hmgt 320 week 3

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L e a r n i n g O b j e c t i v e s

C H A P T E R 4

O R G A N I Z I N G : J O B S , P O S I T I O N S , A N D D E PA RT M E N T S

For every minute spent organizing, an hour is earned.

Benjamin Franklin, author, printer, scientist,

inventor, diplomat

Studying this chapter will help you to

➤ explain organizations and organization structure;

➤ organize work tasks into jobs and positions;

➤ organize jobs and positions into departments;

➤ explain delegation;

➤ explain factors that affect how work is organized;

➤ compare and contrast mechanistic and organic structures; and

➤ understand how the informal organization, contract workers, union workers,

and medical jobs with physicians complicate organizing work.

C o p y r i g h t 2 0 1 9 . H e a l t h A d m i n i s t r a t i o n P r e s s .

A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .

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Here’s WHat HaPPeneD Throughout Partners HealthCare’s long history and extensive growth, managers had been organizing work into tasks, jobs, positions, departments, divisions, and other groupings to achieve the healthcare organization’s (HCO’s) mission and goals. After Partners’ managers developed new strategic plans and goals for telehealth services, they had to reorganize the HCO’s work to implement those plans. They assigned new specific tasks to specific jobs, including primary care physician, cardiologist, diabetes educator, telehealth nurse, pharmacist, equipment technician, project specialist, Cen- ter for Connected Health director, and others. Managers decided how much authority to delegate to lower-level positions in the hierarchy (organization chart). Many positions and work groups were specialized, and managers grouped them into departments and coordinated their work to accomplish shared goals. In doing all this, managers carefully considered internal and external factors that determined how work should be organized. Figuring out how to organize work is one way that managers added value to Partners HealthCare. As a result, managers helped the organization achieve goals, satisfy stakeholders, and improve population health in the Boston region.

I n chapter 2, we learned terms and concepts for organizing work that are important parts of management theory. This chapter further applies those concepts and shows how they are used in the wide variety of HCOs.

After managers at Partners HealthCare developed plans for their organization (described in the opening vignette), they faced a complex question: How should they organize work and workers to accomplish those plans? It was not a multiple-choice question with just one correct answer. It was a complex puzzle for which different managers might choose different answers based on their unique interpretation of the situation. Remember contingency theory from chapter 2? The best way to organize is contingent (dependent) on factors such as organization size, environment, plans, and technology, which managers must try to perceive and interpret. There is no single best way to organize. Rather, there are many possible ways to organize—and each has strengths and weaknesses. Managers must consider the pros and cons of different organization forms and decide which would be best for the HCO now. Later, they should reconsider the HCO’s organization form when its size, environment, plans, and other factors change.

Organizing is the second of the five main functions of management described in this book. Several of the management roles described by Henry Mintzberg in chapter 2 involve organizing: liaison, entrepreneur, disturbance handler, and resource allocator. Managers at all levels must organize the work and workers for which they are responsible. Even managers of small departments or sections of a department must understand how to formally organize work so that they can achieve their area’s goals.

This chapter first defines organizations and then explains how hundreds of work tasks are organized into jobs and positions, which are organized into departments. Managers

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organize by using the principles of organization structure explained in this chapter. Organiz- ing work in HCOs is too complex a subject to address in one chapter. This chapter explains how to organize jobs and departments. Chapter 5 describes structural designs for organiz- ing departments into entire organizations. Chapter 6 discusses how to organize groups and teams needed to coordinate positions and departments. These chapters also explain complications that arise when organizing HCOs. Together, these three chapters provide a practical introduction to how managers organize HCOs. The organizing principles may be applied to an entire organization, to a division or department within an organization, and to a smaller section or work unit within a department.

or g a n I z at I o n s Organizations are “social entities that are goal-directed, designed as deliberately structured and coordinated activity systems, and are linked to the external environment” (Daft 2016, 642). What does this mean?

◆ An organization is a social entity—it has people.

◆ An organization is goal directed—it pursues a purpose.

◆ An organization is deliberately structured and coordinated—it is intentionally set up, organized, and arranged.

◆ An organization is an activity system—it is alive with people doing things that affect each other.

◆ An organization is linked to the external environment—it connects and interacts with its surroundings.

or g a n I z I n g Wo r k I n He a Lt H c a r e or g a n I z at I o n s An organization (as defined here) undertakes deliberately structured activity. Managers intentionally organize, or structure, the activities, tasks, and work into systems that become the formal organization. This creates the organization structure of jobs, reporting rela- tionships, vertical hierarchy, spans of control, groupings of jobs into departments and an entire organization, and systems for coordination and communication (Daft 2016).

This structured activity can involve managers at various levels performing five types of organizing (Daft 2016) that are explained in chapters 4–6:

1. Work tasks must be grouped into job positions. Managers at all levels do this for their particular work units and areas of responsibility.

2. Jobs must be organized (grouped) into work units, such as teams and departments. Middle and top managers do this.

organizations

Social entities that

are goal-directed,

designed as

deliberately structured

and coordinated

activity systems, and

linked to the external

environment.

formal organization

The official

organization as

approved by managers

and stated in written

documents.

organization structure

The reporting

relationships,

vertical hierarchy,

spans of control,

groupings of jobs into

departments and an

entire organization,

and systems for

coordination and

communication.

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M a n a g e m e n t o f H e a l t h c a r e O r g a n i z a t i o n s8 2

3. Departments must be organized (grouped) into an entire organization. Top managers do this.

4. Work must be coordinated among and across job positions and departments. Managers throughout the organization do this.

5. The organization must be linked to other organizations and people in its environment. Managers throughout the organization do this.

Managers do not necessarily organize work in this sequence one step at a time. Nor do they always use all five types of organizing to achieve every goal or plan. Entrepre- neurs who start an entirely new diagnostic testing business will have to do all five types of organizing. Years later, in the same organization, the managers might do only the first and second types of organizing when they want to add one new position in one existing department. Because these five types of organizing interact, managers may use several of them simultaneously until everything fits together.

