Human Resources In Healthcare

HUMAN

RESOURCES

HUMAN

RESOURCES

IN HEALTHCARE

Managing for Success

THIRD EDITION

Bruce J. Fried and

Myron D. Fottler, Editors

Fried

Fottler

Human Resources in Healthcare: Managing for Success,

Third Edition, presents the techniques and practices behind effectively

managing people—the healthcare industry’s most important asset.

It provides the concepts and practical tools necessary for meeting

the unique challenge of managing healthcare employees.

New in this edition:

■ An expanded chapter on health and safety in the workplace, highlighting

disaster preparedness and management

■ A chapter on globalization and the mobile workforce

■ A chapter focusing on employee benefits and benefit design

■ An expanded chapter on training and career development

■ A new section with cases that emphasize the organization-wide impact of

human resources decisions

This book covers fundamental topics as well as timely issues.

About the Editors:

Bruce J. Fried, PhD, is an associate professor and director of the Residential

Master’s Program in the Department of Health Policy and Administration in the School

of Public Health at the University of North Carolina at Chapel Hill. He teaches and has

written in the areas of global health, human resources management, unionization, and

strategic planning and marketing. Dr. Fried is also coeditor of and contributor to World

Health Systems: Challenges and Perspectives (Health Administration Press, 2002).

Myron D. Fottler, PhD, is a professor and executive director of Health Services

Administration Programs at the University of Central Florida, where he teaches

courses in healthcare human resources management, service management and

marketing, and dissertation research. He has written and published 16 books

and more than 130 journal articles.

HU

MAN RESOURCES

IN HEALTH

CARE Managing for Success

THIRD

EDITIONHU

MAN RESOURCES

IN HEALTH

CARE Managing for Success

One North Franklin Street, Suite 1700

Chicago, Illinois 60608-3529

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HUMAN

RESOURCES

IN HEALTHCARE

Managing for Success

THIRD EDITION

Fried_titles 6/6/08 6:47 AM Page 1

AUPHA

HAP Editorial Board

Sandra Potthoff, PhD, Chair

University of Minnesota

Simone Cummings, PhD

Washington University

Sherril B. Gelmon, DrPH, FACHE

Portland State University

Thomas E. Getzen, PhD

Temple University

Barry Greene, PhD

University of Iowa

Richard S. Kurz, PhD

St. Louis University

Sarah B. Laditka, PhD

University of South Carolina

Tim McBride, PhD

St. Louis University

Stephen S. Mick, PhD

Virginia Commonwealth University

Michael A. Morrisey, PhD

University of Alabama–Birmingham

Dawn Oetjen, PhD

University of Central Florida

Peter C. Olden, PhD

University of Scranton

Lydia M. Reed

AUPHA

Sharon B. Schweikhart, PhD

The Ohio State University

Nancy H. Shanks, PhD

Metropolitan State College of Denver

Fried_FM.qxd 6/11/08 4:16 PM Page ii

HUMAN

RESOURCES

IN HEALTHCARE

Managing for Success

THIRD EDITION

Bruce J. Fried and

Myron D. Fottler, Editors

Health Administration Press, Chicago

Association of University Programs in Health Administration, Arlington, Virginia

Fried_titles 6/6/08 6:47 AM Page 2

Your board, staff, or clients may also benefit from this book’s insight. For more informa￾tion on quantity discounts, contact the Health Administration Press Marketing Manager

at (312) 424-9470.

This publication is intended to provide accurate and authoritative information in regard to

the subject matter covered. It is sold, or otherwise provided, with the understanding that

the publisher is not engaged in rendering professional services. If professional advice or

other expert assistance is required, the services of a competent professional should be

sought.

The statements and opinions contained in this book are strictly those of the author(s) and

do not represent the official positions of the American College of Healthcare Executives,

of the Foundation of the American College of Healthcare Executives, or of the Association

of University Programs in Health Administration.

Copyright © 2008 by the Foundation of the American College of Healthcare Executives.

Printed in the United States of America. All rights reserved. This book or parts thereof may

not be reproduced in any form without written permission of the publisher.

12 11 10 09 08 5 4 3 2 1

Library of Congress Cataloging-in-Publication Data

Human resources in healthcare: managing for success / Bruce J. Fried

and Myron D. Fottler, editors.—3rd ed.

p. cm.

