Impact of Quality HR on Healthcare Performance

A comprehensive research based on secondary source of data
IMAPCT OF QUALITY HUMAN
RESOURCE IN HEALTH CARE
PROVIDING INDUSTRIES /
ORGTANIZATION
Submitted to:
Dr. Abuzar Wajidi (PhD),
For the partial fulfillment of
Master in Administrative Sciences (MAS)
Degree Program (2014-15)
Author:
Muhammad Asif Khan s/o Abul Hasan Taj
MAS-Final (After PGDPA)
muhammadasifkhan55@gmail.com
Enrollment # MAS/PAD/EP-24672/2013
Exam Seat # 1433020

My all efforts dedicated to my family

Research Report: Impact of Quality Human Resource In Health Care Providing Organizations
About Author
Author of this research report is the student of Mater of Administrative Sciences (MAS-Final after
PGDPA), Department of Public Administration, University of Karachi, with an aim to complete his
higher education (PhD) in the field of management, administrative & social sciences. He would like to
conduct empirical research in the relevant subjects, to explore the new avenues in order to contribute
his part for the improvement of the socio-economic condition of the society and to maximize the
organizations' efficiency serving to the society either public or private.
This research effort is in consistence with his past research work of PGDPA, in which he tried to
analyze the GDP impact on country's economy and try to explore other economic indicators to identify
the economic wellbeing of the country. Life Expectancy at Birth is one of the indicator other then the
GDP which determines the economic efficiency of a country. This said economic indicator directly
belongs to the research topic and indicates the efficiency and effectiveness of the health system of the
country as well.
This research study emphasize to analyze the importance of Human Resource (health-care workforce)
in a Health care system of the country. Mostly the countries Health System comprises on the health
care organizations owned and run by the government, operate by private entities and working under
NGO.
It has been known by all of us that the country with higher GDP will expand more on health-care of the
public as compare to the country with low GDP. The effectiveness of the health system does not
belong only to the capital expenditures including the building & medical equipments, it also involved
the human capital including practitioners, medical staff and paramedical staff. Most of the health-care
systems they are still unable to utilize this resource in a highly effective manner.
Author: Muhammad Asif Khan (MAS-Final after PGDPA) 3

Acknowledgment
This research effort has been made to fulfill the degree requirement of the Mater in Administrative
Sciences (MAS) degree program (2014-15). On the completion of this report I would like to
acknowledge all of them, who have continually supported me to through the MAS studies.
Special thank goes to the research supervisor upon his continuous guidance, his supervision will enable
me to complete this research effort. I would also like to thank the entire regular and the visiting faculty
members of the Department of Public Administration upon their academic guidance and support.
I hope this research and academic knowledge will help me to attain excellence in my future
professional career.

Preliminary
The aim to choose this research topic was to conduct an empirical research to find out the relationship
between the health-care organizations and two variables human resource & new technological
innovation in medical / health sciences and to identify the that which one is the most contributor in the
health-care providing organizations performance. But due to unavailability of financial resources and
due to time constraint, it was not possible.
It is believed that this research work provides concrete information regarding the topic and provides a
sound knowledge to conduct the empirical research in order to identify that either human resource is
the real contributor in the health-care organizations' performance or the credit goes to technological
innovation in this regard.
In this research report the relationship has been discussed with the help of secondary source of data but
an empirical research will provide more authentic information regarding the relationship of the
variables. Because one of the statements in the past researches create a confusion, that the equipment
without practitioner is useless or the practitioners are useless without equipments. But recent research
reveals that some of the new technological equipments does not required any practitioner or expert, a
layman can also operate them or there is no need of human to operate them. These equipments are
completely capable to diagnose specific diseases at their own with the help of patient inputs.

Table of Contents
• Abstract
• Background of study
• Methodology Applied
• Introduction
• Human Resource Management Definitions
• Human Resource Management Functions
• Key Issues pertaining to the Human Resources in to Health Care
• Literature review regarding the performance measurement in Health-Care
◦ History
◦ Selecting the right measures
◦ Health-care Performance Indicators (KPIs)
• Literature review & analysis regarding the new technological impact on
• Human Resource performance related to the Health-care providing Industries
/ organizations.
◦ The impact of human resources on health-care providing organizations.
◦ The management of change New Technology
◦ The impact of new technology
◦ The socio-technical systems concept
• Literature review & analysis regarding HRM practices & impact of
new technological innovation on human resource performance
specifically related to the Health-care providing Industries / organizations.
◦ The role and effectiveness of human resource management
◦ The impact of human resource management (HRM) practices on
quality of health care service.
◦ The factors that affect the performance of individuals working
in health-care organizations.
• Own observation regarding research topic
• Research findings
• Conclusion
• Recommendations
• Appendix-I
• Appendix-II
• Appendix-III

Research Topic
Impact of Quality Human Resource In Health-Care Providing Industries / Organizations.
Purpose Of the Study
Now a days the Human Resource has been considered most vital resource of any organization,
in relation with the health-care providing organizations it becomes more important due to the
sensitivity of the work, because a minor negligence will lead to the human casualty.
Most of the studies related to health-care providing organizations provide us the informations that the
customers (patients) of the health-care providing organizations are not satisfied with the performance
of these organizations because of human resource (employees) performance or due to the unavailability
of modern medical equipments in these organizations.
The sensitivity of the work and the importance of the health-care providing organizations and
the low performance of the human resource (employees) reported by different sources in these
organizations has brought me to identify the causes and reasons that directly or indirectly affect the
human resource (employees) performance.
The basic purpose of the research study is to analyze and investigate, how and up to what
extent, these two variables, human resource and new technology, are affecting the overall performance
of these organizations and to find out that which one is the least or most contributor in the overall
performance of the health-care providing industries / organizations.
Statement of Problem
The performance of health-care providing organizations are depend upon technological
innovations in the field of Medical / Health Sciences rather than human resource (employees)
capabilities.
Significance of Studies
This research study aims to provide a clear understanding regarding the human input
(employees) and the physical input (new technology), their importance and the impact on health-care
providing organizations' performance.
Objectives
• To evaluate and analyze the impact of quality human resource on health-care providing
organizations.
• The ultimate objective is to enhance the credibility, performance and efficiency of the health-
care providing organizations / industries.
• Another objective is to identify the ways to maximize the human contributions in the overall
performance of the health-care providing organizations.
Conceptual Framework
It is critical to provide clear distinction between these two important inputs, those have direct
influence on the health-care providing organizations credibility and performance, but the clear
relationship can be described among them.