Sometimes HCO managers might not first organize tasks into jobs and then jobs into a department. They might first add a department and then decide which jobs and positions are needed for it. Let’s consider a hospital that wants to recruit physicians. First, suppose the hospital adds one new physician recruiter in its existing medical staff affairs office. That works out well, so another recruiter is added, and then a secretary, and then another recruiter. Eventually, managers organize those four positions into a new, separate department of physician recruitment. Alternatively, suppose that in the strategic planning process, managers decide the hospital must become more active in physician recruiting. They decide to create a new department of physician recruitment. Later, to implement this goal, managers decide which tasks, jobs, and positions are needed for the new department.

After organizing HCOs in these five ways, managers are not done organizing. They often will need to reorganize to better achieve the HCO’s mission, vision, goals, strategies, and plans. Recall that HCOs are open systems—open to their environments. Frequent changes in the external environment force changes in how HCOs should be organized. For example, accreditors, health insurers, businesses (which pay for health insurance for their employees), and government agencies in the external environment have demanded that HCOs improve the patient experience (as discussed in chapter 1). This external pressure has led many HCOs to reorganize their tasks, jobs, departments, and work coordination. The Partners HealthCare scenario at the beginning of this chapter also provides an example.

or g a n I z I n g ta s k s I n t o jo b s a n D Po s I t I o n s Managers must decide which work tasks and responsibilities should be assigned to which jobs and positions, along with the authority, reporting relationships, and qualifications for

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each job. These elements interact, so it is hard to determine one without the others. A good starting point is to consider which tasks to combine into a certain job and then figure out the other parts of the job.

In this chapter, job and position have been used somewhat interchangeably. These two terms have similar yet slightly different meanings. “A job consists of a group of activi- ties and duties that entail natural units of work that are similar and related” (Fottler 2015, 143). Some jobs, such as president, are performed by just one person. Other jobs, such as nurse, might be performed by two, three, or many more people, depending on the volume of nursing work. For example, a department might have two, three, or more nurse positions, each filled by a separate person. “A position consists of certain duties and responsibilities that are performed by only one employee” (Fottler 2015, 144). Thus, five people may fill five distinct nurse positions and all perform the nurse job.

Organizing particular tasks into a job creates division of work and specialization. Think of a job you had and list the specific tasks you did. Also think of the tasks workers did when you went to a doctor’s office for a checkup, an urgent care facility for a minor injury, or a hospice to visit a relative. Hundreds of tasks are done in HCOs, and managers usually (but not always) organize tasks into specific jobs so that work is not left to chance. Certain jobs are accountable for completing certain tasks. (After managers divide work into specialized jobs, they must coordinate all the specialized jobs toward common goals, as explained in chapter 5.)

Managers can use the verb–noun approach to organize tasks into a job. Here are examples: arrange appointments of all outpatients, calculate biweekly payroll of nonsalaried employees, and ensure patients’ protection from radiation. This approach indicates what a worker is supposed to do. Another approach is to state the outcome for which a job is accountable. Here are examples: accountable for appointments of all outpatients, account- able for biweekly payroll of nonsalaried employees, and accountable for patients’ protection from radiation. Managers should avoid task descriptions that are too brief or vague, such as appointments, payroll, and protection.

When assigning tasks to jobs, managers decide how wide or narrow to design a job. A job with many tasks is wider and less specialized than a job with fewer tasks. There is no “one best way” for a manager to determine how wide or narrow to make a job. The manager of a personal care home’s maintenance department in Ithaca might follow the “practice makes perfect” guideline and have a narrow range of repeated tasks that a worker presum- ably becomes very good at (the scientific management approach discussed in chapter 2). This division of work would have separate, narrow jobs for carpentry, plumbing, electrical work, and painting in a personal care home. But narrow, repetitive jobs can become bor- ing, and workers may eventually feel less motivated doing them day after day. Thus, the manager may decide to add tasks to broaden jobs (the human relations approach described in chapter 2). He might assign all maintenance tasks to all of the maintenance jobs and have less division of work and specialization.

job

A group of activities

and duties that entail

natural units of work

that are similar and

related; may be

performed by more

than one person.

position

A group of activities

and duties that are

performed by only one

person.

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Managers also must decide how precisely or loosely to identify job tasks and respon- sibilities. When their tasks are defined too precisely, employees may have difficulty adapting to changing situations. Thus, a trend has been to broadly define core job tasks in a general way with less specificity of assigned tasks. This approach allows flexibility amid chang- ing organization needs and circumstances (McConnell 2018). It enables an employee to temporarily shift to an urgent problem or flex a bit to meet a customer’s unusual request.

The questions of how specialized jobs should be and how many tasks to include in them affect all jobs throughout an HCO—including managerial jobs. Vice president (VP) titles in large hospitals reflect specialization and division of work: VP of financial affairs, VP of human resources, VP of patient experience, and others. A C-suite of hospital executive offices may include specialized executives, such as chief executive officer, chief operating officer, chief finance officer, chief nursing officer, chief information officer, chief medical officer, chief quality officer, and others. Alternatively, a small hospital might have only one VP without specialization. Where and when tasks are performed also affect division of work, specialization, and how tasks are organized. Tasks for a weekend nurse may be similar to but not all the same as tasks for a nurse who works weekdays. The tasks of a hospital physical therapist may slightly differ from tasks of a physical therapist in a sports medicine clinic. In addition to assigning specific tasks to each specific job, managers identify other elements of each job needed to organize work and create organization structure (McConnell 2018). Did managers at the organizations where you worked do the following?

◆ Managers decide how much authority (power) to delegate to each job—for example, to spend money, to enter notes in medical records, to sign contracts, or to schedule patients. Each job must have sufficient authority to take actions, use resources, make decisions, and perform tasks that have been assigned to the job. Delegation of authority is explained later in this chapter.

◆ Managers establish reporting relationships for each job (as explained later in this chapter). Reporting relationships identify

— the position (e.g., supervisor, manager, lead, boss) to which a given position directly reports; and

— the positions (e.g., subordinates, direct reports), if any, that directly report to a given position.

◆ Managers identify other positions and jobs with which a position must coordinate (other than the immediate supervisor). For example, patient care jobs usually must coordinate their work with other patient care jobs. An accountant in the finance department might be required to coordinate with an employee benefits manager in the human resources department.