Includes bibliographical references and index.

ISBN 978-1-56793-299-7 (alk. paper)

1. Health facilities—Personnel management. I. Fried, Bruce, 1952-

II. Fottler, Myron D.

[DNLM: 1. Personnel Management—methods. WX 159 H91807 2008]

RA971.35.H864 2008

362.1068’3—dc22

2008013657

The paper used in this publication meets the minimum requirements of American National

Standard for Information Sciences—Permanence of Paper for Printed Library Materials,

ANSI Z39.48-1984. ™

Project manager: Jane Calayag; Acquisitions editor: Audrey Kaufman; Cover designer:

Anne LoCascio; Composition: Putman Productions, LLC

Health Administration Press Association of University Programs

A division of the Foundation in Health Administration

of the American College of 2000 14th Street North

Healthcare Executives Suite 780

One North Franklin Street Arlington, VA 22201

Suite 1700 (703) 894-0940

Chicago, IL 60606

(312) 424-2800

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BRIEF CONTENTS

Foreword .............................................................................................. xiii

William K. Atkinson, PhD

Preface ................................................................................................... xv

1 Strategic Human Resources Management ......................................... 1

Myron D. Fottler, PhD

2 Healthcare Workforce Planning ...................................................... 27

Thomas C. Ricketts, III, PhD

3 Globalization and the Healthcare Workforce .................................. 47

Leah E. Masselink

4 Healthcare Professionals ................................................................. 71

Kenneth R. White, PhD, FACHE; Dolores G. Clement, DrPH,

FACHE; and Kristie G. Stover, PhD

5 The Legal Environment of Human Resources Management ........... 99

Beverly L. Rubin, JD, and Bruce J. Fried, PhD

6 Workforce Diversity ..................................................................... 145

Rupert M. Evans, Sr., DHA, FACHE

7 Job Analysis and Job Design ......................................................... 163

Myron D. Fottler, PhD

8 Recruitment, Selection, and Retention ......................................... 197

Bruce J. Fried, PhD, and Michael Gates, PhD

9 Organizational Development and Training ................................... 237

Rita Quinton, SPHR

10 Performance Management ........................................................... 257

Bruce J. Fried, PhD

v

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11 Compensation Practices, Planning, and Challenges ....................... 281

Howard L. Smith, PhD; Bruce J. Fried, PhD;

Derek van Amerongen, MD; and John D. Laughlin

12 Employee Benefits ....................................................................... 319

Dolores G. Clement, DrPH, FACHE; Maria A. Curran;

and Sharon L. Jahn, CEBS, CMS

13 Health Safety and Preparedness .................................................... 347

William Gentry

14 Managing with Organized Labor ................................................. 359

Donna Malvey, PhD

15 Nurse Workload, Staffing, and Measurement ................................ 393

Cheryl B. Jones, PhD, RN, and George H. Pink, PhD

16 Human Resources Budgeting and Employee Productivity ............ 433

Eileen F. Hamby, DBA

17 Creating Customer-Focused Healthcare Organizations

Through Human Resources ......................................................... 451

Myron D. Fottler, PhD, and Robert C. Ford, PhD

18 Present Trends that Affect the Future of Human Resources

Management and the Healthcare Workforce ................................. 479

Bruce J. Fried, PhD, and Myron D. Fottler, PhD

Integrative Cases

1 Reduction in Force at Sierra Veterans Affairs Medical Center ........ 501

Sarah Huth and Sara Hofstetter

2 Management Challenges of a Customer Service Center ................ 511

Andy Garrard and Heather Grant

3 Performance Feedback Now and Then ......................................... 523

Lee Ellis, Dawn Morrow, and Adia Bradley

Index ........................................................................................... 529

About the Editors ........................................................................ 537

About the Contributors ............................................................... 538

vi Brief Contents

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DETAILED CONTENTS

Foreword.............................................................................................. xiii

William K. Atkinson, PhD

Preface ................................................................................................... xv

1 Strategic Human Resources Management.......................................... 1

Myron D. Fottler, PhD

Learning Objectives, 1; Introduction, 1; Environmental Trends, 4; The

SHRM Model, 6; Organizational Mission and Corporate Strategy, 11;

Human Resources and the Joint Commission, 19; A Strategic Perspective

on Human Resources, 20; Summary, 22; Discussion Questions, 23;