Hypotheses
Hypothesis: The capability of human resource (employees) has a direct
impact on the services rendered / provided by the health-care
providing industries / organizations.
Alternate Hypothesis: The capability of the human resource (employees) has minimal
or no impact on the services rendered / provided by the health-
care providing industries / organizations as compare to the new
technology or innovations related to the health / medical
sciences.
Abstract
The management of human resources in health-care institution is essential to enable the delivery
of efficient and effective medical services and to achieve patient satisfaction. This study aims to
investigate how the impact of new technological innovation in health / medical sciences and patient
care put an effect on the performance of the health-care providing institutions and to analyze how these
innovations are putting an impact on performance of the health-care related human resource
(employees) and that up to what extent despite of these rapid technological changes, the practicing
human resources management is enable to increase the human resource performance, quality of health-
care service and help them out to achieve patients’ satisfaction. The descriptive methodology was
applied to demonstrate and analyze the previous literatures. The study shows that effective human
resources management has a strong impact on health-care quality and improving the performance of
hospital’s staff. The study suggests before starting performance development process as well as
continuous development and training of staff performance, there is a need to measure the performance
of the managers of human resources department in the health-care organizations.
The purpose of this research study is to gain a deeper understanding of the impact of human
resources (employees) on health sector reform, the importance of HRM in all aspects of health-care
organizations, the positive impact of increased job autonomy on employee outcomes, and the dynamics
of employee engagement in health-care. The literature on the link between HR system perceptions and
civility towards patients, specific roles for HRM in building shared values that can serve both the care
needs of patients and the business needs of health organizations, the complex linkages between
employees' perceptions of human resources systems and hospital performance, and the mechanisms
through which HRM can enhance patient satisfaction in health care organizations is relevant to this
discussion.
Background of the study
Most of literatures have showed the importance of human resources management in developing
the quality of health- care service and found that the incentives and providing motivation to work and
follow the system of bonuses by competencies improve the performance of individuals working in
health-care providing organizations and can make a significant difference between health organization
with good performance measurement and appraisal of work force performance, implementation of
reward systems for employees, professional development of workers, and maintenance of work force.
The lack of studies that cover the topic of HRM on the quality of health-care could affect the

development strategy of health-care providing organizations and without proper studies in this field
may contribute to weakening the overall performance of health-care providing organizations.
Therefore, this study attempt to analyze the main articles and literatures that discussed the role of HRM
in the health sector and attempt to find the common points of previous studies with regard to HRM. In
addition to that this paper investigates the impact of HRM practicing on the quality of health service as
referred by previous literatures.
One of the main goals of Human Resource Management (HRM) is to increase the performance
of organizations. However, few studies have explicitly addressed the multidimensional character of
performance and linked HR practices to various outcome dimensions. This study therefore adds to the
literature by relating HR practices to three outcome dimensions:
• Financial Outcomes,
• Organizational Outcomes, and
• Human Resource (Employees) Outcomes.
Furthermore, we will analyze how HR practices influence these outcome dimensions, focusing
on the mediating role of job satisfaction.
This research also addresses the health care system from a country's perspective including the
health-care providing organizations owned & run by the state, privately owned and operate under the
NGO's, the importance of human resources management (HRM) in improving overall patient health
outcomes and delivery of health care services.
Within many health care systems worldwide, increased attention is being focused on human
resources management (HRM). Specifically, human resources are one of three principle health system
inputs, with the other two major inputs being physical capital and consumables. Human resources
(employees), when pertaining to health care, can be defined as the different kinds of clinical and non-
clinical staff responsible for public and individual health intervention. As arguably the most important
of the health system inputs, the performance and the benefits the system can deliver depend largely
upon the knowledge, skills and motivation of those individuals responsible for delivering health
services. As well as the balance between the human and physical resources (new technological
equipments), it is also essential to maintain an appropriate mix between the different types of health
promoters and caregivers to ensure the system's success. Due to their obvious and important
differences, it is imperative that human capital is handled and managed very differently from physical
capital. The relationship between human resources and health care is very complex, and it merits
further empirical examination and study.
Both the number and cost of health care consumables (drugs, prostheses and disposable
equipment) are rising astronomically, which in turn can drastically increase the costs of health care. In
publicly-funded systems, expenditures in this area can affect the ability to hire and sustain effective
practitioners. In both government-funded and employer-paid systems, HRM practices must be
developed in order to find the appropriate balance of workforce supply and the ability of those
practitioners to practice effectively and efficiently. A practitioner without adequate tools is as inefficient
as having the tools without the practitioner.
Methodology Applied
The descriptive methodology has been applied to analyze the data and the data for this research
study has been collected & explored through secondary sources, which includes following:

• Literature Review
• Extraction of relevant material from the Books related to the health care services
• Past Research Analysis related to the same topic
• Information gathered from medical science journals.
Introduction
Most of literatures have described the importance of human resources management in
developing the quality of health-care service through effectively implementing the HR practices within
the health-care providing organizations and can make a significant difference between health
organizations with good performance and health-care organization performs under or below average.
Human Resources Management (HRM) is a vital management task in the field of health-care and other
services sectors, where the customer facing challenges because of staff’s performance who have the
experience and the quality of performance and that human resource management plays an active and
vital role in the success of the health-care providing organizations. Human resource management is
concerned with the development of both individuals and the organization in which they operate. HRM,
then, is engaged not only in securing and developing the talents of individual workers, but also in
implementing programs that enhance communication and cooperation between those individual
workers in order to nurture organizational development. The primary responsibilities associated with
human resource management include: job analysis and staffing, organization and utilization of work
force, measurement and appraisal of work force performance, implementation of reward systems
for employees, professional development of workers, and maintenance of work force. The
maintenance of workforce includes not only the training of the employees to perform their current job
effectively but also develop them for tomorrow to take the responsibility according to the new situation
that mostly arises due to the introduction of new technology in the health-care related services.
Human Resource Management (HRM) Definitions
Human resource management (HRM) is the management of an organization's workforce, or
human resources. It is responsible for the attraction, selection, training, assessment, and rewarding of
employees, while also overseeing organizational leadership and culture and ensuring compliance with
employment and labor laws (Ulrich, 1996; O'Brien, 2009; Patrick, 2011).
Naturally, the definition of human resource management would be incomplete without further
explaining what the terms of ‘human resources’ and ‘management’. First and foremost, people in work
organizations, endowed with a range of abilities, talents and attitudes, influence productivity, quality
and profitability. People set overall strategies and goals, design work systems, produce goods and
services, monitor quality, allocate financial resources, and market the products and services.
Individuals, therefore, become ‘human resources’ by virtue of the roles they assume in the work
organization. Employment roles are defined and described in a manner designed to maximize particular
employees’ contributions to achieving organizational objectives (Zaria, 2007), these objectives mostly
includes the increase of profitability, to enhance quality of work, to increase productivity and provide
value to the customer and satisfied their needs. A common definition of HRM remains an enigma and,
in many respects, what HRM is purported to represent has not moved beyond some key principles laid
down in the 1980s (Fombrun et al., 1984; Hendry and Pettigrew, 1986; Guest, 1987; Storey, 1989;
Armstrong, 2000).
“Human Resources Management is defined as a system of activities and strategies that focus on

