Version 2.3.
http://www.asph.org/document.cfm?page=851 (http://www.asph.org /document.cfm?page=851) (accessed February 22, 2011).
Calhoun, J. G., P. L. Davidson, M. E. Sinioris, E. T. Vincent, and J. R. Grif ith. 2002. Toward an understanding of competency identi ication and assessment in health care management. Quality Management in Health Care 11 (1): 14–38.
Commission on Accreditation of Healthcare Management Education. 2011. Criteria for Accreditation. http://www.cahme.org/Resources/Fall2013_CriteriaForAccreditation.pdf (http://www.cahme.org/Resources/Fall2013_CriteriaForAccreditation.pdf) (accessed November 17, 2011).
Drucker, P. 1999. Managing oneself. Harvard Business Review 77 (2): 64–74. Fiske, D. W. 1949. Consistency of the factorial structures of personality ratings from different sources.
Journal of Abnormal and Social Psychology 44 (3): 329–44. Goleman, D. 1998. What makes a leader? Harvard Business Review 76 (6): 93–102. Healthcare Leadership Alliance. 2010. Overview of the HLA Competency Directory.
http://www.healthcareleadershipalliance.org /Overview%20of%20the%20HLA%20Competency%20Directory.pdf (http://www.healthcareleadershipalliance.org
/Overview%20of%20the%20HLA%20Competency%20Directory.pdf) (accessed July 13, 2011).
Intercultural Development Inventory. 2010. Developing intercultural competence. http://www.idiinventory.com (http://www.idiinventory.com) (accessed December 11, 2010).
Kovner, A. R., and T. G. Rundall. 2006. Evidence-based management reconsidered. Frontiers of Health Services Management 22 (3): 3–22.
Leadership Development National Excellence Collaborative. 2005. Collaborative leadership. http://www.collaborativeleadership.org/ (http://www.collaborativeleadership.org/) (accessed December 11, 2010).
McCrae, R. R., and P. T. Costa. 1987. Validation of the ive-factor model of personality across instruments and observers. Journal of Personality and Social Psychology 52 (1): 81–90.
Rath, T. 2007. StrengthsFinder 2.0. New York: Gallup Press. Rock, D. 2009. Managing with the brain in mind. Strategy + Business 56: 2–9. Stephens, G. J., L. J. Silbert, and U. Hasson. 2010. Speaker–listener neural coupling underlies
successful communication. Proceedings of the National Academy of Sciences 107 (32): 14425–30.
RESOURCES
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Periodicals
Arndt, M., and B. Bigelow. 2009. Evidence-based management in health care organizations: A cautionary note. Health Care Management Review 34 (3): 206–13.
Begun, J. W. 2009. Realistic evidence-based management. Health Care Management Review 34 (3): 214–5.
Calhoun, J. G., K. Ramiah, E. M. Weist, and S. M. Shortell. 2008. Development of a core competency model for the Master of Public Health degree. American Journal of Public Health 98 (9): 1598–607.
Goleman, D., and R. Boyatzis. 2008. Social intelligence and the biology of leadership. Harvard Business Review 86 (9): 74–81.
Books Amelio, R. C. 2010. Managing a diverse workforce: The manager’s impact. In Managing the public
health enterprise, 37–44), eds. E. L. Baker, A. J. Menkens, and J. E. Porter. Sudbury, MA: Jones and Bartlett.
Kovner, A. R., D. J. Fine, and R. D’Aquila. 2009. Evidence-based management in healthcare. Chicago: Health Administration Press.
Patterson, K., J. Grenny, R. McMillan, and A. Switzler. 2002. Crucial conversations. New York: McGraw- Hill.
Rock, D. 2009. Your brain at work. New York: Harper Business. Studer, Q. 2003. Hardwiring excellence. Gulf Breeze, FL: Fire Starter Publishing. Velsor, E. V., C. D. McCauley, and M. N. Ruderman (Eds.). 2010. The Center for Creative Leadership
handbook of leadership development. San Francisco: Jossey-Bass.
Web Sites • Emotional Intelligence: http://www.unh.edu/emotional_intelligence (http://www.unh.edu
/emotional_intelligence)
• Evidence-Based Management: http://www.evidence-basedmanagement.com/ (http://www.evidence-basedmanagement.com/)
• Intercultural Development Inventory: http://www.idiinventory.com/ (http://www.idiinventory.com/)
• Myers-Briggs Type Indicator: http://www.myersbriggs.org/my-mbtipersonality- type/mbti-basics/ (http://www.myersbriggs.org/my-mbtipersonality-type/mbti-basics/)
• StrengthsFinder: http://www.strengths inder.com/ (http://www.strengths inder.com/)
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CHAPTER
11
Motivating for Improvement
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Understand intrinsic and extrinsic motivation. • Recognize content theories and process theories of motivation. • Be able to apply motivation theory when designing jobs and incentives.
CHAPTER SUMMARY
Improvement-driven organizations motivate employees to contribute their minds and their hearts, as well as their hands, to their organization. This requires managers to take into account the needs of individuals in addition to the needs of the organization. Understanding of the effects of job design, incentives, and rewards on motivation allows managers to provide for the needs of individuals and to align their personal growth and success with the success of the organization.
CASE STUDY
Sonja and Alice were discussing their supervisors.
“Mine is good,” said Sonja. “How is yours?”
“A dork,” Alice replied.
“Why?” asked Sonja.
“Well,” Alice paused to collect her thoughts. “He is rarely complimentary to anyone in our working group. He takes most of the credit for successful projects but rarely assumes responsibility for less than quality outcomes. I feel as if my job skills are getting stale. I’ve been quietly looking for another job, but the present economy is not helping. What makes your boss so good?”
“That is easy to answer,” Sonja began. Before she could continue, her phone chirped.
“Gotta go,” she said. “We’ll inish this conversation later.”
How do you think Sonja will describe her boss?
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11.1 INTRODUCTION
One powerful advantage for health organization managers is that the work of their organizations is intrinsically motivating for many employees. Most intrinsically motivated employees want to improve patient and population health, increase equity in the delivery of services, and provide excellent customer service. It is an unfortunate reality that many health organizations do not use this base of intrinsic motivation to launch a cadre of incredibly energized and powerful employees. Instead, many organizations and managers de-motivate employees through rigid job design, hierarchical controls, and lack of trust. Understanding motivation of employees is a irst step in building energized and energizing workplaces.
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11.2 THEORIES OF MOTIVATION
Explanations of motivation have been classi ied as content theories or process theories. Content theories seek to identify drivers internal to individuals that push them to greater commitment and effort. Process theories focus on activities or forces external to individuals that can be altered to motivate more commitment and effort. A key concept in both approaches is the distinction between intrinsic and extrinsic motivators.
Intrinsic versus Extrinsic Motivators
Intrinsic motivation comes from within an individual, while extrinsic motivation comes from the outside. Intrinsic motivators include idealism, power, learning, honor, vengeance, status, and other internally satisfying feelings. Extrinsic motivators include pay, bene its, accolades and recognition, or punishment. Health organization work is honorable and idealistic. It satis ies the desire of many individuals to improve the world, to make a difference in communities, and to serve others. The stories of many health leaders send this message in very powerful terms (DeBuono, Gonzalez, and Rosenbaum 2007). Management experts Pfeffer and Sutton (2007, 115) state that, “Because they are doing their jobs out of a sense of service and to make a difference, [people] often see more, not less, commitment and effort among public service employees.” Health organization work is a powerful intrinsic motivator.
Extrinsic rewards, like money and recognition, are important resources of management as well, but their effectiveness can wane over time. As someone once observed, “A raise is a raise for a day, then it’s part of your salary.” Employees continually rewarded, for example, through pay increases and compliments may begin to feel entitled to the monetary rewards or compliments. Some evidence suggests that using extrinsic rewards may reduce initial intrinsic motivation (Gagne and Deci 2005). Decreasing or terminating their extrinsic rewards can invite retribution from employees. Extrinsic rewards can be a substitute for doing the hard work of redesigning jobs so that they are more motivating.
Content Theories of Motivation
Content theories of motivation seek to identify universal internal drivers of human behavior. The most famous of these is Maslow’s hierarchy, which proposes that humans are driven by ive core needs, listed in order of importance from the lowest (most basic) to the highest level or type of need:
1. Physiological
2. Safety and security
3. Love and belonging
4. Self-esteem
5. Self-actualization
Graphically, the ive needs form a pyramid, with physiological needs at the base. Satisfying physiological needs (sleep, food, shelter, and immediate health) allows humans to worry about their longer-term security through establishing a family, investing in education, and having careers. At that
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point, needs for intimacy, connection, and friendship can be met. Next, con idence, respect, and identity become motivators, under the heading of self-esteem. Finally, at the apex of needs is self-actualization, the desire to live a life of purpose, and achieving one’s full potential.
Maslow’s hierarchy is an oversimpli ication, because needs change over time and in different situations and interact in more complex ways than a hierarchy can convey. However, Maslow’s hierarchy is an excellent starting point for thinking about the content of employee needs. Maslow’s hierarchy has high face validity; people ind it intuitively true. In terms of workplace applications, basic physiological and security needs are met by salary and bene its and extended by safe workplaces. Most health organizations meet those basic needs. They may also contribute to meeting needs for love and belonging, which are next on Maslow’s hierarchy. Similarly, many organizations have the potential to help meet employees’ self-esteem and self-actualization needs while achieving organizational goals as well.
Another strand of motivation content theory posits three key categories of needs: existence, relatedness, and growth (ERG) (Alderfer 1972). The three ERG categories are congruent with Maslow’s ive categories, but ERG theory argues that humans cycle through categories of needs, rather than
proceeding in an orderly fashion up a hierarchy. Alderfer also proposed that humans’ needs for growth are not satis ied by success. Rather, success merely fuels additional drive for growth. The workplace implications of ERG theory are useful. The workplace can contribute to and leverage natural drives for social relatedness and for continuous growth.
Psychologists also point out that humans can learn or acquire needs. Internal drives are not necessarily genetic. In particular, McClelland (1962) argued that three needs are learned: needs for achievement, af iliation, and power. Because individuals differ in the strength of these three needs, it is important for managers to understand their employees in terms of these dimensions. Most managers who have worked with underperforming employees would agree that some people do not exhibit a strong need to achieve. However, if such behaviors are learned, for example, from past experience in de- motivating work environments, they can be unlearned. This suggests that managers should work to turn around low performers and attempt to motivate them before concluding they cannot be changed.
Herzberg (1968) dug even deeper into the motivation puzzle and concluded that some rewards that satisfy do not really motivate extra effort from individuals. These rewards are referred to as hygiene factors, because like hygiene for personal health, the factors are necessary for preventing problems but do not guarantee improved outcomes. Examples of hygiene factors include job security, salary and bene its, and organizational policies and procedures. A different set of rewards, however, is positively associated with effort. These motivators are characteristics of work itself and how work is managed. They include responsibility, advancement, challenging work, recognition, achievement, and personal growth. Herzberg labeled them as satis iers. These motivators can be in luenced by an organization and its managers, so they create a strong foundation from which organizations can design jobs that motivate. In a similar manner, employees can proactively work to create such conditions in many work settings.
The ield of job enrichment (Hackman and Oldham 1976) derives from content theories of motivation. Most jobs can be enriched so that they come closer to meeting the human needs already expressed. Job enrichment expands the nature of tasks that an individual performs. Five characteristics of jobs are particularly amenable to enrichment:
1. Skill variety—the number of skills used in performing a task
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2. Task identity—the portion of a whole task performed by an individual
3. Task signi icance—the importance of the work to an organization
4. Autonomy—freedom to choose how a task is performed
5. Feedback—information about the quality and outcomes of a task
Enriched jobs allow employees to maximize their skills and to experience the impact of their jobs on their organization and its clients or customers. Strategies for enriching jobs include rotating employees through different assignments, combining tasks so that employees can see processes through from start to inish, assigning whole projects to teams with autonomy over the means to accomplish the project and with responsibility for giving feedback to team members, and delegating tasks typically performed by those higher in an organizational hierarchy.
Content theories of motivation are very useful for managers. Further insights from another type of theory, process theories, give even more detail about how managers can construct workplaces and working conditions that are highly motivating.
Process Theories of Motivation
Process theories of motivation summarize knowledge about work activities that affect motivation. There is a wealth of potential utility for managers from this body of theory and research.
Expectancy Theory
Expectancy theory is at the heart of many of the motivational processes associated with work and working environments. Employees expect that their efforts will improve the quality of their performance and output. For example, if employees stay late to complete a project, they expect the work to get inished. Second, employees expect that if their performance improves (for example, if a project is completed early), their improved performance will be acknowledged by the organization. Whether acknowledgement comes in a form that employees value is the third step in the expectancy theory process. If employees value the acknowledgement, then their increased efforts and higher performance have been worth the effort. The result is that employees feel motivated.
The linkages among (1) employee effort and performance, (2) performance and reward, and (3) reward and satisfaction are all intuitively recognized by most managers. However, many managers are not adept at ensuring that employees’ time is well spent, that effort increases performance, and that performance is recognized. Finally, managers often do not recognize that employees differ in the degree to which they value rewards of different types. Thus, great opportunities for improvement exist in most organizations. These can be identi ied by addressing the three linkages in the motivation process described by expectancy theory.
Goal-Setting Theory
Goal-setting theory (Latham and Locke 2002) is another important component in the foundations of most well-managed organizations, and goal-setting theory also is intuitively appealing to most managers. Goal-setting theory states that establishing appropriate goals for employees is motivating. In
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contrast to vague advice like “work hard and do your best,” well-crafted goals create points of focus for behavior and provide clear targets for performance.
Goals that motivate are jointly agreed upon and are challenging. If employees receive goals in a top- down manner, their motivation to achieve them is decreased. If goals are easily attained, they are less motivating for individuals, and their value is reduced for organizations. It is important to note that individuals must believe that the goals are at least partially attainable. Individuals will reduce their efforts if they know that achieving a goal is not possible.
It is not enough for managers and employees simply to set one or more goals. Feedback on progress is necessary in order to reinforce the importance of a goal and allow employees to relate their performances to goal achievement. Feedback allows employees to adjust their effort or methods to meet goals.
Equity Theory
Equity theory (Adams 1965) identi ies another important aspect of motivation. Humans care about equity, particularly as it relates to their own situation in the workplace. They desire to be treated fairly, independently of other motivators. Employees compare their own effort–reward relationship to that of their coworkers. They expect their own effort to be rewarded in a manner that is equitable with how others are rewarded.
At the least, perceptions of inequity in job perquisites (perks), salary and bene its, prize assignments, of ice space, of ice furnishings, and the like are de-motivating to those who feel that they have been discriminated against. Individuals often vary regarding the level of a bene it that they feel is fair, complicating the ability of managers to predict employee reactions to pay cuts, pay increases, or other changes in rewards.
Managers should strive to have reasonable and publicly defensible reasons for treating employees differently when they do so. Managers need to communicate rationales in order to manage perceptions of inequity.
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11.3 MOTIVATING FOR IMPROVEMENT
This section summarizes implications for managers who are familiar with theories and research on motivation. Managers can use a wide range of approaches to motivate their employees to deliver high- quality customer service and continuously search for improvement. The behaviors are summarized in Table 11–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/98#tab111) .
First, screen new hires to identify those interested in customer service and continuous improvement. Motives are dif icult to change. Employment interviews should address thoughts and behaviors about standards of service and commitment to improve. The hiring process should be extensive and selective.
Second, managers should not solely rely on individuals to motivate themselves. The structure and processes of the workplace make a difference, even to the most positive and energized employees. Build work structures that recognize, reward, and reinforce high motivation. In many health organizations, this means not overpaying high-level managers relative to other employees, due to perceptions of fairness. It also involves sharing information widely so that employees can make informed contributions to improving organizational processes and the value of products and services.
Table 11–1 Guidelines for Motivating for Improvement
1. Screen new hires for attitudes toward service and improvement. 2. Take advantage of management levers to enhance motivation—recognize, reward, and
reinforce high motivation. 3. Invest in employee learning. 4. Customize employee feedback to employee personality and life situation. 5. Experiment with creative forms of recognition. 6. Search for and recognize positives in employee performance. 7. Demonstrate impact of employee’s work on patients and consumers.
Particularly important in motivating health workers are investments in learning opportunities. Support for employee learning and career development feeds employees’ needs for growth, control over their own destinies, and achievement.
Fourth, managers should get to know their employees. Motivations vary among individuals. Some employees are more focused on building life security, while others are more interested in impact and purpose. Although some employees may interpret a compliment as an insult, many others feel underappreciated and savor every compliment.
Fifth, managers should be willing to take some risks. They should be proactive and creative and should experiment with different forms of motivation. Surprising people with creative forms of recognition may not always work, but the efforts likely will be appreciated.
Sixth, look for positives. Managers are more likely to overlook accomplishments than negative behaviors. All supervisors should ind ways to praise people. One consultant advises that workers need three compliments for every criticism and that employees should be thanked by managers, including
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the chief executive of icer, when they complete tasks consistently or exceptionally (Studer 2004). Consistently reliable workers tend to get overlooked in favor of exceptional ones.
Finally, managers can remind health organization employees daily of the importance of their work to the lives of others. Post photos or letters from persons helped by the organization, or bring them in to say thank you in person. Draw on the intrinsic motivation that initially attracts many employees to health care and public health work.
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CONCLUSION
Psychological theories provide a rich basis for designing and continuously revising jobs so that they are satisfying and motivating to employees. Personal needs for social connection and growth are important when designing jobs. Ensuring that employees’ efforts are recognized and rewarded in valued and equitable ways is equally important. Joint goal-setting channels motivation into focused activities that can be linked to organizational success. Challenging employees to meet continuously improving goals draws on their needs for growth and purposeful work.
Systems Thinking about Motivating for Improvement
One adage of systems thinking is that systems produce the results that they were designed to produce. This applies to the use of extrinsic rewards to motivate employee behavior. Managers may get the behavior they extrinsically reward from employees, but that behavior may not always be the one hoped for by managers. In a classic article, Kerr (1975) refers to this as the folly of rewarding A, while hoping for B.
As an example, Kerr (1975) describes a performance evaluation system that promises merit raises of 5% for employees rated outstanding (limited to two per department), 4% for employees rated above average (normally all employees not outstanding are so rated), and 3% for those who are rated negligent or irresponsible. An additional guideline states that if employees are absent for more than 2 time periods over 6 months, they receive no merit increase. Because most employees are indifferent to the extra 1% merit increase (a small reward for a lot of work), the policy fails to motivate performance improvement. The policy does motivate attendance. Management is hoping for performance, but it is rewarding attendance (most likely, including attendance when employees should be home ill).
Managers need to be careful about rewarding activities just because those activities are easy to observe or easy to measure (like attendance). Often the behavior that is less observable and harder to measure is the behavior that managers really want to promote.
CASE STUDY RESOLUTION
The day passed quickly, so Sonja sent Alice the following message using her personal e-mail account and sending it to Alice’s home account.
To inish our conversation from this morning, my supervisor tries to empower and motivate us at every opportunity. Like yours, he is male but, unlike yours, does not have problems with female employees. He is complimentary and allows us to structure our days and how we approach special projects. We set our most of our performance goals jointly with him. He has a great reputation, and I feel lucky to be working for him. Since you are not having good luck inding a new job, send me your resume. I’ll forward it to my boss. You never know what may come of it.
Alice’s resume was in her computer inbox when Sonja arrived for work.
REFERENCES
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Adams, J. S. 1965. Inequity in social exchange. In Advances in experimental social psychology, vol. 2, 267–99, ed. L. Berkowitz. New York: Academic Press.
Alderfer, C. 1972. Existence, relatedness, and growth. New York: Free Press. DeBuono, B., A. R. Gonzalez, and S. Rosenbaum (Eds.). 2007. Moments in leadership: Case studies in
public health policy and practice. New York: P izer Global Pharmaceutical. Gagne, M., and E. L. Deci. 2005. Self-determination theory and work motivation. Journal of
Organizational Behavior 26: 331–62. Hackman, J. R., and G. R. Oldham. 1976. Motivation through the design of work: Test of a theory.
Organizational Behavior and Human Performance 16 (2): 250–79. Herzberg, F. 1968. One more time: How do you motivate employees? Harvard Business Review 46 (1):
53–62. Kerr, S. 1975. On the folly of rewarding A, while hoping for B. Academy of Management Journal 18 (4):
769–83. Latham, G., and E. A. Locke. 2002. Building a practically useful theory of goal setting and task
motivation. The American Psychologist 57 (9): 705–17. McClelland, D. C. 1962. Business drive and national achievement. Harvard Business Review 40 (4):
99–112. Pfeffer, J., and R. I. Sutton. 2007. Do inancial incentives drive company performance? In Hard facts,
dangerous half-truths, and total nonsense, 109–33. Boston: Harvard Business School Press. Studer, Q. 2004. Hardwiring excellence. Gulf Breeze, FL: Fire Starter Publishing.
RESOURCES
Periodicals
Buelens, M., and H. Van den Broeck. 2007. An analysis of differences in work motivation between public and private sector organizations. Public Administration Review 67 (1): 65–74.
Kohn, A. 1993. Why incentive plans cannot work. Harvard Business Review 71 (5): 54–63. Nohria, N., B. Groysberg, and L. Lee. 2008. Employee motivation: A powerful new model. Harvard
Business Review 86 (7/8): 78–84.
Books Kidder, T. 2003. Mountains beyond mountains: Healing the world: The quest of Dr. Paul Farmer. New
York: Random House. Latham, G. P. 2007. Work motivation: History, theory, research, and practice. Thousand Oaks, CA: Sage. Longest, B. B. 2004. Leading to accomplish desired results. In Managing health programs and
projects, 111–44. San Francisco: Jossey-Bass. Oldham, G. R., and J. R. Hackman. 2005. How job characteristics theory happened. In The Oxford
handbook of management theory, 151–70, eds. K. G. Smith, and M. A. Hitt. Cary, NC: Oxford University Press.
Perry, J. L., and A. Hodeghem (Eds.). 2008. Motivation in public management: The call of public service. Cary, NC: Oxford University Press.
Pfeffer, J. 1998. The human equation: Building pro its by putting people irst. Boston: Harvard Business
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School Press. Pink, D. H. 2009. Drive: The surprising truth about what motivates us. New York: Riverhead Books.
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CHAPTER
12
Collaborating Inside the Organization
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Be able to de ine collaboration within organizations. • Explain the characteristics of four types of teams. • Describe methods of collaboration used in each type of team. • Be able to apply techniques characteristic of highly collaborative teams. • Understand the role of leadership in collaboration.
CHAPTER SUMMARY
This chapter discusses the importance of collaboration and teamwork inside health organizations. Four different types of teams are reviewed in detail. Techniques for effective collaboration within teams are considered. Leadership and its importance for teams are brie ly discussed. Each type of team has different characteristics and requires different types of leadership and techniques to function in an effective and optimal manner.
CASE STUDY
Jorge and Maria were discussing the future of their organization. From an internal organizational perspective, individual employees seemed to be working hard and maintaining high morale. From the perspective of output and productivity, though, the organization seemed to be slowly falling behind similar organizations in the region.
“I can’t quite put my inger on it,” said Jorge. “Something is missing.”
“I agree,” replied Maria. “I think our people work as hard as any other organization’s workforce. Maybe we should just retire and let someone else do our worrying.”
“I am not ready to retire, but looking to the future is a good idea. We hired Carmen last year. She recently completed a graduate degree that focused on quality issues in organizations. Let’s invite her in for a consultation. She may be able to offer some insights.”
While Jorge and Maria wait, what ideas do you think Carmen might offer?
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12.1 INTRODUCTION
Destructive con lict, politics, and miscommunication create serious problems for all organizations. Health organizations are not exempt from such problems. Collaboration is an important deterrent. Effective managers maintain an open and collaborative approach in order to minimize disruptions and maximize the creative potential that accompanies con lict.
Employee teams tend to confer a modest advantage to organizations and agencies that support and use them. Four types of teams are commonly encountered: ongoing, microsystem, rapidly formed, and quality improvement. Although similar in many respects, each type of team has a different purpose and slightly different operational, leadership, and resource requirements.
Teamwork requires behaviors that facilitate interaction while a group is working. Each person on a team brings technical and nontechnical skills. Technical skills tend to be speci ic and are associated with an individual’s training and experiences. Nontechnical skills tend to be more universal and include such skills as communication and teamwork. A team of experts, with high levels of technical skills, is not necessarily an expert team (Burke et al. 2004).
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12.2 COLLABORATION
Collaboration inside organizations is de ined as combining the knowledge, experience, and skills of many individuals to deliver services, programs, or products. In the realm of health, recipients of services may include individuals or entire communities. Collaboration occurs at different levels and can involve individuals, members of teams, departments, or entire organizations. When an organization adopts a collaborative rather than hierarchical approach, the priorities and order of activities or steps to be taken by a team or unit are determined by the members of the team rather than by an outsider (a person who is not a team member). This approach results in “buy-in” among team members and yields decisions that personnel are much more likely to agree with and abide by compared to receiving orders that are made by top-level managers alone.
In order to have collaboration within an organization, management and staff must adopt a collaborative approach. In collaborative organizations, individuals recognize that their views alone are not suf icient to convert an idea or proposed solution into a reality. Collaboration with others is necessary and requires an investment of time that is spent listening to one another and sharing ideas within the organization (Volz 2009). The most effective method for achieving collaboration is through the use of teams. This requires actions in several areas. An organization must create a culture that encourages teamwork, cooperation, and collaboration. It must promote and reinforce effective teamwork and team member cooperation. Finally, the responsibilities of team members must be based on collaboration and cooperation. Four types of teams are commonly encountered: ongoing, microsystem, rapidly formed, and quality improvement.
Ongoing Teams
An ongoing team consists of a formally established and de ined set of individuals who work together over time. They comprise a speci ic unit and have ongoing assigned duties and responsibilities. Ongoing teams have four characteristics. (1) Team members commonly have similar backgrounds and training or are assigned to the same department or working group. For example, all pharmacists and pharmacy assistants in a department comprise an ongoing team. (2) A formal reporting relationship exists among team members. For example, all sanitarians in a public health agency report to a single environmental health supervisor. (3) Team members have an identi ied leader. One of the members serves the primary leadership role. (4) Team members work together on a daily basis, becoming familiar with each other’s work and communication styles (cross-training), and usually form informal relationships outside of the work setting. For example, technicians working in a laboratory often spend time socializing together at the conclusion of their working shift. Among the members of a successful ongoing team, collaboration depends on having and using formal reporting structures, establishing effective leadership, delegating to complete tasks, and creating and using a chain of command.
Ongoing teams pass through four speci ic stages in order to achieve effective collaboration: forming, storming, norming, and performing (Tuckman 1965).
Forming
Forming is the irst stage of team development during which team members are unsure of the ground rules and expectations for the team. When teams are initially being formed, team members typically test existing guidelines to understand what constitutes acceptable behavior for groups. During this
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stage, people tend to be polite and reserved, learning about the other members of the team to determine how everyone its together. Team members may discuss issues in more general terms and try to understand why they have been assigned to the team. Individual behaviors tend to be de ined by two forces: avoiding con lict or controversy and being accepted by other individuals on the team.
At irst, members on a new team behave as they did before being assigned to the team. Even though they are polite, their personal needs and preferences tend to guide their actions. They are motivated to work but lack suf icient information to organize and focus their efforts in an effective manner. Despite not fully understanding the reasons for creating the team and the associated goals and objectives, team members make an effort to understand each other. After introductions, they discuss ways to approach potential team assignments. This is a comfortable stage in which to be, but avoiding con lict and threats may mean that not all assigned tasks are completed. A team leader can help build trust during this stage by providing clear directions and suggesting ways to work together. As team members become better acquainted and are given information through of icial (formal) communication channels, the process of establishing goals and approaches is begun. At this point, the real work of the team begins.
Storming
Storming is the next stage during which team members may begin to disagree with one another on issues of importance to the team. Storming is often the most dif icult stage for a team. Individuals may argue, become defensive, or try to establish dominance. Disagreements may be subtle as various team members posture for recognition, form factions to in luence other team members, become very confrontational, or discuss what leadership model they will accept.
Teams grow during the storming stage. This period is often unpleasant because of the possibility of con lict. If team leaders allow the con lict to escalate, team members can lose their motivation to work together. Leaders are important in helping to overcome the stage by developing agreements about how decisions are made and who makes them. If the con lict begins to establish an environment of trust in which team members feel secure to express opinions, this phase of development can strengthen the team. The length of the storming phase varies greatly. Individual maturity levels typically determine the duration of the phase. Mature people can quickly resolve their differences. Immature individuals may end the team’s utility because they cannot resolve interpersonal con licts.
Norming
During the norming stage, teams must resolve issues that surface in the previous storming stage in order to develop and become productive. In this stage, team members begin to discuss constructive approaches to achieving work. The initial resistance fades as team members become accustomed to working with each other. Successful teams manage to focus on a single goal and create a plan that is mutually acceptable to all team members. The process of norming involves compromise. People must subordinate some of their own beliefs. Such actions allow team beliefs and goals to emerge. When these new concepts are fully accepted by all members of the team, the group is ready to harness its collective ambition in pursuit of new team goals. A leader must have the skill to bring the team into the norming stage.
Performing
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During the performing stage, team members work together and become productive. In this inal stage of development, the team has become cohesive, can reach consensus on useful solutions, and becomes highly productive. The team becomes cohesive. Members are loyal to each other, mutually supportive, and develop respectful relationships. Teams often do not reach this stage or only partially attain it. Once teams reach the performing stage, they are better able to work as a group. When con lict stops, they quickly become able to work ef iciently. If con lict does reemerge, the energy associated with discord is redirected and used in pursuit of group goals.
These four stages of development provide a helpful basis for understanding how an ongoing team evolves over time. Some scholars maintain that all of these stages are necessary in order for a team to grow, face up to challenges, ind solutions, and deliver results. In reality, some teams skip one or more stages, complete them in a different order, or even repeat a stage. Further, teams do not always develop as neatly as suggested by this model. For example, a team can progress from one stage to another relatively easily, or it may become stuck in one of the stages. Teams may advance through several stages and then regress to a previous stage. In unusual situations, even high-performing teams may regress to earlier stages of evolution. Such cycles of repetition are common when teams are extensively used. Abrupt or unanticipated changes are the most common triggers for repeating cycles.
Microsystem Teams
One variation of the ongoing team is particularly prominent in health care organizations. The concept of a microsystem has been developed in recent years to explain how particular or individual programs or services (a single or small component of a larger system, also called a microsystem) are provided within the context of a larger entity (an organization, also called a macrosystem). Organizations that deliver health-related services provide convenient examples. A small group of clinicians and supporting staff members working together with a shared clinical or therapeutic goal constitutes a microsystem. A hospital, clinic, or public health department constitutes the larger institution or macrosystem within which such services are delivered.
Microsystems may produce outputs other than direct services to members of the public. Maintenance groups and billing departments both qualify as microsystems because they provide services within a larger organizational context. Three important attributes of successful microsystem teams are value, cooperation, and communications. The work of microsystem teams must result in value to a larger entity. This is frequently (but not required to be) their employer. Interdisciplinary cooperation is essential. Members of microsystem teams are frequently drawn from different departments or organizational units. Microsystem team members must informally communicate with each other to ensure that the team remains focused on its primary goal. The activities of most successful microsystem teams contribute to increased organizational productivity or result in improved customer service. Often, both outcomes are achieved.
Rapidly Formed Teams
A rapidly formed team is de ined as a group of employees who come together for a speci ic, unplanned purpose. Most rapidly formed teams are spontaneous groups that emerge rather than being deliberately formed during emergencies. Depending on the nature of the task at hand, rapidly formed teams can face signi icant complexity and time pressures because they exist without the luxury of deliberate selection and lack a shared history as a team. Examples of rapidly formed teams include
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rescuing a patient or client in an emergency situation or providing immediate help when a disaster occurs.
A rapidly formed team does not meet the criteria of an ongoing team. A rapidly formed team is usually composed of an eclectic group of people. They may or may not have appropriate training for the task at hand. They may or may not know each other. They may or may not have previously worked together. They are not likely to perform together again in exactly the same work team con iguration. When the team’s immediate goal is achieved, the team usually disbands.
Quality Improvement Teams
All quality improvement (QI) methods and approaches emphasize the necessity of collaboration. Organizations that use QI methods recognize the importance of having people work together to address problems and try to improve processes.
A QI team is de ined as a group of individuals who work together to improve a process for which they are mutually accountable (Riley et al. 2008). A QI team has features that differentiate it from ongoing, microsystem, and rapidly formed teams. QI teams are cross-functional because they involve personnel from different departments and working groups within an organization. QI teams are usually interdisciplinary because their members have training and experience in a variety of disciplines. QI teams are focused on addressing a single problem or process. Finally, QI teams usually are informal. They are typically assembled, work, and disbanded without appearing on any formal organization charts.
Several techniques and tools aid in the development of QI teams. These include writing a project charter, identifying a project champion, and selecting team members.
Writing a Project Charter
A project charter is a document that delineates the goals a team intends to achieve and the activities it proposes to reach its goals. A charter is usually a short, one-page form that provides a roadmap for the team. The document also lists the resources that will be needed to complete the team’s objectives. It describes what the team intends to accomplish, who will work on the project, relevant background information about the issue or problem to be addressed, project timelines, and other key information. Team members should refer to their charter throughout the project.
Identifying a Project Champion
A champion is an executive-level manager who has the responsibility for managing and guiding a QI project and for making sure that those efforts support and enhance corporate priorities. Two common reasons QI projects fail are because they do not address important organizational problems or issues and projects are not adequately monitored. In these circumstances, teams spend time and effort doing things that do not improve a process. QI teams should always work to improve processes that support their organization’s mission and goals and avoid being distracted by spurious or other nonessential issues.