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◆ Managers determine the qualifications needed to perform a job, such as education, experience, competencies, licensure, attitudes, behaviors, and other characteristics (further explained in chapter 7).

or g a n I z I n g jo b s a n D Po s I t I o n s I n t o De Pa rt m e n t s Another step in organizing work (to accomplish goals) is departmentalization, the orga- nization of jobs and positions into departments or other groups. A manager must decide on what basis to departmentalize. A department (or bureau, division, section, office) can be organized by grouping jobs that share one or more factors (Dunn 2016). For example, managers might group together jobs that

◆ perform the same activities and tasks (e.g., payroll tasks),

◆ use the same equipment and technology (e.g., telehealth equipment),

◆ serve the same type of customers (e.g., female patients),

◆ create the same product or service (e.g., emergency care),

◆ work in the same place (e.g., the downtown site), or

◆ work at the same time (e.g., night shift).

For example, managers at Sarah Bush Lin- coln Health System in Mattoon, Illinois, formed a care coordination department. It includes care coordinators, physician practice navigators, and health coaches who perform care coordination activities and tasks to improve population health (Hegwer 2016b).

As a department manager, you will apply management theory principles you learned in chapter 2 to design your department’s report- ing relationships (vertical hierarchy), span of control, line and staff positions, unity of command, and (de)centralization. We will study the application of management theory principles by using an example of positions in the sales department of a health insurance company. The sales manager, Kayla, must decide the reporting relationships of workers in her department. She decides that all four sales representatives will report directly to

departmentalization

Organization of

jobs and work into

departments, bureaus,

divisions, sections,

offices, and other

formal groups.

CHECK IT OUT ONLINE

The US Department of Labor publishes the Occupational Out-

look Handbook, which contains information about hundreds of

jobs, including many in healthcare. This resource is available

online at www.bls.gov/ooh/. The online handbook describes

which tasks and work are designed into different health-

care jobs. You can search the handbook to learn more about

the healthcare jobs mentioned in your classes and those you

encounter throughout your career. Check it out online and see

what you discover.

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her, as shown in the organization chart in exhibit 4.1. This creates vertical hierarchy for the department.

When establishing reporting relationships and vertical hierarchy, the department manager also determines the span of control (how many workers report directly to a manager). If all four sales reps and one secretary report to Kayla, her span of control is five, which is reasonable. Suppose that, over time, the department grows and hires nine more sales reps who also report to Kayla. Her span of 14 could be too many for her to effectively manage. She would not have enough time to manage all the workers, her decisions would be delayed, and the sales reps would feel their boss is unavailable and uninterested in them. As depart- ment manager, Kayla should consider adding another level of management—a supervisor level—between the sales reps and herself. This adds a level to the vertical hierarchy, as shown in exhibit 4.2. All sales reps now report to either the East Region supervisor or the West Region supervisor. Kayla’s span of control is now only three (two regional supervisors and one secretary). Kayla will have to delegate sufficient authority and responsibility to the supervisors so that they can make decisions without having to consult her too often. Delegation of that authority to the supervisors will enable closer supervision of the sales reps, which might be needed to achieve the planned sales goals.

Like many aspects of management, the “best” approach is contingent on several factors (Walston 2017). Recall from chapter 2 that research has found that different departments

organization chart

Visual portrayal of

vertical hierarchy,

departments, span

of control, reporting

relationships, and flow

of authority.

exHIbIt 4.1 Department

Organization Chart with Two Levels

in the Vertical Hierarchy

Sales Rep

Sales Manager

Secretary

Sales RepSales RepSales Rep

exHIbIt 4.2 Department

Organization Chart with Three Levels

in the Vertical Hierarchy

7 Sales Reps

Sales Manager

Secretary

6 Sales Reps

West Region SupervisorEast Region Supervisor

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face different contingencies and thus should be organized with different degrees of central- ization, specialization, division of work, chain of command, and so forth. The variety and standardization of work, the amount and frequency of change in work, workers’ education levels and abilities, workers’ physical locations, and external pressures all affect span of control. So too do the manager’s abilities, management style, and methods of monitoring subordinates (Dunn 2016). If all the workers do similar work that is simple, repetitive, and easily explained in procedural rules, a manager might capably supervise ten or more workers. However, if workers do many different tasks that are complex, hard to explain, unpredict- able, and nonroutine, then more supervision is needed and a manager should have a smaller span of control. If the department’s environment changes often and unpredictably, a smaller span of control will allow more frequent supervision to help workers adjust. Workers who are more educated, better trained, and more professional require less supervision and thus permit the manager a wider span of control. Smaller spans of control require more supervi- sory personnel and thus more expense, which is an important factor to consider.

Organizing jobs into a department also involves deciding which jobs are line posi- tions and which are staff positions. In exhibits 4.1 and 4.2, the sales reps are line positions in the vertical chain of command because they contribute directly to accomplishing the department’s sales goals. The secretary is in a staff position outside the vertical chain of command. That position supports the line positions and indirectly helps to achieve the department’s sales goals. Staff positions may provide assistance to relieve the workload of line positions, or staff may provide a specialized ability that line positions do not have (Dunn 2016). People in staff jobs offer advice and support to people in line jobs who make decisions. Staff jobs generally do not have much authority for making decisions. However, they may have power based on expertise, such as a Medicare reimbursement specialist, as discussed in chapter 10.

Unity of command is considered when organizing jobs in a department. Accord- ing to this principle, a worker reports to—and takes directions from—a single boss. This approach makes sense, and workers like it. However, sometimes it is not realistic, even in a sales office—and especially in HCOs, as we will see later. In exhibit 4.1, four sales reps each report only to the sales manager and follow unity of command. The secretary reports directly to the sales manager yet most likely also assists and takes direction from the four sales reps. Direct contact between the sales reps and secretary enables them to work together rather than by communication through the sales manager. This makes better use of the sales manager’s time and reduces miscommunications, delays, and other problems. However, it places more demands on the secretary and may require more meetings to resolve conflict if all four sales reps tell the secretary their work should be done first.