successful management of employees and working staff inside the organization to achieve the goals of
the organizations (Bayars and Rue, 2006).”
Bratton and Gold (1999:11) interpreted the HRM as “That part of the management process that
specializes in the management of people in work organizations. HRM emphasizes that employees are
critical to achieving sustainable competitive advantage, that human resources practices need to be
integrated with the corporate strategy, and that human resource specialists help organizational
controllers to meet both efficiency and equity objectives.” Some scholars claim that HRM can lead to
specifically measurable business outcomes (Huselid, 1995).
Equally, HRM has its critics (Sisson, 1994; Legge, 1995) both of whom view HRM as a
symbolic excuse to enhance managerial legitimacy where the management of individuals has been
intensified within an enterprise culture (Keenoy and Anthony, 1992).
Human Resource Management Functions (HRM) Functions
Human Resource Management (HRM) includes all the functional area of management such as
production management, financial management, and marketing management. That is every manager
from top to bottom, working in any department has to perform the personnel functions. HRM functions
(also called processes) are carried out by the HR managers to fulfill the goals and objectives of the
organization. As illustrated in Figure, they perform two sets of functions, namely managerial functions
and operative functions.
Managerial Functions:
The managerial functions are the basic functions performed by the HR managers in their
capacity as managers or heads of their own departments. In fact, all managers, irrespective of their
departments, perform these functions.
Operative Functions:
The operative functions, on the other hand, are specialized activities performed exclusively by
the HR managers, usually for all the departments. We shall first discuss the managerial functions.
Functions of HRM Mathis (2006) states that the organization should use human resource

management input in the following organizational functions:
i. Establishment of a legal and ethical management system
ii. Job analysis and job design
iii. Recruitment and selection
iv. Health-care career opportunities
v. Distribution of employee benefits
vi. Employee motivation
vii. Negotiations with organized labor
viii. Employee terminations
ix. Determination of emerging and future trends in health care
x. Strategic planning
While, Mc Kinnies (2012) concluded that HRM comprises five broad functions, which are:
i. Resourcing: Activities include HR planning, talent management, succession planning and
ending the employment contract (including managing retirement and redundancy).
ii. Performance: Managing individual and team performance and the contribution of workers to
the achievement of organizational goals, for example, through goal-setting and appraisals.
iii. Reward system: Designing and implementing reward systems covering individual and
collective, financial and non-financial rewards, including pay structures, perks and pensions.
iv. Learning and Development: Identifying individual, team and organizational development
requirements and designing, implementing and evaluating training and development
interventions.
v. Employment relations: Managing employees, communication, handling union management
relations, managing employee welfare and handling employee grievance and discipline.
Defining Human Resources in Health Care
Within many health care systems worldwide, increased attention is being focused on human
resources management (HRM). Specifically, human resources are one of three principle health system
inputs, with the other two major inputs being physical capital and consumables. Figure depicts the
relationship between health system inputs, budget elements and expenditure categories. Relationship
between health system inputs, budget elements and expenditure categories.
Figure identifies three principal health system inputs:
• Human Resources (All personnel related to the Health care organizations)
• Physical Resources (All required physical resources including the technological equipments)
• Consumables (Including drugs & disposable equipments)
It also shows the financial resources to purchase those inputs are of both a capital investment
and a recurrent character. As in other industries, investment decision in health are critical because they
are generally irreversible, they comment large amount of money to places and activities that are
difficult, and impossible, to cancel, close or scale down.
Human resources, when pertaining to health care, can be defined as the different kinds of

clinical and non-clinical staff responsible for public and individual health intervention. As arguably the
most important of the health system inputs, the performance and the benefits the system can deliver
depend largely upon the knowledge, skills and motivation of those individuals responsible for
delivering health services.
Source: World Health Report 2000 Figure 4.1 pg.75.
As well as the balance between the human and physical resources (technology), it is also essential to
maintain an appropriate mix between the different types of health promoters and caregivers to ensure
the system's success. Due to their obvious and important differences, it is imperative that human capital
is handled and managed very differently from physical capital. Both the number and cost of health care
consumables (drugs, prostheses and disposable equipment) are rising astronomically, which in turn can
drastically increase the costs of health care. In publicly-funded systems, expenditures in this area can
affect the ability to hire and sustain effective practitioners. In both government-funded and employer-
paid systems, HRM practices must be developed in order to find the appropriate balance of workforce
supply and the ability of those practitioners to practice effectively and efficiently. A practitioner without
adequate tools is as inefficient as having the tools without the practitioner.
Key Issues Pertaining to Human Resources in Health Care

When examining health care systems, many general human resources issues and as well as
questions have been arisen. Some of the issues include the size, composition and distribution of the
health care workforce, workforce training issues, the migration of health workers, and the level of
economic development in a particular country and socio-demographic, geographical and cultural
factors.
The variation of size, distribution and composition within a county's health care workforce is of
great concern. For example, the number of health workers available in a country is a key indicator of
that country's capacity to provide delivery and interventions. Factors to consider when determining the
demand for health services in a particular country include cultural characteristics, socio-demographic
characteristics and economic factors. Workforce training is another important issue. It is essential that
human resources personnel consider the composition of the health workforce in terms of both skill
categories and training levels. New options for the education and in-service training of health care
workers are required to ensure that the workforce is aware of and prepared to meet a particular
country's present and future needs. A properly trained and competent workforce is essential to any
successful health care system.
The migration of health care workers is an issue that arises when examining health care
systems. Research suggests that the movement of health care professionals closely follows the
migration pattern of all professionals in that the internal movement of the workforce to urban areas is
common to all countries. Workforce mobility can create additional imbalances that require better
workforce planning, attention to issues of pay and other rewards and improved overall management of
the workforce. In addition to salary incentives, developing countries use other strategies such as
housing, infrastructure and opportunities for job rotation to recruit and retain health professionals, since
many health workers in developing countries are underpaid, poorly motivated and very dissatisfied.
The migration of health workers is an important human resources issue that must be carefully measured
and monitored.
Another issue that arises when examining global health care systems is a country's level of
economic development. There is evidence of a significant positive correlation between the level of
economic development in a country and its number of human resources for health. Countries with
higher gross domestic product (GDP) per capita spend more on health care than countries with lower
GDP and they tend to have larger health workforces. This is an important factor to consider when
examining and attempting implementing solutions to problems in health care systems in developing
countries.
Socio-demographic elements such as age distribution of the population also play a key role in a
health care system. An aging population leads to an increase in demand for health services and health
personnel. An aging population within the health care system itself also has important implications:
additional training of younger workers will be required to fill the positions of the large number of
health care workers that will be retiring.

It is also essential that cultural and geographical factors be considered when examining global
health care systems. Geographical factors such as climate or topography influence the ability to deliver
health services; the cultural and political values of a particular nation can also affect the demand and
supply of human resources for health. The above are just some of the many issues that must be
addressed when examining health care system and human resource.
How Does Human Resource Management Affect the Success of Health Care Organizations?
Proactive HR management is critical to a health care enterprise's success:
Health care organizations have an immediate and direct impact on their patients’ quality of life.
The human resources function plays a critical role in how the organization functions and how well its
patients are served. In addition, whether a facility is for profit or not for profit or governmental owned,
a good proactive HR department can have a significant positive impact on resource allocation issues.
Employment Actions:
The job of recruiting, selecting, and terminating employees is a core responsibility of any HR
department. The face-to-face interview is a standard component of the selection process, and the nature
of the work in health care facilities often dictates that additional testing be performed to assess
candidates’ competency and integrity. This process must be fair and objective to assure the best results
and shield the organization from legal repercussions. Good HR practices, especially clear
communication of the organization’s expectations, can reduce the need for disciplinary terminations.
Compensation and Benefits:
Costs in the health care industry continue to rise, in large part because of the cost of durable
goods, medications, and compliance issues, but also because of compensation. Developing an equitable
compensation program that is competitive with other providers is a constant challenge. Employee
benefits represent a key component of compensation, and many organizations offer benefits that are
relatively low-cost but serve as a valuable recruitment or retention tool.
Development and Training:
HR management includes providing employees with ongoing training to keep pace with ever-
evolving legal, regulatory and technological landscapes, as well as to improve the quality of patient
care and achieve cost-cutting goals. While ongoing training helps to meet organizational objectives, it
also is a significant factor in employee motivation and morale.
Succession Planning:
Clearly defined plans to deal with vacancies in key positions help avoid financial losses and
other problems associated with a lack of leadership, as well as the potential for a domino effect if other
top leaders following suit. While succession management is generally the responsibility of boards of
directors, it’s often preferable for HR to develop and maintain succession plans and let boards review
and sign off on them.
Knowledge and Training of HR Managers:
In addition to a high degree of competence in human resource management, a health care
organization's HR manager should be thoroughly grounded in the federal and state (provincial) laws
that affect the industry. The nature of health care is so different from most other enterprises in terms of