Selecting Team Members
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A QI team is usually assembled to address a particular problem or improve a speci ic process. Team selection is important. A team charter will often describe the skills and knowledge that may be needed by the team, selection criteria, and anticipated roles. Team members can be appointed by senior executives or by the team captain. Each approach has advantages and disadvantages. Appointment by an executive signals the importance of a project and lends support. Conversely, such an action may be motivated by political concerns or be made to further an individual’s career. Appointments made by team leaders tend to focus on a project’s goals and objectives. Members tend to be selected for their skills. Team leaders often lack the political clout of executives and may be susceptible to in luence exerted by senior managers.
Most experts agree that teams having ive to nine individuals are optimal for the majority of QI projects. Smaller teams may be easier to manage but often lack critical skills or knowledge. Larger teams provide more resource options but are more dif icult to coordinate. Savvy team captains ensure that team members are representative of all departments that are relevant to the problem or process being studied. Once a QI team has completed its mission, it is usually disbanded.
Dedicating resources and staff to support QI teams sends a powerful message to employees, stakeholders, and members of the public that an organization is serious about improving quality, customer service, and organizational performance. The activities of QI teams often improve the culture of the organizations that sponsor them.
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12.3 TECHNIQUES FOR EFFECTIVE COLLABORATION WITHIN TEAMS
Effective collaboration is essential to the success of all four types of teams. Collaboration is enhanced by communication, training, conducting effective meetings, brainstorming, and using tools such as a prioritization matrix or the six hats method. Communications and training are essential for all types of teams.
Communication
Open, concise, and effective communications are important to all types of teams. Communications require channels through which information is transmitted. Communication channels may be formal or informal (Fallon, Covitch, and Rothenberg 1974). Formal channels are created by management and usually de ined by an organizational chart. They are easily understood but often slow to transmit information. In comparison, informal channels are created by individuals. They are frequently based on friendships. They are often dif icult to de ine but are able to transmit information far more rapidly than formal channels.
Training
It is well established that, in general, teams make fewer mistakes than do individuals (Salas and Cannon-Bowers 2000). However, many organizations continue to function as discrete collections of individuals (Knox and Simpson 2004). Training individuals is different than training teams, and team training requires different approaches and techniques (Reason 1997). Team training involves skills and behaviors that professionals must acquire to function effectively as part of a larger group that is likely to be interdisciplinary.
Two interdisciplinary training methods include the TeamSTEPPS curriculum (Agency for Healthcare Research and Quality 2007) and in situ simulation (Miller et al. 2008). The TeamSTEPPS curriculum focuses on speci ic skills that support team performance principles, including training, behavior, human factors, and cultural changes. Although the materials can be used for groups in almost any setting, TeamSTEPPS was speci ically designed to be used in health care settings to improve quality and patient safety. In situ simulation is an experiential team training method that supplements the concepts and knowledge provided through traditional educational methods (Riley et al. 2008).
Conducting Effective Meetings
Meetings offer opportunities for disseminating information to large groups of people and for enhancing collaboration. Successful meetings require three different but essential components: an agenda, assigned roles, and following the agenda.
Preparing an Agenda
An agenda provides guidance for a meeting and helps participants to focus on the topics to be considered. An agenda should be prepared in advance. Items to be discussed should be listed. Time
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should be allocated for each item. Attendees should be prepared to respect an agenda. This ensures that each item on the agenda will be considered and prevents any single agenda item from dominating or crowding out other discussions scheduled for the meeting.
Assigning Important Roles
Individuals can be given responsibility for speci ic agenda items. Three roles should usually be assigned: facilitator, timekeeper, and recorder. A facilitator has the responsibility for organizing a meeting, ensuring that all team members participate, and guiding discussion according to the agenda. A timekeeper ensures that the meeting does not exceed predetermined limits and announces the time remaining for each agenda item. A timekeeper provides information to the facilitator and team members so that the meeting begins and ends on time. A recorder takes notes and documents signi icant discussion points during the meeting. These include key concepts, decisions that are made, planned next steps, or any other notable ideas mentioned during the meeting.
Following the Agenda
Adhering to the agenda involves starting and ending on time so as to respect the time of all the team members. It also prevents participants from being distracted by items not on the agenda. Time is wasted and productivity is compromised when meetings start late because members are not present or go over the time limit due to prolonged discussions.
Brainstorming
Brainstorming is a QI method that is used by a team to generate a large number of ideas that focus on a single issue of interest. Brainstorming has three primary bene its. The irst bene it can be summarized as the whole is greater than the sum of its parts. A small team of persons generating ideas is signi icantly more creative than one person working alone. As a team brainstorms, the participants extend each others’ ideas to develop new approaches that might not otherwise emerge. The whole is greater than the sum of its parts because each idea has the potential to serve as a catalyst that can trigger other thoughts.
The second bene it of brainstorming is that the approach is an effective way to generate ideas rapidly. This feature is an important component of QI due to the importance of rapid cycle projects. Ideas are generated quickly by following three important guidelines. Suggestions are not censored. Negative responses are not allowed during the initial low of ideas. Assessment of ideas is deferred so as not to interrupt creativity in discussions.
The third bene it of brainstorming re lects the inclusive nature of the activity by considering all ideas. Unlike many group discussion techniques that discount or dismiss new ideas before they are discussed, brainstorming considers all suggestions that are offered. Assessment and prioritization occur only after an extensive list of ideas has been developed.
Brainstorming is recommended when a team becomes mired in its thinking. Comments that alert team leaders to this problem include, “We have done that before” or “That won’t work.” Brainstorming is also useful when all members are not participating in discussions or conversations are dominated by one viewpoint or by a single person. When brainstorming, all participants are encouraged to express
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ideas without being judged. The two major approaches to brainstorming are structured and unstructured.
Structured Brainstorming
In a structured brainstorming session, a facilitator controls the discussion by urging each person to participate in turn until all ideas are exhausted. The facilitator also ensures that any critiques within the group are withheld until later in the process and defers assessment of ideas until the process is complete.
Unstructured Brainstorming
This process is similar to the structured approach method except that ideas may be offered by participants at any time during the brainstorming session. Because ideas are not solicited in rotation, there is a risk that some team members may be reluctant to offer suggestions. Conversely, a few vocal persons may dominate the brainstorming session.
Prioritization Matrix
Prioritization matrices help to assess and order ideas that are generated through brainstorming. A prioritization matrix is a tool that is used to evaluate alternatives in a systematic manner using predetermined decision criteria. A prioritization matrix has two components: a list of alternatives and criteria to evaluate each alternative. It generates scores that yield a ranking of alternatives.
The list of alternatives is generated from the ideas that were suggested during a brainstorming session. A numerical value must then be assigned to each suggestion. This can re lect a consensus that is reached by discussion, a ranking of all suggestions, or another convenient method.
Criteria are identi ied by the team. Numerical values or weights must be assigned to each criterion. These may re lect relevance, cost, ease of installation, or any other relevant attribute. The numerical value for each idea and its associated criterion value are multiplied together to yield a composite score for each suggestion. The scores are put into a ranked order from the highest to the lowest. The suggestion having the highest composite score is assumed to have the highest priority and should be acted upon irst.
Any number of criteria can be used when evaluating suggestions. The process is similar to using a single criterion. Values from all criteria being used are multiplied together. The magnitude of the resulting composite scores may be ignored. The ranking is the desired output of a prioritization matrix.
The Six Hats Method
The six hats method is used when members of a team have to evaluate a proposed solution in a systematic way. The six hats represent six different roles for team members to assume in order to move outside habitual thinking styles and evaluate a proposed solution (De Bono 1999). Five team members each assume different roles. They must discuss a proposal from their assigned perspective. The person wearing the sixth hat is the facilitator. An application of the six hats method usually provides a comprehensive critique. Table 12–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections
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/104#tab121) contains an example of roles for an application of the six hats method.
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12.4 TEAM LEADERSHIP
As good leaders listen to their followers, a team leader’s main job is to facilitate collaboration among team members in order to achieve the team’s goals. This is accomplished by applying two important elements of leadership: accomplishing tasks and supporting individuals (Kouzes and Posner 2008). A team leader is responsible for ensuring that assigned tasks are performed by the team’s members. Supporting individuals involves addressing the personal needs of all team members and promoting positive interpersonal dynamics among them.
In any given situation, effective leaders enhance their chances of successfully achieving a goal by establishing a vision that supports the desired goal, communicating the vision to others, and exhibiting con idence that the goal can be accomplished.
Table 12–1 Example of a Six Hats Application
Setting a goal is an important event. Establishing a vision to accompany a goal provides a context for the goal as well as setting boundaries for activities. The combination of vision and goal provides a focus for subsequent activities. A complete vision and goal statement should include an outline of anticipated activities and a timeline for their completion. Omitting any of these elements is likely to result in confusion for team members, delays in overall progress, and possible wasted efforts.
Communicating the vision and related information is an ongoing process. Major goals of such activities include providing details, motivating team members, answering questions, providing support and encouragement, and addressing personal concerns of team members. The low of communications should be steady. Such an approach also helps leaders identify problems in their early stages and try to resolve or prevent them.
Effective leaders should have con idence in their vision and goals and should share that enthusiasm with others. The perspective of their messages should be positive and pragmatic. Negative attitudes are likely to dampen the morale of team members and reduce the likelihood that important goals will not be achieved.
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12.5 TEAM CONFLICT
Con lict in teams is de ined as tension between team members due to real or perceived differences (De Dreu and Weingart 2003). Two different sources for differences (and con lict) are often encountered: relationships and tasks. Con licts with relationships often stem from differences in personal taste, values, or style of leadership. Con licts with tasks often re lect differences in decision-making style, priorities, assignments, the effort expended by individual team members, and the outcomes of work activities.
Con lict in teams has positive and negative consequences (Schulz-Hardt, Jochims, and Frey 2002). Positive consequences include causing team members to re lect on their activities and alter their perspectives, making better judgments due to changes in perspective and personal growth, realizing that inef iciencies might exist, and making changes in work routines. Negative consequences include reduced task satisfaction due to the presence of tension, reduction in group cohesiveness due to tension among team members, and interference with team productivity and performance because team members are distracted while trying to perform their assigned duties.
Some stress is energizing (Homans 1958). Although stress or con lict is inevitable in all human groups, the positive effect of stress breaks down when con lict becomes more intense. For example, team members can become less lexible and less creative when con lict levels increase. Relationship con lict is often more disruptive to teams than task con lict, because it is more interpersonal and emotional, which leads to more powerful negative responses. Team leaders can help members manage these stresses. When relationship con licts emerge, team morale is at risk, and strategies to reduce relationship con lict are needed. When task con licts occur, they can often be managed with a variety of strategies to help team members resolve task-related disputes.
The inability to resolve con licts may cause a team to lose focus and even disintegrate (Lighter 2010). The type of team often determines optimum ways to manage con lict. For example, con lict in an ongoing team may be handled in a formal manner by the team leader. In a microsystem or rapidly formed team, con lict may be resolved by an individual with professional training. Rules for con lict resolution are often established in the charter of a QI team. Frequently, an appeal process is also included to handle instances where the con lict deteriorates beyond a team’s ability to resolve the issue.
Experts recommend four different methods to handle con lict in teams (Georges, Rowlands, and Kastle 2004).
1. Set goals. When goals are established and agreed to by team members, it is easier to resolve problems. Some con licts can be resolved by reminding members of the group about the objectives that must be met by the team.
2. Assign accountability. When action is required, responsibility is delegated to someone on the team. Delegation is de ined as assigning one or more tasks to be completed. Responsibility is the duty to complete assigned tasks. Accountability is de ined as evaluating how well the task is completed.
3. Understand how decisions are made. Teams are created to make decisions. Understanding the dynamics of decision making provides perspective. Are the decisions aligned with project goals
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and objectives? Are the decisions effective? Is the decision-making process authoritarian (the team leader makes the decision and then informs the team), or is it democratic (team members vote on the decision)?
4. Ensure that meetings are effective. This includes preparing and following an agenda, encouraging all meeting attendees to participate, preventing a few attendees from dominating the meeting, and keeping a record of the meeting.
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CONCLUSION
Collaboration within or among working groups or departments is an essential component of organizational success. Teams can facilitate collaboration. Without highly functioning teams and effective leadership, interpersonal con lict and miscommunication can signi icantly impair organizational effectiveness and success. Different types of teams (ongoing, microsystems, rapidly formed, and quality improvement) have varying applications and requirements for support. Effective leadership is needed to maximize the value of teams. Con lict is an ongoing problem that must be addressed by leaders at all levels of an organization.
Systems Thinking about Collaborating Inside the Organization
Systems thinking encourages consideration of unintended consequences of interventions. Unintended consequences are results that are different from the outcomes expected as a result of a purposeful action. They commonly occur after intervention in any complex process.
One way to learn more about potential unintended consequences is to build a mathematical model of a system and allow the system to unfold over time on a computer. Researchers constructed such a simulation model of individuals in a group trying to agree on a tentative plan (Sayama, Farrell, and Dionne 2010). Steps built into the model were an internal search of opinions by each individual, selection of a speaker, responses to the speaker’s suggestion at the individual level, and responses to the suggestion at the group level. A group-level agreement on a inal plan occurred after iterative (repeated) attempts at agreement.
The simulation revealed an interesting unintended consequence of efforts to reach consensus: The drive for consensus restricted the innovativeness of the group plan. In a group discussion, many individuals are quick to discard their original opinions unless they align with those of other speakers. As individuals strive for consensus, the quality of the group plan may degrade.
To maintain a healthy collaboration, arenas for disagreement and encouragement of diverse solutions need to coexist with consensus building and shared goals. The six hats method and brainstorming techniques covered in this chapter are examples of ways to create that balance.
CASE STUDY RESOLUTION
Carmen, the relatively new employee, arrived 5 minutes later. Jorge and Maria explained their concerns before asking Carmen for her input. Carmen thought for a couple of minutes and then made the following suggestions.
“In my opinion, many programs and procedures are simply tired and should be brought up to contemporary standards. To help get there, the organization should consider using more teams. These will have to be formed and trained. Teams allow a sharper focus on the shared goals and objectives of our programs. They also facilitate collaboration among workers.”
Carmen continued, “Once the teams have been identi ied, a series of quality improvement initiatives for each program would be logical. These have the potential of increasing our overall output and improving customer service. QI reviews often lead to cost savings that should help the organization’s bottom line. Finally, you should carefully review your candidate list as you appoint team leaders.
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Leadership is an important contributor to the success of team programs. Do you have any other questions? If not, thank you for today’s meeting.”
After Carmen left, Jorge and Maria discussed her recommendations. The next weekly message from the organization head announced the formation of a teams initiative. Carmen was the irst team leader to be appointed.
REFERENCES Agency for Healthcare Research and Quality. 2007. TeamSTEPPS: Strategies and tools to enhance
performance and patient safety: Instructor’s guide. Rockville, MD: Agency for Healthcare Research and Quality.
Burke, C., S. E. Salas, K. Wilson-Donnelly, and H. Priest. 2004. How to turn a team of experts into an expert medical team: Guidance from the aviation and military communities. Quality and Safety in Health Care 13 (10; suppl 1): i96–104.
De Bono, E. 1999. Six thinking hats. 2nd ed. New York: Back Bay Books. De Dreu, C. K., and L. R. Weingart. 2003. Task versus relationship con lict, team performance, and
team member satisfaction: A meta-analysis. Journal of Applied Psychology 88 (4): 741–9. Fallon, L. F., S. C. Covitch, and D. H. Rothenberg. 1974. A study of informal information sources in an
academic community. Proceedings of the American Society for Information Science Annual Meeting 11: 260–3.
Georges, M. L., D. Rowlands, and B. Kastle. 2004. What is lean six sigma? New York: McGraw-Hill. Homans, G. C. 1958. Social behavior as exchange. American Journal of Sociology 62 (5): 597–606. Knox, G. E., and K. R. Simpson. 2004. Teamwork: The fundamental building block of high-reliability
organizations and patient safety. In Patient safety handbook. Sudbury, MA: Jones and Bartlett. Kouzes, J. M., and B. Z. Posner. 2008. The leadership challenge. 4th ed. San Francisco: Jossey-Bass. Lighter, D. E. 2010. Advanced performance improvement in health care. Sudbury, MA: Jones and
Bartlett. Miller, K., W. Riley, S. Davis, and H. Hansen. 2008. In situ simulation: A method of experiential
learning to promote safety and team behavior. Journal of Perinatal and Neonatal Nursing 22 (2): 105–13.
Reason, J. T. 1997. Managing the risks of organizational accidents. London: Ashgate Publishing. Riley, W., H. Hanson, A. Gurses, S. Davies, K. Miller, and R. Priester. 2008. The nature, characteristics,
and patterns of perinatal critical events teams. In Advances in patient safety: New directions and alternative approaches, 131–44, eds. K. Henriksen, J. B. Battles, M. A. Keyes, and M. L. Grady. Rockville, MD: Agency for Healthcare Research and Quality.
Salas, E., and J. A. Cannon-Bowers. 2000. The anatomy of team training. In Training and retraining: A handbook for business, industry, government, and the military. New York: Macmillan Reference.
Sayama, H., D. L. Farrell, and S. D. Dionne. 2010. The effect of mental model formation on group decision making: An agent-based simulation. Complexity 16 (3): 49–57.
Schulz-Hardt, S., M. Jochims, and D. Frey. 2002. Productive con lict in group decision making: Genuine and contrived dissent as strategies to counteract biased information seeking. Organizational Behavior and Human Performance 88 (3): 563–86.
Tuckman, B. W. 1965. Developmental sequence in small groups. Psychological Bulletin 63: 384–99.
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Volz, B. 2009. Using in luence to get things done. In The public health quality improvement handbook, 323–30, eds. R. Bialek, G. Duffy, and J. Moran. Milwaukee, WI: Quality Press.
RESOURCES
Periodicals
Burke, C. S., D. Sims, E. Lazzara, and E. Salas. 2007. Trust in leadership: A multi-level review and integration. The Leadership Quarterly 18 (4): 606–32.
Riley, W. J., H. M. Parsons, G. L. Duffy, J. W. Moran, and B. Henry. 2010. Realizing transformational change through quality improvement in public health. Journal of Public Health Management and Practice 16 (1): 72–8.
Salas, E., M. A. Rosen, C. S. Burke, D. Nicholson, and W. R. Howse. 2007. Markers for enhancing team cognition in complex environments: The power of team performance diagnosis. Aviation, Space, and Environmental Medicine 78 (1): 77–85.
Wilson, K. A., E. Salas, H. A. Priest, and D. Andrews. 2007. Errors in the heat of battle: Taking a closer look at shared cognition breakdowns through teamwork. Human Factors 49 (3): 243–56.
Books Bialek, R., J. W. Moran, and G. L. Duffy. 2009. The public health quality improvement handbook.
Milwaukee, WI: American Society for Quality Press. McLaughlin, C. P., and A. D. Kaluzny. 2006. Continuous quality improvement in healthcare. Sudbury,
MA: Jones and Bartlett. Quinn, R. E., S. R. Faerman, M. P. Thompson, M. R. McGrath, and L. S. St. Clair. 2011. Becoming a master
manager: A competing values approach. 5th ed. Somerset, NJ: John Wiley & Sons. Senge, P. M. 1990. The ifth discipline: The art and practice of the learning organization. New York:
Doubleday Currency.
Web Sites • American Society for Quality: http://www.asq.org/ (http://www.asq.org/) • TeamSTEPPS: http://www.teamstepps.ahrq.gov/ (http://www.teamstepps.ahrq.gov/) • Institute for Healthcare Improvement: http://www.ihi.org/ (http://www.ihi.org/)
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CHAPTER
13
Collaborating Outside the Organization
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Appreciate the need for collaboration among health organizations. • Know how to form partnerships among organizations. • Understand why local health organizations must interact with state and federal agencies. • Know how to interact with the public. • Be able to form working relationships with members of the media.
CHAPTER SUMMARY
Most complex health challenges cannot be addressed by single organizations. Interorganizational cooperation and collaboration are essential for the success of health and health initiatives. Many essential resources are controlled by entities other than health organizations. Trust must be developed among stakeholders. Access to resources must be negotiated and formalized. Interorganizational collaboration is an ongoing need and activity for health organizations, especially those providing programs and services in smaller communities and market areas. Many small organizations are inding that they can meet these needs through sharing resources and personnel and operating joint programs with other organizations.
Relationships between the health community and members of the traditional media are important for success. The traditional media encompasses newspapers, magazines, television, and radio. Persons working in health must understand and learn to work with members of the traditional media. Honesty and integrity provide important foundations for relationships between people working in either ield. Relationships and rules for interacting must be developed and agreed on in advance. Members of the traditional media can become important collaborators in meeting health challenges.
CASE STUDY
Health Commissioner James “Jimmy” Durango and Master of Public Health (MPH) student Eric Robinson were sitting in a small conference room, discussing Eric’s internship activities.
“Well, you have been here for 2 weeks,” said Jimmy. “What are your impressions of our department
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so far?”
Eric thought for a bit, apparently selecting his words carefully before he began. “I think that …” He was interrupted by a knock. A woman entered without waiting to be recognized.
“Hi Mr. Durango,” she said. “Your secretary said to tell you that the Mayor wants to speak with you. He is on the telephone in your of ice.”
As Jimmy rose to leave he said, “Eric, this is Linda Gomez, the newest member of our health board. Linda, will you please take over for me? This call could take a few minutes.” He left without waiting for a reply.
Because interruptions appeared to be the order of the day, Linda said, “Jimmy told us that you are in an MPH program from a university in another state and came here for your internship because you could live with your relatives.”
“Yes,” began Eric.
As he was drawing a breath, Linda said, “We don’t see many MPH students. In fact, you are the irst. Can I ask a question? We need a health educator but can’t afford one. An editorial in the newspaper said the same thing, and Jimmy just ignored it. He doesn’t like the press. Do you have any suggestions about how we can get a health educator?”
While Eric thinks, let us interrupt him to ask how you, the reader, might reply to Linda’s question.
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13.1 INTRODUCTION
Health agencies and organizations often serve local population groups. Entities that achieve high levels of quality and success usually do so with assistance from other organizations. They form partnerships. The strongest partnerships are mutually bene icial. Partnerships require planning, ongoing effort, patience, and trust. Local health agencies must occasionally interact with other governmental units. Hospitals and health providers must work with similar organizations in other locations. The requirements for successful interactions are similar to those of partnerships.
Communication with the public and the media is another important dimension of external relations for most health organizations. The media has been called the fourth estate (Schultz 1998). It is always present and employs highly trained professionals. Health organizations must decide if and how they will interact with the media. To avoid constant stress, organizations are encouraged to learn about the media and work with it. Such a decision is usually highly bene icial for all concerned.
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13.2 COLLABORATING WITH EXTERNAL ORGANIZATIONS
Rarely can organizations exist and lourish alone. Partners and collaborators facilitate success. Creating such linkages requires time and effort.
The Context for Collaboration
Historically, many well-established health organizations had two characteristics in common. First, they aligned their service areas with the boundaries on a map. Second, they were reluctant to share resources or ask for help. These characteristics resulted in a sense of territory or turf. Other factors reinforced the notion of territory. Organization leaders believed they knew what was best for the people they served, had limited resources, did not require assistance from outsiders, and competed for external resources.
Recent events have diminished the sense of territory. Health problems, disasters, and emergencies rarely adhere to map boundaries. They create needs that overwhelm the capacities of individual organizations and providers. As organization leaders retire, their replacements have acknowledged limits in their training and knowledge. External resources have become scarcer, and competition for them has intensi ied. Partnerships have evolved as a way to address these changing circumstances.
To address health problems ef iciently and effectively, combinations of organizations need to collaborate. This approach has been endorsed by the Institute of Medicine (IOM) in its 2002 report on the future of the public’s health (Institute of Medicine 2002). The IOM endorsed a view of health organizations as consensus builders and architects of partnerships involving public, private, and voluntary organizations. A health organization that does not cooperate and interact with other providers of services and programs related to health cannot fully protect and promote health on an individual or community level. Organizations must build relationships and understand the various resources that they may call upon.
Partnerships, Balance, and Trust
The process of building collaborative action among health organizations is depicted in Table 13–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/109#tab131) . The irst step in creating a working partnership is identifying potential partners. Partners in health collaboratives typically include community-based organizations, public health departments, direct service health care providers, colleges and universities, and businesses (Varda et al. 2008). Organizations that can provide needed elements or resources become good prospects. To initiate the process of creating a partnership, senior managers representing potential partners should meet. During these sessions, it is critical for attendees to have decision-making authority regarding workers and resources. Each organization should identify its strengths. Culture in luences communications. Trust is essential if cooperation is to become a reality. Trust must be well-established and shared by all organizations that intend to work together. Further, trust must be earned often over an extended period of time. It is important to create an entity that is committed to working together and committed to quality.
Table 13–1 Building Collaborative Relationships among Health Organizations
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1. Identify potential partner organizations. 2. Meet with partner organization decision makers. 3. Begin long-term process of earning trust. 4. Develop memorandum of understanding (MOU). 5. Share power and leadership among partners. 6. Set mission and goals. 7. Seek resources, including personnel. 8. Develop bylaws or working rules. 9. Pursue long-term funding.
10. Hire and train personnel.
Once relationships have been created, trust-building initiated, and areas of common interest identi ied, a memorandum of understanding (MOU) should be developed. It may be necessary to share workers and resources. MOUs facilitate the exchange of equipment, personnel, and other resources. Formal documentation ensures that resources will be properly used and reimbursed.
The groups must be brought together and integrated and their resources managed. The purpose (mission) and goals of the partnership must be understood. The initial task is to identify the needed units and assign their responsibilities. The problem must be de ined, persons with appropriate skills have to be located, and resources must be secured. A leader may be designated and assigned the task of coordinating resources.
No single organization should be allowed to dominate discussions or dictate outcomes. Power may be apportioned and balanced through the use of bylaws. Bylaws can limit or eliminate other squabbles. When making decisions, for example, who will have a vote? Remembering that decisions determine outcomes, the impacts of clear governance documents and open channels of communications are dif icult to overstate.
Another reason that external collaboration is necessary is that funding for health services and public health is rarely suf icient. Because budgeting is a chronic dilemma, establishing appropriate goals that can be funded and the associated long-term planning become important considerations for leaders and senior managers. Opportunities for organizational growth should be included in strategic plans. (See a discussion of strategic planning in Chapter 3 (chapter03.html) .)
External collaboration requires resources. Funding must be provided. New personnel may be required. After hiring, new employees will require training. Existing staff may resist change. While such problems will require attention, they should not be allowed to sti le organizational or personal growth or to suppress innovation. The activities associated with organizational growth provide opportunities to improve the quality of existing programs and services as well as improve performance.
Federal and state statutes often mandate health organizations to provide speci ic programs and services. Recently, funding for mandated programs has decreased. Organizations have been compelled to assume the responsibility for generating the needed funds. Other programs and services are frequently developed to address local problems. Examples of such programs include oral health care, mental health services, environmental programs directed at radon or lead, and treatment services for diseases such as diabetes, rabies, West Nile virus, and Lyme disease. In the face of funding inadequacies
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and mandates for service that are wide and complex, partnerships provide another potential means to deliver needed programs and services.
Politics
Health is not exempt from political concerns. Health organizations often underestimate the importance of political entities. An important concern that is shared by all health organizations is enlisting the support of politicians. If politicians do not become friends of an organization, they must at least respect its goals and activities. Local politicians or political entities sometimes attempt to dictate how providers of health services and programs should do their jobs and the problems that they choose to address. Leaders of health organizations must ind diplomatic ways to decline such requests.
Maintaining public, private, and political health requires tact and frank discussions about the tasks that health organizations can and cannot undertake. Public health organizations exist to protect the community’s health. They cannot be used for purely political gain. Hospitals and individual providers concentrate on the health of individuals living in communities. Hospitals and providers occasionally seek inancial assistance from politicians to construct and equip new buildings. Public health agencies often require inancial support from politicians and should be held accountable for the prudent use of allotted funds. However, politicians must allow all health organizations to focus on their goals and not be asked to assume tasks outside the parameters of their mission or discipline.
Relationships with Government Agencies
Local health organizations that are publicly funded should develop relationships with several different types of entities. The irst are other local agencies and organizations. These may be public and nonpro it or for-pro it, but they have programs that are related to health. Many of these organizations serve members of the community directly.
Working with state governmental agencies entails both rewards and challenges. State agencies are large and bureaucratic. Receiving information from them requires patience; building relationships with them can be dif icult. State agencies establish many of the parameters for health by writing legislation, developing model programs, auditing local agencies, issuing rules and regulations, and acting as conduits for information lowing between local organizations and the federal government.
Many state and local entities consider the federal government to be a source of funding. In addition to funding, federal agencies can also provide support and information. Managers in federal government agencies often have a dif icult time forming relationships with people in state agencies. They are even less likely to establish relationships with managers in local organizations.
Sharing Resources
By sharing personnel, organizations can acquire additional capacity that would otherwise not be available. Such expertise is needed to meet local needs without exceeding the budgetary constraints of smaller organizations.
As an example, a relatively small public health department hired an epidemiologist and promptly shared the available time with ive neighboring organizations. Each organization contributes one-sixth
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of the epidemiologist’s compensation package (salary, bene its, and other expenses). They all share costs for supplies, equipment, travel, and training. Representatives of all six public health departments conduct the epidemiologist’s annual performance review. This particular arrangement for an epidemiologist has become a model for sharing employees in other regions of that state (Fallon and Zgodzinski 2012, 347–348).
Joint Programs
Some organizations have realized the advantages of creating joint programs with other entities. Such arrangements reduce total costs for administration. Other organizations have taken a regional approach when seeking grant funding for new programs. Funders are more likely to support single proposals that serve multiple populations rather than making several awards to serve people living in the same region. Because organizations in a region often have similar needs, joint programs usually have lower total costs due to savings in administrative expenses. The greatest savings are achieved when jointly funded organizations are contiguous and serve similar populations. Organizations contemplating a joint program are advised to begin by collaborating on a single program. A short-term effort is ideal. Trust and mutual con idence must be developed. Two-party collaborations should precede multipartner programs.
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13.3 INTERACTING WITH THE PUBLIC
Another opportunity for health organizations to use collaboration exists in relationships with customers, clients, and the general public. Communication with the general public is fundamental to providing good customer service. Calls and requests for information should be given priority and handled by employees who have received training in providing customer service. If the requested information is not readily available, an employee should discuss the problem, complaint, or question and record the caller’s contact information. The requested information should be obtained in a timely manner. The time required should not extend beyond a few minutes. However, if the desired information is dif icult to obtain or beyond an organization’s control, a courtesy call should be made to inform the caller of the situation and to provide a time frame within which the requested information may be expected.
If the requested information is beyond the organization’s ability to supply, assistance should be offered as to how such information might be obtained. One of the most appreciated customer services that an organization can offer is locating a phone number or Web address for a caller. Such small courtesies are usually remembered. If the organization relies on public funding, the small courtesies can return large dividends during funding renewal. Excellent customer service is always appreciated.
Informational meetings for staff are both valuable and appreciated. They provide opportunities for exchanging information and ideas. Organizational philosophy and the importance of quality and customer service can be discussed. Group meetings allow employees to develop and strengthen teams and reinforce the need for everyone to work together in pursuit of a common cause. These meetings should be planned by the management team. An agenda should be prepared and followed. Ground rules should be established and followed. However, these meetings should be suf iciently lexible to provide opportunities for staff and management to exchange ideas. This often results in more ef iciency and greater productivity. Organizational size will dictate how meetings should be organized and how frequently they should be held.
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13.4 INTERACTING WITH TRADITIONAL MEDIA: PRINT AND BROADCAST
The media encompasses many formats. Relationships with professionals from any media format should be taken seriously by all organizations. Print (newspapers and magazines) and broadcast (television and radio) formats comprise the so-called traditional media that are discussed in the paragraphs that follow. Electronic media (telephone and the Internet) are elaborated on in our discussion of marketing health (Chapter 4 (chapter04.html) ).
Introduction
Health organizations and the media have different but complementary goals. The goal of health organizations (including clinical providers, hospitals, and public health agencies) is to protect and promote the health of the people and communities they serve. The goal of the media is to disseminate information. Media professionals and health organizations are, by de inition or by default, partners in this process. As a consequence, relations with the media are important to the success of all health organizations. A successful relationship between health organizations and the media requires effort. Summarizing the relationship from the perspective of health organizations, leaders should establish contacts, maintain relationships, and follow the rules.
The effectiveness of any organization may be measured by its success in achieving its goals. The effectiveness of a health organization can be measured by the outcomes of its services and programs. Media organizations use ratings to assess their success. Ratings improve when a media organization provides clear and accurate accounts to its customers. The public must be made aware of the programs and services provided by a health organization. The media is a conduit for education. Local health departments, hospitals, and other providers; their boards; and their employees all serve the public. When health and media organizations work well together, both improve their chances for success. Health organizations have more to lose if strong relationships are not established with the media.
Integrating the Media
Public health organizations pursue their goals and objectives by organizing projects, providing programs, and delivering services. Hospitals and other providers pursue their goals and objectives by delivering clinical services. Media representatives have the potential to provide good advice while such activities are being planned. Based on their experience, they are often able to help health organizations develop media plans in support of services and programs. Media representatives know how to reach target audiences and how to use a range of media resources and elements. Politicians and members of the public are more likely to support the objectives of health organizations when they understand their goals.