The manager must also decide how much to centralize and decentralize authority for making decisions. Recall that with decentralization, a manager delegates authority to a subor- dinate (lower-level) position to make decisions. Decentralization empowers the lower position by granting it authority to make decisions, take actions, and use resources needed to perform

delegate authority

Give authority to a

subordinate position

to make decisions and

take actions.

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the job. How much decentralization depends on the tasks and responsibilities assigned to a job, the people (manager and subordinate) involved, the type of work, and other factors. Certainly, the manager must delegate enough authority to enable subordinates to perform tasks and fulfill responsibilities assigned to their jobs. Kayla, as sales manager, can keep all authority centralized for some decisions and tasks (e.g., choosing the Salesperson of the Year award winner) so that only she does them. Yet she can simultaneously decentralize authority to sales reps for other decisions and tasks (e.g., scheduling sales calls, preparing contract proposals). The manager must delegate enough authority to lower-level positions, share enough information with those employees, and trust them so they can do the jobs they are responsible for (as assigned by the manager). Then the manager should get out of the way, avoid micromanaging, and hold them accountable for the delegated work. Appropriate delegation often enables lower-level employees to be more productive, motivated, and satisfied (Walston 2017).

When delegating authority, Kayla must consider possible problems. For example, she should realize that each sales rep probably will not do the work exactly the same way as she and other sales reps would do it. Decentralization increases variation and decreases standardization at lower levels of the organization. Is that acceptable to her? Kayla must think carefully about which authority to delegate to which subordinates. She might want to assign more tasks and delegate more authority to one sales rep (Josh) for his professional growth so he can cover for Kayla when she is away. However, other sales reps might then feel left out and think Kayla is unfair. Later chapters on leadership will offer more advice about delegating.

In summary, when delegating authority, the following things must happen (Dunn 2016; Walston 2017):

1. A manager must ensure that the employee knows what job the manager expects to be done.

2. The manager must grant the employee authority for the tasks, decisions, resources, and actions needed to do the job.

3. The employee must then accept responsibility and authority to do the job and be held accountable for it.

4. The manager must trust the employee to do the job and keep the manager informed with periodic reports.

After authority is delegated to lower positions, the manager position still has authority too. Delegating authority is like sharing knowledge—it increases the number of positions and people that have it, rather than taking it from one and giving it to another (Dunn 2016). Further, the manager is still responsible for the work delegated to lower-level employees. If those employees do not fulfill their assignments, the manager is ultimately responsible and must do the work herself.

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Notice how Partners HealthCare used these organizing principles in the Here’s What Happened at the beginning of this chapter. Managers brought together specialized jobs (e.g., diabetes educator, telehealth nurse, equipment technician) and created a Center for Connected Health with responsibility for developing patient-centered telehealth services. A director was given authority for the center, and authority for patient care decisions was delegated to lower-level patient care staff.

fa c t o r s tH at In f L u e n c e or g a n I z I n g Wo r k An HCO’s environment (external factors) and the organization itself (internal factors) affect how managers organize work. Prior strategic planning, discussed in chapter 3, ana- lyzed both types of factors. Take a few minutes to jot down examples of how the external environment and the organization itself might affect how work is organized. Then read the following example.

New technology invented in the external environment creates new ways of perform- ing existing tasks—and sometimes entirely new tasks—that must be organized into jobs. The invention of digital communication led to the redesign of jobs to use electronic health records rather than traditional paper records. Digital “writing” slowed down physicians in hospital emergency departments, so many of those departments hired digital scribes. A scribe goes into the emergency room with the physician (and the patient) and writes all the digital medical records in real time while the physician treats the patient. After caring for the patient, the physician reviews, edits, and signs the digital record. Thus, because of a technological innovation in the external environment, a new digital scribe job was cre- ated and the tasks of the emergency room physician job changed. Artificial intelligence, chatbots, and virtual assistants developed in the external environment are further changing tasks and work in HCOs (Schawbel 2017).

e x t e r n a L f a c t o r s

Recall from chapter 2 that contingency theory arose from studies that found one type of organization structure works best if the external environment is mostly stable and predictable, whereas a different organization structure works best if the external environment changes quickly and unpredictably. A mechanistic structure fits best with a stable, predictable environment, while an organic structure fits best with an unstable, changing environment. Characteristics of mechanistic and organic organizations are shown in exhibit 4.3.

These two organization structures are idealized types, and organizations are not entirely one or the other. They blend the two types and could be mostly one type or the other. Many managers feel their environments have become more unstable and unpredict- able, so they have reorganized their HCOs to become more organic. The organic model seems more alive and natural than the mechanistic form. On the other hand, elements of

mechanistic

Emphasizing

specialized, rigid tasks;

centralized decisions;

strict hierarchy, control,

and rules; and vertical

communication and

interaction.

organic

Emphasizing

shared flexible

tasks; teamwork;

decentralized

decisions; loose

hierarchy, control, and

rules; and horizontal

communication and

interaction.

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M a n a g e m e n t o f H e a l t h c a r e O r g a n i z a t i o n s9 0

mechanistic structure are being used to organize some patient care work, as noted in the Check It Out Online sidebar.

You might want to quickly review in chap- ter 1 the sectors of the external environment and the healthcare trends and future developments. Thinking about these will help you understand the many external factors that affect how work and jobs are organized and why work and jobs are being reorganized. In recent years, stakehold- ers outside of HCOs have demanded—and reim- bursement has changed to reward—better value, clinical quality, customer satisfaction, patient expe- rience, patient safety, and transitions throughout the continuum of care. These external forces have been driving changes in how HCOs organize their work, jobs, and structure. Some of these changes

are described in the Using Chapter 4 in the Real World sidebar and following bullet points (Bosko and Gulotta 2016; Hegwer 2016a; McConnell 2018; Radick 2016; Walston 2017):

◆ Reorganization to be more patient centered (rather than provider centered) for the patient’s convenience

◆ Workflow analysis and redesign to streamline and facilitate prompt, seamless patient care among different jobs, departments, and facilities

◆ New tasks organized into new jobs such as chronic disease educators, population health coaches, care coordinators, medical practice facilitators, and patient experience officers

Stable, Predictable Environment Unstable, Unpredictable Environment

Mechanistic structure is best. Organic structure is best.