products and services that HR staff members ideally should have experience in other areas, including
marketing, finance and accounting, and health care service operations. Such cross-functional
experience enhances credibility and gives the department a much broader perspective in the
development of policy and consultation with colleagues.
Ethics:
Ethics is a complex issue in the health care field, and it falls to HR to ensure that the
organization has a code of ethics that is well-understood by all staff members. The code of ethics
should include a clear anti-bullying policy. In those organizations that also perform research, a function
of HR management is to establish institutional review board training in ethics guidelines.
Employee Morale:
Morale can be a major factor in how employees perform their duties, and this in turn has a
significant impact on patients’ lives. A quality work environment, which includes worker-oriented
initiatives like training and career development programs, work-life balance, transparent management,
and employee empowerment programs, provides employees a strong incentive to perform well.
Unions / Employees Associations:
When health care professionals form unions / associations, they often do so for reasons other
than pay. Nurses have formed unions / associations at numerous facilities due to concerns that cutbacks
would have an adverse impact on patient care. Although the specific issues have been addressed, the
unions / associations remain intact. HR management at a non-union health care facility must identify
the issues of greatest concern to union-eligible staff and address them pro actively to forestall union
organizing efforts.
What is Performance?
Just what is performance anyway? By clearly understanding this, your life as a manager will be
so much easier. “Performance is simply the production of valid results.” There may be many other
answers to this question, but it all boils down to: can the employee produce the results expected of
them? It can recognize this via certain key performance indicators.
Organizations try to manage the performance of each employee, team and process and even of
the organization itself. We're used to thinking of ongoing performance management for employees, for
example, setting goals, monitoring an employee's achievement of those goals, sharing feedback with
the employee, evaluating the employee's performance, rewarding the employee's performance or firing
the employee. However, performance management applies to teams and organizations, as well.
Organizational performance involves the recurring activities to establish organizational goals,
monitor progress toward the goals, and make adjustments to achieve those goals more effectively and
efficiently. Those recurring activities are much of what leaders and managers inherently do in their
organizations -- some of them do it far better than others.
HRM and Organizational Performance:
One of the main goals of Human Resource Management (HRM) is to increase the performance
of organizations. Pfeffer emphasized the importance of gaining competitive advantage through
employees and noted the importance of several Human Resource (HR) practices necessary to obtain
this advantage. Huselid stressed the use of an integrated and coherent ‘bundle’ of mutually reinforcing

HR practices over separate ones. Notwithstanding the substantial volume of research on the link
between HRM and performance, the exact nature of this relationship within the health care sector
remains unclear. This can be considered problematic, as studying HRM in the health care sector and its
effect on performance has both practical and academic relevance.
However, performance is not a concept that can be easily defined and conceptualized.
According to Guest, it is better to use the concept of ‘outcomes’ instead of performance. One can then
distinguish three different outcomes:
1) Financial outcomes (profits, net margin, market share),
2) Organizational outcomes (productivity, quality, efficiency, client satisfaction) and
3) HR outcomes (employees’ attitudes and behavior).
Dyer and Reeves noted that HR and organizational outcomes are more proximal outcomes, for
example, closely linked to the HR practices adopted by an organization, whereas financial outcomes
are more distant, as they are less likely to be directly affected by HR practices. Moreover, specific HR
outcomes are often used as intermediate outcomes that bridge the ‘black box’ between HR practices
and financial or organizational outcomes.
This multidimensional perspective of outcomes seems especially relevant for health care
organizations, as financial outcomes are certainly not the only or even primary objective.
Notwithstanding the large amount of research on HRM in health care, few studies have explicitly
addressed the multidimensional character of performance and linked HR practices to various outcome
dimensions. In this article, we therefore add to the literature by examining several outcome dimensions
of health care organizations. To analyze this we will address is as follows:
To what extent are HR practices in health care organizations related to multiple outcome
dimensions?
HRM and outcomes:
Studying the relationship between HRM and performance outcomes is an important theme. In
an overview article, Boselie et al. identified the main research issues within the field. These primarily
concern the conceptualization and measurement of the central concepts and several theoretical issues
about their relationship. These issues remain important in the contemporary debate. The concept of
performance has been discussed above. HRM is commonly defined as a set of employee management
activities, but there is no consensus regarding which HR practices should be included in a
‘comprehensive HRM checklist’. Even more important is the question as to whether one should
examine discrete HR practices or employ a systematic HRM approach. According to the systems
approach, one should regard interrelated HR practices that affect performance as a ‘synergistic whole’.
In this study we follow the systems approach, as this was proven valuable in earlier studies.
In addition to conceptualization, there are also important measurement issues concerning HRM.
Does one measure HR policies at the company level (for instance by asking HR managers) or at the
individual level (practices as experienced by employees)? Nishii and Wright refined this issue by
distinguishing among intended, actual and perceived HRM. The notion behind this is that there may be
differences within organizations among the HR policy designed by the HR department (intended
HRM), the HR practices implemented by line managers (actual HRM) and the perceptions of
employees (perceived HRM). We focus on perceived HRM, following the Thomas Theorem: if men