A solid working relationship should be established. Trust facilitates interactions. Relationships that are based on trust can usually withstand intense scrutiny. Trust facilitates good customer service because members of the public receive their information from a reliable source. A health organization that follows up by delivering quality programs, products, and services is using the media resource wisely.
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Although speci ic localities are different, media outlets are likely to be quite similar. These should be investigated before reaching out to speci ic media representatives. Read or listen to the media’s product and then review their policies and political positions. Identify the audiences for each media source under consideration.
Determine which outlets reach the groups and constituencies desired by the organization. Create a ile of the contact persons and other key personnel that work in each media outlet. After considering
relevant factors such as target audience, time lines, and cost, select the primary and secondary media outlets.
Before involving any members of the media, review existing and planned policy objectives and goals. Be sure that these factors are aligned with the objectives of health programs and services. Only then can appropriate and reasonable objectives for the media be discussed and established. Become acquainted with media contacts. Meeting in the of ices of media persons usually facilitates good working relationships. Operating protocols (ground rules) must be clear and understood by all parties. Everyone must agree to them before they can be considered to be binding.
Developing Working Relationships
Health personnel should expect to have a primary role in developing relationships with members of the media. This allows a measure of control. It also recognizes the reality that media people have busy schedules and many responsibilities. Members of the media are also subject to in lexible deadlines. Take the time to develop sound working relationships. These relationships should be developed before a crisis emerges. The expertise and experience of media personnel should be respected. Organization leaders should be prepared to provide instruction in health and the organization’s goals, objectives, programs, services, and products. Media representatives are most receptive to organizations whose messages and needs they understand and whose purpose they value.
The importance of ground rules has already been mentioned. Remember that comments are always on the record. Everyone involved must agree in advance to requests for exchanges to be off the record.
Health leaders who establish good working relationships are improving the quality of their programs and services. They realize that the media can disseminate a health organization’s messages. They respect the fact that the media has the potential to reach many people in a brief sound bite or a few lines of text.
Providing Material
Television and radio often use short sound bites (10 to 15 seconds in length). Messages and press releases should be drafted with that in mind. Additional information should be supplied in a press kit. Supplementary materials (written documents and pictures) should be provided on a computer disk in a convenient format. With few exceptions, PDF iles should be avoided because they require special software to edit them.
Marketing experts estimate that Americans are exposed to more than 5000 advertising messages each day (Story 2007). This number does not include the Internet. Any messages prepared by an organization must have relevance and appeal. Brevity is a highly desirable attribute. Organizations that focus on health should provide health-related information. The media provides a convenient forum for
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reaching out to community constituencies. Working with the media can help to make an organization head or spokesperson gain visibility.
The social and economic environments of community neighborhoods clearly affect health. The media shares the responsibility for reporting on conditions that contribute to health problems. Members of the media should be viewed as partners who can help implement and support responsible health policies, programs, and services. By working together, health organizations and the media can help each other to succeed.
Public respect and trust must be earned. A single false or misleading statement can damage an organization’s integrity and reputation. Repairing the damage may require years of effort. Be sure that shared information is clear, complete, and not misleading. Periodically, have an organization spokesperson or head provide information. Never invent facts or information because that jeopardizes an organization’s reputation. Through their spokespersons and leaders, organizations have an ethical responsibility to be honest and accurate.
Avoiding Problems
Many managers of health organizations must interact with members of the media as part of their normal job duties. Preparing for these encounters is often omitted in educational classes and textbooks. Media experts suggest caution or, better still, avoiding these situations. However, there inevitably are times when media interaction is required and important.
A working member of the media provided the following suggestions about working with media professionals (Fallon and Zgodzinski 2012, 351–358):
• Think before speaking.
• Honesty may be unpleasant, but it can never be challenged.
• “No comment” is usually heard as “I know something and won’t share it.”
• Always assume that a camera or microphone is live.
• Assume that every conversation or statement is on the record.
• The only way to guarantee that a statement will not be printed or broadcast is to avoid making it.
• Be willing to admit not knowing the answer to a question, but then attempt to ind the answer in a timely fashion.
• Avoid speculation.
Remember that more than one organization will be involved as the importance of any story increases. When honesty and courtesy are extended to members of the media, fairness and accuracy will usually be returned.
Members of the media are not usually trained in health. Avoid using professional jargon, inside expressions, or abbreviations. Such behavior is not only rude but also confusing. This applies to anyone, including the general public. Not understanding often leads to feelings of anger. The health ield has
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many acronyms. Any acronym should be clearly de ined every time that it is used.
In any environment, simplicity helps to provide focus, improves the likelihood that a message will be understood, and increases the probability that it will repeated accurately. Accuracy and focus are improved when no more than three concepts are communicated during any single session, interview, broadcast, or story.
Delivering Accurate Information
Air time and space on a page are always in short supply. The media appreciates any help that can be given. This includes preparing press releases and providing background information. Preparing inished products avoids transcription errors. Electronic rather than written documents also tend to
reduce errors. Reporters accept telephone calls if they happen to be in their of ices and are not busy with other, more important projects.
Stories and other documents must be complete. In a press release or draft of an article, answers to the questions of who, what, where, when, why, and how should be provided as early as possible. Many health organizations have appointed public information of icers who handle the majority of media interactions and questions. Many people contribute to their inal statements. An offer of additional information is always appreciated. Contact information (regular telephone numbers [home and of ice], cellular telephone number, e-mail address) should be added to all material that is sent to the media.
Final Thoughts on Collaborating with the Media
A few additional comments and suggestions for relating to the media have been collected in this inal section.
Types of News
Reporters are paid to seek information. Because they also appreciate help, they will accept both good and bad news. Sharing information with reporters should be a priority for a health organization. This is a variation of quality improvement. When the public realizes that information from a particular health organization is always accurate and truthful, the public’s appreciation of the source (the health organization) will increase.
Avoidance
Experienced people (health and media professionals) agree that reporters should not be avoided. Reporters who cannot have access to senior health of icials and managers have two options: ind a different source for information or drop the story. The information supplied by alternative sources may be inaccurate. Dropping the story results in a loss of publicity. Neither option contributes to improving the quality and performance of health organizations.
Reporters rarely forget the frustration associated with being denied access to information. Future requests for coverage may be acted upon slowly or ignored. Neither outcome is helpful in a crisis or an emergency. The solution is to appoint and train an organizational spokesperson.
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A related issue involves delegating authority and trust. Organizational executives should consider delegating authority to subordinates, learning to trust them, and allowing them to speak with reporters. Proper training is essential.
Absence, like avoidance, also hurts relationships with members of the media. A useful policy is to maintain contact during quiet times. Continue to provide information and ideas for stories. Reporters typically work on more than one story. When time or space becomes available, they will use the information or ideas.
Advice
The media professional introduced earlier provided a summary of key points to remember about working with members of the media (Fallon and Zgodzinski 2012, 351–358):
• Be deliberate when providing material.
• Discard insigni icant items.
• Do not bury important information in an otherwise boring press release.
• Honesty is genuinely appreciated by all parties.
• Calling media contacts in advance about an important story will help to earn their trust.
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CONCLUSION
Among health organizations, collaboration is often necessary when addressing complex programmatic or service challenges. Collaboration usually contributes to service and program quality. Jointly funded programs and sharing employees provide alternatives for organizations that have limited resources. Open communications, trust, and a willingness to think creatively and work together are requirements for successful collaborations.
Openness and trust are also prerequisites for successful relationships involving the media. The goal for all concerned (health organizations and the media) is to maximize the bene its of the relationship. The media appreciates clearly worded press releases, organizations that respect their deadlines, and the truth. Healthy relationships with members of the media contribute to quality health care services and programs. Good relations involving the media also usually improve overall organizational performance.
Systems Thinking about Collaborating Outside the Organization
A macrolevel or whole-systems perspective on meeting health challenges that affect communities views health systems as “the full complement of public and private organizations that contribute to the delivery of public health services for a given population, including governmental public health agencies as well as private and voluntary entities” (Mays, Halverson, and Scutch ield 2003, 180). From a whole-systems perspective, collaboration among health organizations is imperative for ef iciently and effectively meeting complex health challenges.
As one example, consider the arena of adolescent health. Researchers have studied the delivery of services for adolescent health in rural service areas, identifying the multiple organizations committed to improving adolescent health (Wholey, Gregg, and Moscovice 2009). These organizations include schools, local health departments, clinics, hospitals, family planning agencies, and faith-based community groups. The bonds among collaborating organizations were mapped using the methodology of social network analysis. This approach (social network analysis) identi ies the strength and type of connections that exist among individuals and organizations. The researchers found that smaller communities had fewer organizations available to meet local needs, so that local health departments were more prominent in convening and managing collaboratives to improve adolescent health. In larger communities, the role of the local health department as convener was less central, as specialized collaboratives (e.g., a consortium to fund child health insurance) frequently arose to address dimensions of the problem.
It is critical that some organization(s) be assigned or allowed to seize responsibility for whole- system development and improvement. In the decentralized US health system, organizational managers can push their own organizations to lead and join whole-system health improvement efforts. Taking this step requires courage and determination to tackle complex health problems.
CASE STUDY RESOLUTION
Returning to Eric Robinson and Linda Gomez, Eric said, “I have three recommendations. First, consider forming a partnership with the three health agencies in adjacent counties. All of you are probably in similar situations and have similar problems. You each want a health educator, but none of you can
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afford to pay the entire salary. Second, I suggest that someone from the board approach the editor of the paper and begin a dialogue. This agency and the newspaper could both bene it. Third, since Mr. Durango apparently doesn’t like to interact with the press, appoint someone to be the spokesperson for the agency. Mr. Durango shouldn’t mind giving up something that he doesn’t like in the irst place.”
“Interesting. Thank you.”
Jimmy returned at that moment and said, “Thanks, Linda …”
Linda interrupted, saying, “Thank you, Jimmy. You have a student who is not only smart but quite perceptive. I’ll be in touch with both of you.”
There is no record of Linda Gomez’s communication with the Health Commissioner. Three months later, Eric received a letter offering him a job. The terms speci ied providing health education services for 1 day per week to each of four adjoining health agencies. Linda’s agency would coordinate administrative details and provide a home base. For the remaining day each week, Eric would serve as the home agency’s of icial media spokesperson.
REFERENCES Fallon, L. F., and E. Zgodzinski. 2012. Essentials of public health management. 3rd ed. Sudbury, MA:
Jones and Bartlett. Institute of Medicine. 2002. The future of the public’s health in the 21st century. Washington, DC:
National Academies Press. Mays, G. P., P. K. Halverson, and F. D. Scutch ield. 2003. Behind the curve? What we know and need to
learn from public health systems research. Journal of Public Health Management and Practice 9 (3): 179–82.
Schultz, J. 1998. Reviving the fourth estate. Cambridge, England: Cambridge University Press. (Historical note: In 1837, Thomas Carlyle attributed the origin of the fourth estate to Edmund Burke who used it in 1787 in a parliamentary debate.)
Story, L. 2007. Anywhere the eye can see, it’s likely to see an ad. New York Times. http://www.nytimes.com/2007/01/15/business/media/15everywhere.html (http://www.nytimes.com/2007/01/15/business/media/15everywhere.html) (accessed December 2, 2010).
Varda, D. M., A. Chandra, S. A. Stern, and N. Lurie. 2008. Core dimensions of connectivity in public health collaboratives. Journal of Public Health Management and Practice 14 (5): E1–7.
Wholey, D. R., W. Gregg, and I. Moscovice. 2009. Public health systems: A social network perspective. Health Services Research 44 (5, Part II): 1842–62.
RESOURCES
Periodicals
Erwin, P. C. 2008. The performance of local health departments: A review of the literature. Journal of Public Health Management Practice 14 (2): E9–18.
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Jones, W. J., and P. Honorè. 2007. Business and public health partnerships: Policy and regulatory challenges and successes. Organizational Ethics 4 (1): 23–34.
Mooney, H. 2010. Total place–part 1. Why partnerships make total sense for savings. Health Service Journal 120 (6192): 24–5.
Mooney, H. 2010. Total place–part 2. Why working together boosts independence. Health Service Journal 120 (6193): 22–3.
Mooney, H. 2010. Total place–part 3. How partnerships can maximise resources. Health Service Journal 120 (6194): 24–5.
Nyberg, A. 2010. Retaining your high performers: Moderators of the performance-job satisfaction- voluntary turnover relationship. Journal of Applied Psychology 95 (3): 440–53.
Schmalzried, H. D., and L. F. Fallon. 2007. Succession planning for local health department top executives: Reducing risk to communities. Journal of Community Health 32 (3): 169–80.
Szczypka, G., M. A. Wake ield, S. Emery, Y. M. Terry-McElrath, B. R. Flay, and F. J. Chaloupka. 2007. Working to make an image: An analysis of three Philip Morris corporate image media campaigns. Tobacco Control 16 (5): 344–50.
Winston, J. L. 2009. Building relationships from an industry perspective. Journal of Dental Hygiene 83 (4): 204–5.
Books Bonk, K., and E. Tynes. 2008. Strategic communications for nonpro its: A step-by-step guide to working
with the media. 2nd ed. San Francisco: Jossey-Bass. Burlin, T. J. 2007. Collaboration: Using networks and partnerships. 4th ed. Blue Ridge Summit, PA:
Rowman & Little ield. Butterfoss, F. D. 2007. Coalitions and partnerships in community health. San Francisco: Jossey-Bass. Johnston, J. 2008. Media relations: Issues and strategies. St. Leonards, New South Wales, Australia:
Allen and Unwin. Loghurst, J. 2006. Making the news: An essential guide for effective media relations. Ottawa, Canada:
Novalis. Theaker, A. 2008. The public relations handbook. London: Routledge.
Web Sites • American Health Information Management Association: http://www.ahima.org/
(http://www.ahima.org/)
• California Center for Public Health Advocacy: http://www.publichealthadvocacy.org/ (http://www.publichealthadvocacy.org/)
• City and County: The Voice of Local Government: http://americancityandcounty.com/ (http://americancityandcounty.com/)
• Johns Hopkins University Bloomberg School of Public Health Center for Communication Programs: http://www.jhsph.edu/publichealthnews/ (http://www.jhsph.edu /publichealthnews/) and http://www.jhuccp.org/ (http://www.jhuccp.org/)
• National Assembly of Health and Human Service Organizations: http://www.nassembly.org/ (http://www.nassembly.org/)
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SECTION IV
Control and Improvement
This section, Control and Improvement (Section IV (section04.html) ), covers knowledge, skills, attitudes, and values related to managers’ responsibility to control and improve their units and organizations. As noted in the introduction chapter (Chapter 1 (chapter01.html) ), a primary theme of this book is the need to improve the management of health organizations. Managing Performance and Quality (Chapter 14 (chapter14.html) ) discusses the measurement and improvement of organizational performance. The chapter also presents concepts and tools for assessing organizational activities and programs. Evaluation is a key element of organizational learning and provides critical input into how programs and activities can be improved.
Any new expenditures for improvement are subject to the constraints of inancing and budgets. Managing Finance and Budgets (Chapter 15 (chapter15.html) ) conveys the fundamentals of inancial management in health organizations. Managing Information (Chapter 16 (chapter16.html) ) covers opportunities and challenges in the growing area of information technology, with a focus on the electronic health record. Managing Change (Chapter 17 (chapter17.html) ) continues the theme of challenging the organizational status quo through innovation and learning.
From the Association of Schools of Public Health (ASPH) inventory of core competencies (Association of Schools of Public Health 2010), this section (Section IV (section04.html) ) contributes to ful illing three competencies in Health Policy and Management:
• Apply the principles of program planning, development, budgeting, management, and evaluation in organizational and community initiatives.
• Apply quality and performance improvement concepts to address organizational performance issues.
• Apply “systems thinking” for resolving organizational problems.
This section also addresses selected ASPH competencies from the two crosscutting domains of Program Planning and Systems Thinking. From the Healthcare Leadership Alliance competency framework (Healthcare Leadership Alliance 2010), this section emphasizes the competency domain of Leadership and the three clusters of competencies for Information Management, Financial Management, and Quality Improvement within the domain of Business Skills and Knowledge.
REFERENCES Association of Schools of Public Health. 2010. MPH core competency model. Final Version 2.3.
http://www.asph.org/document.cfm?page=851 (http://www.asph.org /document.cfm?page=851) (accessed February 22, 2011).
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Healthcare Leadership Alliance. 2010. Overview of the HLA competency directory. http://www.healthcareleadershipalliance.org /Overview%20of%20the%20HLA%20Competency%20Directory.pdf (http://www.healthcareleadershipalliance.org
/Overview%20of%20the%20HLA%20Competency%20Directory.pdf) (accessed July 13, 2011).
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CHAPTER
14
Managing Performance and Quality
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Understand the importance of improving organizational performance through performance management, program evaluation, and continuous quality improvement (CQI).
• Be able to explain the Turning Point model of performance management. • Be able to explain a logic model and how it can be used to evaluate and improve programs. • Be able to de ine quality from the perspective of health care delivery and from the perspective of
public health. • Understand CQI methods and techniques such as process maps, the Plan-Do-Check-Act cycle,
Lean, and Six Sigma.
CHAPTER SUMMARY
Developing a system for controlling organizational performance is a critical step in improving the quality and performance of health programs and services. This chapter reviews concepts and applications of performance management, program evaluation, and continuous quality improvement (CQI) in health. CQI topics include a de inition of CQI, the six quality aims of the health care delivery system and nine quality aims of public health, and four CQI techniques (process maps, Six Sigma, Lean, and Plan-Do-Check-Act).
CASE STUDY
The conversation between Richard, the Assistant Financial Director, and Hannah, the Director of Community Health Outreach Programs, had started over coffee before moving to Richard’s of ice.
“Hannah,” Richard said. He was trying to remain calm. “You have been asking for additional funding regularly for the past few months. Money is tight. It will become even tighter thanks to recent decisions that have reduced funding to the organization by 25 percent.”
“All the more reason to grant my request for additional funding,” Hannah replied. She was becoming irritated by her colleague. “It’s no surprise that people call him Rich when he is not around,” she thought. “He thinks that the organization’s money belongs to him.”
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“How do you propose to spend the money?” Richard was asking. His voice interrupted Hannah’s reverie.
“I want to hire a CQI consultant to analyze my division’s programs to …”
Richard interrupted. “Didn’t your programs win an award from the Senior Women’s League …”
It was Hannah’s turn to interrupt Richard, “That was almost 10 years ago.”
“So? An award is an award.”
Hannah was fuming. “Give me a moment to collect my thoughts before I try to give you an explanation.”
While Hannah thinks, what would you say to Richard?
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14.1 INTRODUCTION
Health organizations have been put on notice to perform more ef iciently and to improve health outcomes, often with reduced levels of funding or revenues. Managers and employees who make performance improvement their top priority are sorely needed in the health sector. Many organizations in a variety of industries use performance management and continuous quality improvement (CQI) techniques to improve not only the services and products that they deliver but also the ef iciency of the processes that they employ. Over the past two decades, health care delivery organizations in the United States have embraced performance and quality improvement in an effort to improve the quality of care they provide to the people they serve while simultaneously reducing costs. Recently, public health organizations have begun to adopt a variety of performance management frameworks and techniques.
Program evaluation is a key element in the search to improve and monitor performance in health organizations. Program evaluation is de ined as the systematic assessment of the operation and/or outcomes of a program, compared to a set of standards, in order to improve the program (Weiss 1998). Program evaluation is an essential feedback system that allows learning to occur in an organization and is a way to ensure managers and policy makers that programs are meritorious. Evaluation examines the worth of a program (Scriven 1998) and is used to describe and appraise the changes that take place as a result of program interventions. The purpose of all health services and programs is to produce changes in people or their communities. Program evaluation helps determine whether these purposes have been achieved and how they may be more effectively and ef iciently accomplished.
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14.2 PERFORMANCE MANAGEMENT
Performance management is a framework for organizational evaluation and improvement. Performance management frameworks have been developed for widespread use both in the public health sector and the private health sector.
Performance Management in Public Health
A performance management model that is customized for public health organizations was created by the Turning Point National Excellence Collaborative (Turning Point 2005). There are four components to the Turning Point performance management model: performance standards, performance measurement, a quality improvement process, and a system for reporting progress. The underlying basis for the model is the use of objective data and observable outcome measures. The goal of the model is improving the health of people in their communities. Locally developed goals and program performance targets are evaluated using outcome measures that are derived from objective data. Using this approach, resources can be prioritized and allocated in a fair and unbiased manner. The same data can be used to modify programs or policies or to change the way resources are allocated. The ultimate use of the collected data is in evaluating the effectiveness (outcomes) of policies, programs, and services. Expressed simply, were goals met?
Performance Standards
Guidelines that are used to assess an organization’s products, programs, or other outputs are called performance standards. These are based on objective data. Comparisons may be made with similar local, regional, or national organizations. They may use guidelines. They may be based on expectations of experts, professional associations, or the public being served. The common denominator for all performance standards is that they are based on objective data and observable outcome measures. A different way of characterizing performance standards is that they can be quanti ied.
Performance Measurement
The process of collecting information that will be used in assessing outcomes is called performance measurement. Data that are used for evaluating organizational performance or programmatic outcomes must be measurable and quanti iable. Meeting these criteria is necessary to satisfy the requirement for objective standards. Performance measures must be as objective as possible.
Quality Improvement
An organization that creates a program to manage, change and improve its processes and outputs is engaging in quality improvement. The hallmarks of a quality improvement program include established and quanti ied standards, measurements that are aligned with the standards being used and frequently checked, regularly collecting objective data, analyzing collected data, and periodically sharing conclusions with the workers who are responsible for creating the organization’s products and output.
Reporting Progress
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Health organizations should routinely collect data that can be used to report on progress associated with their programs. The purpose or nature of the programs being assessed will determine the speci ic data that are collected. Accurate and objective data facilitate comparisons between local program performance and national benchmarks, objectives, or standards. The same data can be used to identify program de iciencies or gaps in coverage, outcomes, or population segments being served.
Performance Management in Health Services Delivery
A basic performance management model that is used by most organizations that deliver clinical health services is accreditation by The Joint Commission, which covers approximately 19,000 health services organizations in the United States. Accreditation is technically voluntary. However, unaccredited institutions often cannot receive reimbursement from insurance providers. The Joint Commission standards cover performance in key areas such as patient care, medication safety, and infection control. Standards include annual national patient safety goals, such as the following one: identify patients correctly. The goal of accurate patient identi ication is further reinforced by two sub-goals: use at least two ways to identify patients (for example, use the patient’s name and date of birth); and make sure that the correct patient gets the correct blood when the patient gets a blood transfusion (The Joint Commission 2011).
Perhaps the most popular performance management framework in the private sector in the United States is the Baldrige Criteria for Performance Excellence. The Baldrige criteria provide the basis for the Malcolm Baldrige National Quality Award, the highest level of national recognition for performance excellence. The program was established by the US Congress in 1987 to raise awareness about the importance of quality and performance excellence as a competitive edge for attaining organizational success. Congress originally authorized the Baldrige Award for manufacturing and service organizations but has expanded eligibility to include public health and health care organizations (National Institute of Standards and Technology 2010). Many health care delivery organizations use the Baldrige model, and several have achieved the National Quality Award.
Pursuing the Baldrige criteria requires that organizations measure and improve performance in seven areas: leadership; strategic planning; customer focus; measurement, analysis, and knowledge management; workforce focus; process management; and results. The Baldrige criteria and the improvement process engendered by striving to meet the criteria are a worthwhile framework for many organizations working in and around health, because the criteria enable organizations to use data and feedback to improve on a comprehensive range of performance indicators.
Performance Management System
An organization that uses performance standards, measures employee performance and output, regularly reports progress, and includes a quality improvement program is operating a performance management system. All of the components must be integrated. Experts suggest that a performance management program be operated on multiple levels such as involving one or more departments and an entire organization or integrating regions or states as well as a local community in addition to an entire organization. The goal of a performance management system is to monitor an organization’s processes and resulting outputs using objective data. A well-designed performance management system holds all component departments and units of an organization accountable to a comprehensive and integrated set of quality norms.
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Most organizations have multiple outputs, offering a variety of different products and services to different client or customer bases. A county public health department, for example, may serve different audiences for immunizations, communicable disease investigation, school wellness, day care education, ordinance enforcement, waste and recycling, and a host of other services. A hospital may serve inpatients, outpatients, and the community as a whole. A second complexity in managing performance is that performance may depend on several key processes in the organization, so that simply measuring outputs does not necessarily help the organization identify where internal improvement is necessary.
One effort to address these complexities in performance management is the balanced scorecard (Kaplan and Norton 1996). The balanced scorecard helps organizations to select and measure key inputs, processes, or outputs, with performance represented by scores on each of the measures. Most organizations using a balanced scorecard include measures of employee satisfaction and learning, which historically was neglected in assessments of organizational performance. In organizations producing multiple outputs, like the county health department and hospitals, measures of employee satisfaction and learning likely are related to the quality and value of all the different outputs. (In CQI terms, employee satisfaction and learning is a root cause of service quality and value.) Typically, balanced scorecards also include measures of (1) inancial outcomes, (2) internal ef iciency and quality, and (3) client satisfaction. Including client satisfaction in the balanced scorecard ensures that the organization listens to feedback from those who are served.
The balanced scorecard enables organizations to focus on key measures of different dimensions of performance. The scorecard helps managers recognize that performance in complex systems is comprised of multiple, often interrelated, dimensions, and that effective organizations balance multiple goals and objectives at the same time.
Assessing a Performance Management System
To be maximally useful, a successful performance management system should be responsive to local needs and designed to align closely with an organization’s mission, strategic goals, and priorities. Health organization leaders can assess the effectiveness of their performance management system by addressing some fundamental issues. The following questions are offered as a guide for such activity.
• On what basis are performance targets established?
• Are performance targets aligned with organizational goals?
• Are the targets used by other organizations that have similar operational goals?
• To what extent are local targets aligned with national, state, and regional goals and objectives?
• Are the targets scienti ically sound?
• How does the local organization measure process capacity?
• Are outcomes aligned with organizational capacity?
• What tools are used to measure output?
• How is quality measured?
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• How is customer satisfaction measured?
• How often are quality and customer satisfaction assessed?
• How does the organization document progress?
• Who receives summaries of performance data?
• What venues are used in reporting?
• How does the organization use the data that it gathers and the results that are generated from the data?
• How often is the performance management process reviewed?
In addition, successful large-scale organizational improvement requires both top-down and bottom- up participation by all employees. Achieving performance improvement depends largely on organizational leadership that provides an environment where people can perform optimally to achieve meaningful goals.
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14.3 EVALUATING PROGRAMS
Another approach to performance improvement in health organizations is program evaluation. The discipline of program evaluation has been a traditional strength of the public health sector, because many public health problems have been targeted by publicly or privately funded programs speci ically created to address those problems. The clinical health sector also engages in the program evaluation process. Program evaluation is de ined as the systematic assessment of the operation and/or outcomes of a program, compared to a set of standards, in order to improve the program (Weiss 1998). The purpose of all health programming is to produce changes in patients, customers, clients, or the community. Program evaluation helps determine whether these purposes have been achieved and how they may be more effectively accomplished (Scriven 1998). Program evaluation and performance management share the same general goals.
Formative and Summative Program Evaluation
A basic distinction is made between formative and summative evaluation. Both are important to understanding and improving any health program. Three characteristics that distinguish these two different types of evaluation are shown in Table 14–1 (http://content.thuzelearning.com/books /Fallon.9852.17.1/sections/117#tab141) . Purpose refers to the reason for the evaluation, Phase of Program refers to the time period in the life cycle of the program when the evaluation is conducted, and Level of Application refers to the way(s) evaluation indings are applied.
Table 14–1 Comparison of Formative and Summative Evaluation
Formative Evaluation Summative Evaluation Purpose Degree to which program milestones
are achieved General assessment of inal outcomes
Phase of Program
Completed during program development
Completed when a program is operating at full strength
Level of Application
Assess phases of program development Assess merits of the program
The purpose of formative evaluation is to determine whether the service or program is evolving as intended. A summative evaluation is directed toward a more general assessment of the degree to which the outcomes have been attained over the entire course of the program. The formative phase of program evaluation occurs in the program’s development stage, while the summative phase occurs when the program is operating at full strength. The level of application in a formative evaluation is to assess the development phases of a program, while a summative evaluation determines the merits of a program. This factor most sharply differentiates summative evaluation from formative evaluation.
Formative Evaluation
Formative evaluation involves collecting evidence during the creation and implementation of a program so that revisions can be made as the program is developed. Because formative evaluation
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takes place during the formation stage, every effort should be made to use it to improve the process. In this respect, formative evaluation is useful during program development as well as when reviewing services and assessing client, patient, or consumer satisfaction.
Summative Evaluation
Summative evaluation refers to an assessment that is undertaken at the end of a program or program cycle to estimate the program’s effectiveness. The essential characteristic of summative evaluation is that a judgment is made about the program with regard to the effectiveness of the service that has been provided by the organization. Too often, evaluation is essentially summative in nature, occurring only at the end of the program cycle, when it is too late to make modi ications. However, if evaluation is to be useful for both improving the program and evaluating user or participant satisfaction, it must occur not only at the end of the implementation phase, but also while the program is being implemented.
A Framework for Program Evaluation
The Centers for Disease Control and Prevention (CDC) has developed a useful framework to guide health professionals in conducting a program evaluation (Centers for Disease Control and Prevention 2005). The CDC framework outlines the essential elements of program evaluation and illustrates how to organize and conduct an evaluation project. The framework is intended to assist managers and staff associated with health programs when planning, designing, implementing, and using the results of comprehensive evaluations in practical ways. Three separate aspects of programs should be evaluated: implementation, effectiveness, and accountability.
Program Implementation
A irst evaluation activity is judging whether the program was implemented as intended (was the program faithful to its design). What activities took place? Who conducted them? For whom were they conducted? Was the intended recipient population reached? What were the barriers to implementation? Addressing questions like these can help managers make changes in program content and delivery, thereby maximizing their potential impact.
Program Effectiveness
The traditional target of program evaluation has been judging the effectiveness of the program in improving ultimate or long-range health outcomes. A convenient example is provided by the goals associated with any of the Healthy People programs. Typically, programs have a number of goals that focus on inputs, processes, and outcomes. The effectiveness on each of those dimensions must be reviewed in order to understand why some programs are successful while others are not. Frequently, health problems are simultaneously addressed by multiple programs. It is important to identify the potential effects of different but interdependent programs on the outcomes being pursued.
Program Accountability
Program evaluation is one way for health organizations and sponsors of programs to demonstrate accountability to their stakeholders, such as funding agencies, legislators, community leaders, and
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organizational partners. Improvement-driven health organizations welcome external scrutiny as opportunities to learn and improve. Program evaluation should include questions that are important to stakeholders, such as cost effectiveness and cost–bene it.
Analyzing the effects of a program on a health problem is one of the most dif icult problems in evaluation. No single method of evaluation is widely accepted (Centers for Disease Control and Prevention 1999). The concept of logic models is one method that has gained legitimacy in recent years. Logic models are useful for exploring relationships between program interventions and outcomes.
Using Logic Models in Program Evaluation
A logic model is a graphic representation that shows the interrelationships between the resources that go into a program, the activities the program undertakes, and the changes or bene its that result (Taylor-Powell, Jones, and Henert 2003). The model provides a visual summary of the interrelationships among the components of a program, how and why they it together, and why the program should lead to the intended results or bene its (Hosley 2005). A logic model is very useful in a program evaluation because it describes the sequence of events thought to bring about bene its or changes over time. The model depicts how the program goals, activities, and expected outcomes are linked together and if the chain of reasoning is valid. A simple logic model identi ies inputs (the resources invested that promote achieving the desired outputs), outputs (the activities conducted or products created that reach targeted participants or populations), and outcomes (changes or bene its for individuals, families, groups, businesses, organizations, or communities).
A logic model is also a systems model because it shows the relationship of the interdependent parts that together comprise an entire or total program. In systems thinking, a total program is greater than the sum of its individual parts (Sundra, Scherer, and Anderson 2003). A graphic illustration of the causal thinking behind a program usually clari ies the relationships among the parts of the system in which the program is embedded. A logic model often is the initial step in evaluation because it helps to determine when and what to evaluate.
A detailed example of a simple logic model for a program intended to reduce waiting times for patient or client services is shown in Figure 14–1 (http://content.thuzelearning.com/books /Fallon.9852.17.1/sections/117# ig141) . The logic model visually illustrates the external situation of unacceptably long waiting times for appointments and the relationship between inputs, outputs, and outcomes. The inputs include program staff, resources, and community partners to address the problem. Outputs include gathering and analyzing data (to better understand the problem), designing patterns of low for proposed changes, and developing and presenting training materials for staff and patients and clients (to familiarize them with the changes). Anticipated program outcomes include reduced waiting times (short term), growth in market share (medium term), and growth in market share (long term). The overarching goal is to reduce waiting times.
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FIGURE 14–1 A Simple Logic Model: Reducing Waiting Times
The complexity of logic models can be increased. These are referred to as expanded logic models. In an expanded logic model, it is important to consider the context of the problem including the current approach or strategy of the organization, expectations from stakeholders, and underlying organizational mission and values that determine the overall priorities. The inputs include staff, resources, and facilities (if appropriate; these are elements that will help achieve the expected changes) and affected individuals or groups (elements that will be impacted by any proposed changes). The outputs of a logic model address what is done by the agency or program (in terms of productivity) and what energy or resources are being allocated to the problem. The outcomes of a logic model can be categorized into three types: short-term changes in knowledge, skills, and attitudes; medium-term changes in behavior or policies; and long-term impacts on the underlying problem An expanded logic model addresses assumptions that contribute to the problem or situation to be addressed as well as the external factors that can facilitate results or serve as barriers to resolving the problem or issue.