Separate, specialized, rigid tasks Shared, flexible tasks adjusted by teamwork

Centralized decisions Decentralized decisions

Strict vertical hierarchy, tight control, narrow span of control, many rules

Loose, flatter hierarchy; loose control; wide span of control; few rules

Vertical communication and interaction

Diffuse horizontal communication and interaction

Sources: Data from Daft (2016) and Walston (2017).

exHIbIt 4.3 Environment and

Structure

CHECK IT OUT ONLINE

Healthcare workers often follow care protocols that list stan-

dardized work processes for specific health problems. These

protocols are based on scientific evidence and best practices

to help organize work by healthcare workers. Search online for

“standard care protocols” or “hospital care protocols” to find

examples of standardized work processes in healthcare. Check

it out online and see what you discover.

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◆ Scripted tasks and behaviors (sometimes embedded in electronic health records) for staff to follow when interacting with patients and families

◆ Shifting more work to primary care and other ambulatory services in the continuum of care

◆ Data analytics, clinical information technology, and artifi cial intelligence to improve clinical care work processes and provide decision support for clinical care

USING CHAPTER 4 IN THE REAL WORLD

Collecting payment from a medical group’s patients may be diffi cult, awkward, and

stressful for everyone involved. Front desk staff can better perform this task if the job

has been designed well. The American Medical Association (AMA) offers scripts for this

purpose. The scripts give staff standard approaches to collecting payment that allow for

a courteous, respectful patient experience. Here is one script (AMA 2015):

Script 3: For collecting payment from patient upon check-out

After the appointment, the medical staff walks the patient to the front desk, says

goodbye to the patient and quickly exits the area. The patient is now ready for check-

out. Reviewing the patient’s insurance eligibility verifi cation response, say: “Accord-

ing to your insurance benefi t coverage details, your fee today is $310.”

Look directly at the patient and say, “How would you like to pay for that—by

check, cash or credit card?”

Then wait and allow the patient to answer. . . . Look at the patient directly and

allow them to answer. Do not speak until the patient has responded to your question.

If a patient says they cannot pay the entire amount at the time of service, follow up

by asking, “How much are you able to pay today?”

Thank the patient for whatever amount he or she can pay, and follow up by say-

ing, “And when do you anticipate paying the balance of today’s visit?”

Be sure the patient commits to a date for that payment and, again, wait for

the patient to respond. . . . Make sure you address the entire balance, not just

one payment, and then put the new payment arrangement in writing. This cre-

ates an agreement that the patient is more apt to abide by, as opposed to an oral

agreement.

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M a n a g e m e n t o f H e a l t h c a r e O r g a n i z a t i o n s9 2

I n t e r n a L f a c t o r s

An HCO’s size, its goals, and worker motivation are internal factors to consider when organizing tasks into jobs. In a small HCO, there may not be much division of work into specializations. Because larger HCOs have more work, more workers are hired, which allows for more specialization and, in turn, requires more coordination. In a small HCO, there is not enough medical imaging work for a full-time computed tomography (CT) tech, a full-time magnetic resonance imaging (MRI) tech, and so forth. So the HCO may have unspecialized imaging technicians who have broader responsibilities and perform CT, MRI, and radiology. Extensive growth in the medical imaging workload and number of employees could lead to specialization, division of work, and need for coordination. Conversely, if a large HCO downsizes during an economic recession, the fewer remaining workers may be expected to do whatever needs to be done with less specialization.

An HCO’s goals also influence how work is organized. If the HCO has a goal to improve the quality of medical imaging, managers may create narrower medical imaging jobs that specialize in just one modality (e.g., CT or MRI) and staff those jobs with workers who are experts in that modality. Assuming that practice makes perfect, this specialization would improve quality. Also, specialization generally reduces errors and the need to redo work, which could help achieve an efficiency goal. In contrast, if the goal is to be respon- sive to customers’ unique preferences to improve their patient experience, managers may organize jobs flexibly to allow workers to interact with customers and adjust to their needs. Doing so calls for more decentralization of authority to frontline service workers so they can make decisions quickly for customers. It also calls for fewer rigid rules.

When designing jobs, managers must also think about worker motivation. If jobs are too repetitive and only follow a simple step-by-step process, workers may become unmotivated. Jobs in which workers perform tasks alone may demotivate people who need social interaction. Jobs with rigidly organized narrow tasks and no opportunity for creativity demotivate people who need growth or self-expression. We will learn more about motivation in later chapters on staffing, leading, and motivating. For now, realize that job design affects—and therefore should consider—motivation.

Jobs can be organized in multiple ways. Some approaches focus on getting the work done, producing the products and services, and achieving the goals. Other approaches focus on keeping workers satisfied, enabling employees to grow, and fulfilling human needs. Each approach has advantages and disadvantages, and a manager must try to balance all considerations when organizing work. After deciding on an approach and implementing it, the manager should periodically evaluate the results and reorganize if necessary.

a fe W co m P L I c at I o n s Managers can use the methods and principles explained in this chapter to organize work in HCOs. When doing so, they should consider four possible complications—the informal organization, contract workers, unionized workers, and medical jobs with physicians.

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I n f o r m a L o r g a n I z at I o n

This chapter has focused on the formal organization—the organization shown in the official bylaws, charts, job descriptions, policies, and other documents. However, managers must realize that after they formally organize work and workers, the workers will not always fol- low the formal organization. They often create and follow their own unofficial, informal organization, which coexists with the official, formal organization. Employees use their own unwritten and informal rules, work procedures, behaviors, expectations, and com- munication networks (e.g., the grapevine) to create their informal organization. Managers should understand that the informal organization can support—or disrupt—the formal organization. The informal organization is powerful and influential and often reflects how work is really done and how employees really feel about the organization (McConnell 2018).