Experiential Exercises, 24

2 Healthcare Workforce Planning....................................................... 27

Thomas C. Ricketts, III, PhD

Learning Objectives, 27; Introduction, 27; The History of Healthcare

Workforce Planning, 29; The Rationale for Healthcare Workforce

Planning, 31; Overview of Workforce Planning Methodologies, 32;

Challenges and Difficulties of Workforce Planning, 37; International

Perspectives, 38; Workforce Supply Metrics, 40; Summary, 40; Discussion

Questions, 41; Experiential Exercise, 41

3 Globalization and the Healthcare Workforce ................................... 47

Leah E. Masselink

Learning Objectives, 47; Introduction, 47; History and Current

Trends, 48; Causes of International Migration, 50; Sending

Country/Region Trends, 50; Consequences for Receiving

Countries, 53; Issues for Managers, 58; The Future of International

Health Workforce Migration, 64; Summary, 65; Discussion

Questions, 66; Experiential Exercise, 66

vii

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4 Healthcare Professionals.................................................................. 71

Kenneth R. White, PhD, FACHE; Dolores G. Clement, DrPH,

FACHE; and Kristie G. Stover, PhD

Learning Objectives, 71; Introduction, 71; Professionalization, 72;

Healthcare Professionals, 74; Considerations for Human Resources

Management, 86; Changing Nature of the Health Professions, 88;

Summary, 94; Discussion Questions, 94; Experiential Exercise, 95

5 The Legal Environment of Human Resources Management ............ 99

Beverly L. Rubin, JD, and Bruce J. Fried, PhD

Learning Objectives, 99; Introduction, 100; Employment Laws, 102;

Employment Discrimination, 104; Equal Employment Opportunity

Legislation, 106; Implementing EEO Principles, 114; Employment-at￾Will Principle and Its Exceptions, 128; Termination Procedures, 132;

Grievance Procedures, 135; Other Employment Issues, 136;

Summary, 137; Discussion Questions, 138; Experiential Exercises, 139

6 Workforce Diversity ...................................................................... 145

Rupert M. Evans, Sr., DHA, FACHE

Learning Objectives, 145; Introduction, 145; A Definition of

Diversity, 146; The Business Case for Diversity, 148; Diversity in Healthcare

Leadership: Two Major Studies, 151; The Impact of Diversity on Care

Delivery, 155; Components of an Effective Diversity Program, 157;

Summary, 159; Discussion Questions, 159; Experiential Exercise, 160

7 Job Analysis and Job Design.......................................................... 163

Myron D. Fottler, PhD

Learning Objectives, 163; Introduction, 163; Definitions, 164; The Job

Analysis Process, 165; Job Design, 178; Specialization in Healthcare, 178;

Summary, 184; Discussion Questions, 185; Experiential Exercises, 186;

Appendix A, 189

8 Recruitment, Selection, and Retention .......................................... 197

Bruce J. Fried, PhD, and Michael Gates, PhD

Learning Objectives, 197; Introduction, 197; Recruitment, 198;

Selection, 210; Turnover and Retention, 224; Summary, 229; Discussion

Questions, 229; Experiential Exercises, 230

9 Organizational Development and Training.................................... 237

Rita Quinton, SPHR

Learning Objectives, 237; Introduction, 237; Designing Training for

Sustainability, 239; Training Methods, 244; Employee Socialization, 245;

Succession Planning, 247; Trends in Organizational Development and

viii Detailed Contents

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Training, 249; Summary, 251; Discussion Questions, 251; Experiential

Exercises, 252

10 Performance Management ............................................................ 257

Bruce J. Fried, PhD

Learning Objectives, 257; Introduction, 257; The Role of Performance

Management, 261; The Cynicism About Performance Management, 271;

Conducting Effective Performance Management Interviews, 274;

Summary, 277; Discussion Questions, 277; Experiential Exercise, 278

11 Compensation Practices, Planning, and Challenges........................ 281

Howard L. Smith, PhD; Bruce J. Fried, PhD;

Derek van Amerongen, MD; and John D. Laughlin

Learning Objectives, 281; Introduction, 281; The Strategic Role of

Compensation Policy, 283; Intrinsic Versus Extrinsic Rewards, 287;