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14.4 CONTINUOUS QUALITY IMPROVEMENT
Many health organizations have experimented with a variety of continuous quality improvement activities to intensify their impact and improve their outcomes. CQI concepts and techniques have been successfully implemented in a range of diverse health programs. CQI has improved the operation and outcomes of Women, Infants and Children (WIC) clinics, expanded parental access to child mental health services, increased childhood immunization rates, and helped to initiate programs that provide dental services.
Within the health industry, health organizations share a common de inition of CQI. The de inition of CQI includes using deliberate techniques to improve programs and processes, assessing and then responding to the needs of people and communities served by an organization, and focusing on programs and activities designed to improve and enhance the health of persons living in the service region. CQI is intended to alter processes, thereby achieving measurable improvement. CQI includes service delivery (focusing on activities related to delivering programs and services) and process performance (focusing on the processes encompassed by service delivery). The goal of CQI is to improve or streamline activities.
The four key components in the de inition of CQI can be expanded.
• Using deliberate techniques to improve programs and processes. This refers to speci ic CQI methods including Six Sigma, Lean, or the Model for Improvement. Six Sigma is an approach that is designed to reduce the number of defects or errors associated with a process. Lean is a method intended to improve the low of elements that comprise speci ic processes. (Six Sigma and Lean are described in more detail later in this chapter.) The Model for Improvement begins by making relatively small changes and then rapidly expands their scope. All three approaches contribute to larger, systemic improvements. Health organizations are encouraged to select the most relevant methods or approaches for their particular settings.
• Assessing and then responding to the needs of people and communities served by an organization. CQI is focused on the needs of the people that an organization serves. Recipients can be customers, clients, patients, or entire communities. Underlying all CQI activities is a need to understand personal or collective needs or preferences and then create programs or deliver services to meet the needs. Two types of customers or clients are commonly encountered in health organizations. The irst includes individuals who seek services. Their needs are usually addressed by public health programs such as WIC or services such as immunization clinics or routine health care services. The second relates to persons in a community who are at risk but are typically unaware of their status. Such situations or needs can be identi ied by health care practitioners who allocate time to discuss personal situations with their patients or clients or through community health assessments.
• Focusing on programs and activities designed to improve and enhance the health of persons living in the service region. The goal of CQI in health is to develop programs and services that will meet the needs of individuals as well as improve the health of the population with whom they work or reside. Health organizations often respond with programs such as HIV/AIDS prevention, environmental health, smoking cessation, and preventing teenage pregnancies or childhood obesity.
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• Achieving measurable improvement. This refers to the fact that CQI is data-driven. Basing managerial decisions on objective data is receiving more emphasis in all types of health organizations. Because the data used in making decisions is objective, the outcomes of those decisions are likely to be improved.
By virtue of its name, CQI is continuous. It is not a one-time operation or single-project undertaking. The goal of using CQI techniques is to improve processes. Commonly, CQI activities are initially introduced into health organizations as small projects. As managers and employees become more experienced, CQI programming is expanded to encompass a greater number of departments in an organization. Success with CQI is often synonymous with permanent integration into the fabric of an organization.
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14.5 UNDERUSE, OVERUSE, AND MISUSE
De iciencies in quality occur when an appropriate service is not available, provided, or experienced. Quality de iciencies can be divided into three broad categories: underuse, overuse, and misuse. Underuse, overuse, and misuse can be addressed using different perspectives. One such approach is whether professional standards were met. Another approach is whether the services provided to individuals or groups were appropriate, suf icient, or excessive in terms of the speci ic situation being reviewed.
Underuse
Underuse denotes that a service or program has not been fully or optimally used. A different frame of reference suggests that underuse indicates excess capacity. In the realm of providing clinical services, underuse represents inadequate service delivery. This can be caused by resource levels that are not adequate to meet existing demand or because consumers of services are seeking them at levels that could be expanded. Underuse is locally de ined and re lects local capacity and conditions. Underuse is also used to describe situations or programs in which the potential bene its outweigh the potential risks.
Overuse
This situation is the opposite of underuse; overuse is characterized by insuf icient capacity to meet demand. Overuse refers to services or programs in which demand from potential recipients or participants is greater than planned or exceeds the ability of an organization to supply the services. Overuse also describes a situation or program in which the potential risks outweigh the potential bene its. When applied to clinical services, overuse is considered to be inappropriate.
Misuse
Misuse occurs when otherwise appropriate services or programs are provided in ways or situations that result in undesirable complications or outcomes. Misuse is often due to sloppiness by service providers or program coordinators. It can also result when guidelines or protocols are ignored. Misuse can occur simultaneously with underuse or overuse. In all situations, misuse usually wastes resources or opportunities (or both).
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14.6 DEFINING QUALITY
Quality can be de ined using many different frames of reference. Quality may refer to trouble-free operations or to components that do not fail. Quality can be cosmetic, evanescent, or enduring. The Institute of Medicine (IOM) proposed a de inition of quality that has been broadly applied in the acute care sector of the US health care system. Quality is de ined by the IOM as “the degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge” (Institute of Medicine 1990, 128–129). This widely used de inition has provided signi icant guidance for hospitals, clinicians, researchers, and policy makers. A corresponding de inition for quality in public health (Consensus Statement on Quality in the Public Health System) was developed by the Department of Health and Human Services (2008). The Consensus Statement de ines quality as “the degree to which policies, programs, services, and research for the population increase desired health outcomes and conditions in which the population can be healthy.”
A de inition alone is not suf icient. Targets for quality levels and a mechanism for implementing the elements of quality improvement programs are also required. Without both components, any organization will experience great dif iculty developing the necessary infrastructure to work toward desired health outcomes.
Six Aims of the Health Services Delivery System
The IOM has identi ied six aims for improvement in the quality of care (Institute of Medicine 2001). The goal is to make health care safe, timely, effective, ef icient, equitable, and patient-centered (STEEEP):
• Safe. Avoid injuries to patients from the care that is meant to help them.
• Timely. Reduce waits and sometimes harmful delays for those who receive care and those who give care.
• Effective. Provide services based on scienti ic knowledge to all who might bene it. Refrain from providing services to those not likely to bene it.
• Ef icient. Avoid waste of equipment, supplies, ideas, and energy.
• Equitable. Provide care that does not vary in quality because of a patient’s gender, ethnicity, geographic location, or income level.
• Patient-centered. Provide care that is respectful of and responsive to a patient’s preferences, needs, and values. An individual patient’s values should guide all clinical decisions.
To achieve these six aims, emphasis should be placed on the systems of care rather than the individual caregivers. The CDC has identi ied a limited number of conditions (about 15 to 25) that account for the majority of health care services. Nearly all of these conditions are chronic (such as cancer, diabetes, emphysema, heart disease, arthritis, and asthma). By focusing attention on a limited number of common conditions, it may be possible to make sizable improvements in the quality of care received by many individuals. Carefully designed evidence-based care processes offer the greatest
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promise of achieving the best outcomes from care for chronic conditions.
Nine Aims of the Public Health System
The Consensus Statement on Quality in the Public Health System also identi ies a set of nine goals for improving public health. Quality programs and services in public health should encompass the following dimensions:
• Population centered. Programs and services should protect and promote healthy conditions to improve the health of the entire population.
• Equitable. They should be available to all people in a given population and result in health equity for everyone.
• Proactive. They should formulate policies and sustainable practices that are grounded in prevention and lead to greater emphasis on prevention in a timely manner. Further, they should be adaptable to new situations, threats, or programs.
• Health promoting. They should ensure that new policies and strategies can be developed to advance existing programs and practices. Providers and the population should bene it by increasing the probability that positive health behaviors and program outcomes will emerge.
• Risk reducing. They should reduce adverse environmental and social events by implementing policies and strategies that reduce the probability of preventable injuries or illnesses occurring. Other negative outcomes that become diminished are considered to be welcome bonuses.
• Vigilant. They should support existing practices. New policies and practices should enhance aspects of existing surveillance activities such as technology, standardization, and systems thinking and modeling.
• Transparent. They should improve the openness in delivering services and programs by emphasizing reliance on valid, reliable, accessible, timely, and meaningful data that are readily available to stakeholders, including the public.
• Effective. They should justify investments by using evidence, science, and best practices to achieve optimal results in areas of greatest need.
• Ef icient. They should translate descriptions of the costs and bene its of public health interventions into language that is easily understood by members of the public. Ef iciency is important in the current economic climate. Quality programs and services should optimize resource usage so as to achieve desired outcomes.
The speci ic aims for improvement in public health have not been universally agreed upon. For this reason, indicators of quality are not commonplace. The foregoing de inition of quality with nine aims provides a potential framework for many quality improvement efforts in public health.
Process
All quality improvement systems analyze the procedures (processes) followed in order to improve
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them. A process is de ined as a series of steps designed to produce activities associated with a desired outcome. A process has a beginning and an end. For example, a visit to a clinic can be organized into a multiple-step process. The process begins when an individual irst calls for an appointment. The end point of the process does not necessarily occur when the person leaves the clinic after the visit. Billing, collection, and making future appointments are all elements of the same clinic visit process.
Processes are almost always cross-functional. This means that they usually involve several different departments in an organization. For example, in the clinic visit process, these may include appointment schedulers (administration), nutrition educators (nursing), a bene its expert (community health), the social services referral system (social work), immunization screening (medical), billing ( inancial), and scheduling a follow-up appointment (administration). An organization is only as effective as its processes. The irst step in quality improvement is to de ine and identify a process. Once it is completely identi ied (all steps documented), the process can be analyzed and potentially improved.
Process Map
A process map is used to graphically depict and analyze a process. A process map that portrays the steps associated with a clinic appointment should include important activities such as making an appointment, entering the clinic system, and receiving services. To be complete, the map should include other activities such as paying for services, data collection, and scheduling follow-up visits.
Although several steps have been mentioned, many other steps have been omitted (such as travel to and movement within the clinic). A basic process map is not intended to show all the steps required to complete a process. However, it should depict the most important steps that have the greatest potential to in luence the process. These also have the greatest potential impact on quality, customer service, or productivity.
A process map is helpful because it identi ies where major action steps are taken and decisions are made in a process. When a process map is analyzed, it helps show the difference between what people think happens and what actually occurs. In addition, it allows process improvement teams to reach agreement on the steps needed to study in a process. Although process maps with fewer steps are more easily constructed, the missing details may include major problem areas.
Problems Associated with Process Maps
After a process map has been constructed, it can be used to identify speci ic problem areas. Many times a process map will uncover a problem that crosses departmental boundaries. A process map can highlight locations where breakdowns may occur or identify steps that can be eliminated. Four types of problems can be identi ied by studying a process map.
• Disconnect. This occurs when transfers of information from one group to another are poorly managed. For example, an appointment scheduler might make an appointment on a day when the service provider is not available.
• Bottleneck. This occurs at a point in a process where the volume of services sought overwhelms the capacity of a system or program to process them. For example, a bottleneck would occur if two people are scheduled for the same service provider at the same appointment time.
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• Redundancy. This occurs when the same activity is repeated at two or more different points in a process. For example, an individual may be asked for insurance information at several different times during a service encounter: when an appointment is initially scheduled, when the person arrives for the visit, and when the individual is referred to another location for additional testing or treatment.
• Rework. This occurs when work must be repeated, ixed, or corrected. For example, if insurance information is entered incorrectly or incompletely, extra effort is required to retrieve the information at a later time and then correct the original error.
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14.7 QUALITY AS A SYSTEM PROPERTY
The concept of making quality a system attribute means ensuring that each system process is sound, rather than relying on individuals using processes that are not correctly or ef iciently con igured or that are not able to support the particular activity. Higher quality is commonly approached by asking employees to work harder or more ef iciently. Although such pleas may yield temporary changes or increases in productivity, they are unlikely to result in sustained increases in quality. Most health professionals are already hardworking individuals. Health organizations often have quality problems because they rely on outmoded processes to perform their work. Poorly organized or con igured processes set up a workforce to fail, independent of how hard employees work. To achieve higher levels of quality in services and programs, existing health processes must be redesigned or new ones developed.
CQI experts maintain that only 15% of problems can be attributed to people. The rest (85%) of all problems are due to lawed processes (Hogg and Hogg 1995).
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14.8 OVERVIEW OF QUALITY IN THE UNITED STATES
Americans should be able to rely on receiving health services that meet their needs and are based on the best available scienti ic knowledge. This is not always the case. There is a growing realization that health care service providers often fail to deliver the potential bene its. Within the past several years, health care leaders have been discussing how to make changes in the American health care delivery system. This has escalated to the Congressional level, as related in this book’s discussion of the policy context for management (Chapter 2 (chapter02.html) ).
Public health organizations have not received the same level of attention, in part because they re lect a small portion of health expenditures. Despite the reality that public health programs often target high-risk populations, suf icient resources are not always available to provide necessary health programs. The United States spends over $2 trillion annually on health care. Approximately 3% is designated for prevention, including public health. Phrased differently, almost all health care expenditures (97%) are devoted to treating people who are sick rather than being spent on primary prevention.
Background for Process Improvement
CQI was introduced to the American clinical health care ield in the early 1990s. Since then, it has gained in importance in understanding how organizations work and how performance can be improved. CQI was initially developed in the 1920s by the Western Electric Company, a research and manufacturing subsidiary of the American Telephone and Telegraph Company. It was applied to manufacturing processes throughout the country. The CQI movement languished during the depression of the 1930s, only to reemerge in the 1940s. The second wave was led by workers at the Motorola Company who applied CQI concepts to electronics. A third wave was led by W. Edwards Deming and Joseph Juran in the 1970s. Over time, the basic concepts of core processes have been assimilated into many health care organizations. These were followed by developing process improvements. A leader in process improvement for health care is the Institute for Healthcare Improvement (Institute for Healthcare Improvement 2010). At the present time, public health is just beginning to assimilate and apply CQI concepts.
Core and Support Processes
Two types of processes are found in most health organizations: core and support. Core processes in health care provider organizations concentrate on individuals. In contrast, core processes in public health focus on populations. In both organizational milieus (clinical health and public health), processes commonly cross many departmental boundaries.
Core Processes
In health services organizations, core processes typically are clinical care services to individuals, such as oncology or cardiology or primary care services; communities as a whole rarely receive such services. This is fundamentally different from public health organizations. Public health organizations usually have a variety of core processes that focus on community needs, including, for example, environmental health inspections, community health planning, infectious disease monitoring and immunizations, and
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emergency preparedness efforts.
Support Processes
A support process is one that provides services that enable core processes to function. Examples of support processes might include inance (budgeting) or human resources (employee recruitment and hiring). Support processes in clinical health care and public health organizations function in similar ways.
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14.9 SIX SIGMA
Six Sigma is a process improvement technique that can be applied in health organizations to reduce errors and improve quality. Six Sigma has three key aspects:
Table 14–2 Two, Three, and Six Sigma Performance Goals
• Six Sigma is designed to measure work output.
• Six Sigma is intended to be applied throughout all departments in an organization, eventually becoming a part of the organization’s culture.
• The goal of Six Sigma is 3.4 errors per 1 million operations.
Six Sigma was developed in manufacturing environments. Table 14–2 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/123#tab142) illustrates the impact of Six Sigma performance goals. The table contains examples of three processes that have health applications. The table provides estimates of the number of errors that would be allowed or tolerated at three different thresholds of performance.
Six Sigma Process Improvement Model
Six Sigma recognizes that an organization is an interconnected system of processes and products. Like other process improvement models, one of its goals is to eliminate the silo mentality created by typical departmental structures within an organization.
The Six Sigma model has ive steps that are de ined in the following list:
• De ine: Identify a problem and understand it by listing all of its elements.
• Measure: Quantify the problem, and then focus on component parts and measure each resulting component.
• Analyze: Study the steps in the process as well as data that have been generated to ascertain the cause(s) of the problem.
• Improve: Implement a process solution that eliminates the root cause and mitigates other aspects
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of the problem.
• Control: Develop and apply ongoing monitoring measures.
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14.10 LEAN
Lean or Toyota Production System (TPS) methods, derived from successes of the Toyota Motor Company, are an approach to quality improvement focused on elimination of waste in processes. Eliminating waste increases the value of products, services, and programs. Waste is eliminated through getting rid of work that does not add value, minimizing downtime (time when people or equipment are not working), and smoothing work low. Methods to eliminate waste have been customized and applied to health organizations in growing frequency (Spear 2005).
Delays in serving customers and duplication of patient information are common examples of waste in many health care delivery organizations, and both can be addressed by Lean methods. Mapping process lows and testing small interventions quickly in subunits of the organization (rapid experimentation) are commonly used to address waste issues.
Lean and Six Sigma methods can be combined (and formally referred to as Lean Six Sigma or Six Sigma Lean) in order to address issues of both waste and error, because the methods share many similarities.
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14.11 PLAN-DO-CHECK-ACT
Another relatively common quality improvement method is the Plan-Do-Check-Act (PDCA) cycle. Once an opportunity for improvement is identi ied, the PDCA cycle can be initiated. The PDCA cycle is based on the following:
• Plan: Address the issue by gathering and analyzing speci ic and relevant data and observations.
• Do: Test the most appropriate or likely solution to the situation. Test the proposed solution on a small scale to observe the effect of the intervention.
• Check: Compare the results of small-scale tests through measurements and analysis, and then decide if the test case is a representative sample that provides the desired change(s).
• Act: Make the change permanent, as appropriate. If the change did not meet the expected requirements, go through the PDCA cycle again to test one or more different potential solutions.
The PDCA cycle is a simple, yet powerful technique for organizational improvement. It can be conducted by both irst-line supervisors and experienced organizational leaders.
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CONCLUSION
Customer service and operational ef iciency are becoming increasingly important in health organizations. Changing economic conditions and associated limitations on resources are motivating these changes. Effective performance management, program evaluation, and CQI techniques such as process mapping, PDCA, Lean, and Six Sigma help organizations to operate more ef iciently and effectively, improving the quality and value of health services.
Systems Thinking about Managing Performance and Quality
Continuous quality improvement (CQI) is based on systems thinking. CQI requires constant feedback and adjustment of goals and internal inputs and processes, in the search for more valuable and higher quality programs, products, and services. CQI seeks to identify the causes of quality problems and to eliminate or control them.
CQI practitioners use the term root cause to refer to the most foundational, initiating cause of a problem, and the term root cause analysis to refer to the search for the root cause. A goal of systems thinking is to identify and address root causes of problems, rather than symptoms of problems. In practice, however, there is rarely one single root cause for a problem, but rather a constellation of several interdependent ones. Much of the work of health organizations is directed at preventing or eliminating the root causes of individual or population health problems. The root causes of many health problems include malnutrition, smoking, poor food and water safety practices, poor waste management practices, and failure to immunize. Another complexity of root cause analysis is that one can keep digging further and further for root causes. What are the root causes of malnutrition, poor food and water safety practices, and failure to immunize? Human nature, environmental change, war, or poverty?
In practice, managers focus on identifying root causes that they can in luence. One analyst (Bellinger 2004) prefers the term actionable cause analysis over root cause analysis. He suggests that as a manager, “I’m looking for a cause that I can act on that will provide long-term relief from the symptoms, without causing more problems that I have to deal with tomorrow.”
CASE STUDY RESOLUTION
Hannah had calmed down a bit. “Richard,” she began. “A lot has changed in the past decade. Our customers expect more from the organization today. CQI stands for continuous quality improvement. I want to exceed the expectations of our customers. Doing that should increase the number of participants in our programs. That …” Hannah paused for emphasis, “should increase our revenues, repaying the loan for the consultant and helping to reduce our dependence on grant funding.”
“Oh,” said Richard.
“So will you increase my funding?” Hannah asked.
“I’ll look for some underused funds and get back to you.”
“Thanks,” said Hannah.
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She waited until she was in the hall outside of Richard’s of ice before breaking into a smile.
REFERENCES Bellinger, G. 2004. Root cause analysis. http://www.systems-thinking.org/rca/rootca.htm
(http://www.systems-thinking.org/rca/rootca.htm) (accessed February 2, 2011).
Centers for Disease Control and Prevention. 1999. Framework for program evaluation in public health. Morbidity and Mortality Weekly Report 48 (RR-11): 1–40.
Centers for Disease Control and Prevention. 2005. Of ice of the Director. Introduction to program evaluation for public health programs: A self-study guide. http://www.cdc.gov /eval/evalguide.pdf (http://www.cdc.gov/eval/evalguide.pdf) (accessed December 14, 2010).
Department of Health and Human Services. 2008. Consensus statement on quality in the public health system. http://www.hhs.gov/ophs/initiatives/quality/quality/phqfconsensus- statement.html (http://www.hhs.gov/ophs/initiatives/quality/quality/phqfconsensus- statement.html) (accessed August 6, 2010).
Hogg, R. C., and M. C. Hogg. 1995. Continuous quality improvement in higher education. International Statistical Review 63 (1): 35–48.
Hosley, C. 2005. Tips for conducting program evaluation. Wilder Research. http://www.ojp.state.mn.us/grants/Program_Evaluation/Wilder_Tips/4.pdf (http://www.ojp.state.mn.us/grants/Program_Evaluation/Wilder_Tips/4.pdf) (accessed December 14, 2010).
Institute for Healthcare Improvement. 2010. Homepage. http://www.ihi.org/ihi (http://www.ihi.org/ihi) (accessed August 6, 2010).
Institute of Medicine. 1990. Medicare: A strategy for quality assurance. Washington, DC: National Academy Press.
Institute of Medicine. 2001. Crossing the quality chasm: A new health system for the 21st century. Washington, DC: National Academies Press.
Kaplan, R. S., and D. P. Norton. 1996. The balanced scorecard: Translating strategy into action. Boston: Harvard Business School Press.
National Institute of Standards and Technology. 2010. Baldrige Performance Excellence Program. http://www.nist.gov/baldrige/ (http://www.nist.gov/baldrige/) (accessed March 15, 2011).
Scriven, M. 1998. Minimalist theory of evaluation: The least theory that practice requires. American Journal of Evaluation 19 (1): 57–70.
Spear, S. J. 2005. Fixing health care from the inside, today. Harvard Business Review 83 (9): 78–91. Sundra, D., J. Scherer, and L. Anderson. 2003. A guide on logic model development for CDC’s
Prevention Research Centers. Prevention Research Centers Program Of ice. http://www.ojp.usdoj.gov/BJA/evaluation/guide/documents/cdc-logic-model- development.pdf (http://www.ojp.usdoj.gov/BJA/evaluation/guide/documents/cdc-logic-model- development.pdf) (accessed December 17, 2010).
Taylor-Powell, E., L. Jones, and E. Henert. 2003. Enhancing program performance with logic models, University of Wisconsin–Extension. http://www.uwex.edu/ces/lmcourse (http://www.uwex.edu/ces/lmcourse) (accessed December 14, 2010).
The Joint Commission. 2011. Hospital national patient safety goals. http://www.jointcommission.org/assets/1/6/HAP_NPSG_6-10-11.pdf
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(http://www.jointcommission.org/assets/1/6/HAP_NPSG_6-10-11.pdf) (accessed July 8, 2011).
Turning Point. 2005. Performance Management Collaborative. http://www.turningpointprogram.org/Pages/perfmgt.html (http://www.turningpointprogram.org/Pages/perfmgt.html) (accessed March 15, 2011).
Weiss, C. 1998. Evaluation: Methods for studying programs and policies. 2nd ed. Upper Saddle River, NJ: Prentice Hall.
RESOURCES
Periodicals
Berwick, D. M. 2002. A user’s manual for the IOM’s “Quality Chasm” report. Health Affairs 21 (3): 80–90.
Bohmer, R. M. J. 2010. Fixing health care on the front lines. Harvard Business Review 88 (4): 62–9. Craig, P., P. Dieppe, S. Macintyre, S. Mitchie, I. Nazareth, and M. Petticrew. 2008. Developing and
evaluating complex interventions: The new Medical Research Council guidance. British Medical Journal 337: 979–83.
Davis, M. V. 2006. Teaching practical public health evaluation methods. American Journal of Evaluation 27 (2): 247–56.
DelliFraine, J. L., J. R. Langabeer, and I. M. Nembhard. 2010. Assessing the evidence of Six Sigma and lean in the health care industry. Quality Management in Health Care 19 (3): 211–25.
Goren lo, G. 2010. Achieving a culture of quality improvement. Journal of Public Health Management and Practice 16 (1): 83–4.
Leviton, L. C., L. K. Khan, D. Rog, N. Dawkins, and D. Cotton. 2010. Evaluability assessment to improve public health policies, programs and practices. Annual Review of Public Health 31: 213–33.
Reason, J. 2000. Human error: Models and management. British Medical Journal 320 (7237): 768–70. Riley, W. J., J. W. Moran, L. C. Corso, L. M. Beitsch, R. Bialek, and A. Cofsky. 2010. De ining quality
improvement in public health. Journal of Public Health Management and Practice 16 (1): 5–7. Riley, W. J., H. M. Parsons, G. L. Duffy, J. W. Moran, and B. Henry. 2010. Realizing transformational
change through quality improvement in public health. Journal of Public Health Management and Practice 16 (1): 72–8.
Scutch ield, D. G., M. L. Zuniga de Nuncio, R. A. Bush, S. H. Fainstein, M. A. LaRocco, and N. Anvar. 1997. The presence of total quality management and continuous quality improvement processes in California public health clinics. Journal of Public Health Practice and Management 3 (3): 57–60.
Victoria, C. G., J. Habicht, and J. Bryce. 2004. Evidence-based public health: Moving beyond randomized trials. American Journal of Public Health 94 (3): 400–5.
Yuan, C. T., I. M. Nembhard, A. F. Stern, J. E. Brush, H. M. Krumholz, and E. H. Bradley. 2010. Blueprint for the dissemination of evidence-based practices in health care. Issue Brief (Commonwealth Fund) 86: 1–16.
Books Bialek, R., J. W. Moran, and G. L. Duffy. 2009. The public health quality improvement handbook.
Milwaukee, WI: American Society for Quality Press.
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Center for Advancement of Community Based Public Health. 2000. An evaluation framework for community health programs. Durham, NC: Center for Advancement of Community Based Public Health.
Chalice, R. 2007. Improving healthcare using Toyota lean production methods: 46 steps for improvement. Milwaukee, WI: American Society for Quality Press.
Foster, S. T. 2009. Managing quality. 4th ed. Upper Saddle River, NJ: Prentice Hall. George, M., J. Maxey, D. Rowlands, and M. Price. 2004. The lean and Six Sigma pocket toolbook. New
York: McGraw-Hill. Harris, M. J. 2010. Evaluating public and community health programs. San Francisco: Jossey-Bass. Hoyle, D. 2007. Quality management essentials. Burlington, MA: Butterworth-Heinemann. Liker, J., and J. K. Franz. 2011. The Toyota way to continuous improvement. New York: McGraw-Hill. Longest, B. B. 2004. Managing health programs and projects. San Francisco, CA: Jossey-Bass. Moran, J. W., G. L. Duffy, and W. J. Riley. 2010. Quality function deployment and Lean-Six Sigma
applications in public health. Milwaukee, WI: American Society for Quality Press. Pande, P. S., R. P. Neuman, and R. R. Cavanagh. 2000. The Six Sigma way: How GE, Motorola, and other
top companies are honing their performance. New York: McGraw-Hill. Pawson, R., and N. Tilley. 1997. Realistic evaluation. Thousand Oaks, CA: Sage. Steckler, A., and L. Linnan (Eds.). 2002. Process evaluation for public health interventions and research.
San Francisco: Jossey-Bass. Trusko, B. E., C. Pexton, J. Harrington, and P. K. Gupta. 2007. Improving healthcare quality and cost
with Six Sigma. Upper Saddle River, NJ: Pearson Education.
Web Sites • American Evaluation Association: http://www.eval.org/ (http://www.eval.org/) • American Society for Quality: http://www.asq.org/ (http://www.asq.org/) • Center for Program Evaluation and Performance Measurement: Developing and working
with program logic models: http://www.ojp.usdoj.gov/BJA/evaluation/guide/pe4.htm (http://www.ojp.usdoj.gov/BJA/evaluation/guide/pe4.htm)
• Centers for Disease Control and Prevention, Practical Evaluation of Public Health Programs Workbook: http://www.cdc.gov/eval/framework/index.htm (http://www.cdc.gov /eval/framework/index.htm)
• Institute for Healthcare Improvement: http://www.ihi.org/ihi (http://www.ihi.org/ihi) • National Institute of Standards and Technology, Baldrige National Quality Program:
http://www.nist.gov/baldrige/ (http://www.nist.gov/baldrige/) • Public Health Accreditation Board: http://www.phaboard.org/ (http://www.phaboard.org/) • Robert Wood Johnson Foundation: http://www.rwjf.org/ (http://www.rwjf.org/)
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CHAPTER
15
Managing Finance and Budgets
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Know the elements of a business plan. • Be able to interpret a set of organizational inancial documents. • Understand budgets and explain the uses of budgets. • Be able to construct incremental and zero-based budgets.
CHAPTER SUMMARY
An important goal of quality improvement is to improve the performance of an organization by improving inancial ef iciency. Business plans are one tool for making decisions about the feasibility of new organizations, products, and services. An organization’s inancial activities and position are summarized in four documents collectively referred to as inancials. Budgets are important documents that are used for planning, disbursing, monitoring, and auditing inancial expenditures. This chapter brie ly describes the elements of business plans and an organization’s inancials. It then examines budgeting and discusses how careful budgeting contributes to organizational quality and performance.
An operating budget is used for routine operations. Most operating budgets are structured as incremental budgets, which make small changes in every program to achieve a balanced budget for the organization. However, some organizations use zero-based budgets. These prioritize all budget items and then eliminate the lowest priority items, programs, or services when seeking to balance the budget.
CASE STUDY
Jean stopped to say hello to her colleague Hector. Instead of his usual smile, she was greeted by a frown. Hector was obviously frustrated.
“Hey, what gives? Why the frown?” Jean asked.
Hector replied, “It’s budget time. I’d rather have a toothache. I am having the budgetary equivalent of writer’s cramp. Do you have any advice?”
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What advice do you think Jean might offer? What advice would you offer?
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15.1 INTRODUCTION
Finances de ine the bottom line for an organization. A basic knowledge of inance is essential for all managers. Most activities that occur within an organization are eventually quanti ied in inancial terms. Organizational success or failure usually is assessed using inancial status as a major indicator. Financial status is summarized using a set of documents that are collectively termed inancials.
Financial information is not reserved for recording transactions and assessing performance. Organizations create budgets to provide guidance for operations and activities. Prudent organizations also create detailed business plans as they contemplate their operations and activities.
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15.2 BUSINESS PLANS
A business plan is an outline that is used to launch, maintain, or expand the activities of an organization. It is used by for-pro it businesses as well as governmental and nonpro it organizations. Pro it status is determined by rules contained in the Internal Revenue Service code. Business plans are appropriate for single-person operations as well as larger entities.
According to the Small Business Administration, a complete business plan contains nine different components or elements (Small Business Administration 2011). Each component is designed to communicate a speci ic set of information to investors, creditors, and organizational leadership. Prudent organizations create and follow their business plans.
A business plan begins with an executive summary that provides an overview of proposed organizational activities as well as a brief summary of the contents of the business plan. Like any well- written executive summary, this component should be completed last to ensure that its contents are consistent with the details of the documents that follow it. An executive summary should include key details about the activities of the business or organization, including when the entity was founded and by whom, and information regarding investors or creditors. It must have a description of the commercial or professional activities (existing or proposed), including a market analysis and discussion of main products or services, details regarding any locations, and inancial data for the entity.
New entities will not have much, if any, information to provide in the form of inancial data for investors or supporters. In this case, it is important to focus on the market data and the products, programs, or services to be provided in order to provide suf icient evidence to support the continuing development of the organization. For this reason, the second, and arguably the most important, element of a business plan is a market analysis. A market analysis provides a description of the industry in which the organization plans to operate, an analysis of the target markets, and results of any market testing that has been done. The market analysis should look at demographic composition and trends in the area in which the organization plans to operate as well as competitive trends in the industry or region to determine if there is suf icient demand to support the establishment of the entity as well as suf icient competitive advantages for it to succeed.
Following the market analysis is a description of the organization. The description should provide basic information regarding the structure of the organization, the nature of the business in which it will be engaged, and any factors that may contribute to the success of the enterprise, including competitive advantages, unique services or programs, or specialized skills or professional competencies.
The fourth part of the plan provides details regarding the organizational and managerial information about ownership or sponsorship and detailed information about the experience and skills of members of the management team.
The ifth element focuses on marketing and sales. It should provide an overview and some details regarding how the products, programs, and services of the organization will be delivered. Experts recommend that the marketing strategy be created irst because it is likely to affect or in luence sales activities.
The sixth element of a business plan is a description of the products, programs, or services that will
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be provided by the organization. The goal of this section is to provide details regarding the advantages that the entity will provide to customers, patients, or clients as well as some basic information regarding future products, programs, or services. A business plan is not the platform to provide highly detailed descriptions or data about individual products, programs, or services that will eventually be offered.
The seventh section contains the request for funding. This is probably the most important section for most business developers. This section provides details about the economic support that will be needed to establish or expand the business as well as to meet projected future funding needs. Potential investors and creditors like to know if there may be future investors who may dilute their interest in the proposed entity or receive a superior claim should the new organization default. Additionally, a business plan may propose several different funding scenarios based on alternate scenarios or projections for the operation of the proposed business. The funding that is requested should be aligned with the prospective inancial data, which are presented next.