Informal groups and unofficial arrangements arise from shared interests and social relationships among people who work together (Dunn 2016). Groups may form among the third-shift personnel in a skilled nursing facility, the information technology staff in a health insurance firm, or the therapists in a rehabilitation center. Coworkers with com- mon interests or friendships outside the HCO may also create informal groups at work. Members of these groups talk, gossip, share opinions, support each other, and report what they have heard (true and untrue) elsewhere in the organization. They interact both at work and outside of work via social media, informal gatherings, recreational activities, and other opportunities. Group members help each other gain satisfaction and fulfill certain needs, such as the need for friendship, belonging, security, acceptance, status, comfort, emotional support, affiliation, reinforcement of one’s beliefs, sympathy, camaraderie, and collective power.

Informal groups have their own rules, culture, and behavioral norms that specify what members of the group are supposed to do. These expectations may conflict with an HCO’s official goals, job descriptions, and work plans. The groups strongly influence members who want to remain in the group and gain its benefits. The informal leader lacks formal authority yet influences others by using informal reward power and coercive power

informal organization

Workers’ own unofficial

and unwritten work

rules, procedures,

expectations,

agreements, and

communication

networks (e.g., the

grapevine), which

coexist and may

conflict with the official

ones of the formal

organization.

TRY IT, APPLY IT

Suppose you are the manager of a college health and wellness center. (You may think

creatively about its mission and services.) Brainstorm and list at least 15 tasks that your

center performs. Use the verb–noun approach to listing the tasks. Then organize the

tasks into jobs. Which jobs will perform which tasks? Compare your ideas with those of

other students.

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M a n a g e m e n t o f H e a l t h c a r e O r g a n i z a t i o n s9 4

in the group. If a group member does not support the group’s rules, then the leader and other group members may discipline that member using ridicule, avoidance, rejection, or other punishments.

Just as the formal organization has smaller parts, such as departments, so too does the informal organization. The basic unit is the small group—a few workers who share contact, interaction, feelings, and friendship. Depending on the size of the organization, there may be dozens of small groups in the informal organization. Small groups may form in each formal department of an organization and also around specific interests, such as “the parking problem.” An employee may belong to more than one small group in the informal organization that coexists with the formal organization.

The informal organization, its groups, and its leaders can greatly influence employees to support—or oppose—the tasks, jobs, departments, and decisions of the formal orga- nization (Dunn 2016). For example, the informal organization may support or oppose a change in the work schedule and job tasks at an outpatient therapy clinic. Managers in the formal organization may struggle to implement changes if the informal organization does not support the changes. Formal organization leaders should recognize this fact and work with informal leaders to gain this support. They must figure out who the informal group’s leaders are and understand the group’s norms, viewpoints, and expectations. Then they must develop collaborative working relationships with the informal group and its leaders. The formal leader must turn the informal leader into an ally rather than a rival. Later chapters provide more information about informal organizations.

c o n t r a c t W o r k e r s

Sometimes, not all the workers in an HCO are actual employees of the organization. For example, when a hospital is unable to fill vacant nurse positions, it might contract with a staffing agency for nurses. The agency hires its own nurses and contracts with businesses that need temporary nursing staff. The hospital pays the agency a fee, and the agency pro- vides temporary workers (sometimes called travel workers). Temp agencies provide contract workers for dozens of job specialties, sometimes for a day and sometimes for much longer.

The contract between the agency and the HCO formally identifies the work respon- sibilities, required clearances to work, supervision, authority, and other aspects of the relationships among the worker, agency, and HCO. Even so, questions and conflicts can and do arise. The HCO might feel the agency worker lacks the skills or behaviors needed for the job, or the worker might feel the HCO demands more work than the contract allows. A contract therapist will feel more loyalty to the Therapists ’R’ Us agency than to the HCO she is assigned to.

Another type of contract worker is someone, usually with specialized expertise, who negotiates his own contract with an HCO rather than working for a staffing agency or being hired as an employee. Biomedical engineers, medical physicists, and speech therapists are

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examples. These contract arrangements can be useful in some situations, but they compli- cate the department’s and HCO’s formal organization. When a hospital in Spartanburg developed a new radiation treatment center for cancer, it contracted with a full-time medical physicist. Along with job responsibilities, the written contract described how that posi- tion fit into the organization. The contract stated which manager the position reported to, identified what authority the position held, and explained how the position was required to coordinate with management, employees, and the medical staff.

In today’s “gig economy,” the contract worker concept has many variations, and employers are increasing their use of gig workers (Schawbel 2017). HCOs use freelance, per diem, temporary, part-time, and on-call arrangements and jobs. All of these approaches require managers to properly organize the relationships between the workers and HCOs.

u n I o n I z e D W o r k e r s

Some workers in HCOs may vote to be represented by a labor union regarding their jobs, work, rules, schedules, compensation, and other terms of employment. For example, some clinical workers, maintenance workers, clerical workers, and others are represented by unions. Although it is not part of the official organization, the union controls unionized workers and their relationship with the employer. Unions obtain authority through employee elections and negotiated contracts (backed by labor laws) to control aspects of who works when, where, and how. After employees vote to be represented by a labor union, HCO manag- ers alone cannot organize the work, tasks, and jobs. Instead, managers must use collective bargaining and negotiate with the union to jointly decide the terms and conditions of work for the represented workers (Malvey and Raffenaud 2015). Union rules control how HCO managers and employees communicate and interact with each other and how union representatives and HCO managers resolve workplace disputes. Unions complicate how work is organized into jobs and departments because managers must make such decisions jointly with the union. Labor unions are discussed in more detail in chapter 8.

m e D I c a L j o b s W I t H P H y s I c I a n s

In hospitals, medical practices, outpatient surgery centers, health insurance companies, and some other HCOs, certain tasks, jobs, and positions must be performed by a physician. Some of these jobs involve medical work, such as surgeon, radiologist, anesthesiologist, and hospitalist. Others are administrative yet also involve medical work, such as vice president of medical affairs, medical director of quality care, and cardiology medical director. These jobs require a physician with appropriate medical expertise, a license to practice medicine, and other qualifications that only a physician would have. For these jobs, the HCO may hire and pay a physician, may contract with and pay a physician (see the “Contract Workers” section earlier in this chapter), or may grant the physician privileges to work in the HCO

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M a n a g e m e n t o f H e a l t h c a r e O r g a n i z a t i o n s9 6

without being paid by the HCO. (In the last case, the physician is paid by patients and their insurance plans.) Positions that require a physician can make HCOs very different from other organizations. These positions make organization structure and management more complex because they do not fit neatly with the traditional chain of command, organiza- tion chart, and use of management authority.