Determining the Monetary Value of Jobs, 292; Variable

Compensation, 297; Special Considerations for Compensating

Physicians, 303; Future Directions for Physician Compensation, 311;

Summary, 314; Discussion Questions, 314; Experiential Exercises, 315

12 Employee Benefits ........................................................................ 319

Dolores G. Clement, DrPH, FACHE; Maria A. Curran;

and Sharon L. Jahn, CEBS, CMS

Learning Objectives, 319; Introduction, 319; Brief Historical

Background, 321; Major Federal Legislation, 324; Overview of

Employment Benefits, 325; Designing a Benefits Plan, 341;

Summary, 344; Discussion Questions, 345; Experiential Exercise, 345

13 Health Safety and Preparedness..................................................... 347

William Gentry

Learning Objectives, 347; Introduction, 347; Hazard Analysis for a

Healthy and Safe Workplace, 348; Preparedness for Workplace

Disasters, 350; Safety and Preparedness Requirements, 353; Measuring

Workplace Safety and Preparedness, 354; Summary, 355; Discussion

Questions, 356; Experiential Exercise, 356

14 Managing with Organized Labor .................................................. 359

Donna Malvey, PhD

Learning Objectives, 359; Introduction, 359; Overview of

Unionization, 361; The Labor Relations Process, 362; A Review

of Legislative and Judicial Rulings, 372; Developments in Organizing

Healthcare Workers, 378; Management Guidelines, 383; Summary, 384;

Discussion Questions, 385; Experiential Exercises, 385

Detailed Contents ix

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15 Nurse Workload, Staffing, and Measurement................................. 393

Cheryl B. Jones, PhD, RN, and George H. Pink, PhD

Learning Objectives, 393; Introduction, 393; Types of Nursing

Personnel, 394; Definitions and Measurement, 396; Measurement of

Nurse Staffing, 401; Key Issues in Managing Nurse Staffing and

Workload, 406; Future Directions and Challenges, 417; Summary, 419;

Discussion Questions, 420; Experiential Exercises, 420; Appendix B, 428

16 Human Resources Budgeting and Employee Productivity ............. 433

Eileen F. Hamby, DBA

Learning Objectives, 433; Introduction, 433; Linking Budgeting with

Human Resources Management, 434; Linking Human Resources

Budgeting to Employee Productivity, 439; Other HR Practices Related

to the Labor Budget, 442; Using Labor Budget Metrics for

Measurement, 445; Mergers, Acquisitions, and Strategic Alliances, 447;

Summary, 447; Discussion Questions, 448; Experiential Exercises, 448

17 Creating Customer-Focused Healthcare Organizations

Through Human Resources .......................................................... 451

Myron D. Fottler, PhD, and Robert C. Ford, PhD

Learning Objectives, 451; Introduction, 451; An Emerging Customer

Focus, 453; The New Paradigm, 459; Summary, 473; Discussion

Questions, 474; Experiential Exercises, 474

18 Present Trends that Affect the Future of Human Resources

Management and the Healthcare Workforce.................................. 479

Bruce J. Fried, PhD, and Myron D. Fottler, PhD

Learning Objectives, 479; Introduction, 479; Ten Healthcare

Trends, 479; SHRM’s Survey Results, 485; Six Overall Challenges

in Human Resources Management, 488; Summary, 497; Discussion

Questions, 497; Experiential Exercise, 498

Integrative Cases

1 Reduction in Force at Sierra Veterans Affairs Medical Center......... 501

Sarah Huth and Sara Hofstetter

Background, 501; The RIF Order, 501; Process and Implementation, 504;

Unexpected News, 507; The Outcome, 508; Discussion Questions, 508

2 Management Challenges of a Customer Service Center ................. 511

Andy Garrard and Heather Grant

Background, 511; Imaging Customer Service Center, 511; The

Situation, 513; Initial ICSC Assessment, 515; Process Review, 517;

x Detailed Contents

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Personnel Review, 519; Information Technology Review, 521; The

Ultimatum, 521; Discussion Questions, 522

3 Performance Feedback Now and Then.......................................... 523

Lee Ellis, Dawn Morrow, and Adia Bradley

Introduction, 523; Background, 523; Current Situation, 525; Ms.