The data provided in the business plan should include projected inancial statements for all businesses and past or historical inancials for established entities. The inancial statements should present the operational results envisioned by management based on the market analysis presented in Section II (section02.html) . The documents included in this section are a balance sheet, an income statement, a statement of cash lows, and a capital expenditure budget. Documents that contain only projected, rather than actual, data are called a pro forma. The Small Business Administration suggests that inancial ratio and trend analyses be included with the inancial statements (Small Business Administration 2011).
The inal section of a business plan is an appendix. Although all business plans do not require an appendix, it is helpful to include one to provide additional details or clari ication of information presented earlier in the document. Depending on the person or institution reviewing the business plan, the appendix can be adjusted to provide speci ic information relevant to different audiences.
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15.3 FINANCIAL STATEMENTS
Traditional inancial statements convey the inancial position of an organization. Financial statements are more complex and extensive in for-pro it organizations than in nonpro it organizations. Governmental organizations typically manage funds with a budget (covered later in this chapter) rather than with inancial statements. Financial statements are composed of four parts: an income statement, a balance sheet, a statement of cash lows, and a statement of retained earnings. Each document presents a portion of the picture regarding the operations of a business during a speci ic period in time. The information presented in the statements ranges from inancial performance, presented in the income statement, to how the business used its cash during the period, shown in the statement of cash lows.
Before detailing the inancial statements, it is necessary to note that they can be prepared in two ways, using either a cash or accrual basis. Under cash basis accounting, revenues and expenses are recognized as cash received or paid without regard for when the revenue was actually earned or the expense incurred. For example, a business using cash basis accounting would recognize the expense related to electricity when the bill is paid. Under accrual basis accounting, revenues and expenses are recognized in the period in which they are earned or incurred in an attempt to match revenue with the expense that helped to generate that revenue. Using the same example, accrual basis accounting would recognize the expense associated with the electric bill at the end of the period, prior to paying the bill, in order to match the expense with the period in which the bene it was received. Although the difference may not be signi icant for small items such as an electric bill, distortions in pro itability can be created when large, infrequent expenses are incurred.
Income Statement
An income statement (Figure 15–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections /130# ig151) ) details the sales, expenses, and net income generated by a business during the period of interest or the period ending on the date of the document. Also known as the pro it and loss (P&L) statement, the income statement begins with revenue (the “top line”) and works down to net income (the “bottom line”), detailing items such as cost of sales, interest expense, and income tax expense along the way.
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FIGURE 15–1 Income Statement
The irst item presented on an income statement is revenue, or all income generated while engaging in the company or organization’s primary commercial or professional (business) activities. For example, the money received by a hospital for services provided to a patient would be recorded here, while any money received from the sale of a piece of equipment would not, because equipment sales is not the primary business activity in which most hospitals are engaged.
Following revenue is cost of sales, also referred to as cost of goods sold or cost of revenue. Cost of sales represents the expenses incurred by the business to produce revenue. Expenses classi ied in cost of sales can include materials, direct labor costs (wages and bene its), overhead, and other expenses related to production and delivery of the primary revenue stream. Subtracting cost of sales from revenues yields gross pro it.
The next items are selling, general, and administrative (SG&A) expenses. SG&A expenses are the costs incurred by a business that do not directly relate the production of revenue and can include back of ice expenses (e.g., billing, collections, human resources), selling expenses (e.g., sales commissions, vehicles provided for a sales force), and other general expenses such as postage or advertising.
Depreciation is the accounting method that is used to allocate the cost of ixed assets over their expected or service life. The amount of deprecation varies for different assets. Factors that affect how depreciation is calculated include the cost of an item, the expected useful life, and the expected salvage value (if any) at the end of service (when the item has been “used up”). Although there is no cash expense associated with depreciation, it is included on the income statement to provide an accurate depiction of the pro itability of the business and to avoid distortions in expenses. For example, when a business purchases a vehicle for use, an asset is created on the balance sheet that represents the cost of the vehicle. At the same time, the business determines the useful life of the vehicle, what (if any) residual value will remain at the end of the useful life, and what method of depreciation to use. Assuming the straight line method of depreciation, the annual depreciation expense would then be calculated with the following formula:
Operating pro it is determined by subtracting SG&A and depreciation from gross pro it. Operating pro it margin is one of the most common measures of ef iciency for organizations because it excludes nonoperational items such as taxes and interest expense.
Following operating pro it on the income statement are other income/expense, interest expense, and income taxes. These are generally referred to as “below the line” items because they are not operational in nature but still included in net income. The other income/expense line includes any income or expense items that are unrelated to the company’s primary business activity. Using the earlier example, any gain or loss the hospital recorded on the equipment sale would be reported here.
Interest expense includes any interest paid by the business during the period, including interest paid on debt and payable arrangements. Subtracting other income/expense and interest expense yields income before taxes, the number on which income taxes (if applicable) are calculated. Although the income tax expense shown on an income statement differs from actual income taxes paid because of
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the different accounting methods used for calculating income for inancial statement and income tax purposes, the income tax expense shown on the income statement is the best representation or estimate of the income tax liability incurred in the period.
The inal item on an income statement is net income, calculated by subtracting income tax expense from income before taxes. This yields or represents the net pro it available to owners of the organization. This value is transferred to the balance sheet as retained earnings in the equity section.
Balance Sheet
The balance sheet (Figure 15–2 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections /130# ig152) ) is also known as the statement of inancial position. It contains three sections: assets, liabilities, and equity. As the name suggests, the balance sheet must balance according to the following equation:
Assets = Liabilities + Equity
As the balance sheet is continuously changing, cash lows in and out of an organization on a daily basis. For convenience, the balance sheet is commonly presented as of the inal day in a inancial period, much like any account statement.
The irst section on a balance sheet re lects assets. Assets are items that are likely to provide some type of future bene it. When they are presented, assets are listed in order of liquidity from most liquid (cash) to least liquid (goodwill) and are generally recorded at their historical cost. Assets are also divided into two categories: current and long term. Current assets are likely to be used within the next year; long-term assets are items that are likely to provide bene it to the business over a longer term.
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FIGURE 15–2 Balance Sheet
The irst assets presented are cash, which can also include cash equivalents such as short-term investment and receivables. The cash and equivalents balance is recorded as a combination of cash balances and the market value of the short-term investments. Receivables, or debts of others to the company, are listed after cash and recorded as the net value after providing an allowance for potentially uncollectible accounts.
Following receivables is a listing of inventory and other current assets. Inventory is the one item on the balance sheet that may not be recorded at historical cost. This is because Generally Accepted Accounting Principles (GAAP) stipulate that inventory be valued at the lower value of either cost or market. Translated, this means that inventory must be valued at the lower value of either the price paid to acquire or manufacture it or the current market value of those goods. Other current assets include any that are expected to be used within a year and any that do not it into any of the other categories.
The irst long-term asset presented is property, plant, and equipment, which is also referred to as PP&E. Property, plant, and equipment are recorded at their purchase price but accompanied by accumulated depreciation. This permits a calculation of a net PP&E, which represents the theoretical value of the assets. The balance presented in this account can be misleading because organizations are
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not allowed to increase the value of these items to re lect changes in market conditions or market value. For example, if an organization owns a retail store and the accompanying property that was purchased many years ago, the carrying value of the property remains at the price paid for it and cannot change, regardless of any appreciation in the market value of the property.
Goodwill and intangibles are used to recognize the value of other aspects of assets such as the value of brands and trademarks. Brand names such as Coca-Cola®, Tylenol®, or Kleenex® provide convenient examples that are easily recognized. The acquired value of a company or organization can be calculated as the excess of the purchase price over the value of acquired assets. Items in this category are not physical assets but have economic value to the organization.
Other long-term assets, much like other current assets, include any remaining assets that do not it into the other categories.
The liabilities section of the balance sheet recognizes any obligations owed to others. Current liabilities are presented irst. These include payables, short-term debt, and current maturities of long- term debt. Payables are debts owed to entities such as suppliers and employees. These are not de ined as debt because they generally do not have any contractual basis. Short-term debt includes any borrowings that are made for less than 1 year. A household example of this would be a home equity line of credit in which the homeowner accesses the credit line when cash is needed and repays the debt in a short time frame. This differs from current maturities of long-term debt because current maturities of long-term debt include the principal on long-term debt that is due within the next year. Using a similar household example, this would be the principal due on a mortgage in the next 12 months.
Following the current liabilities are long-term liabilities. Long-term liabilities are obligations that will not be settled in the coming year, such as outstanding bonds. Continuing with the mortgage example, this would include the remaining balance of the mortgage due more than 1 year from the end of the period covered by the inancials.
The equity section represents the value of the organization that belongs to the owners. Presented irst is common stock, or the par value of stock in the business that has been sold. The par value of
stock does not equal the actual price at which the stock was sold, but rather an arbitrary value assigned by the organization, commonly $1.00 or $0.01 per share. The next item, additional paid-in capital, is used to record the difference between the par value of the stock and the amount for which the stock was actually sold. The inal item, retained earnings, represents pro its that have been earned by the organization but not distributed as dividends. The calculation of retained earnings is detailed under the statement of retained earnings.
Statement of Cash Flows
The statement of cash lows (Figure 15–3 (http://content.thuzelearning.com/books/Fallon.9852.17.1 /sections/130# ig153) ) is used to reconcile the changes in cash balances for a business. Divided into three sections, this statement reconciles cash used in operating activities, investing activities, and inancing activities. The distinctions are made to help investors or creditors identify where cash is
coming from and how it is being spent.
Included under operating activities are cash uses that result from operations, including adding back any depreciation expense, because depreciation is a noncash charge. The change in the operating assets
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area accounts for cash used to inance a company’s operations by subtracting the changes in receivables and inventory, because cash is generally used to pay for increases in inventory and all receivables are created at a cash cost to the organization.
Investing activities include items in which the organization is investing to increase its business. Cash lows re lected in this section can include capital expenditures, acquisitions, divestitures, and asset sales. It is not uncommon for a growing organization to have consistently negative investing cash lows as investments are made to expand the size and capacity of the business.
FIGURE 15–3 Statement of Cash Flows
The inancing activities portion captures any cash paid or received as a result of inancing activities. These can include issuing or repaying debt, short-term borrowing, and any cash dividends paid on outstanding stock.
The inal lines present the net change in cash, as derived from totaling the net cash line in each section, which is then added to the cash balance at the beginning of the period to arrive at the ending cash balance. This amount should match the amount reported under cash and equivalents on the balance sheet.
Statement of Retained Earnings
The statement of retained earnings (Figure 15–4 (http://content.thuzelearning.com/books /Fallon.9852.17.1/sections/130# ig154) ) provides a reconciliation of the equity section of the balance sheet. Although the statement can be rather complicated for large, global corporations, the essential elements are only four lines. The statement opens with the beginning equity balance, adds net income, subtracts any dividends paid, and calculates the inal equity balance as it appears on the balance sheet.
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In addition to net income and dividends, two other items that are common are the issuance and repurchase of stock. When new stock is issued during the period, the amount received from the issuance is added to the equity balance. When stock is repurchased, the amount repurchased is subtracted from the balance to offset the decrease in cash on the balance sheet.
FIGURE 15–4 Statement of Retained Earnings
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15.4 BUDGETS
A budget is a comprehensive, detailed plan for achieving an organization’s goals and objectives expressed in monetary terms (Zelman, McCue, and Glick 2009). Budgets include objectively de ined, measurable projections of resource allocations and use obtainable data in their creation. Preparing budgets is an ongoing process that involves personnel from all levels of most organizations.
Managers must be skilled in budgeting. They must often revise a budget several times in order to achieve one that is balanced. Operating without a balanced budget is planning for failure. At the same time, in order to achieve its mission, a health organization must prepare a budget that balances revenues and expenses in a way that preserves or even improves quality and performance.
Approaches to Budgeting
There are two fundamental approaches to budgeting: incremental and zero-based. An incremental budget modi ies an existing budget, usually the current or immediately previous one. The modi ications are based on changes in assumptions. The changes are usually small and tend to be applied uniformly to all categories.
A zero-based budget assumes that no operating units are automatically entitled to resources and uses priorities when establishing plans for spending. Incremental budgets are reviewed later in this chapter, followed by zero-based budgets. Simpli ied examples of both budgets are given in Appendix 15–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/141#con.189a) .
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15.5 BUDGETING
Management responsibilities traditionally include preparing budgets, managing them while they are applicable, and using them for auditing. Managers should not only know about the process of budget preparation, but also how to create one. Because budgets are used as control documents, knowledge of accounting is useful (Garrison, Noreen, and Brewer 2009; Warren, Reeve, and Duchac 2011). When preparing a budget, managers must review information about historical costs, discern how they have changed over time, and calculate how service volumes have changed. The sources, timing, and amounts of revenues have to be understood. When developing a budget, managers must factor in organizational goals as well as programs, products, and services offered by their organization.
Directors of organizations tend to develop and manage large and complex budgets. Managers who are lower on the organizational hierarchy are responsible for smaller (as re lected in dollar amounts) budgets. These tend to focus on single programs or services. However, their budgets are highly detailed and no less important to the organization.
Recent trends among public health organizations mirror those of health care provider organizations. Many health outcomes have remained largely unchanged (for example, the prevalence of smoking) or have become worse (for example, the rise of type 2 diabetes among relatively young children) while expenditures have increased. This combination should be interpreted as a challenge to focus on controlling costs and promoting organizational ef iciency. Both of these outcomes are aligned with efforts to improve the quality and value of services and programs.
Employees from many levels provide input for decisions about acquiring equipment and supplies, tracking the use of resources, and determining the priorities for purchases. All of these activities contribute to budget preparations. All operating organizations generate cash lows, acquire assets, and put those assets to work. Health organizations are not an exception. They should use the same economic principles and spending guidelines.
A majority of managers think that their basic inancial responsibilities are to develop a budget and then be bound by its allocations. Managerial personnel who understand budgeting apply their knowledge throughout the iscal year. Managers who truly understand budgets also realize the power and potential associated with the budgeting process. The potential includes using budgets for inancial planning, making judicious expenditures, and tracking inancial activities.
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15.6 OVERVIEW OF PROCESS AND USAGE
A budget is an important tool for any organization. Budgets are used for planning activities and allocating the resources that they are likely to require. Budgets have other applications. Budgets are used as control documents for monitoring the expenditure or allocation of resources and as templates for auditing inancial and other transactions.
Although budgets are commonly developed by executives and managers of an organization, they are approved by the board of directors. The length of a budget cycle is 1 year. Budgets establish the basis for formal and quanti iable planning because all the activities of an organization are converted into monetary terms. Most organizations develop and use three types of budgets.
1. Operating budget. This document is used for planning and executing usual or routine activities.
2. Capital budget. This document is used for allocating and controlling resources when making improvements to property or buildings or when purchasing equipment.
3. Cash budget. This document contains detailed estimates of anticipated cash receipts and disbursements.
The master budget of an organization includes all three documents.
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15.7 OPERATING BUDGET
An operating budget contains detailed plans concerning the anticipated revenues and expenses for every product, program, or service created or delivered by an organization. The overall plan is suf iciently detailed that each operating unit or department has its own separate budget. When all of the individual operating budgets are combined, the resulting document is referred to as a consolidated operating budget. An operating budget provides the foundation on which organizational planning and control are based. Operating budgets are prepared prior to the beginning of each iscal year. An operating budget is essential for the following reasons:
• Allocating inancial resources among competing organizational departments and units
• Providing a method for establishing priorities
• Giving managers information about changes that can improve performance
A iscal year is the period for which a budget is created. Fiscal years are arbitrary divisions that can begin on any day. For convenience, however, the majority of iscal years coincide with calendar years by starting on January 1.
An operating budget contains four parts: statistics, expenses, revenues, and a pro forma or projected statement of revenue and expense.
Statistics Budget
A statistics budget contains information related to the expected extent and scope of activities. It includes estimates of activities that will occur during the next budget period. Three separate steps are used when compiling a statistics budget: output expectations, the methodology used, and who is responsible for making the estimates.
Output expectations are estimates or forecasts of the activities of a given department. Future estimates are often based on past activity. A more sophisticated approach factors in estimates of demand in the next budget period. This is important in health organizations due to new or emerging diseases, changes in community or individual health status, or unanticipated emergencies.
Statistics budget methodology refers to the approach used to calculate output expectations. This may include key indicators of health, results of community health assessments, past medical histories, or other empirical data. The methodology may be supplied by a governmental unit, developed locally using objective data, or obtained from a published source. Variations (weekly, monthly, or seasonal) throughout the budget period may signi icantly in luence the method’s results.
Responsibility for making estimates is self-evident. The persons making the estimates should have experience with budget creation and understand the programs that will be offered and skill sets of the workers who will be delivering the department’s or organization’s products and services.
Expense Budget
An expense budget converts expected work activities into predicted expenditures. An expense budget
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has two main components: statistical information and cost data. Statistical information is combined with cost information to forecast expenses. Before calculating an expense budget, types of costs must be understood. The two primary types of costs are variable and ixed. Variable costs are directly related to output in a manufacturing environment or number of programs and services in a health organization. Fixed costs are constant and independent of employee activities. Other relevant concepts associated with an expense budget include the length of the budget period, the degree of lexibility in the budget, standards for quality, and how indirect costs are allocated.
The length of a budget period is typically 1 year or one operating cycle. Although a length of one operating cycle is not absolute, it is the overwhelming norm. Budgets may be ixed or rolling. This designation also refers to the budget period. The length of a ixed budget is de ined and is most often 1 year. A rolling budget can be extended, most commonly 1 month at a time. A ixed budget is easier to develop. A rolling budget requires more time and effort to create but has advantages. Because it may be modi ied, the forecasts of a rolling budget are usually more realistic and contribute to higher levels of quality and productivity. A rolling budget spreads the development work throughout the year. This aspect usually improves understanding of the budgeting process among managers.
A lexible budget adjusts anticipated costs as changes in volume of output (services or programs) occur. A traditional forecast budget is not able to respond as quickly. A common approach to developing a budget using data from a prior year involves in lating the previous year’s allocation by 10%. The 10% factor is often rationalized by asserting that it accounts for in lation and organizational performance. The 10% factor is often selected because budget preparers can make the calculations in their heads.
Standards for quality re lect an attempt to recognize and reduce changes in production costs. Variations in production or delivery costs re lect the effects of changes in the price or cost for labor and the quantity or number of hours worked. Minimizing these variations helps to stabilize prices, an outcome that contributes to quality because steady prices are appreciated by consumers and patients.
Allocating indirect costs is frequently contentious. Indirect costs include building maintenance and upkeep, heating and cooling, and services that are provided by organizational departments whose activities do not generate revenue. Human resources provides a convenient example of a non-revenue- generating department. Managers and employees recognize the need for hallways, rest facilities, and other common spaces in a building. However, they resist having to pay for them. A common method for allocating indirect costs is in proportion to a unit’s of ice or working space (square footage).
Revenue Budget
A revenue budget requires information and data from the statistics and expense budgets. Because all organizations must break even (at a minimum), revenues must be suf icient to cover all expenses. Rates for services and programs are established to achieve this goal. Estimates regarding the likelihood of receiving payments from customers and clients are factored into a revenue budget.
Pro Forma Budget
A pro forma budget is a projected revenue and expense statement. The budget uses information contained in statistics, expense, and revenue budgets. It is a inal test to check the validity of the other budgets and the accuracy of their assumptions.
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15.8 CAPITAL BUDGET
A capital budget is the plan for spending on improvements and additions to the property, plant, or equipment of an organization. A capital budget is concerned with the acquisition, maintenance, and replacement of ixed assets. A ixed asset is de ined as something that is owned and has a useful life that is greater than 1 year in length. Because resources are limited, spending requests should be carefully analyzed and prioritized. Decisions to purchase capital items are made only after careful deliberation. Capital items typically are used for long periods of time; they involve large expenditures and usually de ine strategic directions for an organization.
Because capital budgets are long term in nature and involve large expenditures, they are developed using an approach that is different from the one used when creating an operating budget. Because capital purchases can be substantial, organizations may encumber money (save up) for long periods of time. In such situations, the time value of money becomes important. The time value of money is derived from an analysis that determines the current value of future money. Operating budgets are usually subjected to short-term inancial analysis because they are typically prepared for purchases that can be completed within a year. In contrast, capital budgets involve relatively large investments in equipment, buildings, or new programs. They are based on multiyear time frames and require long- term analysis before being made.
Most organizations must continually acquire or replace ixed assets. The capital budget cycle recurs each year. An annual list of desired capital projects is developed. However, capital resources are always limited, and it is rarely possible to afford all the equipment, building, and new project requests that are proposed by managers. All requests for capital purchases must be evaluated. This is accomplished by listing, analyzing, and prioritizing all the requested capital items, and then deciding which will be approved for purchase and in what budgeting cycle.
Analyzing a Capital Request
A number of non inancial criteria are considered when an organization decides which capital budget requests to approve. The following categories of non inancial criteria can be used to evaluate capital requests.
Safety and Regulatory
This category consists of expenditures necessary to comply with local building codes (such as installing a sprinkler system or widening stairways) or federal government regulations (such as providing accommodations for people with disabilities). Most items that fall into this category are mandatory. As a result, budget administrators have very little discretion in deciding whether to approve these expenditures.
Quality and Customer Service
Quality and customer service expenditures enhance the quality of programs, products, or services. New technologies are continually being developed. Purchases that improve quality or customer service should receive a high priority.
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Mandatory Replacement
Mandatory replacement expenditures are made to replace worn-out or damaged equipment. Typically, such expenditures are necessary for the continued safe and ef icient operation of an organization’s working environment. Examples include replacing an aging roof or purchasing a new heating system.
Discretionary Replacement
The discretionary replacement category includes expenditures to replace usable but obsolete equipment. Such replacements generally help to lower operating costs (such as purchasing a new telephone system), improve the quality of programs (such as purchasing upgrades for equipment used in teaching programs), or improve productivity, for example, enhancing customer service (such as purchasing new computers or software that speed up transactions or reduce errors).
Expansion
Most organizations continually attempt to expand and increase capacity, penetrate new markets, develop new services, offer new programs, or pursue new strategies. These projects often require spending large sums of money over long time periods of time. A detailed analysis of inancial and non inancial factors should be made before approving this type of expenditure.
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15.9 CASH BUDGET
A cash budget is used to evaluate an organization’s solvency in the immediate future. It uses estimations and data from the operating and capital budgets. A cash budget is typically compiled for one or more de ined periods within a complete budget cycle.
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15.10 ZERO-BASED BUDGET
Zero-based budgets use the same data as traditional budgets but array the data differently. A zero- based budget works on the assumption that no existing program or expenditure is entitled to be automatically renewed. The approach is also used when available funding is limited or uncertain.
A zero-based budget begins like a traditional budget. Cost data are obtained and listed. Unlike a traditional budget, the importance of each budget item is ranked. A traditional budget aggregates the data into categories. For example, items that pertain to programs or services may be grouped into a single category of the same name. Similarly, other categories are created and used to collect related line items. A zero-based budget commonly has two categories. The irst contains items that are required by a law, statute, or legal order. Examples of items that are legally required include employee compensation, unemployment insurance, and workers’ compensation insurance. The second category contains all other items. Each is given a priority ranking by the person or committee that is responsible for creating the budget. The rankings are used to list the items in descending order of importance. A second column that contains a running total of expenditures is created.
When the amount of allocated resources becomes available, a budget administrator simply inds the line having a total for items that does not exceed the available monies. Assuming that rankings were made in a fair and honest manner, funding decisions become automatic. Appendix 15–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/141#con.189a) contains examples of both types of budgets (traditional and zero-based). Both use the same data; priority rankings are arbitrary.
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15.11 IMPLEMENTING AND USING BUDGETS
A budget is a critically important document for any organization. While a budget is being developed, it contains plans and guidelines for potential expenditure of resources. During the period encompassed by the budget, it provides guidelines and limits for actual spending. After the budget cycle has been completed, the budget can be used to review and audit actual disbursements to assess the accuracy of prebudget projections and provide insights for modifying future spending plans.
Making Informed Budgeting Decisions
Budgeted allocations are compared with actual amounts expended to evaluate how well the organization achieved its operating and inancial goals during the budget period. Budgetary review and analysis should seek to identify categories that were either overfunded or underfunded. Managers should look for changes in funding needs and programs or services that have occurred over time. They should evaluate the success of a budget in enabling employees to meet departmental or organizational objectives.
All review activities should be undertaken within the context of quality, productivity, and customer service. Although operating within planned spending limits is important, actions that negatively affect quality, productivity, or customer service have far greater potential for organizational harm.
Taking the time to make these comparisons yields valuable information that can improve budget planning for subsequent iscal cycles. Successful organizations learn from past events and experience so as to improve their programs, products, and services and to be better prepared for the future.
Budget Options
Before developing a budget or initiating the budgeting process, decisions should be made. Answers to the following questions are usually helpful when considering budget development. There are no correct or incorrect responses. Honesty in responses will improve resulting budgets and, ultimately, bene it the organization.
Type of Budget: Incremental versus Zero-Based Budgeting
Should the justi ication for line items in the expense budget be incremental or zero-based? The answer to this question involves an organization’s philosophy of budgeting. It also signals an organization’s willingness to commit time and resources to the budgeting process.
The process of incremental budgeting uses the previous iscal operating plan, expense budget, and revenue budget to guide and justify the operating plan, expense budget, and revenue budget for the next iscal period. Most health organizations use an incremental approach to budgeting.
Zero-based budgeting is an alternative process that requires a complete item-by-item annual review of the operating plan. Every proposed item in an expense budget must be justi ied on its own merit each year with its own budget package and without reference to previous years. Zero-based budgeting requires that each activity and expenditure be justi ied by a program or service need. The intent is to increase organizational quality, ef iciency, and productivity. However, zero-based budgeting requires
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extensive effort and must be backed by an organizational commitment to the philosophy of zero-based budgeting and the resources to support it.
A compromise position is to subject a small number of departments or programs to zero-based budgeting every year, so that over a set time period (for example, 5 years) all major departments and programs must justify the value of all their expenditures to the organization.
Level of Detail Needed
What detailed information is needed for each program or service area? Responses to this question depend on how an organization plans to use its budget. When budgets are used throughout the budget cycle (planning, spending guidelines, and after-cycle evaluation), detailed information helps to sharpen the focus of such activities. For organizations that develop budgets as a managerial exercise, the time spent to collect detailed information is essentially wasted. Detailed information is very useful to organizations that are committed to quality improvement. Details facilitate insights that often lead to improvements in quality or productivity.
Sources of Information
Who or what are the best sources for this information? This question requires detailed knowledge of an organization’s activities and employees. Not being able to answer it should be interpreted as a warning and suggestion for changing managerial attitudes toward workers.
Approach to Information Gathering
Is the desired process for input of information from the bottom up, top down, or a mix? This depends on managerial preferences, an organization’s attitude toward its workers, and the extent to which management values the opinions of its employees. Answers to this question provide more insights into managerial and organizational culture than they do for budgets.
Expense Budgets
Is it best to operate with a ixed expense budget, or should some programs or service areas have lexible expense budgets? In addition to facilitating budgetary development, responses to this question provide useful information and insights regarding organizational attitudes toward quality improvement and productivity.
Bottom-Up versus Top-Down Budgeting
The bottom-up budgeting process starts with information provided by workers at lower levels of an organization. The information is communicated to senior managers through formal hierarchical channels. Information from employees who have program or service responsibilities is vital for making the budget an effective planning tool and for improving quality and performance.
Top-down budgeting occurs when senior managers in luence and control the budgeting process. Most experts suggest that the effective organizational budgeting occurs with some degree of balance
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between bottom-up information low and top-down control (McLean 2002). Budget meetings between individuals of various levels provide opportunities for feedback, negotiations, and adjustments. In the end, senior managers make the inal budget allocations because they are responsible for monitoring iscal activities and ensuring that a balanced budget is created. Management experts report signi icant
increases in employee performance when the suggestions of subordinates are sought and followed (Robbins and Judge 2010). Providing feedback to employees who make suggestions during the preparation of a budget acknowledges their suggestions and contributions. Such comments from senior managers are rewarding to those people making them. Employees who have a sense of involvement are more likely to be productive than are employees who feel that their comments and suggestions are not valued.
Fixed versus Flexible Expense Budgets
Fixed expense budgeting assigns a speci ic dollar amount to every line item. Flexible expense budgeting allows costs to be aligned with changes in demand for programs or services. Flexible budgeting does not provide free access to unlimited funds. It is often appropriate to have both ixed and lexible components in an organization’s expense budget. It is also appropriate to establish lexible expense accounts for programs or services that experience or expect changes in demand.
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15.12 USING BUDGETS TO EVALUATE ORGANIZATIONAL PERFORMANCE
Budgets can, and should, be used as auditing tools. They provide a convenient basis for evaluating inancial performance of an organization.
Monitoring the Budget
Budget monitoring is a form of organizational control that allows managers to detect and correct deviations from established plans. In general, the control process consists of four elements: setting performance standards, using industry standards and results, comparing organizational performance with industry standards, and evaluating and correcting organizational processes.
Setting Performance Standards
A standard is a target against which subsequent inancial performance is compared. A budget provides a collection of performance standards. Each line item establishes a performance goal for the local organization.
Using Industry Standards
Information on industry standards is used to assess local performance. Trade associations typically collect information on outcomes of members. The association compiles the data and calculates the industry standard. The calculated standards are collected and published or made available to members through the Internet.
Comparing Organizational Performance with Industry Standards
Actual results from the local organization are compared with industry standards. Such comparisons help organizations to pinpoint problem areas. Once problems have been identi ied, local performance can be modi ied. Such actions contribute to improving organizational quality and performance.
Evaluating and Correcting Organizational Processes
The inal step in the control process is to evaluate inancial performance and take appropriate action. If deviations occur and the results differ from industry standards, corrective action is needed. Using this approach, managers can focus on problem areas. Comparing local results with industry standards allows managers to concentrate on correcting problems rather than trying to manage an entire work process. Three options exist after evaluating inancial performance. Managers can do nothing. This negates the value of the time spent reviewing outcomes. Organizations can change the standards or use standards from another source. While alternative standards can allow organizations to experience apparent success, the basis for the success is due to changing the rules rather than modifying and improving processes. Finally, managers can address the problem that was responsible for the deviation from organizational standards. This option will entail work but is the only one that will result in true improvement in organizational growth and quality.
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Variance Analysis
A variance report is a periodic (typically monthly) analysis that compares planned inancial results and actual budget expenditures. The process involves identifying all line items in a budget that have not met the plan for the period of analysis. If budget goals have not been achieved, managers should determine why and make corrections promptly to ensure that expected budget goals are met in the future.
Variances are expressed in two different ways: total dollars and percentage variance. This is necessary because a large variance in dollars can have a small percentage variance, while a small dollar variance can have a large percentage variance. Four steps are needed to use the data in a variance analysis. First, focus on signi icant or meaningful variances. Look for large deviations from industry or organizational standards. Second, try to identify the cause or reason for each budget variance. Third, concentrate on the variances that can be controlled. Fourth, take action to correct the variance.
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CONCLUSION
Business plans are useful tools for launching or expanding the activities of an organization. Business plans provide guidance to organizations just starting out as well as those that have been in operation. A set of inancials summarizes the inancial position of an organization. Although typically created on a regular basis or cycle, inancials can be created to re lect an organization’s position at any point in time.
A budget is a comprehensive plan of an organization’s goals and objectives expressed in monetary terms. Two common approaches to budgeting are incremental and zero-based budgets. Managers are responsible for developing, implementing, and monitoring budgets in their organizations. Because the inancial results of the organization are essential to its ongoing success, budget results generally should
be examined at least monthly. A variance report is generated and used for this purpose.
Systems Thinking about Managing Finance and Budgets
In literal terms, a budget is a relatively simple control mechanism. If the budget gets out of balance in the negative direction, alarms go off (if the manager is doing appropriate monitoring of the budget). Negative variances are noticed. Managers then introduce ef iciencies to produce the same output using fewer inputs (for example, by restricting overtime hours), or they introduce ways to increase revenues (for example, asking employees to make more solicitations of prospective clients). Cutting expenses, rather than increasing revenues, is often the most direct and assured way to get a budget back in balance.
In practice, though, controlling a budget is not simple. For example, if several departments throughout an organization cut their expenses to balance their budgets, the long-term effects can damage the production of high-quality goods, services, and programs. If the underlying goal driving managerial behavior becomes “stay within budget” rather than “deliver the best quality programs and services at a reasonable cost,” short-term decisions can work to the disadvantage of the organization. This is an example of a common systems archetype, ixes that fail. As described in the introductory chapter (Chapter 1 (chapter01.html) ), in the ixes that fail archetype, a solution ( ix) is applied to a problem and has immediate positive results. However, the ix has unforeseen long-term consequences that eventually make the problem worse.
In the case of a short-term budget ix, cutting expenditures for employee education and training is a common action during expense-reducing cycles. Over time, this can lead to the loss of good employees, which can lead to further deterioration in service performance and output and even greater budget problems. Staying within budget is rarely painless, but budget-balancing managers need to keep the organization’s long-term mission and vision central in their thinking.
CASE STUDY RESOLUTION
Returning to Hector and Jean, Jean offered the following advice.
“Your approach should be organized. It’s a great opportunity to make your operations more ef icient and create more value for the organization and for consumers. Start by analyzing last year’s budget. Use the monthly variance analyses. Determine which allocations were accurate and which were off. Pay attention to our performance compared to industry standards. The organization uses an incremental
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approach to budgeting. Prepare a draft and share it with the workers in your unit to get their input. Modify your numbers. After a couple of iterations, your budget will be complete. If you want an outsider’s opinion, send me a copy.”