define situations as real, they are real in their consequences. Thus, if employees believe that specific
HR practices are employed in the organization, they will act according to that belief.
An important theoretical issue that has dominated the field in the last decade concerns the
precise nature of the mechanism linking HRM and performance outcomes. This issue is called the
‘black box’, i.e., the mediating link between HRM and performance. In recent years, many suggestions
have been made regarding the nature of this ‘black box’, but most scholars emphasize the perceptions
and experiences of employees as the main linking mechanism. HR practices forge a psychological
contract between employer and employee that in turn affects these perceptions and experiences. In this
article, job satisfaction is used as a mediating variable linking HRM to various outcomes.
In the last two decades, several studies on HRM and performance have been conducted in the
health care sector. In their review of health care studies, Harris et al concluded that HR practices are
often related to patient oriented performance outcomes. They also noted the importance of conducting
additional research on the ‘black box’ issue. Furthermore, many health care studies relate HRM to
organizational and HR related outcomes. However, studies focusing on financial outcomes - which
have been extensively addressed in the private sector HRM literature - seem rather scarce.
Its contribution concerns two elements discussed in the literature. First, we apply a
multidimensional performance perspective, and we will therefore consider three outcome dimensions:
financial, organizational and HR. This is innovative because although many health care studies have
analyzed care - an organizational outcome - and HR outcomes, financial indicators have received much
less attention. Moreover, we are unaware of health care sector studies that have examined the
relationship between HRM and these three outcome dimensions simultaneously. The second
contribution concerns the ‘black box’ issue. Many studies use employee attitudes as an outcome
variable. However, an important interpretation of the ‘black box’ implies that employee attitudes will
mediate the link between HRM and performance. Using job satisfaction as indicator of employee
attitudes.
Financial outcome:
The net margin is defined as the ratio of a firm’s net profits to its total revenues. It indicates
what share of income earned is translated into profit. It is stated as a percentage:
Net Margin = Net Profit / Total Revenues * 100
Organizational outcome:
The organizational outcome is measured by focusing on client satisfaction. Clients can be asked
about their satisfaction with the treatment they received.
HR outcome:
The HR outcome measure considered is absence due to sickness. Absence due to sickness can
be considered a key HR outcome as the decision of employees to be absent affects the available human
resources and is a critical success factor for the continuation of work processes within the organization.
For example, absenteeism due to sickness is calculated in percentages, using a standard formula
developed by Vernet. In brief: for every employee, each day he/she calls in sick is multiplied by the
part-time factor and disability factor pertaining to that day. These days are then summed and divided by
the total number of working days. Maternity leave is excluded. This is calculated for the organization
as a whole.
Another view to analyze the HR outcomes is the to evaluate the patient's feedback and
complains regarding the services rendered by the employees of the hospital.

LITERATURE REVIEW REGARDING PERFORMANCE MEASUREMENT IN HEALTH
CARE
Health care organizations should be able to quickly improve their performance measurement
systems by following some simple rules.
The changing nature of today's health care organizations, including pressure to reduce costs,
improve the quality of care and meet stringent guidelines, has forced health care professionals to re-
examine how they evaluate their performance. While many health care organizations have long
recognized the need to look beyond financial measures when evaluating their performance, many still
struggle with what measures to select and how to use the results of those measures. Because a growing
number of health care professionals have readily adopted quality concepts, health care organizations
should be able to quickly improve their performance measurement systems by following a few simple
rules. (Kicab Castaeda-Mndez)
History:
A brief look at the evolution of quality in modern health care systems may help understand the
need to improve performance measurement.
More than 30 years ago, a physician named Avedis Donabedian proposed a model for assessing
health care quality based on structures, processes and outcomes. He defined structure as the
environment in which health care is provided, process as the method by which health care is provided,
and outcome as the consequence of the health care provided. As a result, process management is
limited, and often temporary, when the structure isn't also improved.
Two decades later health care adopted continuous quality improvement, which uses teams to
improve processes. According to Donabedian's model, processes are constrained by the structures in
which they operate. To date, few health care organizations have addressed these structures because
health care senior managers have replicated the behavior of most industrial senior managers by
focusing on the process level.
The popularity of Robert S. Kaplan and David P. Norton's balanced scorecard method--
popularized in their book The Balanced Scorecard (1996, Harvard Business School Press)--expanded
health care organization measures beyond financial analysis. They led to the development of measures
in four or more areas, including patient/customer, financial, internal operations and clinical. However,
in creating a balanced scorecard, many organizations failed to do the critical, difficult part: develop a
cause-and-effect relationship among these measures. Consequently, health care organizations typically
generate lists of strategies and goals as if they are independent of each other.
An additional impetus for health care organizations to adopt quality principles has been the
Joint Commission on Accreditation of Health-care Organizations' standards. While the JCAHO
standards have evolved during the past decade, swayed in part by the Baldrige criteria, health care
organizations have been slow to use this organizational assessment as a way to drive performance
improvement.
The demand from JCAHO for performance improvement drove many health care organizations
to learn as much as possible about continuous quality improvement. They began implementing ideas
such as: teams and facilitators with training on conflict resolution; problem solving with use of
statistical tools and standardized problem-solving procedures; data collection, including patient,
physician and employee satisfaction surveys; process management using clinical algorithms and
practice guidelines with training on pathway development; and planning using balanced scorecards and

performance measurements. With continuous quality improvement often delegated to levels below
senior management, organizations struggled to integrate and justify their many initiatives.
Selecting the right measures:
An effective measurement system integrates initiatives, aligns organizational units and
resources, and improves performance.
Paradoxically, most people select measures before they decide how to use them. While it makes
sense to discuss selection and use of measures in that order, the effective order in practice is the
reverse.
Organizations need performance measures in three areas:
• To lead the entire organization in a particular direction.
• To manage the resources needed to travel in this direction.
• To operate the processes that makes the organization work.
Most organizations typically don't use leadership measures. However, many health care
organizations have struggled to move beyond their heavy emphasis on financial measures to include
leadership measures. With continuous quality improvement entrenched at the process level, these same
organizations struggle to better manage their resources because they don't consider the effects of
structures. Without an integration of clinical and financial measures, the same organizations will find it
nearly impossible to effectively operate the processes they are so keen on improving.
To overcome these barriers, organizations need measures for three purposes:
Strategic--to drive strategies into action and change the organizational culture
Diagnostic--to evaluate the effectiveness of these actions and the extent of change
Operational--to improve continuously
Senior managers are responsible for ensuring that measures exist for these three purposes at the
organizational level. These measures can be placed in a cycle to reveal the three phases that
organizations with excellent performance go through (see Figure).
Unlike the usual approach to quality management, the strategic plan must direct teams focused on
processes. That plan must have goals with clear measures. Then systems (structural elements run by
senior management) and processes can be managed operationally according to continuous

improvement principles. Finally, results from system and process measures are used to diagnose the
effectiveness of the strategic plan's actions.
A strategic plan defines the specific cause-and-effect relationship through strategic measures.
Performance improvement is accomplished by using measures of processes and outcomes to operate
the processes.
Cause-and-effect relationships:
By understanding how measurements will be used, it becomes easier to understand what
measures to have. Measures are needed to test various cause-and-effect relationships at the
organizational, process and individual level. By their very existence, organizations create the basis for
interdependency among themselves (and partners) and their customers and employees (see Figure).
This interdependency weakens when one or more parties do not receive value or perceive the
value as insufficient. Organizations can strengthen this interdependency by integrating and aligning
structures, processes, results, quality and costs. Strengthening the interdependency requires measuring
the value each party needs.
Thus, health care organizations need to implement measures of business, patient and employee
value. While many do, these measures typically are not developed in a way that shows this
interdependency. They are not selected to show that a cause-and-effect relationship exists among the
three types of values.
During the universal fee-for-service period, hospitals and health care professionals didn't need
to worry about costs--as evidenced by the number of providers who until recently had charge and no-
cost accounting systems. With the combination of managed care penetration and public ire about health
care costs, health care organizations began focusing on costs and patient satisfaction. They now need to
add employee satisfaction and value to finish the value-added picture.
The second cause-and-effect relationship organizations must test is their strategic plan. Kaplan
and Norton define a strategy as a hypothesis about a cause-and- effect relationship. Therefore, a health
care strategy postulates how (cause) a specific level of clinical quality (effect) will be achieved. The
how must be explained by the specific level of organizational operations' effectiveness and efficiency.