Kopalski’s Performance, 527; Discussion Questions, 528

Index................................................................................................... 529

About the Editors ............................................................................... 537

About the Contributors...................................................................... 538

Detailed Contents xi

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FOREWORD

uman resources management is one of the most dynamic and reward￾ing responsibilities in healthcare delivery. Because a healthcare organi￾zation cannot exist without the people who provide care, both directly

and indirectly, recruitment and retention of staff are critical. A healthcare organ￾ization can only be as competent and quality-focused as its employees, physi￾cians, leaders, and volunteers. To ensure the delivery of safe patient care, recruit￾ment and retention of a highly skilled and qualified workforce are essential and

must be a top priority.

Today’s healthcare organizations face many challenges, including sig￾nificant shortages of physicians; nurses; respiratory therapists; radiologic, car￾diovascular, and medical technologists; physical and occupational therapists;

physician assistants; and nurse practitioners. Making recruitment particularly

imperative is the fact that the population is aging and will be leaving the work￾force in large numbers; consequently, more healthcare services will be de￾manded in the years ahead. Never before has it been so important for health￾care leaders and managers to understand employee satisfiers.

“Workforce development” is a relatively new term that refers to the con￾tinuing education and training of employees for current, new, and/or changing

jobs. Such a program also aims to recruit and prepare students for the jobs of

the future. Healthcare organizations that do not have a strong, committed

workforce development program and/or a partnership with local high schools,

colleges, and universities will find themselves grossly understaffed in the com￾ing years. In addition, healthcare organizations must help the educational

institutions in their communities to solve problems such as limited classroom

capacity, inability to fill instructor vacancies, aging instructors, and long wait￾ing lists of qualified students for allied health and nursing programs.

For the first time ever, people from four different generations are work￾ing together. Traditionalists, baby boomers, generation Xers, and millennials

have differing work needs and expectations, challenging those who manage

them to find appropriate ways to motivate, satisfy, reward, and recognize each

group. The core values of one generation are also different from the other, so

no longer will a one-size-fits-all approach to employee programs suffice. One

theme that is common among members of these generations is the pursuit of

xiii

H

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work–life balance. No longer are employees interested in devoting their lives

to their jobs. Time for friends, family, and self has become a significant worker

value, making flexible work scheduling a must in contemporary organizations.

Workforce diversity and inclusion is another area of great challenge.

There is fierce competition for talent with diverse backgrounds, and putting

together a workforce that is diverse in culture, knowledge, perspective, and

style is not easy. Many advances toward greater inclusion have been made, but

major distances still need to be covered before the healthcare workforce can

truly reflect the U.S. society as a whole.

Competitive compensation and benefit programs are especially essen￾tial in this tight labor market. Of even greater importance is ensuring that

these programs motivate or provide an incentive to employees to achieve op￾timal performance. Performance management systems must be designed to

clearly articulate expectations and to appropriately reward performance.

A recent addition to human resources challenges is disaster prepared￾ness, and nowhere is this more important than in a healthcare organization.

In the midst of a disaster, healthcare providers must be able to continue, and

even expand, operations and services for their communities. At the same time,

they must recognize and respond to the personal needs of their own staff,

many of whom will be required to work during catastrophic events. Success￾ful healthcare organizations are ready, willing, and able to respond when un￾foreseen circumstances occur, and they will occur.

Healthcare organizations have tremendous opportunities to recruit, re￾tain, develop, and coach their workforce when reimbursement and other fi￾nancial pressures are high. That is the time to be strategic and to make solid

cost–benefit human resources decisions that support the organization’s finan￾cial goals as well as the long-term ability to staff with highly qualified individ￾uals. Although getting caught up in day-to-day problem solving is easy, quick

fixes cannot address long-term issues.

Human resources management and strategic planning should mirror

the strategic priorities and goals of the organization. Positive outcomes in hu￾man resources metrics are essential to financial health, patient satisfaction, and

the ability to achieve goals each year.

This book provides a comprehensive discussion of these and other top￾ics related to strategic human resources management. Whether you work in

human resources specifically or management in general, you must understand

and appreciate the connection between a positive workforce culture and out￾standing patient care delivery. Human resources issues are complex, and the

answers are not simple. Therefore, human resources thinking, planning, and

execution must be strategic.

William K. Atkinson, PhD,

president and chief executive officer, WakeMed Health & Hospitals,

Raleigh, North Carolina

xiv Foreword

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