As she was leaving, Jean added, “You can do this, Hector.”
“Thanks.” Hector’s frown was gone. A week later, his smile returned.
REFERENCES Garrison, R., E. Noreen, and P. Brewer. 2009. Managerial accounting. 13th ed. Columbus, OH: McGraw-
Hill. McLean, R. A. 2002. Financial management in healthcare organizations. 2nd ed. Clifton Park, NY:
Delmar Cengage. Robbins, S. P., and T. A. Judge. 2010. Organizational behavior. 14th ed. Upper Saddle River, NJ:
Prentice Hall. Small Business Administration. 2011. Essential elements of a good business plan.
http://www.sba.gov/category/navigation-structure/starting-managing-business /startingbusiness/writing-business-plan/essential-elements-good-busines (http://www.sba.gov/category/navigation-structure/starting-managing-business/startingbusiness
/writing-business-plan/essential-elements-good-busines) (accessed July 17, 2011).
Warren, C. S., J. M. Reeve, and J. Duchac. 2011. Accounting. 24th ed. Florence, KY: South-Western. Zelman, W. N., M. J. McCue, and N. D. Glick. 2009. Financial management of health care organizations:
An introduction to fundamental tools, concepts, and applications. 3rd ed. San Francisco: Jossey- Bass.
RESOURCES
Periodicals
Goren lo, G. 2010. Achieving a culture of quality improvement. Journal of Public Health Management and Practice 16 (1): 83–4.
Honore, P. A., and J. F. Costich. 2009. Public health inancial management competencies. Journal of Public Health Management and Practice 15 (4): 311–8.
Scutch ield, D. G., M. L. Zuniga de Nuncio, R. A. Bush, S. H. Fainstein, M. A. LaRocco, and N. Anvar. 1997. The presence of total quality management and continuous quality improvement processes in California public health clinics. Journal of Public Health Management and Practice 3 (3): 57–60.
Books Cleverley, W. O., and A. E. Cameron. 2007. Essentials of healthcare inance. 6th ed. Sudbury, MA: Jones
and Bartlett. Gapenski, L. C. 2003. Understanding healthcare inancial management. 4th ed. Washington, DC:
AUPHA/Health Administration Press.
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Web Sites Healthcare Financial Management Association: http://www.hfma.org/ (http://www.hfma.org/) Institute for Healthcare Improvement: http://www.ihi.org/ihi (http://www.ihi.org/ihi)
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Appendix 15–1
BUDGET EXAMPLES
Greatly simpli ied examples of traditional and zero-based budgets are presented. Both use the same data; priority rankings are arbitrary.
Items to be Included in the Budget (in Alphabetical Order) Item Proposed Allocation Babysitter training program $ 1,500 Board member retreat $ 2,300 Cancer avoidance program $ 10,000 Emergency preparedness training $ 5,000 Emergency services $124,600 Employee counseling services $ 18,500 Employee training $ 24,000 Employee travel $ 17,500 Immunization program $ 14,000 Maintenance (building) $ 35,300 Maintenance (grounds) $ 24,300 Maintenance (parking lot) $ 43,600 Personnel (bene its) $ 45,260 Personnel (retirement) $ 5,300 Personnel (salary) $600,250 Personnel (temporary part-time) $ 42,000 Publicity $ 22,000 Recruitment $ 8,450 Restaurant inspection program $ 18,400 Seniors exercise program $ 10,200 Travel immunization services $ 3,060
Incremental Budget
Notes
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1. Items and allocations: No changes 2. Legal requirements: Ignored 3. Priority of items: Ignored 4. Comment: Items are not prioritized and typically are not subject to change
Budget for XYZ Health Organization (Incremental Method)
Amount Total Personnel:
Personnel (salary) $600,250
Personnel (bene its) $ 45,260
Personnel (retirement) $ 5,300
Personnel (temporary part-time) $ 42,000
Employee counseling services $ 18,500
Employee training $ 24,000
Employee travel $ 17,500
Recruitment $ 8,450
Total $ 761,260 Capital (building and grounds):
Maintenance (building) $ 36,300
Maintenance (grounds) $ 24,300
Maintenance (parking lot) $ 43,600
Total $ 104,200 Program:
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Babysitter training program $ 1,500
Cancer avoidance program $ 10,000
Emergency services $124,600
Immunization program $ 14,000
Restaurant inspection program $ 18,400
Seniors exercise program $ 10,200
Travel immunization services $ 3,060
Total $ 181,760 Training:
Emergency preparedness training $ 5,000
Total $ 5,000 Other:
Board member retreat $ 2,300
Publicity $ 22,000
Total $ 24,300 Total $1,076,520
Zero-Based Budget
Notes
1. Items and allocations: No changes 2. Legal requirements: Items required by law separated from optional items 3. Priority of items: Items not required by law prioritized 4. Comment: Fund items until all available money is used
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Budget for XYZ Health Organization (Zero-Based Method)
Amount Running Total Required by law:
Personnel (salary) $ 600,250
Personnel (bene its) $ 45,260
Restaurant inspection program $ 18,400
Total $ 663,910 Not required by law (prioritized):
Emergency services $ 124,600 $ 788,510
Personnel (retirement) $ 5,300 $ 793,810
Immunization program $ 14,000 $ 807,810
Maintenance (grounds) $ 24,300 $ 832,110
Publicity $ 22,000 $ 854,110
Maintenance (building) $ 36,300 $ 890,410
Employee counseling services $ 18,500 $ 908,910
Emergency preparedness training $ 5,000 $ 913,910
Maintenance (parking lot) $ 43,600 $ 957,510
Seniors exercise program $ 10,200 $ 967,710
Employee training $ 24,000 $ 991,710
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Travel immunization services $ 3,060 $ 994,770
Cancer avoidance program $ 10,000 $1,004,770
Recruitment $ 8,450 $1,013,220
Babysitter training program $ 1,500 $1,014,720
Personnel (temporary part-time) $ 42,000 $1,056,720
Employee travel $ 17,500 $1,074,220
Board member retreat $ 2,300 $1,076,520
Total $1,076,520 $1,076,520
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CHAPTER
16
Managing Information
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Appreciate the interconnected nature of computerized devices in hospitals and other organizations.
• Be able to de ine and explain the elements of an electronic health record system. • Appreciate the growing use of information systems in support of public health activities. • Understand that many health care providers and members of the public do not share the same
enthusiasm for information systems that managers have.
CHAPTER SUMMARY
This chapter is about managing information in health organizations. Electronic health records systems are highlighted. Such systems can be found wherever services are rendered or programs are conducted. Information systems are used in public health settings for surveillance, program evaluation, and population outcomes assessment. In contemporary health organizations, information systems also typically are used to help manage inances, inventory, and human resources. Although gaining in popularity and acceptance, not all elements of information systems are popular or fully accepted by organizational employees or members of the public.
CASE STUDY
Dr. James Olds had been practicing medicine for almost 40 years. He was talking about electronic health records with Dr. Kevin Bright, a second-year resident physician who was a member of Dr. Olds’s clinical team.
“Dr. Olds,” began Kevin. “What are the alternatives to using these new electronic health records? They are a real pain to ill out. And they automatically send me down useless paths.”
“Why do you think that, Kevin?” asked Dr. Olds.
“These electronic systems don’t allow me to think for myself. I went to medical school to learn how to diagnose and treat illness, think, and save people. If I wanted to learn how to follow someone else’s treatment plan, I would have gone into a different ield.”
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“Think of it as a recipe for getting uniform results,” said Dr. Olds.
“I would have gone to culinary school if I wanted to follow recipes,” said Kevin, without really thinking. He continued, “Dr. Olds, you’ve been in practice for years. Don’t you like to think for yourself?”
“Well …,” began Dr. Olds.
While Dr. Olds gathers his thoughts, how would you reply to Kevin’s question?
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16.1 INTRODUCTION
Managing information is unlike managing people. Information rarely becomes tired and does not require periodic breaks to rest, smoke a cigarette, or use the rest facilities. However, some similarities do exist between people and information. Both require some level of vigilance, protection, or supervision to keep them from straying or becoming lost. Both have value.
Information is a complex commodity. When asked to give an example of information in the health ield, a common reply is electronic health records. Billing, record keeping, inventory, human resources
information, some forms of interpersonal communications, and compensation records all create, use, or transfer information. Accuracy of information is important, as is availability.
This chapter notes a number of applications that involve information management. These include electronic health records, inventory control, human resources information, and public health records. This is merely a subset of applications.
Two other aspects of information management are important to management: security and user perceptions. Security is critical in order to safeguard information that belongs to users and persons or groups being served. User perceptions are opinions held by people. Although they may be incorrect, their presence must be considered.
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16.2 ELECTRONIC HEALTH RECORDS
Advocates of health information technology feel that the widespread adoption of electronic health record systems in both inpatient and outpatient settings will result in substantial improvement in the quality of patient health and safety based on their ability to introduce new ef iciencies to medical practice (Southern California Evidence-Based Practice Center 2006). The Institute of Medicine provided an early endorsement of electronic health records and advocated for new investments in informational systems as the best means to improve health care system safety, quality, and ef iciency (Institute of Medicine 2003). In theory, electronic health records should promote information sharing among multiple health care providers treating the same individual and enable information continuity between visits. Supporters of computerized medical or health records contend that electronic health records will lead to improved quality of care, reduced incidence of medical errors, and reductions in cost.
Health records are important elements in any health care organization that provides services to individuals. Health records are actually a system. Such a system requires one or more portals to input information, a means to transport it to a holding or storage area, a means of organizing it, one or more connections to export output information, and a means to protect the information from being possessed by unauthorized persons.
De initions
The Institute of Medicine offered two de initions of electronic health record systems. The earlier de inition focused on patient care: “A patient record system is a type of clinical information system, which is dedicated to collecting, storing, manipulating, and making available clinical information important to the delivery of patient care. The central focus of such systems is clinical data and not inancial or billing information. Such systems may be limited in their scope to a single area of clinical
information (e.g., dedicated to laboratory data), or they may be comprehensive and cover virtually every facet of clinical information pertinent to patient care (e.g., computer-based patient record systems)” (Dick, Steen, and Detmer 1997, 56).
Six years later, the Institute of Medicine’s de inition of an electronic health record was broadened (Aspden et al. 2003, 434) to include “a longitudinal collection of electronic health information for and about persons; immediate electronic access to person-and population-level information by authorized users; provision of knowledge and decision-support that enhance the quality, safety, and ef iciency of patient care; and support of ef icient processes for health care delivery” (emphasis added).
At the same time, the Institute of Medicine addressed the goals for a computerized health record system. The broad goals were promoting ef iciency in health care delivery, increasing the quality of health care, and promoting patient safety (Institute of Medicine 2003). Any electronic health record system had to possess the following eight attributes:
• Health information and data: Provide immediate access to information such as individual diagnoses, medications, allergies, and laboratory test results to improve the ability or service providers to make sound clinical decisions in a timely manner.
• Result management: Provide access to new and past test results, thus allowing all participating providers to make more informed decisions about the effectiveness of treatment regimens and
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patient safety.
• Order management: Ensure that providers have the ability to enter and store orders for prescriptions, tests, and other services. This capability is intended to improve legibility, reduce duplication, and allow orders to be completed in a timely manner.
• Decision support: Provide reminders, prompts, and alerts to facilitate diagnoses and treatments by improving compliance with best clinical practices, promoting regular screenings and other preventive practices, and identifying possible drug interactions.
• Electronic communication and connectivity: Promote secure, open, and readily accessible channels of communication among providers and patients to improve the continuity of care, increase the timeliness of diagnoses and treatments, and reduce the frequency of adverse events.
• Patient support: Provide tools that give individuals access to their health records, provide interactive education on relevant health topics, and provide protocols to help people conduct home-monitoring and self-testing activities to improve control of chronic conditions such as diabetes and hypertension.
• Administrative processes: Include computerized administrative tools, such as scheduling and record-keeping systems; such equipment should greatly improve the ef iciency and performance of hospitals and clinics, allowing them to provide more timely services to patients and other clientele.
• Reporting: Provide suf icient supportive equipment (software, hardware, and memory capacity) that meets uniform data standards and enables health care organizations to respond more quickly to federal, state, and private reporting requirements, including those that support patient safety and disease surveillance.
Acceptance of Electronic Health Records
Although electronic health records have been available for approximately two decades, their acceptance has not been robust. Computerized record systems in other industries such as manufacturing, inance, transportation, and many retail establishments have achieved much higher rates of acceptance. An early computerized health record system was introduced in New Jersey (Fallon, Beaugard, and Bucksbaum 1987). It was suppressed largely through the application of political pressure.
The authors of a recent study of public perceptions reported that people were guardedly optimistic that electronic health record systems have promise to make a positive impact (Linz and Fallon 2008). The same study reported that one person in four believed that, in their present stage of development, electronic health records fail to improve the quality of health care and to eliminate virtually all medical errors.
Acceptance of electronic health records has been the most dif icult barrier for proponents of the technology to overcome. A variety of factors have contributed to the slow acceptance of the technology, including the following:
• Technical problems such as user familiarity with computers in general and the record systems in
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particular. (Early electronic record systems did not accept data input from instruments and other ancillary sources in hospitals or clinics; these problems largely have been overcome.)
• Problems related to resources such as insuf icient funding for initial purchases of equipment and software needed to make health record systems operate, and inadequate initial and ongoing training.
• Financial problems such as purchasing software upgrades and concerns about return on investment.
• Concerns expressed by potential users. These included initial and ongoing training, changes in workplace routines associated with use of electronic health record systems being mandatory, and doubts about the professional utility or clinical relevance of the systems.
• Miscellaneous concerns related to security of the system and its contents, maintaining con identiality, system maintenance, and ensuring that access by unauthorized individuals does not occur.
Small groups of clinicians and independent practitioners are not likely to adopt electronic health records until the costs of implementing and maintaining the systems decrease, standards for connecting to other organizations (interoperability) are adopted, and the systems are more widely accepted as contributing to improved quality of care (Kemper, Uren, and Clark 2006).
Structural Considerations
A traditional health records system is based on paper. Data are entered into the system by hand (directly by a provider or in typed form via a transcription of notes dictated by a provider). Information is usually organized into iles that are stored on shelves or in iling cabinets. Data from consultations or the results of laboratory or other diagnostic tests must be added to the appropriate iles as they become available. This task is done by hand. Files are retrieved (often by a clerk) and transported by hand to the location where they will be needed. Duplication of information in health records is accomplished by photocopying. Radiographic images are commonly stored apart from paper records. Security is often provided by a door to the storage area. The door may not be kept closed. A lock, if present, is often not used to save time.
The systemic elements of an electronic health records system are similar to those found in a paper system. Unlike patient records that are kept on single pieces of paper, electronic health records store data in computers or other electronic formats. Individual providers use computers to enter data directly into the system. Results of diagnostic tests pass from the diagnostic instruments directly into individual records. Radiographic images are digitized and stored with other individual information. Individual health records are stored in computers or electronic devices connected to the system. Information is transported electronically from storage site to wherever it is needed. Protection is provided by electronic security systems that are linked to the system.
Compared to paper records, electronic health records offer several important advantages. They are far more compact. Enormous quantities of information require miniscule volumes of space for storage. Electronic records can be quickly retrieved. Unless they are initially mis iled, electronic records are rarely lost or misplaced. Although errors can and do occur in electronic systems, they are unlikely. On average, computers make one error for every billion operations. Human error rates are approximately
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one in every hundred operations. Expressed in numerical form, this is a difference of 107—computers are 10 million times more accurate. Images of information do not degrade. Electronic images are always crisp and clear, unlike paper images that may become smudged, folded, or faded. On a cost per unit of information basis, electronic record systems are far less expensive to operate than paper-based systems.
However, electronic record systems have a number of signi icant disadvantages. Security is a constant worry. Where paper records require a physical presence to remove them, electronic records can be accessed from anywhere in the world. The only way to achieve absolute security is to isolate an electronic record system from all outside connections. Obviously, this negates one of its major advantages, namely ease of sending and receiving information. To stay connected with the Internet, security must be maintained electronically. The success of hackers and the prevalence of stolen data attest to the inadequacy of electronic security systems. The fact that health information is often highly sensitive attests to the importance of providing adequate security.
Access is a subtle problem. Systems for information input, storage, and output change rapidly. Storage provides a convenient example. Magnetic tape was replaced by 5.25-inch loppy disks. These were replaced by 3.5-inch disks. Greater capacity was obtained with the advent of zip disks. The current standard is a so-called thumb drive. While each successive storage innovation had greater capacity than the mechanism it replaced (5.25-inch loppy disks could store 256 bytes of data; thumb drives with capacities of 120 gigabytes are available), the data transfer protocols changed with each successive improvement. As a result, storage systems must upgrade and transfer their contents to new systems to maintain accessibility. This involves considerable expense.
Health record systems must be protected against damage or loss. Protocols for backing up information and systems have been developed. Keeping the backed-up information at another location provides protection against loss but increases security risks.
Although a paper-based health record has tradition and virtues, research has shown that it can be illegible, incomplete, dif icult to access in more than one location, and insecure from unauthorized uses and users (Dick, Steen, and Detmer 1997). While inancing the implementation of electronic medical information records and other potential limitations remain powerful barriers, physicians are using computers more often, accessing electronic health record systems in hospitals more regularly, and providing prescriptions via e-mail with growing frequency (Hagland 2006).
Electronic health records are frequently linked to billing systems. Such linkages speed up the generation of billing statements, often require fewer personnel, and are less likely to contain errors when compared to manually generated statements. These are quality improvements that increase productivity.
Impact on Quality
Assessments of the effectiveness of electronic health records in improving the quality of health care services delivered by providers have produced mixed results. Measures of physician performance are especially important to accrediting and licensing bodies, purchasers, consumer advocates, and professional associations. Compared to traditional pen-and-paper medical charts, the use of electronic health records has led to higher documentation rates of hypertension, greater use of antihypertensive therapy, and more successful reductions in blood pressure (Kinn et al. 2002), as well as to better
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outcomes in treating a broad spectrum of diseases (Sequist, Cullen, and Ayanian 2005). However, many physicians continue to resist full engagement in quality improvement activities, including electronic health records (Audet, Doty, Shamasdin, and Schoenbaum 2005). In contrast to physicians, nurses often are able to inish their work much faster with electronic records (Likourezos et al. 2004). Organizational support for electronic health record systems affects their acceptance (Russell and Spooner 2004).
Medical errors and adverse events are more dif icult to evaluate because they must be understood in the context of the systems within which they occur (Thomas and Petersen 2003). Electronic health records have been used to identify errors that are directly related to patient care. They facilitate methods such as morbidity and mortality conferences, autopsy indings, malpractice claim analysis, and error-reporting systems that include surveys and structured interviews of providers. A report from the Institute of Medicine addressed concern over the prevalence of adverse drug events attributable to medication errors. The Institute of Medicine report, believing that most adverse drug events could be prevented, recommended that electronic health records in conjunction with decision-making protocols for prescriptions could reduce medication errors by providing essential information to health care providers at the time they were seeing their patients (Johns Hopkins Bloomberg School of Public Health 2006).
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16.3 MANAGING PUBLIC HEALTH INFORMATION
Information systems are an integral part of public health management, serving important functions in such areas as surveillance, program evaluation, and population outcomes assessment (Aspden 2011; Lee 2008; Studnicki, Berndt, and Fisher 2008). Large data bases are increasingly interconnected, accessible, and feasible for analysis by individual users. Local users are able to access standardized national data sources such as the US Census, Medicare, and the National Noti iable Diseases Surveillance System. One growing ield of application of computerized information bases is geographic information systems (Melnick 2008), which analyze and display data on maps and allow for distance issues such as transportation to be incorporated in health planning.
Privacy and security issues are a major concern in the use of health information, both in the health care delivery and public health arenas, and are a major focus of public policy interdependence with management, as noted in the discussion of the policy context for management (Chapter 2 (chapter02.html) ). Legislation has de ined elements of individual health information that may not be shared without permission of the individual. Protected health information includes not only diagnostic information, but also information on utilization and payment of services. Privacy requirements for health information are quite onerous but must be respected as a critical element of the interdependence and trust needed between health organizations and their clients and constituents.
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16.4 MANAGING INVENTORY
Information systems are used to manage a variety of other activities in organizations, including assuring an adequate inventory of supplies. The term inventory survives in health organizations. In retail and manufacturing facilities, logistics has replaced inventory. Logistics begins with the delivery of raw materials or supplies that will be used in delivering programming and services. It continues with keeping records of supplies that are used up or converted into inished goods. The process continues until the inished goods are shipped. The process concludes with replenishing stocks of materials that were used.
Before computers made integration of the previous steps possible, each was done independently, often by hand. Not only was this process slow, but it lagged behind actual production or usage of materials. It required lead time to ensure that needed materials would be available when needed. Counts of components on hand were made infrequently.
Integrated information systems and the ability to read barcodes have streamlined the inventory process. When a barcode is scanned to obtain information such as the price of an item, the computer can adjust the count of raw materials as well as the count of inished goods. Supplies of replacement components can be ordered automatically. Computer scheduling makes the inventory process more ef icient.
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16.5 MANAGING HUMAN RESOURCES
Requirements for record keeping have accompanied many federal laws. The record-keeping requirements have increased signi icantly since passage of the Civil Rights Act in 1964. Responsibility for complying with record keeping and reporting requirements is often assigned to human resources. Having information systems has greatly eased this burden. Many pieces of legislation that have reporting requirements are reviewed in the discussion on organizing human resources (Chapter 8 (chapter08.html) ).
When payroll is not outsourced, responsibility for it is often assigned to human resources. Processing multiple inputs from every employee is challenging. Because it is payroll, the tolerance for errors is essentially nil. This is realistically possible only with a modern information system.
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CONCLUSION
The potential for information management to improve the value and quality of services delivered by health organizations has dramatically increased in recent decades. The ability to convert hard (paper) copy information to electronic format, to access large information bases, and to connect disparate sources of information will only continue to increase. Successful managers will search for new opportunities to use information technology to manage quality, human resources, inventory, and other processes and outcomes of their units and organizations. User frustrations and resistance to new technologies can be expected and should be heard and processed.
Systems Thinking about Managing Information
This chapter has emphasized that information needs to be organized as a system, so that information may be used, managed, and improved. But what are the boundaries of the information system? In particular, does the information system include the user of the information?
All too often, managers forget that the user is part of the information system, and as a result, managers are surprised when the information system does not optimally it into the larger organizational system. Alter (2004) refers to this oversight as viewing information systems as tools rather than systems. Managers wrongly separate the mechanical tool from the people who put the tool to use.
If managers view an information system as a tool, people are users of the information system rather than participants in the information system, and the manager’s goal is to get the tool (the information system) installed and used as intended. Viewed as a part of a larger system, the manager’s goal for an information system is to improve the quality or value of the product or service. The information system should be continuously modi ied as needed to meet organization-wide needs, including better customer service and better working conditions for the organization’s employees. The manager’s central focus should be on improving value and service, not on implementing a new tool.
CASE STUDY RESOLUTION
Dr. Olds has gathered his thoughts.
“Kevin,” he began, “In medical school, I was taught to help people. Thinking was almost an unintended consequence. Having protocols to follow has improved the outcomes of the people who I have treated. Did you want to add something, Kevin, or perhaps I should address you as Doctor?”
“No sir,” Kevin said. “Thank you for your guidance and your teaching. Please excuse me, I have work to do and people to help.”
REFERENCES Alter, S. 2004. Desperately seeking systems thinking in the information systems discipline.
International Conference on Information Systems (ICIS-25) Proceedings. Paper 61. Washington,
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DC, 757–69. Aspden, P. 2011. Informatics in public health. In Essentials of management and leadership in public
health, 103–16, eds. Burke, R. E., and L. H. Friedman. Sudbury, MA: Jones and Bartlett. Aspden, P., J. M. Corrigan, J. Wolcott, and S. M. Erickson. 2003. Patient safety: Achieving a new
standard for care. Board on Healthcare Services. Washington, DC: National Academies Press. Audet, A. M., M. M. Doty, J. Shamasdin, and S. C. Schoenbaum. 2005. Measure, learn, and improve:
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technology for health care. Revised edition. Board on Healthcare Services. Washington, DC: National Academies Press.
Fallon, L. F., P. A. Beaugard, and M. J. Bucksbaum. 1987. The uni ied perinatal record: A state-wide personal computer based system serving clinical and epidemiological needs. Journal of Perinatal Medicine 15 (Suppl 1): 22–9.
Hagland, M. 2006. Electronic medical records. Healthcare Informatics 23: 34–6. Institute of Medicine. 2003. Key capabilities of an electronic health record system. Board on
Healthcare Services. Washington, DC: National Academies Press. Johns Hopkins Bloomberg School of Public Health. 2006. Public Health News Center. Q&A:
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Kemper, A. R., R. L. Uren, and S. J. Clark. 2006. Adoption of electronic health records in primary care pediatric practices. Pediatrics 118 (1): e20–4.
Kinn, J. W., J. C. Marek, M. F. O’Toole, S. M. Rowley, and V. J. Bufalino. 2002. Effectiveness of the electronic medical record in improving the management of hypertension. Journal of Clinical Hypertension (Greenwich) 4 (5): 415–9.
Lee, C. V. 2008. Public health data acquisition. In Public health administration, 297–328, eds. Novick, L. F., C. B. Morrow, and G. P. Mays. 2nd ed. Sudbury, MA: Jones and Bartlett.
Likourezos, A., D. B. Chal in, G. Daniel, D. G. Murphy, B. Sommer, H. Kelly, K. Darcy, and S. J. Davidson. 2004. Physician and nurse satisfaction with an electronic medical record system. Journal of Emergency Medicine 27 (4): 419–24.
Linz, A. J., and L. F. Fallon. 2008. Public perceptions regarding the impact of electronic medical records on healthcare quality and medical errors. Journal of Controversial Medical Claims 15 (2): 10–5.
Melnick, A. L. 2008. Geographic information systems for public health. In Public health administration, 329–51, eds. Novick, L. F., C. B. Morrow, and G. P. Mays. 2nd ed. Sudbury, MA: Jones and Bartlett.
Russell, S. C., and S. A. Spooner. 2004. Barriers to EMR adoption in internal medicine and pediatric outpatient practices. Tennessee Medicine 97 (10): 457–60.
Sequist, T. D., T. Cullen, and J. Z. Ayanian. 2005. Information technology as a tool to improve the quality of American Indian health care. American Journal of Public Health 95 (12): 2173–9.
Southern California Evidence-Based Practice Center. 2006. Costs and bene its of health information technology. Evidence Report/Technology Assessment No. 132. AHRQ Publication No. 06-E006. Rockville, MD: Agency for Healthcare Research and Quality.
Studnicki, J., D. J. Berndt, and J. W. Fisher. 2008. Using information systems for public health administration. In Public health administration, 353–410, eds. Novick, L. F., C. B. Morrow, and G.
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P. Mays. 2nd ed. Sudbury, MA: Jones and Bartlett. Thomas, E. J., and L. A. Petersen. 2003. Measuring errors and adverse events in health care. Journal of
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RESOURCES
Periodicals
Atkinson, L. 2011. Integrating the EHR into the patient relationship. Iowa Medicine 101 (2): 21–6. Samataray, R., V. O. Nioku, J. W. Brunner, V. Raghaven, M. L. Kendall, and S. C. Shih. 2011. Promoting
electronic health record adoption among small independent primary care practices. American Journal of Managed Care 17 (5): 353–8.
Sidorov, J. 2006. It ain’t necessarily so: The electronic health record and the unlikely prospect of reducing health care costs. Health Affairs 25 (11): 1079–85.
Books Gartee, R. 2011. Electronic health records: Understanding and using computerized medical records.
2nd ed. Upper Saddle River, NJ: Prentice Hall. Hamilton, B. 2010. Electronic health records. 2nd ed. Schaumburg, IL: Career Education. Jones, S., and F. M. Groom. 2011. Information and communication technologies in healthcare. Deland,
FL: Auerbach Publications. O’Carroll, P. W., W. A. Yasnoff, M. E. Ward, L. H. Ripp, and E. L. Martin (Eds.). 2010. Public health
informatics and information systems. New York: Springer-Verlag. Sterling, R. B. 2010. Keys to EMR/EHR success: Selecting and implementing an electronic medical
record. 2nd ed. Phoenix, MD: Greenbranch Publications.
Web Sites • About.com (http://About.com) : The Bene its of Electronic Medical Records (EMRs):
http://patients.about.com/od/electronicpatientrecords/a/EMRbene its.htm (http://patients.about.com/od/electronicpatientrecords/a/EMRbene its.htm)
• EMR and HER: The Advantages of EHR Systems: http://www.emrandehr.com/2009/05 /05/the-advantages-of-emr-systems/ (http://www.emrandehr.com/2009/05/05/the-advantages- of-emr-systems/)
• Health Affairs: Can Electronic Medical Record Systems Transform Health Care? Potential Health Bene its, Savings, and Costs: http://content.healthaffairs.org/content /24/5/1103.abstract (http://content.healthaffairs.org/content/24/5/1103.abstract)
• Open Clinical: Electronic Medical Records: http://www.openclinical.org/emr.html (http://www.openclinical.org/emr.html)
• TeleMedical.com (http://TeleMedical.com) : Directory of Electronic Medical Records Systems: http://www.telemedical.com/Telemedical/Products/emr.html (http://www.telemedical.com /Telemedical/Products/emr.html)
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CHAPTER
17
Managing Change
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Understand strategies for managing planned change. • Be able to conduct a force ield analysis of a planned change. • Understand strategies for encouraging and managing emergent change. • Be able to apply strategies for stimulating innovation and creativity in employees and
organizations.
CHAPTER SUMMARY
Performance-driven and improvement-seeking health organizations embrace the notion that change is ubiquitous. Such organizations are highly aware of and responsive to their external environments. While they prepare plans to shape external changes in advance, they also expect surprises. Performance-driven and improvement-seeking organizations also promote internal change and innovation. Encouraging and managing change is the responsibility of employees throughout an organization. Successful managers should seek opportunities for change, select strategies and tactics that improve the likelihood of integrating change, and reward workers who are lexible and are energized by change and innovation. Managers and employees who proactively embrace change and innovation are likely to contribute to organizational improvement. This chapter explains several tools, concepts, and strategies that managers and employees can use to lead and manage change for organizational improvement.
CASE STUDY
Aaron, the chief executive of icer of a multi-unit health services delivery organization, and Brittany, the chief operating of icer, were discussing the current status of the one of their organization’s key units. Brittany commented, “The ef iciency of the unit lags behind most of the other units in the organization. The employees have the potential to do great work. Over the years, though, they have not been held accountable for improving their services. As a result, they are satis ied with performance levels that are much lower than our organization and our community deserve.”
“I agree,” replied Aaron. “Our clients and other stakeholders have the right to expect better
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performance. Do you have any thoughts on how the unit can transform itself?”
How would you reply to Aaron? How would you start the process of changing the unit?
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17.1 INTRODUCTION
Organizations face a myriad of challenges and opportunities that invite or require many types of change. In health organizations and agencies, change is often the result of new national, state, or local governmental policies or regulations. For example, in the United States, legislation demanding more effective responses to emergency situations has altered the internal structure of state and local health departments. Many health agencies have added new divisions or units to manage emergency responses. Recent changes in Medicare reimbursement have stimulated hospitals to focus more on safety and quality of inpatient care. Changes come from a variety of other sources as well. Recently, changes in domestic and international organizations have been stimulated by economic recession and increased competition for scarce resources, such as philanthropic grants. Changes in the external environment have squeezed budgets of health organizations. As a consequence, health organizations have had to become innovative and change in order to survive, much less thrive.
Management commentators often state that approximately 80% of major change initiatives in organizations fail. However, research has shown that organizational modi ications are often quite successful depending on the types of change. Median success rates range from 58% for “strategy deployment” to 40% for “technology change” and 19% for “culture change” (Smith 2002). With adequate attention to proactive and positive management of the change process, health organizations can avoid the waste associated with failed change initiatives. Such oversight conserves organizational resources, prevents cultures of cynicism from forming, and reduces resistance that is associated with change initiatives that fail.
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17.2 DIMENSIONS OF CHANGE
Changes come in a variety of sizes, types, and formats. Examples of change include revising an organization’s mission; relocating of ice staff; digitizing records; or merging autonomous units, teams, or departments. Understanding two dimensions of any change is critically important to the process of managing the modi ications.
The irst dimension is the degree of consensus on the need for change and on the nature of the proposed change. Although consensus is not necessary for organizations to implement change, lack of initial agreement often foreshadows future problems associated with the modi ication process. Achieving consensus usually requires widespread discussion, debate, and communication. An organization’s decision makers may agree on the need for change, but workers may not. Even if employees agree that change is needed, they may have different views on the type and scope of solutions proposed by management. Long-term thinking about the change process often convinces managers to take more time in the initial phase of the process, in order to establish a strong foundation for successful change. Investing time before implementing change usually pays off in the long run.
A second key dimension of any change is its complexity. For simple changes, implementation is usually straightforward, and surprises are infrequent. For complex changes, implementation must be lexible to accommodate unexpected outcomes that may arise as the plans for change evolve.
For simple changes accompanied by widespread consensus about both the need for change and the nature of the response to it, implementation may be uneventful. Unfortunately, such situations are relatively rare. Solutions that are thought to be simple and predictable often turn out to be complex and unpredictable. For example, managers and workers may be convinced that a program is failing and agree that it should be ended. Managers and workers may have frequent and close contact with program recipients and supporters. They may assume that any consequences of closing down the program are predictable and can be managed, for example, by transferring recipients to other similar programs. In the midst of the closure and transfer, however, disgruntled clients or their political representatives may approach the media and challenge the wisdom of ending the program. In such a scenario, a seemingly simple change can suddenly become complex.