Let’s consider hospitals, because they have many kinds of medical jobs with physi- cians. A hospital generally does not hire a physician through the human resources depart- ment—the way it hires most employees. A physician applies to the hospital for medical staff privileges in a specialty such as neurology, orthopedics, or cardiology. She specifies the kinds of medical work and procedures for which she is requesting privileges. She submits her credentials (e.g., medical school degree, years of residency training, license, recommendation letters) and provides evidence of competency to perform her specified medical work. The medical staff office collects all this information and forwards it to the medical staff credentials committee for review. The credentials committee then makes a recommendation to the board of directors for consideration. The board decides whether to grant the physician the requested privileges to practice the requested kinds of medical work in that hospital.

Hospitals also have hospital-based physician (HBP) positions, such as pathologist, emergency physician, and hospitalist. Although there are variations, physicians in these positions work in and directly for the hospital rather than in their own private medical practice in the community. Physicians in these jobs might be employed by or contract with (and be paid by) the hospital to provide their services. Or, they might provide services in hospitals but bill patients and insurers for those services. In general, HBPs have author- ity and responsibility for their medical work but not for administrative work unless it is specifically required in their contract or assigned to them by managers.

In a variation of this scenario, a hospital or hospital system hires physicians as employees to work in medical offices (rather than in the hospital itself ). Hospitals and their systems often own and operate primary care and medical specialty practices. The physicians are hired as employees and practice ambulatory medicine. They are office-based physicians, working for a hospital (system). If a patient needs to be admitted to the hospital, the patient is cared for by a HBP hospitalist who practices inpatient medical care. Like HBPs, the office-based physicians have authority and responsibility for medical work but not for administrative work unless it is specifically assigned to them by managers.

Where does medicine end and administration begin? Good question. The boundary between medicine and administration is fuzzy. Unity of command can be routinely violated if HBPs and administrative managers both direct the same laboratory technicians or the same emergency nurses. Managers and physicians share responsibility for the quality of patient care, but problems arise when physicians feel that anything affecting medical care is a medical matter and within their sole authority. If a radiologist claims authority to fire a technologist who made a mistake, the manager can say that is an administrative matter. On

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the other hand, managers must be careful about how involved they get in medical matters. If a physician asks a nonphysician manager, “And where did you go to medical school?” the physician likely believes the manager has become too involved in something that requires medical expertise. Yet, the administrative manager can—and must—require physicians to comply with hospital medical staff bylaws, rules, and standards. Usually, boundaries and responsibilities are understood and respected so that work proceeds smoothly. When managers take the lead with respectful, candid, and open dialogue, physicians can become integral parts of the management hierarchy with agreement on authority, coordination, organizing, and other matters. For this structure to work, the manager must cultivate a professional relationship with the physician leader based on trust, honesty, and ability.

Some physicians who work in a hospital are not hired, contracted, or paid by the hospital. The hospital grants privileges to these independent physicians to provide care to patients in the hospital; these physicians then bill the patients (and insurance plans) for payment. For example, a neurosurgeon is granted surgical privileges to perform neurosurgery on his patients in the hospital and collect payment for his services from those patients and their insurance plans. That physician most likely has a medical office practice in the com- munity where he sees patients. He might also have privileges to perform neurosurgery on patients at other hospitals. The percentage of physicians in independent practice has been declining, while the percentage in interdependent practice (with a hospital) has been growing.

Do administrative managers have authority over the surgeon? Well, not entirely. In the hospital organization chart, the surgeon does not report to the operating room (OR) manager as the scrub nurses do. In many hospitals, the physicians are in a medical hier- archy different from the usual administrative hierarchy (organization chart). This medical hierarchy (explained more in chapter 5) usually reports to the chief of the medical staff or perhaps to the CEO and ultimately is accountable to the board of directors in the chain of command. Physicians do have more autonomy than other workers in deciding how they will perform their work. The manager can specify how the OR custodian should clean the room after a surgical case, but the manager cannot specify how the surgeon should perform the surgery. Hospital managers may, however, dictate which equipment and supplies are used in the OR to ensure consistency and efficient purchasing practices. In addition, the hospital neither employs nor pays the independent surgeon, which reduces the manager’s power and influence over that physician. Yet, the manager does have authority to ensure the surgeon complies with hospital bylaws, policies, and standards. When the hospital grants a physician privileges to practice in the hospital, the privileges require this compliance, and the physician agrees.

In HCOs, medicine and management are gradually merging, resulting in less separa- tion of medical and administrative matters. New payment methods—such as payment based on value, clinical quality, and customer satisfaction—are causing medicine and manage- ment to become more interdependent. Hospital managers must develop effective working relationships with physicians who are becoming more involved in leading, managing, and

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M a n a g e m e n t o f H e a l t h c a r e O r g a n i z a t i o n s9 8

integrating clinical care across the continuum. Further, regardless of how integrated or separate medicine and management are, the physician has medical expertise on medical matters. A manager cannot direct a physician the way she directs nonphysician workers. Remember that physicians are physicians, which means they have autonomy, influence, and expectations based on medical expertise.

Organizations, including HCOs, are “social entities that are goal-directed, designed as deliberately structured and coordinated activity systems, and are linked to the external environment” (Daft 2016, 642). Managers deliberately structure HCOs by organizing tasks into jobs, organizing jobs into departments, and organizing departments into an entire organization. To accomplish this, managers use management theory, concepts, and prin- ciples including specialization, division of work, authority, reporting relationships, vertical hierarchy, chain of command, span of control, line and staff positions, unity of command, departmentalization, delegation, and decentralization. These elements are used to orga- nize work and jobs.