Organizational operations include information systems, process management, human resource
management and the leadership system. These, too, must be arranged in a cause-and-effect relationship.
Each component of the strategic cause-and-effect relationship requires effectiveness and efficiency
measures.
The third critical cause-and-effect relationship is at the process level and explains how
processes affect specific outcomes. When managing (maintaining and improving performance) and
operating systems and processes, managers should continually increase their understanding of how
processes affect outcomes. That understanding comes from establishing relationships between process
measures and outcome measures. Too often, process improvement teams fail to establish that
relationship because they focus only on process measures or only on outcome measures. Their resulting
control system then becomes a barrier to effective continuous improvement. The organization has direct
control over the process measures and can more easily collect data on these measures. Data on outcome
measures is often more difficult and more costly to collect. Understanding the relationship between the
two measures helps reduce data-collection costs.
The three critical types of systems and process measures are quality, time and cost. Here again,
there is a cause-and-effect relationship that supports an interdependency. The common perspective is
that time; quality and cost are opposing forces. For example, a customer who wants a product or
service sooner is often told by the supplier that it will cost more and that quality is not assured.
However, by defining time as cycle time to complete a process and quality as defect-free, these forces
will support each other. Reducing cycle time increases the amount of data on a process and creates
more opportunities for a fixed period to improve quality.
Practical rules:
While health care professionals, especially physicians, tend to shy away from leading and
managing organizations as businesses, their scientific background gives them one advantage in
developing measures and analyzing the results. The approach described here is based on scientific
principles of generating hypotheses about cause-and-effect relationships and testing those hypotheses.
The leadership part focuses on developing the measures for all three critical cause-and-effect
relationships and analyzing the results. The management part focuses on deciding what action to take
based on the analysis and then allocating resources to carry out those actions.
Three actions to effectively lead are:
• Develop measures to build the value-added interdependency
• Manage activities, time and quality to strengthen this interdependency
• Analyze performance to determine the effectiveness of those measures and
management
At the strategic level, the first two cause-and-effect relationships are combined.
Rule 1:
Have your strategic cause-and-effect relationship explain how all three types of value will be
increased.
Your top-level measures are the three types of value. After developing the strategies, develop
specific action plans, allocate resources and communicate the plan. When you are done, you should be
able to answer the following questions:

• Are strategies operationally defined?
• Are the causal relationships among the strategies clear?
• Will all constituents receive strategic value?
• Does everyone know what the strategic direction is and remain committed to it?
• Does each person know how he or she can contribute to the organization's success?
Rule 2:
Measure time, quality and cost at the process level. Time and cost are relatively easy to define
and measure. The key to defining quality measures is in knowing the purpose of process steps and the
outcome. Defining these purposes operationally yields quality measures.
Rule 3:
Develop information systems after deciding on the measures. Because few people have the
luxury or inclination to develop information systems after having defined measures, they should always
have information systems that are flexible enough to include any measures developed later.
Rule 4:
Analyze results to test the three critical cause-effect relationships. The distinguishing feature of
excellent organizations is their analysis. They don't necessarily have greater ability; they are just
committed to analyzing the data to see what works and what doesn't. Then they take action.
Health-Care Key Performance Indicators (KPI) and Metrics
Following standards or indicators can be use to determine the performance or efficiency of the
health-care providing organizations / industries. These indicators and the prescribed standards are
helpful to gauge the overall performance of the organization after implementing a reform program
before introducing a reform program in any health-care providing organization.
Time to Health-Care Service:
The time to health service key performance indicator (KPI) measures health-care providing
organization's ability to provide incoming patients with health care service in a timely manner.
Prescribed standards to the different health-care services are as under:
• Arrival to Physician Target 60 minutes
• Arrival to Bed Target 20 minutes
• Arrival to Nurse Target 40 minutes
• Arrival to Discharge Target 100 minutes
Lab Turnaround Time:
The lab turnaround time key performance indicators (KPI) measures the ability of the Lab to
process lab required results. Prescribed standards of lab turnaround time for different tests are as under:
Lab Test Turn Around Target Time
• Amylase 24 hrs.
• ANA 168 hrs

• a PTT 72 hrs.
• Basic Metabolic Panel 24 hrs.
• Complete Blood Count 24 hrs.
• Electrotype panel 24 hrs.
• Comprehensive Metabolic Panel 48 hrs.
• Sedimentation Rate 96 hrs.
Emergency Response(ER) Waiting Time:
Measure the amount of time patients are currently waiting before being seen by a physician in
emergency response. The prescribed standards for emergency response are as under:
ER Urgent Stable
• Wait Time 01:50 02:30
Number of Patients in ER:
Provides key data about patients in the ER such as room number, urgency of their case, current
wait time and if they have been attended to by a nurse.
Current ER Occupancy:
Measures how many are currently occupied in your ER compared to the total number of beds.
Average Length of Safety:
Measures how long on average, patients stay in your hospital after having a specific procedure,
such as appendectomy. The prescribed standard for the average length of stay:
• Length of stay-------Average 14 days or less
Other KPIs for Health-Care Providing Organizations:
Inpatient Flow:
• In patient raw mortality rate.
• CMS core Measure
• Harm events per 1000 patients days
• Bed turnover
• Readmission Rate
• Occupancy Rate
• Average Cost Per discharge
• Patient Satisfaction
Revenue Cycle:
• Total Operating Margin
• Account Receivable (A/R) days due to outstanding

• Total Accounts Receivable (A/R) days outstanding
• Total Accounts Payable (A/P) days outstanding
• Cash receipt to bed debt
• Claims Denial Rate
• Days of Cash on Hand
What is Quality?
The term quality refers to the attainment of the customer needs in an effective and efficient
manner. Because if a good or service is unable to meet customers perceived value, it will be considered
low quality goods or services irrespective of its worth.
What is Quality Human Resource?
The term quality human resource refers to the human resource with ability to meet or exceed
customer requirements. The quality human resource is considered highly motivated, trained and highly
skilled in their respective areas and they have ability to translate organization's vision in to reality with
other available resources.
In health-care organizations the patient satisfaction is not only depends upon the technology but
also upon the human resource (employees) capability.
LITERATURE REVIEW & ANALYSIS REGARDING THE NEW TECHNOLOGICAL
IMPACT ON HUAMAN RESOURCE PERFORMANCE RELATED TO HEALTHCARE
PROVIDNG INDUSTIRES / ORGANIZATIONS
The impact of human resources on health-Care Providing Organizations
When examining health care systems, it is both useful and important to explore the impact of
human resources on health sector reform taken by any country or an health -care providing
organization. While the specific health care reform process varies by country to country and
organization to organization, some trends can be identified. Three of the main trends include efficiency,
equity and quality objectives.
Various human resources initiatives have been employed in an attempt to increase efficiency.
Outsourcing of services has been used to convert fixed labor expenditures into variable costs as a
means of improving efficiency. Contracting-out, performance contracts and internal contracting are also
examples of measures employed.
Many human resources initiatives for health reform also include attempts to increase equity or
fairness. Strategies aimed at promoting equity in relation to needs require more systematic planning of
health services. Some of these strategies include the introduction of financial protection mechanisms,
the targeting of specific needs and groups, and re-deployment services. One of the goals of human
resource professionals must be to use these and other measures to increase equity in their organizations.
Human resources in health sector reform also seek to improve the quality of services and
patients' satisfaction. Health care quality is generally defined in two ways:
1. Technical quality:

Technical quality refers to the impact that the health services available can have on the health
conditions of a population.
2. Socio-cultural quality:
Socio-cultural quality measures the degree of acceptability of services and the ability to satisfy
patients' expectations.
Human resource professionals face many obstacles in their attempt to deliver high-quality
health care to the patients. Some of these constraints include budgets, lack of congruence between
different stakeholders' values, absenteeism rates, high rates of turnover and low morale of health
personnel.
Better use of the spectrum of health care providers and better coordination of patient services
through interdisciplinary teamwork have been recommended as part of health sector reform. Since all
health care is ultimately delivered by people, effective human resources management will play a vital
role in the success of health -care providing organizations.
Staff Management
The two key areas that mangers have to be concerned with in their job roles are managing their staff
and managing the machines and technology with which those staff have to work or perform their duties
effectively and efficiently. How organizations and their managers can, and should, relate to these two
main areas of their work has been the concern of Robert Blake and Jane Mouton in their work on The
Managerial Grid (Blake R.R. And Mouton J.S.-1985 The Managerial Grid III. Hogan Page.). This is
the device for representing the concern for production and for people shown by different mangers with
a 1-9 scale being used to represent the degree of concern, 9 representing the high concern. The major
points on the Grid and their meaning are shown in Figure below.
9 1,9 9,9
5,5
Concern for People
1 1,1 9,1
1 9
Concern for production
Position 9,1:
Efficiency in operations results from arranging conditions do work in such a way that in such a
way that human elements interfere to a minimum degree, by being concerned with acquiring the latest
and most efficient technology which itself strictly controls the human input into the work process. This
approach may well lead to staff (Blake R.R. and Mouton J.S.-1985 The Managerial Grid III. Hogan
Page.) frustration and demotivation through a lack of job satisfaction in feeling themselves to be
essentially machine feeders and machine minders.

Position 1,9:
This is the opposite approach where the thoughtful attention of the manager to the needs of this
staff for satisfying relationships leads to a comfortable, friendly organization atmosphere and working
tempo, but whilst job sanctification and morale may be high, production may well not be as efficient as
it could and should be. The danger is that more ruthless employers and managers of the 9,1 type will
produce the same work at quicker rate and lower cost and that the pleasant, cushioned surroundings
created by the 1,9 manger will only be short-term before bankruptcy and redundancy take place.
Position 1,1:
This is the least satisfactory approach of all, where the manger puts in the least effort possible,
both with regard to his staff and production equipment in order to get the required work done and to
sustain organization membership. The aim is purely to keep things ticking over to survive—a
minimalist approach. In this situation, both the morale of the staff and the output of work are likely to
be low and inefficient, leading to the twin problems of low motivation and uncompetitive production.
Position 5,5:
This is where an adequate level of performance is achieved through balancing the necessary to
get the work out at a level of speed and efficiency which is competitive enough to provide an adequate
level of the staff at a satisfactory level. It could be argued that this is the 'satisficing' level suggested by
Herbert Simon.
Position 9,9:
This is the optimum management approach, where work output and accomplishment is
achieved through committed, highly-motivated staffs that agree with, and believe in, the equal
commitment to using the most efficient and productive as possible. The management's attitude to the
staff is that they are as important in the production process as the latest technology they work
efficiently with, and this also creates an interdependence between management and staff through their
feeling of having a 'common stake' in the purpose, objectives and method of the organization, which
leads to relationships of trust and respect.
It may be that some readers, particularly those who have always been employed to the Health
Services, will even now shuddering at the mention of 'profit' in a research related to the health care
management. Blake and Mouton are mainly concerned with profit-oriented commercial organizations.
However, the current emphasis on privatization and the increasing use of performance indicators,
should leave nobody, in any doubt that even a relatively low-key interpretation of the word “profit', as
the most effective and efficient use of staff time and equipment to give them most cost-effective return.
Although the Managerial Grid could be criticized as being somewhat simplistic, it could be argued that
the gamut of specialist management books published each year could do with more means of
illustrating the balance in outlook and concern that each manger has to have between concern for his
staff and concern for high-powered, efficient technology.
The Management of Change New Technology
Current technological advancement in the health services bears eloquent testimony to the fact of
organizational change. Not all change has been perceived as unequivocally good. However, where there

is a net gain, the organization must learn to absorb the costs. For some workers change can be a painful
process and involve jobless and redundancy. In other cases, life-time perceptions of working norms and
practices may appear to be discounted, leaving workers emotionally stranded as their careers, together
with their knowledge and skills, appear to founder on the rising tide of uncertainty.
For some this aspect of change provides an undoubted stimulus and challenge, particularly if
changes are perceived as incremental and an expected and natural component of professional and
career development. If training is also available, this is likely to facilitate change, but the degree of
resistance may well depend upon the worker's perception of his new role and its status, given that
salary is unaffected. More rapid change , as might occur with the privatization of a part of the health
care services or the rapid introduction of new technology may give less time for personal adjustment
and increase feelings of alienation at work (Blauner R.-1964 Alienation and Freedom—the) Factory
Worker and His Industry, III Chicago, University of Chicago Press). Although Blauner's work on
alienation specifically refers to factory employees, we believe his concepts are transferable to other
large organizations. We therefore use this term in his work-related sense and not in the more general
sense employed by Marx (Mc Lellan D-1970 Marx before Marxism. Harmondsworth, Penguin).
Organizations may be either reactive or proactive that is, planning to activate desired change
rather than merely reacting to environmental impositions or client demands. This health care service
received much criticism for its reactive approach in responding to demand rather to evaluated need
(Cooper M.H.-1974 Rationing Health Care, London Croom Helm) and more recently this reactivity has
been identified with the lack of a general management process.
As we have seen corporate planning in health care involves the identification of need, planning
how to meet that need and mobilizing the entire organization to carry out those plans in a concerted and
organized way. This cannot be achieved in a static and insensitive organization whose members place a
premium on stability or a high value on 'nostalgia' (clinging to old ways) at the expense of improved
patient welfare.,
The Impact Of Technology:
The development of technology and its applications in health care has brought enormous
benefits to both patients and the organizations which serves them. Among many examples are the
developments of the medical application of ultrasonic, the pacemaker, the heart lung machine, nuclear
medicine, radiology, radiotherapy, computerized scanners, and laboratory analyzers. The development
of the fibre optics has allowed a new approach to the investigation and treatment of many quite
different clinical conditions with fewer 'postoperative' consequences and at a lower marginal cost than
the corresponding surgery.
Some of these are clinical, high profile examples of high technology appreciations and health
workers can no doubt identify many more less dramatic bit no less significant contributions to the
business of diagnosis and treatment. In terms of output modern technology allows us to investigate and
treat substantially larger numbers of patients today as compare to past.
However, in some quarters the arrival of high technology is not always well received. In fact, it
may be feared by some workers whose working practices, skills and indeed, very employment may be
threatened by its introduction. It is clear that technology itself is not to blame for this but rather the way
it is employed within the organization. It is no solution to argue that providing redundancies are
avoided there is little ground for objections to new technology. This would be to deny the intrinsic
value and function of work and the social significance it gives to both individuals and groups a point
overlooked by F.W. Taylor, the father of Scientific Management (Taylor F.W.-1947 Scientific