Understanding the dimension of complexity means that virtually all changes require forethought and planning. Several strategies for designing and implementing planned change have been developed.
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17.3 CHANGE MANAGEMENT STRATEGIES: PLANNED CHANGE
The de inition of planned change is contained in its name. Planned change is thought out well in advance and executed in a deliberate and orderly fashion. All too often, change management does not begin until after the changes have been planned and announced by a coalition of top decision makers. For example, management may announce that overtime hours will be limited. Workers grumble and ignore or sabotage the intended outcome, in part because they were not involved in planning for the change. The irst step in any planned change process, then, is to establish a dialogue and discuss the need for change and the nature of the proposed change. Dialogue and discussion are preferable to announcements because managers should be prepared to learn from the discussion and then alter the nature or extent of change, based on input from workers and other stakeholders that may be affected. Stakeholders can include workers, outside contractors, vendors, customers, and others such as policy makers and inancial contributors.
Most of the discussion should focus on the need for change, rather than the exact nature of the organization’s response. As one analyst (Bridges 2003, 16) noted, “People aren’t in the market for solutions to problems they don’t see, acknowledge, and understand.” Selling the need for change involves developing a sense of urgency throughout an organization. This requires proactive leadership by managers to combat the natural tendency of individuals and organizations to seek equilibrium and certainty. Managers who want to create a sense of urgency can bring in outside information and outside sources to communicate internally, using emotionally compelling resources like stories and videos. Managers can role model the sense of urgency through their own behavior. At the same time, they should avoid acting anxious or angry. Managers can position the need for change as an opportunity. Managers can also make dif icult decisions to remove or work around individuals who are determined to retain the status quo.
Establishing a sense of urgency and debating the need for change require time and slow down the process of change. Such negative aspects must be offset by clear advantages. Debating proposed changes can be advantageous if stakeholders feel like they truly have been heard. In turn, the stakeholders are more likely to be more supportive or understanding of the proposed change. In addition, input from stakeholders can improve both the diagnosis of the problem and the proposed solution.
Once the need for change has been introduced and discussed, a decision to proceed is made by consensus or imposed by an organizational leader. A planned but lexible change process can then be implemented, as shown in Table 17–1 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections /152#tab171) . The next step in the process is to reinforce the need for the change and publicize the nature of the proposed change throughout the unit, organization, or community. One organizational change expert advises leaders to over-communicate the change vision by a factor of 10 to 100 or even 1000 (Kotter 1996). A concurrent step requires identifying a coalition of individuals to manage the change process. The size of the coalition can range from a single manager or worker assigned the responsibility for introducing a simple or noncontroversial change, to large teams of diverse stakeholders that are responsible for overseeing a complex or controversial change.
The hard work of change begins rather than ends with the third step: developing a work plan and ways to measure progress (metrics) for implementation. For simple and predictable changes, the work
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plan and metrics should include a schedule and target goals or levels for important indicators. For example, a new training program could be introduced to 10% of workers every month until all are trained. More complex changes usually require lexible work plans that are revised and updated as the change implementation process proceeds.
Table 17–1 Steps for Managing Planned Change
Step # Activity 1 Engage in debate or dialogue about the need for change and the nature of the proposed
solution. 2 Communicate consensus or decision to all stakeholders. 3 Form a coalition to manage the change process. 4 Develop a work plan and ways to measure progress (metrics). 5 Implement the proposed change by integrating it in organizational culture, structure, and
strategy. All Listen and learn, adjusting the nature of the solution and the speed of the process as
needed.
No matter how closely the irst three steps in the planned change management process are followed, employees who have changes thrust upon them will often react to the modi ications like the body reacts to a splinter or allergen by attempting to thwart or reject the proposed changes. Therefore, all but the simplest changes require corresponding reinforcement using organizational structures, culture, or strategies. For example, a new safety director position in a health organization is unlikely to achieve its intended goals unless a culture of organizational safety emerges, new policies enforce safer behaviors, employees are rewarded or recognized for safety improvement, and the organization promotes safety as an organizational strategy.
Throughout any planned change process, it is critical that managers of change listen and learn and then adjust the change intervention program and the speed of the process as needed. Learning should be part of the work plan. Systematic efforts to assess the process by collecting feedback from stakeholders are extremely useful. Experienced change agents continually ask questions such as, “How is the change going?” or “What can we do to facilitate the change process?” These and similar questions can be asked of focus groups (individuals selected for their expertise about the change implementation) or representatives of stakeholder groups.
Employee resistance to change is often cited as a cause of failure for change initiatives. Resistance can come from individuals who are not committed to the organization or to their own growth. In such cases, removing the workers from the process or unit, or even the organization, may be appropriate. However, resistance often results from lack of training, lack of communication, or lack of consensus building. All of these can be prevented by managers who listen closely and learn about their employees. Managers can analyze their employees to determine who will lose something when the proposed change is implemented. Losses can include power, status, money, or autonomy. Once the potential loss is identi ied, managers are able to focus attention on those individuals. For example, managers can arrange training for those who will need new skills as an outcome of the proposed change.
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Managing planned change requires a sustained commitment of resources to the change implementation process. An assessment of the resources needed to implement a proposed change should be made before a inal decision to make a change is made. Managers tend to underestimate the time and resources needed to introduce and sustain change. If resources are not suf icient to implement and sustain a proposed change, then it is doomed to failure even if there is consensus on the need for change and the nature of the solution.
Force Field Analysis: A Change Management Tool
Force ield analysis is a tool that is commonly used in the process of managing planned change. It is a systems thinking tool in that it allows managers to identify interrelated factors that may affect the outcome of a change process. Acting on that information, then, provides more control of the process. Force ield analysis provides both visual and quantitative ways to express what many managers understand intuitively. Thus, it helps those who may lack the intuition, and it helps intuitive managers ensure that they have included all relevant variables.
First, list the forces that may impact a proposed change. Next, note which forces support the change and which forces are barriers to change. Then, estimate the weight or importance of each force, from weak to strong. The process of identifying facilitators and barriers to change and assigning weights is highly subjective, but it can be improved by consulting with others and learning from their input. This yields an estimate of the likelihood of success for the change initiative, without intervention.
Next, estimate the degree of in luence the organization exerts on each of the positive and negative forces. This will help managers focus their attention on the forces that they can alter.
Force ield analysis yields a calculation about the feasibility of change, allowing a manager to stop or slow down. The analysis also results in an estimation of the probability of success. The likelihood of success can be increased by either (1) diminishing a negative force or (2) strengthening a positive force. In some cases, strengthening a positive force may only increase resistance. Diminishing negative forces becomes a more reliable option.
Table 17–2 (http://content.thuzelearning.com/books/Fallon.9852.17.1/sections/152#tab172) presents an example of a force ield analysis of a county public health department reorganization. The director of the health department could use the analysis to improve the likelihood that the proposed change will be accepted and implemented with energy and enthusiasm by stakeholders. In this case, the director would be well advised to diminish two negative forces before implementing the proposed reorganization. The director should (1) improve human resources conditions in the agency and (2) develop more support for the change by strengthening relationships with outside agencies such as local governments and ire and safety departments. The director also should strengthen a positive force by communicating more extensively about the likelihood of emergency events, adding to the sense of urgency driving the change. Such actions could affect the balance of popular perception, converting an unpopular and demoralizing change into one that is energizing and positive.
Table 17–2 Force Field Analysis of a County Public Health Department Reorganization
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Notes: Strength is measured from 1 (weakest) to 10 (strongest). CDC, Centers for Disease Control and Prevention; MI, moderate in luence; NI, no in luence; SI, strong in luence. Source: Based on case material presented in Applegate, L. M., A. Vinze, and M. Ipe. 2005. County department of public health: Organizing for emergency preparedness and response. Harvard Business School Case 9-806-089. Boston: Harvard Business Publishing. For illustrative purposes only.
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17.4 CHANGE MANAGEMENT STRATEGIES: EMERGENT CHANGE
In contrast to planned change, emergent change follows a less predictable path. Even planned changes often have elements of emergence and surprise to them. In many situations, managers do not know the exact dimensions of needed change. They may only know or sense that some sort of change would be welcomed or useful. Another possibility is that managers may be unaware that change is needed, but employees may be quite aware of the need. This reality applies to many complex problems where multiple perspectives are both present and useful. In these situations, managers are better advised to encourage or allow emergent change than trying to de ine and impose planned change. Encouraging and managing emergent change are critical competencies for managers in organizations that strive for improvement.
Appreciative Inquiry
One methodology for unleashing emergent change is appreciative inquiry. Formally, appreciative inquiry is a systematic, four-step methodology for whole-system transformation that is often applied to entire organizations or agencies. A wide variety of public and private organizations and agencies have used appreciative inquiry to transform their organizational cultures and designs, often with the goal of achieving greater employee conviction and collaboration and better customer service. Many of the methods and lessons of appreciative inquiry can be applied to smaller and less ambitious change initiatives, including relatively minor changes in teams and other organizational subunits. The assumptions of appreciative inquiry resonate with many improvement-driven managers who seek to have maximally productive employees and organizations.
The irst component of the formal appreciative inquiry process is the discovery stage, where participants focus on appreciating what exists around them rather than de ining their current situation as a failure that needs to be ixed. Even in the most dire circumstances, there are noteworthy organizational accomplishments and programs to appreciate and people to honor for their positive efforts or achievements. This initial show of appreciation is based on the theory that people respond better to positive reinforcement than negative criticism. Many experts argue that managers should take advantage of the potential associated with this positive energy.
The second component in the appreciative inquiry process is the dream phase, in which members of an organization ask, “What might be?” or “What are the possibilities?” Positive visualization awakens openness to change and feelings of comfort that accompany successful change.
The third component encompasses designs for change. How exactly should change be achieved? What processes, structures, and technologies are needed to achieve the dream? In this phase, the actual work of changing structures and processes is begun, as participants work through the preparations and modi ications that are needed to implement and achieve change.
In the inal or destiny phase, the task of sustaining change is undertaken. This involves creating and implementing strategies that empower workers to accept, accommodate, and sustain their new changed reality.
The four formal steps are not absolutely required and do not have to be followed in the given order
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to bene it from appreciative inquiry. Some managers adopt an appreciative inquiry philosophy when approaching any change. They integrate pieces of the process as appropriate into their planned change strategies. For example, some organizational managers begin project assessment activities by exploring appreciative-type questions such as, “What is already going well with regard to the project objectives in your team or on your unit? What is already changing? What are you learning?” Other managers have included questions about “What is going right?” in employee engagement and patient satisfaction surveys (Havens, Wood, and Leeman 2006).
The process of appreciative inquiry is illustrated by the following example from a health care system in the southwestern United States. Nursing turnover rates were unacceptably high. The annual turnover rates for nurses in system facilities ranged from 18% to 30%. With assistance from an external consultant, nurses engaged in an appreciative inquiry exercise designed to improve retention and job satisfaction. They generated positive stories about their nursing work, about humor and appreciation from patients, and about the joys of teamwork. Together, they developed a series of changes, including a new recruiting brochure, new assessment and orientation programs, a recognition process, a calendar illustrating stories and quotes about nurses at work, a video for Nurse’s Day, and new training materials. As a result of the changes developed in the appreciative inquiry exercise, the health care system experienced major improvements in retention, nurse vacancy rates, and nurse and patient satisfaction (Wood 2003).
As a general method of change management, appreciative inquiry has much to offer to managers who want to implement signi icant changes in an organization. Appreciative inquiry draws upon people’s desire for positivity and optimism. It emphasizes collaboration and participation by all members of an organization and its related stakeholders. It values continuity with the past while moving the organization forward. Appreciative inquiry has a systems thinking orientation. Because it approaches change as a journey that unfolds, rather than as a planned event, appreciative inquiry resonates with the experiences of most managers and workers.
Positive Deviance
A related approach to discovering successful new ideas and opportunities and then disseminating them is known as positive deviance. This technique provides another powerful tool for managers interested in stimulating and managing change. Positive deviance emerged from the work of community activists addressing malnutrition in rural Vietnam in the 1990s (Pascale, Sternin, and Sternin 2010). In a poor rural area, activists engaged people from a local community to identify the few children who actually were well nourished. After the community members did so, they were motivated to learn why those few children were better off. The healthier children were deviating from community norms, but in a positive way: They were positive deviants. The well-nourished children were being fed frequently throughout the day, contrary to local custom, and were supplementing their rice diet with available sources of protein and vitamins, such as shrimp, crabs, and sweet potato greens, which were items that were not viewed as good food by most villagers. As important as the discovery of the positive deviants was, the ensuing dissemination process was of greater importance. Women were invited to visit in each others’ homes and to discuss the nutrition issue and contribute to group meals using the new ingredients. Eating norms were changed, signi icantly reducing malnutrition for children in the village.
As developed and formalized over the past two decades, positive deviance involves ive steps. All are relevant to many of the problems addressed by health care and public health organizations (Weber 2005a, 2005b):
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1. Identify a target community, group, or system that is made up of people who see themselves as similar.
2. Target a problem or aspect of behavior that members of the community, group, or system feel should be changed. The target problem should be identi ied by the community, group, or system, not by an outside leader or authority.
3. Conduct a search for group members who have successfully overcome or resolved the problem. These are the positive deviants.
4. Identify the relevant behaviors of the positive deviants.
5. Promote spreading the behaviors to other group members.
Two insightful statements used by positive deviance cofounder Jerry Sternin re lect an understanding of human behavior that is innovative and effective in many health settings: (1) “It’s easier to act your way into a new way of thinking, than to think your way into a new way of acting,” (Fuller 1976) and (2) “What I discover, I own” (Weber 2005a, 2005b). The statements speak to the dif iculties associated with planned change. People have trouble embracing change that is externally concocted or imposed. If people see desirable behaviors in themselves or in their own communities, families, groups, or organizations, they are more likely to embrace them. Rather than suggesting or imposing solutions, the emergent change management process helps people to make their own discoveries.
An illustration of the positive deviance process provides further insight into the technique. Staphylococcus aureus is a common pathogen that has become resistant to methicillin, the antibiotic used for treating infections caused by these bacteria. The result has been the evolution of methicillin- resistant Staphylococcus aureus (MRSA). In 2005, approximately 19,000 individuals developed MRSA infections while they were hospitalized (Lloyd, Buscell, and Lindberg 2008). Hospital employees were familiar with infection control protocols and procedures such as hand hygiene guidelines, isolation of infected or colonized patients, and environmental cleaning, but they did not always follow them. The issue was how to motivate them to apply the information with which they were already familiar.
Six hospitals and clinics began a positive deviance campaign with an initial meeting attended by staff from all disciplines. The meeting included basic information about MRSA and the scope of the problem, with staff and patients recounting real-life MRSA stories. After some nursing units volunteered to become pilot sites, a core group of leaders emerged. Managers and infection control professionals were trained to serve as facilitators of a process that focused on participation by frontline staff members who would take ownership of the problem and seek solutions. The suggested solutions included making small changes such as restocking gowns and gloves more frequently, placing them on the doors of isolation rooms, and packing used materials more compactly to avoid over lowing disposal containers. Housekeeping staff suggested posting cleaning protocols and checklists in isolation rooms. As a result of making a variety of small changes that were customized for each setting, the participating hospitals signi icantly reduced the incidence of MRSA infections by 30% to 39% (Lloyd et al. 2008).
Other tools that are useful in managing change are brainstorming and the nominal group technique. Any manager or worker interested in building a change-friendly organization or unit should be familiar with both of these techniques.
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Brainstorming
Brainstorming enables widespread participation in group processes for innovation and creative problem solving. Brainstorming is often used informally in meetings when managers ask all participants for creative ideas about tackling a problem or pursuing an opportunity. A more formal structured brainstorming process is described in detail in the discussion on collaborating inside the organization (Chapter 12 (chapter12.html) ). Brainstorming encourages group members to generate lots of ideas, without worrying about right ones and wrong ones. In organizations where participation in meetings typically is highly structured, this requires some patience, support, and practice.
Nominal Group Technique
Like brainstorming, the nominal group technique formalizes the equal participation of all members of a group. Both techniques are designed to prevent selected individuals from dominating group input. The nominal group technique also produces a set of priorities or rankings that re lect the structured input of all participants. In this sense, the process is highly democratic, and it takes advantage of maximizing diversity of input as well as scope of participation. A series of guidelines follows:
1. Discuss the process and objectives of the nominal group technique.
2. Generate ideas independently and silently. The facilitator distributes or posts a written description of each issue, opportunity, or topic, and then reads it to the group, taking clarifying questions. A period of silence follows, while group members generate and write down their own responses.
3. Record the ideas generated. Ideas are collected and recorded by the facilitator so that all can view them. Ideas are numbered for the convenience of later voting.
4. Discuss the ideas. Group members talk about the merits and relevance of each idea, with prompting from the facilitator. Anyone may comment on an idea. The provider of the idea may or may not choose to defend it.
5. Vote on the ideas. The facilitator requests that all members of the group privately prioritize the ideas using an agreed-upon set of criteria. There are several ways to vote. One system gives each participant ive cards. Participants then list their top ive ideas, one per card, and rate the priority of each from 1 (low) to 5 (high). The moderator collects the cards and, with the assistance of a group member, tallies and posts the scores. The highest scores are the ideas most favored by the group. If desired, the discussion and voting process can continue for another round to winnow down the list even further. Another system has participants vote on each idea. This approach becomes cumbersome when a large number of ideas are being evaluated. A third system asks participants to designate the three most appealing ideas and the three least appealing ideas. The least appealing are removed from consideration, and the process is repeated until the group members reach a consensus about the most appealing ideas.
Brainstorming and the nominal group technique usually produce a greater number of ideas than a traditional group discussion. The nominal group technique produces a quantitative ranking of priorities that is more tangible than the feelings expressed during traditional group discussions. There are clear limitations to both techniques, however. If participants are uninformed or uninterested, the
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quality of their ideas may be poor. The ordinal ranking system (if it is used) in the nominal group technique does not allow ine distinctions in preferences to be expressed. Rating each idea on a 1 to 100 scale has the potential to allow more precise differences. The need for such ine distinctions does not always exist. Because brainstorming and the nominal group technique require participants to focus on one issue, idea, or topic, the question must be thoughtfully worded, and interrelated issues cannot be addressed. Complex questions should be discussed in less structured forums that allow interdependent issues to be raised.
Bottom-Up Change
As already noted, critical organizational changes need not be imposed from senior executives or come from the outside. An improvement-driven organization promotes change from the bottom up as well as from the top down. Changes may emanate from individual workers or stakeholders rather than from management. For example, employees who are motivated by a desire to improve can become agents for change. They do not have to wait for an invitation or seek permission from management to suggest changes.
Workers may choose disruptive and confrontational strategies to promote personal agendas for change. However, such a strategy is risky for employees and is often ineffective. In contrast, a tempered radical is an employee who exercises leadership through working for change from the bottom up using means that challenge and push but do not destroy an organization (Meyerson 2001). Managers are usually well-served to seek out and support such individuals. In concept, a tempered radical enacts Gandhi’s (n.d.) advice to “be the change that you want to see in the world.” Bottom-up change leaders exhibit and model the behaviors and attitudes they wish to promote through self-expression, through challenging norms or policies, and through building alliances with others sympathetic to their cause. They share their passion for change with others in their organization, building support incrementally. Examples of sharing opportunities include organizing informal or “brown bag” lunches and bringing in speakers or guests, particularly clients of the organization. Savvy employees often seek allies among others in the organization who are known for their openness to innovation or who are politically connected. Developing a Web presence and creating a group identity are useful steps in the bottom-up diffusion of ideas. In the future, the organization may decide to allow the tempered radical to sponsor the change or to make the task an assigned job responsibility of the change agent.
In one health organization, a tempered radical wanted to be better able to respond to the needs of the organization’s clients who were recent immigrants from Africa. She began to study the cultures of several different African countries and posted information (such as lags, pictures, and statistics) in her workspace about a different country each month. She organized a group of interested colleagues. They began meeting monthly to discuss a particular country’s culture, share some native food, and hear about the country from a recent immigrant. She sought and received her division’s support of the monthly meetings by appealing to politically connected colleagues. Eventually, the entire organization adopted the activity as part of a new diversity training initiative.
Being a tempered radical will not appeal to everyone. It requires passion and patience. It is one way that motivated workers can promote change even in tradition-bound units and organizations. Encouraging tempered radicals will not be appealing to every organization or manager. Some organizations may not be ready to embrace that degree of challenge and growth. Bottom-up change is an option that should be considered by managers who are motivated to push their organization or unit to new heights.
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Stimulating Innovation and Creativity
Creative managers and workers produce new ideas, approaches, or actions. Managers, workers, and organizations that put those new ideas to work are innovators. Forward-moving organizations require both creativity (the generation of ideas) and innovation (the application of new ideas). An improvement-driven organization is always searching for changes that not only are new but also allow the organization to deliver services at lower costs and higher quality. A strategy for addressing these goals includes encouraging creativity and innovation by individual workers and work groups throughout the organization.
Characteristics of Creative and Innovative People
Most people can be creative if they work at it. For many aggressive and ambitious workers and managers, this means changing habits, thoughts, or behaviors. For example, many people expend their personal energy in judging or criticizing others rather than generating ideas. Fantasy, re lection, play, relaxation, feelings, and intuition are all correlated with creativity, yet they are discouraged in most workplaces. Fear of failure and fear of looking foolish are common reasons given for not being able to speak in front of others or talk on a subject that is outside of one’s comfort zone. Another reason that managers and employees avoid working to be more creative is an inability to tolerate ambiguity.
People can learn to be more creative and innovative. Dyer, Gregersen, and Christensen (2009) studied the work behavior of innovative business leaders. They reported that innovative people exhibited four behaviors that could be emulated by many individuals: questioning, observing, experimenting, and networking. Questioning is important because it stimulates curiosity and stretches possibilities. Questions such as “Why?” or “Why not?” or “What if?” are common for an innovative person. Observing is a hallmark of innovators. They seek knowledge through insights based on what they see and hear. Innovators are constantly experimenting and have little fear of failure. They know that many experiments will fail to verify their hypotheses but that rejecting lawed hypotheses is a component of progress. Networking with diverse individuals and organizations broadens the scope of knowledge that creative people continually acquire. Innovation often involves connecting seemingly unrelated questions, problems, or ideas from different ields in new ways.
These four behaviors can be modeled by managers, encouraged in employees, and practiced by all. Although it may seem counterintuitive for managers to encourage workers to question existing processes, the end result is continuous improvement and a thirst for change.
Diffusion of Innovations
The work of Everett Rogers (2003) on the diffusion of innovations provides useful guidance for managers of change, whether the changes emerge spontaneously or are planned. Rogers noted that innovations typically follow predictable diffusion patterns. Adopters are distributed in a bell-shaped curve. About one-sixth of individuals or organizations are labeled as innovators and early adopters. At the other end of the bell curve, comprising another one-sixth of the population, are laggards, or individuals who are reluctant to change unless forced to do so. About one-third of the population is early majority adopters, and one-third is late majority adopters. One key implication of Rogers’ work is that managers must work at spreading innovation because many individuals and organizations have an innate resistance that must be overcome. The fact that an innovation appears logical and energizing to
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one individual or organization (typically an innovator or early adopter) does not mean that acceptance is guaranteed. In fact, later adopters are often harder to convince than early adopters.
A second implication of Rogers’ work is that diffusion efforts should seek out the individuals or organizations that are most likely to be innovators and early adopters. Successful early efforts at change, in turn, will reinforce further diffusion. Early adopters are the individuals known for their openness to new ideas, or they are the organizations or units that have joined or stimulated change in the past. In contrast, laggards provide a reminder that some individuals, units, or organizations are unlikely to be persuaded to change without a major investment of resources, incentives, or coercion. At times, managers may have to remove such individuals or units from the process.
Building an Innovative Organization
Managers can work on creating environments and policies that remove some of the barriers to creativity and innovation. Failures can be celebrated along with successes. Managers can role model the use of humor and relaxation to stimulate new ideas. They can offer and encourage educational activities that expose workers to new trends and ideas. Innovative organizations and units can seek workers who are change friendly. Innovation and creativity can be built into talent management and succession planning for the innovative organization. Managers can use creativity and openness to innovation as criteria when reviewing the performance of workers and themselves.
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CONCLUSION
Managers can make signi icant contributions by helping their organizations to achieve greater levels of excellence. One important resource for improving organizations is change management. Health organizations that continually seek to deliver services at lower cost, greater ef iciency, higher quality, and increased accessibility must be change agents.
Planned changes can be successfully introduced and implemented if the change process is adequately resourced and if the processes for achieving change are followed. Emergent change can be encouraged and harnessed through appreciative inquiry, positive deviance, bottom-up change, and stimulating innovation and creativity. Brainstorming and nominal group techniques can be used to increase participation in the change process and enlist commitment to making changes. Managers should look forward to change and become pro icient at enabling change. Employees can contribute to the process of organizational change, or even lead it, by individually promoting changes that enhance their organization’s ability to provide better programs and services.
Systems Thinking about Managing Change
This chapter has emphasized the need to promote and enhance change in organizations. While little or no change can slowly harm organizations, too much change can be a problem as well. Organizations that are continually changing are not likely to be able to produce goods and services ef iciently. If employees are constantly being trained in new skills, technologies are constantly being replaced or updated, or products and services are constantly being altered, employees and processes do not have a chance to achieve new equilibriums. When confusion and chaos replace orderly operations, organizations have little chance of surviving. Managers have a responsibility to help balance an organization’s transitions with stability.
A metaphor borrowed from systems thinking, the edge of chaos, may be useful when seeking the ideal balance between stability and change. In lay terms, chaotic systems appear to be unpredictable, and actions of the system appear to be random. Highly ordered systems, on the other hand, are predictable and dif icult to change. Chaotic teams and organizations fail to make progress toward achieving their mission and goals. The same is true of stable organizations with highly ordered processes that are expected to respond or adapt to a rapidly changing environment. Certain types of mathematical or physical systems are most adaptive and vibrant at the intersection of order and chaos, the so-called edge of chaos. Managers must try to push their organizations to the edge of chaos, but not into chaos. Without suf icient rates of change, an organization becomes mired in stability. With rates of change that are too rapid, an organization can easily slip into chaos. Managers must be aware of the pulse of their various teams or units in order to make wise judgments about whether the time is right for change.
CASE STUDY RESOLUTION
Returning to the opening case study, Brittany began to speak. “I have been reading about different ways to manage change. Maybe helping change along would be a better description. It won’t be simple or easy. We need to start by communicating that there is a problem, so employees can understand the urgency for change. We must get the employees to buy into new goals and performance standards for
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the unit.”
Brittany continued, “There are several approaches. We could use force ield analysis to think about how to stage the process. We could use appreciative inquiry, brainstorming, and nominal groups to get employee ideas. We could identify subunits and individuals that already are high performers and recognize and learn from them. We should think about providing incentives for employees to undertake change. Once small changes begin to occur in the unit, further changes should become easier.”
“I agree that change should become a part of the unit’s culture,” said Aaron. “Let’s get started.”
REFERENCES Applegate, L. M., A. Vinze, and M. Ipe. 2005. County department of public health: Organizing for
emergency preparedness and response. Harvard Business School Case 9-806-089. Boston: Harvard Business Publishing.
Bridges, W. 2003. Managing transitions. 2nd ed. Cambridge, MA: Perseus Publishing. Dyer, J. H., H. B. Gregersen, and C. M. Christensen. 2009. The innovator’s DNA. Harvard Business
Review 87 (12): 61–7. Fuller, M. 1976. Founder of Habitat for Humanity. http://www.managersforum.com/quotes
/QuoteDetail.asp?Type=CHANGE (http://www.managersforum.com/quotes /QuoteDetail.asp?Type=CHANGE) (accessed August 26, 2010).
Ghandi, M. n.d. Brainy quote. http://www.brainyquote.com/quotes/quotes /m/mohandasga109075.html (http://www.brainyquote.com/quotes/quotes /m/mohandasga109075.html) (accessed September 9, 2010).
Havens, D. S., S. O. Wood, and J. Leeman. 2006. Improving nursing practice and patient care: Building capacity with appreciative inquiry. Journal of Nursing Administration 36 (10): 463–70.
Kotter, J. P. 1996. Leading change. Boston: Harvard Business School Press. Lloyd, J., P. Buscell, and C. Lindberg. 2008. Staff-driven cultural transformation diminishes MRSA.
Prevention Strategist 1 (1): 10–5. Meyerson, D. E. 2001. Radical change, the quiet way. Harvard Business Review 79 (9): 92–100. Pascale, R., J. Sternin, and M. Sternin. 2010. The power of positive deviance: How unlikely innovators
solve the world’s toughest problems. Boston: Harvard Business Press. Rogers, E. M. 2003. Diffusion of innovations. 5th ed. New York: Free Press. Smith, M. E. 2002. Success rates for different types of organizational change. Performance
Improvement 41 (1): 26–33. Weber, D.O. 2005a. Positive deviance, Part 1. Hospitals and Health Networks, online magazine.
http://www.hhnmag.com/hhnmag_app/jsp/articledisplay.jsp?dcrpath=HHNMAG /PubsNewsArticle/data/050906HHN_Online_Weber&domain=HHNMAG (http://www.hhnmag.com/hhnmag_app/jsp/articledisplay.jsp?dcrpath=HHNMAG/PubsNewsArticle
/data/050906HHN_Online_Weber&domain=HHNMAG) (accessed January 28, 2011).
Weber, D.O. 2005b. Positive deviance, Part 2. Hospitals and Health Networks, online magazine. http://www.hhnmag.com/hhnmag_app/jsp/articledisplay.jsp?dcrpath=HHNMAG /PubsNewsArticle/data/050913HHN_Online_Weber&domain=HHNMAG (http://www.hhnmag.com/hhnmag_app/jsp/articledisplay.jsp?dcrpath=HHNMAG/PubsNewsArticle
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/data/050913HHN_Online_Weber&domain=HHNMAG) (accessed January 28, 2011).
Wood, S. O. 2003. Lovelace health system: Discovering the passion for nursing. http://appreciativeinquiry.case.edu/practice/toolsCasesDetail.cfm?coid=3289 (http://appreciativeinquiry.case.edu/practice/toolsCasesDetail.cfm?coid=3289) (accessed July 24, 2010).
RESOURCES
Periodicals
Ash, J. S., J. G. Anderson, P. N. Gorman, R. D. Zielstorff, N. Norcross, J. Pettit, and P. Yao. 2000. Managing change: Analysis of a hypothetical case. Journal of the American Medical Informatics Association 7 (2): 125–34.
Thompson, J. M. 2010. Understanding and managing organizational change: Implications for public health management. Journal of Public Health Management and Practice 16 (2): 167–73.
Books Christensen, C. 2009. The innovator’s prescription: A disruptive solution for health care. New York:
McGraw-Hill. Cooperrider, D. L., and D. Whitney. 2005. Appreciative inquiry: A positive revolution in change. San
Francisco: Berrett-Koehler. Kotter, J. P. 2008. A sense of urgency. Boston: Harvard Business Press. Kouzes, J. M., and B. Z. Posner. 2008. The leadership challenge. 4th ed. San Francisco: Jossey-Bass. Manns, M. L., and L. Rising. 2005. Fearless change: Patterns for introducing new ideas. Boston:
Addison-Wesley. Olson, E. E., and G. H. Eoyang. 2001. Facilitating organization change: Lessons from complexity science.
San Francisco: Jossey-Bass/Pfeiffer. Rowitz, L. 2008. Public health leadership: Putting principles into practice. 2nd ed. Sudbury, MA: Jones
and Bartlett. Senge, P., A. Kleiner, C. Roberts, R. Ross, G. Roth, and B. Smith. 1999. The dance of change: The
challenge of sustaining momentum in learning organizations. New York: Doubleday. Singhal, A., P. Buscell, and C. Lindberg. 2010. Inviting everyone: Healing healthcare through positive
deviance. Bordentown, NJ: Plexus Press. Suchman, A. L., D. J. Sluyter, and P. R. Williamson (Eds.). 2011. Leading change in healthcare. London:
Radcliffe Publishing. Whitney, D., and A. Trosten-Bloom. 2010. The power of appreciative inquiry: A practical guide to
positive change. San Francisco: Berrett-Koehler.
Web Sites • Appreciative Inquiry Commons: http://appreciativeinquiry.case.edu/
(http://appreciativeinquiry.case.edu/)
• Center for Positive Organizational Scholarship: http://www.bus.umich.edu/positive/ (http://www.bus.umich.edu/positive/)
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• Force Field Analysis Worksheet, Mind Tools: http://www.mindtools.com/pages/article /newTED_06.htm (http://www.mindtools.com/pages/article/newTED_06.htm)
• Positive Deviance Initiative: http://www.positivedeviance.org/ (http://www.positivedeviance.org/)
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CHAPTER
18
Conclusion: Leading the Way
CHAPTER OBJECTIVES
After reading this chapter, readers will:
• Appreciate the need for managers to have leadership competencies. • Know about the philosophy and associated practices of servant leadership, collaborative
leadership, and complexity leadership. • Understand the need for versatility in leadership style throughout one’s career. • Understand differences among members of demographic groups in the workplace. • Know about appropriate behaviors for career advancement.
CHAPTER SUMMARY
This chapter reviews important aspects of leadership. These include theories most relevant to health- related organizations and their implementation. Examples are provided. The personality patterns and values of different demographic groups are reviewed. When persons seeking employment understand these differences, the frustrations associated with looking for a job and staying in a present position are lessened. Thoughts concerning careers are also offered.