There is no single best way to organize—it is contingent on external factors in the en- vironment and internal factors in the HCO. Mechanistic structure works best in a stable en- vironment, while organic structure is best for unstable environments. Organizations blend both approaches to fit with their environments and other contingency factors. When orga- nizing HCOs, managers must consider the informal organization, contract workers, union- ized workers, and medical jobs with physicians—which all complicate organizing HCOs.

o n e m o r e t I m e

FOR YOUR TOOLBOX

• Organization structure and charts

• Specialization and division of work

• Vertical hierarchy (chain of

command)

• Reporting relationships

• Span of control

• Line and staff positions

• Unity of command

• Departmentalization

• Delegation of authority and

decentralization

• Mechanistic and organic structure

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C h a p t e r 4 : O r g a n i z i n g : J o b s , P o s i t i o n s , a n d D e p a r t m e n t s 9 9

1. Organizing work into distinct jobs requires managers to make decisions about tasks, responsibilities, authority, specialization, spans of control, reporting relationships, qualifications, and other matters. Which of these decisions do you think would be easiest to make? Why? Which would be hardest? Why?

2. Discuss how specific internal factors and specific external factors affect how work should be organized.

3. Compare and contrast mechanistic and organic structures. Why might an HCO be partly organic and partly mechanistic?

4. Discuss how the informal organization affects managing an HCO. How can HCO managers try to work with rather than against the informal organization?

5. How do medical jobs and work done by physicians affect how managers manage HCOs?

These questions refer to the Integrative Case Studies at the back of this book.

1. Disparities in Care at Southern Regional Health System case: Explain how an informal organization may exist at SRHS. Then explain how the informal organization might affect Mr. Hank’s efforts to reduce disparities in patient care at SRHS.

2. Hospice Goes Hollywood case: Describe how some complications in management and organization (explained in this chapter) may affect what happens in this case.

3. “I Can’t Do It All!” case: Using this chapter, explain how you think Mr. Brice should organize work at Healthdyne. Describe how he should write tasks in vice presidents’ job descriptions, delegate authority to vice presidents, and decentralize decision making.

4. The Rocky Road to Patient Satisfaction at Leonard-Griggs case: Explain how an informal organization may exist in this case. Then explain how the informal organization might affect Ms. Ratcliff ’s plans.

5. The Rocky Road to Patient Satisfaction at Leonard-Griggs case: Which tasks are evident in the intern’s job? Which tasks are being added to the jobs of office personnel? Using terms, concepts, and methods from this chapter, explain how you would improve the way work is assigned and authority delegated in this case.

f o r D I s c u s s I o n

c a s e s t u D y Q u e s t I o n s

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M a n a g e m e n t o f H e a l t h c a r e O r g a n i z a t i o n s1 0 0

RIVERBEND ORTHOPEDICS MINI CASE STUDY

Riverbend Orthopedics is a busy group practice with expanded services for orthopedic

care. It has seven physicians and a podiatrist, plus about 70 other employees. At its big,

new clinic building, Riverbend provides extensive orthopedic care. Several technicians

provide diagnostic medical imaging, from basic X-rays to magnetic resonance images.

The physicians perform surgery in their own outpatient surgery center with Riverbend’s

own operating nurses and technicians. Therapy is provided by three physical therapists

and one part-time contracted occupational therapist. In addition to staff providing actual

patient care, the clinic has staff for fi nancial management, medical records, human

resources, information systems/technology, building maintenance, and other admin-

istrative matters. Occasional marketing work is done by an advertising company. Legal

work is outsourced to a law fi rm. Riverbend is managed by a new president, Ms. Garcia.

She and Riverbend have set a goal of achieving “Excellent” ratings for patient experi-

ence from at least 90 percent of Riverbend’s patients this year.

One of Riverbend’s physicians, Dr. Barr, argues that because he is a physician, he

must be granted autonomy to practice medicine the way he prefers to practice (i.e., for

the physician’s convenience).

mInI case stuDy QuestIons

1. Explain how Ms. Garcia could apply tools, methods, concepts, and principles of or-

ganizing from this chapter to help achieve the goal. You may make reasonable as-

sumptions and inferences.

2. Using what you learned in this chapter, describe how you think Ms. Garcia should

work with Dr. Barr and other physicians to achieve Riverbend’s goal. You may make

reasonable assumptions and inferences.

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C h a p t e r 4 : O r g a n i z i n g : J o b s , P o s i t i o n s , a n d D e p a r t m e n t s 1 0 1

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Payment at the Time of Service.” Accessed May 9, 2018. www.stepsforward.org/Static/

images/modules/20/downloadable/poc-scripts.pdf.

Bosko, T., and B. Gulotta. 2016. “Improving Care Across the Continuum.” Journal of Health-

care Management 61 (2): 90–93.

Daft, R. L. 2016. Organization Theory and Design, 12th ed. Mason, OH: South-Western

Cengage.

Dunn, R. T. 2016. Dunn and Haimann’s Healthcare Management, 10th ed. Chicago: Health

Administration Press.

Fottler, M. D. 2015. “Job Analysis and Job Design.” In Human Resources in Healthcare, 4th

ed., edited by B. J. Fried and M. D. Fottler, 143–80. Chicago: Health Administration Press.

Hegwer, L. R. 2016a. “5 Ways to Support Clinical Integration.” Healthcare Executive 31 (1):

18–25.

. 2016b. “6 Business Imperatives for Population Health Management.” Healthcare

Executive 31 (4): 11–28.

Malvey, D., and A. Raffenaud. 2015. “Managing with Organized Labor.” In Human Resources

in Healthcare, 4th ed., edited by B. J. Fried and M. D. Fottler, 389–426. Chicago: Health

Administration Press.

McConnell, C. R. 2018. Umiker’s Management Skills for the New Health Care Supervisor,

7th ed. Burlington, MA: Jones & Bartlett Learning.

Radick, L. E. 2016. “Improving the Patient Experience.” Healthcare Executive 31 (6): 32–38.

Schawbel, D. 2017. “Workplace Trends You’ll See in 2018.” Published November 1. www.

forbes.com/sites/danschawbel/2017/11/01/10-workplace-trends-youll-see-in-2018/.

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spectives and Management Applications. Chicago: Health Administration Press.

r e f e r e n c e s

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L e a r n i n g O b j e c t i v e s

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