CASE STUDY
Roger, President of the Board of Health, and Tracy, the Board Human Resources Committee Chair, were talking.
“We have an opportunity to make some needed changes,” noted Roger, “with the retirement of the Health Of icer and the need to replace the agency’s epidemiologist occurring together. By hiring the two right people, we can take a big step into the 21st century. Just think, we can advertise for both positions at the same time. Why, the combination of an experienced health of icer and a newly graduated epidemiologist from the MPH program over at the university could …”
“Wait a minute,” Tracy interrupted, “You are making a number of assumptions. Some are good, and others are not. Let me offer some thoughts.”
“Okay,” Roger said. “This is your domain. I’m ready to listen.”
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If Tracy could take a time out and ask for your help, what advice would you offer?
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18.1 LEADERSHIP
This book is about management. Many people distinguish management from leadership. Kotter (1990), for example, argues that managers plan and budget, while leaders set direction. Managers organize and staff, while leaders align people. Managers control and solve problems, while leaders motivate and inspire. Others have summarized the distinction between leaders and managers with the adage that leaders do the right thing, while managers do things right. Often, the distinction between managers and leaders in organizations is based on hierarchy (position). Those at higher levels (leaders) are given more control over resources and decisions related to vision, mission, and strategy.
The authors believe that the distinction between leaders and managers has limited value in the new workplace. Managers need leadership skills (such as strategic planning), and leaders require management skills (such as the ability to implement and execute organizational plans). An organization bene its when managers, and indeed all employees, think of themselves as leaders and are treated as leaders. All employees in a workforce that is fully engaged in quality improvement and committed to delivering value are expected to lead. Employees are expected to exhibit the traits of credibility and inspiration that are associated with leadership. Employees are expected to lead themselves and their teammates. Employees are expected to do the right thing as well as to do things right. In these ways, everyone in an organization is expected to develop both leadership and management skills.
Managers of organizations that are dedicated to health can bene it from knowledge of leadership models and should integrate the elements of models into their work. Three related models of leadership are particularly useful when working with individuals and entire organizations that are engaged in providing health-related programs, services, and products. Servant leadership is a philosophy that many health workers embrace. It provides a useful philosophy for communicating and drawing on the energy and service commitment that many employees of health organizations feel. Collaborative leadership is a philosophy that is quite useful in health organization management as well, because organizational work inevitably involves multiple stakeholders that must negotiate, compromise, collaborate, and work together. Finally, complexity leadership builds on the interactive, relationship-based, and complex nature of much of health-related work.
Servant Leadership
Robert Greenleaf (2002) irst articulated the philosophy of servant leadership in the 1970s. He argued that leadership should low from a motivation to serve, rather than from a desire to get out front or be in command. Leaders are servants to their organizations and their employees and to their communities. In contrast, leaders who are motivated by pursuit of their own agendas or by power for its own sake can take an organization or community in directions not supported by either employees or stakeholders.
Servant leadership is a philosophy rather than a set of prescribed and evidence-driven practices. However, many authors have attempted to transform the philosophy into workplace behaviors. Although there is a wide range in such applications, the following guidelines are useful for employees and managers who consider service to be their primary motivator.
Dye (2010) has articulated seven broad behavioral attributes of servant leadership. Servant leaders share information, rather than hoarding it for personal gain. They delegate authority in order to
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develop others and disperse power. They take their organizational or community missions to heart, spreading the missions throughout their own organizations through policies and practices. Servant leaders support the development of their employees through coaching and continuing education. They celebrate and praise accomplishments, building commitment and energy in employees. They shift the focus of performance reviews from attack to development. Finally, they connect with employees rather than standing aloof from them. Servant leaders put their employees irst, ahead of themselves.
Servant leaders are most effective when employees share their commitment to their organization and its vision and values. This is the case in many successful health organizations and agencies.
Collaborative Leadership
Collaborative leadership involves working together with shared power and inclusive decision making. Some would argue that collaborative leadership is the only path to effective leadership, but such a conclusion ignores the reality that hierarchical leadership (use of authority based on position) is effective under certain conditions such as when emergency decision making is required, when the leader holds the expertise, when employees are not committed to organizational goals, and when consensus cannot be reached. Hierarchical leadership is of limited use in many situations faced by managers of organizations delivering services and programs that are related to health, however. Collaborative leadership should be a competency that is embraced by any manager in a health-related organization. For many such managers, collaborative leadership may be their preferred and typical style of managing and leading.
In a study of community health partnerships, researchers observed ive themes in the collaborative leadership of those partnerships (Alexander et al. 2001). The irst theme is systems thinking, which has been covered extensively in this book. Systems thinking encourages a population view of health, helps the group to identify high-leverage strategies for promoting health, ensures inclusiveness of all components of the health promotion system in the group, and keeps the group’s focus on the broadly shared vision. Second, because there are few other options for motivating participation in collaborative activities, vision is a key motivator or driving force for group members. The vision is designed through a systematic and inclusive process. A third theme in collaborative groups involving multiple organizations is collateral leadership. Collateral leadership is the use of small, rotating, diverse subgroups to execute elements of a larger group’s vision and mission. Collateral leadership reduces the burden on any single organization or individual to keep the group moving. A fourth theme in collaborative leadership groups is power sharing, which builds broad support among individuals and organizations. Often, organizational leaders have to resist the urge to assert power when they are working in multipartner collaboratives. A inal characteristic of collaborative leaders is the ability to remain accessible and listen attentively so that partners feel included and valued.
Koh and McCormack (2006, 108) argue that “In public health, the traditional leadership trait of ierce independence must give way to the higher value of ierce interdependence.” The interdependence
of almost all workers in public health organizations with citizens and with other community organizations makes “ ierce independence” a negative leadership trait. The same statement can be applied to providers of clinical services. The “ ierce independence” of many clinicians is related to their training and the fact that they typically interact with only one person at a time. Yet collaborative care is a growing fact of life for most clinical situations, particularly for individuals with chronic conditions and for problems treated in hospitals. Collaboration helps individuals and organizations address complex challenges because it is powered by the skills, knowledge, experience, and insights of many
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people, not just one (Frisina 2011).
Complexity Leadership
In many activities that involve collaborations, the direction of a group, team, project, task force, committee, organization, or collaborative is less than clear. The strategies or even the mission of the entity may be ambiguous or uncertain. Direction and action can be imposed by command-and-control leadership, but such activity is unlikely to engender commitment and support. Alternatively, direction and action can emerge from participative decision making and from learning. Under these conditions, complexity leadership is a useful model.
From the perspective of complexity leadership, all complex human systems need direction, commitment of participants, and the ability to adapt in the face of challenges (Drath 2004). In successful complex systems, leadership arises from a variety of sources to accomplish those three important tasks. Direction, commitment, and adaptive actions emerge from dialogue and learning among diverse individuals, organizational units, and, in most cases, multiple organizations and their stakeholders. The task of individual leaders in such settings is to provide time and resources for shared learning, to encourage participation, and to do the attentive listening that is preferred by the collaborative leadership model. Because solutions to complex challenges are rarely clear or easily discovered, complexity leadership bene its from maximal input of employees and stakeholders, including customers and clients. Complexity leadership also requires tolerance for uncertainty, taking some risks, trying new solutions, and occasionally failing, but learning from those failures. In many health settings, this model of leadership is far more effective than the traditional command-and-control model of leadership.
Versatility in Leadership Approach
Successful managers are able to adapt their approach to the situations they face. This is particularly true in the long run, because managers are more apt to face different situations as they change jobs, organizations, or locations. If leadership is the ability to get people to work together, command-and- control can be the best choice when employees share the same goals and agree on the substance of the command, or when time is short and a decision must be made. Under most conditions faced by managers in health organizations, however, goals are often diverse and con licting, and agreement on the substance of management actions is more dif icult to achieve. The importance of this statement increases as individuals rise in their organizational hierarchies and their authority increases. The tenets of collaborative leadership, complexity leadership, and servant leadership are powerful tools for improving the quality and performance of health organizations under those conditions.
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18.2 MANAGING AND LEADING ACROSS GENERATIONS
The need for versatility and lexibility in management and leadership is illustrated by striking patterns in worker characteristics based on the time periods in which they were born. Those patterns re lect signi icant continuities among individuals who share similar experiences with major social, political, technological, and cultural events. Managers need to motivate and lead individuals from several different generations. Managers who understand differences among generations are likely to be more successful than managers who ignore the differences.
Demographic Pro iles of Employees
Demographers have divided people into four categories: Traditionalists, Baby Boomers, Generation X, and Generation Y. Brief pro iles of each group follow. Although the pro iles are generalizations that do not apply to all people in the categories, the pro iles give managers a starting point for better understanding the workplace behavior and attitudes of diverse employees.
Traditionalists
Traditionalists are also called the Silent Generation. They were born between 1927 and 1945. This is currently the smallest generation of workers in the United States. Members of this group may be near retirement, but they often have both power and responsibilities due to their senior positions in organizational hierarchies. Traditionalists have strong work ethics and have worked long hours to advance their careers. They tend to be loyal and express this loyalty to their employers through years of continuous service.
Traditionalists respect authority and work well in groups. They tend to avoid being the center of attention. Many have been slow in adapting to technological innovations in the work environment. Their moral, social, and personal values are traditional. Their working attire is appropriate, although younger colleagues may judge them to be overdressed.
Baby Boomers
Baby Boomers were born between 1946 and 1964. Although they have started to retire, an estimated 80 million are still working. Members of this group often hold positions of power and in luence. They are hardworking and often de ine themselves by their professional accomplishments. Advancement, prestige, and perquisites provide motivation on their jobs. They are willing to make sacri ices to succeed. Because this generation came of age during a time of social upheaval, Baby Boomers are not afraid of confrontation when it is backed up by hard work. They are highly competitive and goal oriented. Their careers provide focus in their lives. Most believe that work should be done in an of ice. They seek out challenging projects that allow them to showcase their knowledge and skills.
Generation X
Generation X includes people born between 1965 and 1980. Between 45 and 50 million members of Generation X are working in the United States. The number of workers from Generation X is growing at a rapid pace. Just under two-thirds (60%) of these workers have college educations. As a group, they
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currently hold mid-level managerial positions.
Members of Generation X are resourceful, independent, and self-suf icient. As a consequence of these traits, they dislike structured working environments and often openly ignore authority. They prefer to work at home and set their own working hours. Generation X employees value responsibility but prefer it to be accompanied by personal freedom. They are technologically competent.
As a group, Generation X does not emulate the organizational loyalty of earlier generations. Members of Generation X are committed to their own wellbeing and freely change employers. Leisure time is an important aspect of their lives. Careers are important but tend to be subordinate to their personal interests.
Generation Y
Generation Y comprises the remainder of the American workforce. These people are also called the Millennial generation and were born between 1981 and the present. As of 2010, experts estimate the number of Generation Y workers in the American workforce to be approximately 70 million. Most contemporary college graduates are members of Generation Y.
These individuals rely heavily on technology. They use e-mail far more extensively than traditional mail. Text messaging is preferable to personal contact. In school, they have a strong preference for online learning and ind traditional lectures to be boring. Members of Generation Y readily accept lower salaries when they are accompanied by lexible hours and working conditions. They want their jobs to be meaningful and are not afraid to convey that message to their managers. They have few qualms about questioning authority. Generation Y individuals value teamwork and constantly seek praise and approval from supervisors and coworkers.
Intergenerational Friction
With members of four different generations in the workplace together, friction between them is inevitable. Older workers criticize Generation Y for lacking commitment and behaving in a sel ish manner. Generations X and Y criticize Traditionalists and Baby Boomers as being too rigid and being too focused on goals. Older employees think that younger ones are insubordinate, while younger individuals think that the values of older employees are lawed. No group is immune to criticism concerning their attitudes toward technology.
Cross-understanding among the generations provides a key to creating collaborative and open work environments that include members of all four generations. Managers can help by educating their employees about such generational differences.
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18.3 CAREER ADVICE
We conclude by offering a few thoughts about careers. We do not intend to preach or lecture readers. Rather than envisioning a classroom or lecture hall, transform the venue to a table surrounded by a few individuals sharing age-appropriate beverages.
No Learning Is Ever Lost or Education Wasted
In 1854, Louis Pasteur said that “Chance favors the prepared mind” (Kubinyi 1999). Education is the key to being prepared. Within wide limits, individuals cannot have too much education. Education can be acquired formally or informally through reading. Because the future is impossible to predict with total accuracy, having a broad fund of knowledge is one of the best ways to be prepared for unknowns.
Be Prepared to Work Hard to Succeed
Advancement is rarely automatic. Most organizations promote people who achieve results. Over time, having a focused approach to work in general and to one’s job in particular maximizes the chances for success and advancement.
Establish a Goal, and Then Take Steps to Achieve It
Goals provide focus for activities. They also provide a basis for evaluating progress. Periodically, goals should be reset. Immediately after completing an evaluation is a good time to review and reset goals.
Appreciate the Importance of Networking
Networking provides links with other people and organizations. These links are especially useful when seeking employment or information. Prior interaction adds a personal dimension that is missing from contact information obtained from a directory or the Internet.
Good Manners Are Essential
Parents teach manners to their children. All too often, such lessons are forgotten when parents are not present. However, clients and customers appreciate politeness. More to the point, rude employees can cause potential consumers to postpone or change their decisions about health care or health prevention. Good manners contribute to good customer service.
Give Good Client and Customer Service
Customer service is a core concept of quality management. Poor service can lead to upset consumers or lost sales. In most cases, the recipients of poor service seek other sources for the services or programs in which they are interested. They also tend to discuss their experiences and frustrations with friends. This often leads to further loss of clients and revenues.
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Apply the Lessons of Quality Management
Quality improvement, quality management, and customer service are mainstays in many manufacturing and service industries. They are being successfully integrated into health care organizations. Public health agencies are just beginning to embrace them. Individuals who ignore this reality are unlikely to achieve sustained success in a health organization.
Never Burn Bridges
Because the future cannot be predicted, individuals never know when they might need something (information, a referral, a letter of recommendation, or a favor) from a former supervisor or employer. Irrevocably severing ties with a person or organization closes all channels of communication. Telling someone off may provide a momentary release for anger. However, such an action usually burns a bridge and can lead to unwanted future consequences.
Don’t Say Bad Things about Other People
Offering negative opinions about other people is a form of gossip and should be avoided. If cruelty is not a suf icient reason to avoid criticism, burning bridges should be. The object of gossip may be a friend of the person receiving or hearing about an unkind comment. When criticism is needed to correct an inappropriate behavior, it should be provided directly and in private. Praise can and should be given in public.
Understand Politics
Politics are common in organizations. Prudent individuals take the time to understand and constructively use power relationships in organizations. The same people do not allow destructive politics to consume them.
Most people begin their careers by obtaining a job for which they have adequate technical skills and expertise. Over time, many start to rely on political rather than technical skills for job security. As this process continues, politics based on personal interest rather than organizational interest can become predominant. As this replacement occurs, it is usually accompanied by an increase in fear. A common outcome is job loss. The antidote has two parts: maintain technical competence through continuing education while avoiding the allure of self-interested politics.
When You Slow Down, Prepare to Be Passed Up
The workplace is a competitive environment. A continuous supply of new graduates wants to begin their careers. They have fresh educations, lots of personal energy, and a desire to succeed. Existing members of the health (or any other ield) workforce must invest some time and energy to advance their competencies. Ignoring the need for this investment may give new job seekers an advantage that leads to employment. A gradual loss of energy is a typical aspect of normal aging. Knowing this fact may be helpful when contemplating retirement.
The authors of this book are members of the Baby Boom generation. To a degree, this career advice
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re lects their personal values. However, they are senior members of their respective professions. In this respect, their values are similar to the values held by the people most likely to be setting policies in organizations for the next decade. Although organizational mores are likely to change, they are not likely to do so overnight.
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CONCLUSION
Effective managers use the competencies that traditionally have been associated with leadership, and vice versa. In the management of organizations that provide services and programs related to health, useful leadership competencies include delegating tasks, developing others, encouraging participation, sharing power, celebrating organizational accomplishments, and inspiring others. Such competencies are particularly important when people are being considered for promotion. Managing one’s career is essential for timely advancement and promotion. An understanding of differences in workplace attitudes among members of the Traditionalist, Baby Boomer, Generation X, and Generation Y groups is useful when managing and working with others. Advancing one’s career requires hard work, continuous learning, an appreciation for client and customer service, and participation in organizational politics without abusing it in the pursuit of self-interest.
Systems Thinking about Leading the Way
The butter ly effect is a metaphor based on the idea that the lapping of a butter ly’s wings in, for example, Brazil can cause a tornado in a distant location, for example, the state of Texas in the United States. There is at least a kernel of literal truth in that assertion. The butter ly effect gained popularity based on work done by meteorologist and mathematician Edward Lorenz in 1961 (Gleick 1987). Building a 12-equation computer simulation model of the weather, Lorenz entered the number 0.506 for one of the initial values of a weather parameter, truncating the intended value of 0.506127. He assumed that the difference was too small to matter. Instead, the small difference in the initial value of the parameter created wildly different weather conditions when he ran the simulation.
To return to the butter ly metaphor, the insect’s actions do not literally cause a weather disturbance by providing energy to fuel the tornado. But the butter ly’s actions do create new initial conditions that can lead to a chain of events resulting in a tornado. In the same way, a small alteration in a complex and dynamic system can cause a chain of events leading to large-scale changes. Most of us work in complex and dynamic organizations, and all communities and societies are both complex and dynamic.
The bottom line is that the butter ly effect reminds us that each person has the potential to initiate or lead a transformation. Even when working at the lowest microsystem level, alone in a cubicle or interacting with a group or team, our actions matter. They always matter to us and our group, even our organization, and they have the potential for moving hundreds, thousands, millions, and possibly billions of human lives toward better health.
CASE STUDY RESOLUTION
Returning to Tracy and Roger’s meeting, Tracy considered the situation and offered the following advice.
“Hiring a new Health Of icer is the Board’s responsibility. All the other employees, including an epidemiologist, are ultimately managed by the Health Of icer. We should decide on the style of leadership and personal values we prefer in a Health Of icer and then ind such a person. To meet the needs of the community, we need a Health Of icer who works hard, is collaborative, and is focused on
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serving our customers and clients at the highest level of quality.”
Tracy continued, “But we should allow the Health Of icer to make the inal decision about a new epidemiologist. The board should not micromanage the agency. Besides, consider the hiring decision as a test of the new Health Of icer’s ability to select employees and a rati ication of the Board’s ability to hire a Health Of icer who is aligned with its expectations.”
Tracy and Roger shook hands and departed. Both were smiling.
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Hooper, P. L., H. S. Kaplan, and J. L. Boone. 2010. A theory of leadership in human cooperative groups. Journal of Theoretical Biology 265 (4): 633–46.
Kaplan, R. E., and R. B. Kaiser. 2003. Developing versatile leadership. MIT Sloan Management Review 44 (4): 19–26.
McConnell, C. R. 2007. The leadership contradiction: Examining leadership’s mixed motivations. Health Care Management (Frederick) 26 (3): 273–83.
McDaniel, R. R., Jr., and D. J. Driebe. 2001. Complexity science and health care management. In Advances in health care management, 11–36. Vol. 2, eds. Blair, J. D., M. D. Fottler, and G. T. Savage. Stamford, CT: JAI Press.
Pees, R. C., G. H. Shoop, and J. T. Ziegenfuss. 2009. Organizational consciousness. Journal of Health
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Organization and Management 23 (5): 505–21. Shekleton, M. E., J. C. Preston, and L. E. Good. 2010. Growing leaders in a professional membership
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George, B. 2007. True north: Discover your authentic leadership. San Francisco: Jossey-Bass. Hackman, M. Z., and C. Johnson. 2008. Leadership: A communication perspective. 5th ed. Long Grove,
IL: Waveland Press. Heifetz, R. A., M. Linsky, and A. Grashow. 2009. The practice of adaptive leadership. Cambridge, MA:
Harvard Business Press. Kouzes, J. M., and B. Z. Posner. 2008. The leadership challenge. 4th ed. San Francisco: Jossey-Bass. Northouse, P. 2009. Leadership: Theory and practice. 6th ed. Thousand Oaks, CA: Sage. Rowitz, L. 2008. Public health leadership: Putting principles into practice. 2nd ed. Sudbury, MA: Jones
and Bartlett. Seltzer, B. 2010. 101 Careers in public health. New York: Springer.
Web Sites • Career Advice: http://www.careeradvice.com/ (http://www.careeradvice.com/) • Collaborative Leadership: http://www.collaborativeleadership.org/
(http://www.collaborativeleadership.org/)
• Free Management Library: Leadership Development Planning: http://managementhelp.org/ldr_dev/ldr_dev.htm (http://managementhelp.org/ldr_dev /ldr_dev.htm)
• Leadership: http://www.nwlink.com/~donclark/leader/leader.html (http://www.nwlink.com /~donclark/leader/leader.html)
• National Center for Healthcare Leadership: http://www.nchl.org/ (http://www.nchl.org/) • National Public Health Leadership Institute: http://www.phli.org/ (http://www.phli.org/) • Servant Leadership: http://www.greenleaf.org/ (http://www.greenleaf.org/) • Team building: http://www.funteambuilding.com/articles.php
(http://www.funteambuilding.com/articles.php)
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Glossary
Assumption—An estimate of an important future event over which an organization has little or no control.
Balancing—Where a change in one direction creates resistance in the opposite direction.
Bene its—Incentives (either direct or indirect) that organizations provide for their employees.
Bottom up—When applied to customer service and issues related to quality, lower-level workers are trained in basic Quality Improvement (QI) methods and techniques and then encouraged to apply their training; when applied to budgeting, refers to input from rank and ile employees rather than senior executives.
Boundary spanners—Employees in an organization who are critical to cross-functional collaboration as they collaborate among two or more departments.
Budget—A control document used for monitoring the expenditure or allocation of resources; also used as a template for auditing inancial and other transactions.
Business plan—A common type of operational guide; describes services, products, or programs and their markets and makes projections concerning the personnel and other resources needed to implement or provide the items.
Butter ly effect—A metaphor based on the idea that the lapping of a butter ly’s wings can cause a tornado in a distant location. It suggests that one’s actions can have major unintended and unanticipated consequences.
Capital budget—A plan for spending on improvements and additions to the property, plant, or equipment of an organization. A capital budget is concerned with the acquisition, maintenance, and replacement of ixed assets.
Cash budget—A document containing detailed estimates of anticipated cash receipts and disbursements.
Causal loop diagram—A visualization of changes in a system over time as it portrays cause-and-effect linkages within a system. Causal loops are circular, rather than straight lines.
Central connectors—Employees who are important in an organization in ways that are unrecognized by the formal hierarchy and formal job descriptions; employees who respond conscientiously to requests from others, engage in joint problem solving, provide personal support to others, and put people in contact with others.
Centralization—The degree to which decisions and information low are controlled by a single individual or unit in an organization.
Collaboration—A solution involving ideas or concepts that are embraced or supported by two or more parties (also called a win–win solution).
Collaborative leadership—Leadership philosophy that involves individuals working together with shared power and inclusive decision making.
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Collateral leadership—The use of small, rotating, diverse subgroups to execute elements of a larger group’s vision and mission.
Community health assessment—Public health agencies and health providers conduct research to determine which services are relevant or needed for a given population or segment.
Complexity leadership—A leadership philosophy that is common in an organization where the strategy(ies) or mission of the whole are ambiguous or uncertain. It can involve leadership that is drawn from a variety of sources to establish organizational direction, commitment of participants, and the ability to adapt in the face of challenges.
Compromise—A behavior, decision, or course of action that requires that all parties to give up something for a solution that is not ideal for any single party but which all parties are willing to accept in the interests of an organization.
Culture—Underlying norms and values of a group or organization.
DECIDE method—An acronym that represents a systems thinking approach during an emergency: Detect the presence of a hazard; Estimate the likely degree of harm without intervention; Choose the most appropriate response objective(s); Identify options for action; Do the best option; and Evaluate progress.
De ined bene it plan—Approach to bene its administration that provides the same bene its to all employees. The extent of the bene its typically increases as years of service increase.
De ined contribution plan—Approach to bene its administration that allocates a ixed amount of money to each employee for bene its and provides a list of bene it options and from which employees may select, up to the limit of the money provided.
Drifting goals—An example of a system archetype; a gradual downward slide in performance that goes unnoticed, threatening the long-term future of a system.
Employee Assistance Program (EAP)—Service or organization (typically external) that provides short-term counseling services for employees; while the counseling is typically for non-work- related types of problems, this is not a requirement.
Evidence-based management—An approach to managing that promotes use of scienti ic or objective data in strategic and operational decision making.
Existence, relatedness, and growth (ERG)—A content theory of motivation that states humans cycle through categories of needs, rather than proceeding in an orderly fashion up a hierarchy.
Expense budget—A document that converts expected work activities into predicted expenditures by considering two important factors—statistical information and cost data.
External environmental assessment—Examines the key factors outside an organization such as economic, political, and legal trends that affect the service area and operation of a health care organization.
External equity—Signi ies that rates of pay in an organization are reasonable compared with other similar positions in a given area for people performing the same or similar job duties.
Federalism—The sharing of power between states and the national government. States are granted authority by the US Constitution to establish laws that protect the public’s health and welfare.
Feedback—Information about change that leads to further modi ications. Performance reviews of employees are examples of a common feedback mechanism that exists within organizational
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systems.
Finance section leader—An of icial who has training in accounting, budgeting, inance, and inancial planning; establishes inancial guidelines and allocates costs to participating agencies during an emergency.
Fiscal year—The period for which a budget is created. Fiscal years are arbitrary divisions that can begin on any day. For convenience, however, the majority of iscal years coincide with calendar years by starting on January 1.
Fixed asset—Something that is owned and has a useful life that is greater than 1 year in length.
Fixed budget—A budget that has a de ined length, which is most often 1 year.
Fixed costs—Expenses that are constant and independent of employee activities.
Fixes that fail—An example of a system archetype; a solution ( ix) is applied to a problem and has immediate positive results. However, the ix has unforeseen long-term consequences that eventually make the problem worse.
Forecasting—Predicting or estimating future events. Forecasting is usually based on extrapolating past or present trends into the future.
Formalization—The degree to which organizational policies and norms are codi ied.
Formative evaluation—An assessment to determine whether a service or program is evolving as intended.
Frame—A method for packaging and positioning an issue in order to convey a particular meaning; the political equivalent is spin. A marketing frame is de ined by a principle or basic belief.
Functional structure—A form of differentiation that distinguishes between employees based on the skill or knowledge that they bring to a work setting.
Health disparities—Population-speci ic differences in health.
Health policy—The principles and activities guiding the allocation of resources that affect the health of persons and populations. Health policy is heavily in luenced by the laws and regulations formulated and implemented by governmental units.
Horizontal integration—The combination and operation of assets of similar entities under common ownership.
Incident commander—The person responsible for all aspects of an emergency response; formerly known as an incident manager.
Incident manager—The person responsible for all aspects of an emergency response; now known as an incident commander.
Information brokers—Employees in an organization who ensure that communications are distributed to all persons throughout the organization.
Internal equity—Signi ies that employees think their pay is fair when compared to others with the same job title in the same organization.
Internal organizational assessment—A review of an organization’s resources and performance that typically measures productivity, staf ing ratios compared to industry standards, key inancial ratios, consumer and client satisfaction rates, employee morale, and other performance measures.
Key issue—An event that, if it occurs or does not occur, will have an important impact on an
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organization.
Laws—Rules developed and approved by legislative bodies and enforced in the courts.
Life insurance—In case of an individual’s death, a bene it that provides the person’s survivors with a cash payout; the amount of the payout or coverage is equal to a multiple (usually one to two times) of the insured employee’s annual compensation.
Logistics section leader—An of icial who has the responsibility of ensuring that needed resources, supplies, and personnel are available for the operations section leader during an emergency.
Long-term disability insurance—A common bene it designed to protect employees from the inancial devastation of a serious illness or accident. Plans usually provide covered employees with approximately 60–66% of their wages during a period of disability.
Machine bureaucracy—Bureaucracy characterized by a high degree of centralization and extensive reliance on formal channels for communication; decisions tend to be made by senior managers and mechanically implemented by workers at lower levels.
Maslow’s hierarchy—A content theory of motivation that proposes humans are driven by ive core needs, listed in order from most basic to highest level:
1. Physiological 2. Safety and security 3. Love and belonging 4. Self-esteem 5. Self-actualization
Master budget—A document that includes an organization’s operating budget, capital budget, and cash budget.
Mobilizing for Action through Planning and Partnerships (MAPP)—A strategic planning process for improving public health services and outcomes in local communities; a community-wide strategic planning tool developed speci ically for public health by the National Association of County and City Health Of icials (NACCHO) and the Centers for Disease Control and Prevention (CDC).
Mutual adjustment—The achievement of coordination by the simple process of exchanging information through both formal and informal channels of communication.
National Incident Management System (NIMS)—A system in place that provides a means for coordinating and controlling resources and activities during emergencies.
Operating budget—A document containing projections of revenues and expenses, used for planning and executing usual or routine activities.
Operations section leader—An of icial who assumes direct control of all actions focused on resolving emergency situations; trained to resolve relatively common problems such as communication failures, personnel problems, and technical and infrastructure malfunctions.
Organizations—Systems that are comprised of inputs (employees, managers, and inancial resources) and processes (policies, procedures, and production activities) that interact to produce outputs (products, programs, and services).
Paid Time Off (PTO) plans—A system under which employees accumulate an allotted number of days to be away from work and then use them at their own discretion.
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Peripheral people—Employees who may be underused in an organization and whose work may cause them to be isolated because their work tends to be accomplished alone.
Planning section leader—An of icial who is responsible for developing guidelines that will be implemented by the operations section leader during an emergency.
Pooled interdependence—When the outputs of separate units can be combined without having to share information among the units.
Positive deviance—Approach to discovering successful new ideas and opportunities and then disseminating them.
Pro forma budget—A projected revenue and expense statement; the inal test to check the validity of other budgets and the accuracy of their assumptions.
Process engineering—A methodology that analyzes operational sequences and is used to improve operational ef iciency.
Professional bureaucracy—Bureaucracy characterized by a high degree of decentralization of decision making to professionals delivering core services.
Quality improvement (QI)—Encompasses a set of methods and techniques that can be used to improve programs, services, products, or output of any organization. They can also be used to decrease organizational costs. Two examples of QI approaches are top down and bottom up.
Reciprocal interdependence—When units must exchange feedback during the production process.
Regulations—Rules developed by governmental agencies or by private organizations that have been assigned authority by the government, usually to enact the provisions of laws.
Reinforcing—Where a change in one direction causes even more change in that same direction.
Rolling budget—A budget having a length that can be extended, most commonly 1 month at a time.
Root cause analysis—The search for the fundamental cause of a problem.
Sentinel site surveillance—A form of data collection consisting of routine reporting data for health care facilities that are automatically compared using a program that has preestablished thresholds for diseases or conditions of interest. When the thresholds are exceeded, personnel are noti ied to investigate the situation.
Separation of powers—Principle that divides government into three branches—the judiciary (courts); the executive, including the President at the national level and governors and mayors at the state and local levels; and the legislative, including the Senate and the House of Representatives at the national level and similar entities at the state level.
Sequential interdependence—When one unit must complete its assigned tasks before the next unit can start its work.
Servant leadership—Leadership philosophy that argues that leadership should low from a motivation to serve, rather than from a desire to be in command.
Six Sigma—A process improvement technique designed to measure work output that can be applied in health organizations to reduce errors and improve quality. The technique is intended to be applied throughout all departments in an organization, eventually becoming a part of the organization’s culture; its ultimate goal is less than 3.4 errors per 1 million operations.
Social media sites—Web sites developed to provide channels of communication for social
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interactions; they can be used by organizations to participate in marketing activities.
Social norms—Expectations about behavior that tend to be tacitly established and maintained through body language and nonverbal communication between people in their normal social interactions and activities.
Span of control—The number of workers reporting to a single manager.
Standardization—The degree of uniformity in the inputs, work processes, and outputs of units and organizations.
Statistics budget methodology—The approach used to calculate output expectations for budgeting purposes.
Strategic planning—The process of developing strategies for operating an organization.
Strategy—A major course of action an organization uses to pursue its mission and vision; how to position an organization in its environment.
Summative evaluation—A general assessment of the degree to which outcomes have been attained over the entire course of a program.
SWOT analysis—Acronym that refers to the Strengths and Weaknesses inside an organization and the Opportunities and Threats outside an organization.
Syndromic data collection—A method of surveillance that uses speci ic codes for different symptoms related to the nature of an emergency. The approach is currently used by hospitals, laboratories, responders, and other organizations.
System archetypes—Patterns that occur repeatedly in different settings; a technique for training people to think dynamically about complex interrelationships.
Systems—Groups of interacting or interdependent elements that form a uni ied whole.
Systems thinking—An intellectual approach that is concerned with the interrelations between parts and their whole. This type of thinking causes people to think of the consequences of their actions over time. Also known as forest thinking.
Top down—Senior leaders in an organization support Quality Improvement (QI) as a method for improving performance, create a vision that provides one or more goals, and supply needed resources; when applied to budgeting, refers to input from senior executives rather than rank and ile employees.
Variable costs—Expenses directly related to activity or output in a manufacturing environment or number of programs and services in a health organization.
Vertical integration—The combination under common ownership of entities serving different stages in a production process, such as the production of health.
Vision—A targeted description of the future outcomes expected if an organization is successful. This is usually developed by the decision makers in the organization.
Workers’ compensation insurance—Intended to provide health care, income maintenance, and survivor protection for employees who become disabled or killed due to an occupational injury or illness.
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