Management, London, Harper & Row). This is in essence, forms the basis of the critique of Taylor's
theories by Trist (Trist E.-1976 Critique of Scientific Management in terms of Socio-Technical
Theory) ) who, with various co-workers from the Tavistock Institute, introduced the concept if Socio
technical Systems. These two systems organizational change that are of immediate concern, namely the
social consequences at work of change, deskilling and redundancy. We start by considering the
influence of Taylor, recognizing that his theories are widely diffused and now form part of the culture
of mangerialism--the manger's right to manage—which by its unqualified stance alone has done, and
continues to do, much to inhibit goodwill and mutual respect between all sections of industry.
What is Scientific Management?
Scientific management is based on the work of the US engineer Frederick Winslow Taylor
(1856-1915) who in his book The Principles of Scientific Management (1911) laid down the
fundamental principles of large-scale manufacturing through assembly-line factories. It emphasizes
rationalization and standardization of work through division of labor, time and motion studies, work
measurement, and piece-rate wages.
Scientific Management, also called Taylorism is a theory of management that analyzes and
synthesizes work flows. Its main objective is improving economic efficiency, especially labour
productivity. It was one of the earliest attempts to apply science to the engineering of processes and to
management.
Applications:
Scientific management theory is important because its approach to management is found in
almost every industrial business operation across the world. Its influence is also felt in general business
practices such planning, process design, quality control, cost accounting, and ergonomics. Your
knowledge of the theory will give you a better understanding of industrial management. You'll also
understand how a manager can use quantitative analysis, an examination of numbers and other
measurable data, in management to improve the efficiency and effectiveness of business operations.
Theorists:
The founding father of scientific management theory is Frederick W. Taylor (1856-1915). He
was an American inventor and engineer. His two most important works were Shop Management (1903)
and The Principles of Scientific Management (1911).
The husband and wife team of Frank Gilbreth, Sr. and Lillian Moller Gilbreth contributed to the
theory. This duo continued the practice of time and motion studies started by Taylor, believing they
could find the best way to perform each task studied.
Definition, Principles & Contributions:
Scientific management theory seeks to improve an organization's efficiency by systematically
improving the efficiency of task completion by utilizing scientific, engineering, and mathematical
analysis. The goal is to reduce waste, increase the process and methods of production, and create a just
distribution of goods. This goal serves the common interests of employers, employees, and society.
Scientific management theory can be summarized by Taylor's Four Principles:
1. Managers should gather information, analyze it, and reduce it to rules, laws, or

mathematical formulas.
2. Managers should scientifically select and train workers.
3. Managers should ensure that the techniques developed by science are used by the
workers.
Managers should apply the work equally between workers and themselves, where managers apply
scientific management theories to planning and the workers perform the tasks pursuant to the plans.
Briefly, Taylor observed that manual workers were 'inefficient', that is, they worked below maximum
output because their mangers either managed by guesswork of assumed that the workers knew best
how to carry out manual procedures and so left matters to them. Taylor set to work to analyze and
measure in detail every movement that formed a part of each manual operation.,
According to Taylor, defining a 'fair day's work' was a purely technical matter, being
prescribed by production engineers after work study and was therefore not a matter of opinion but
science. It is sufficient to say that Taylor applied his 'scientific' principles to every aspect of work and
established a major, influential and continuing 'school' of management theory. Taylor's motives were
profit-oriented and he sought to reward his workers who wholly complied with his instructions with
handsome bonuses directly linked to productivity. In this, however, he was largely frustrated as the
company owners could not accept that any manual worker could be given the opportunity for unlimited
earnings even though linked to individual productivity. In later years Taylor was to express regret since,
in his attempt to alter the layout of the plant and to change the traditional way of things he was not very
popular.
The Socio technical Systems Concept
Taylor published accounts of his work in the early 1900s at about the same time as
mechanization was being introduced in the industries. This also involves heavily prescribing individual
working methods and practices in order to accommodate the new machinery which promised to
increase the productivity of every seam in which it was used. Small working groups, often family
based, were required to split up and join large shift of men. Job functions were divided between shifts
so that each man and each shift was responsible for only one function and therefore whole process was
dependent upon each shift completing its allocated function on time.
Trist and Bamforth (an-examiner) (Trist E. and Bamforth K. -1951 Some Social and
Psychological Consequences of the Longwall Method of coal-getting, Human Relations) identified that
in the introduction of new technology important social considerations had been totally ignored. They
realized that coal mining with its inherent danger and discomfort was essentially a group activity with a
high degree of interdependence both within and between groups. Group maintenance, therefore, is an
important factor in not only productivity but in the associated problems of absenteeism, sickness,
accident rates, disagreements and stoppages. When, in 1951, a mine manager in the East Midlands
Division V. W. Sheppard, initiated a composite arrangement for each shift which restores group
autonomy, productivity and job satisfaction rose: absenteeism and labour turnover fell and health
records improved. (Trist E. Op. Cit., P.84)
The essence of this experiment may be viewed as joint optimization of both the requirements of
the technology and those of the work group in which the group had a certain degree of autonomy. The
results of similar factory-based experiments in India Scandinavia support this statement. In keeping
with Taylor, however, the pecuniary reward system appears to be a significant ingredient as,in all these
experiments, participating workers able to earn an increase in pay.

If there any lesson to be learned from the Socio-technical Systems concept, perhaps to be
transferred to areas of merging technical innovation, they were widely ignored. In 1973, Enid Mumford
could assert that:
“Work systems are usually designed in technical terms to
meet technical and business objectives, with little thought
given to the needs of people operating the system.”
(Mumford E. -1973, Designing Systems for Job Satisfaction. Omega I, (4), 493-8.)
It might be argued that, because this work was related to the introduction of technology into the
manual production industries, the experimental evidence is irrelevant in science-based industries,
including some aspects of health care. Trist disagrees. He believes that the requirement for manual
dexterity is decreasing in these activities, changing the role of the worker from a doer of the work to a
user and manger of the technical tools he has acquired. This is a general trend and will apply equally
wherever technology displaces manual work of any kind. Hence the prescribed element of work is
reduced since it is contained within the machine, whereas the discretionary part is increased the worker
monitoring performance and intervening where necessary. (Trist E., op. Cit., P.88).
Trist has stated that the reason for the workers presence:
“......is to assess the performance of the programme and, if necessary, to change it either himself of in
conjunction with others at higher levels. No longer is there 'a split at the bottom of the bottom of the
executive chain' which separates mangers and managed. Everyone is now on the same side of the
'great divide' and whatever fences there may still be on the common side would seem best kept low. A
general change is in consequence taking place in all role-relations in the enterprise. This is the
underlying reason for the bureaucratic model being experienced as obsolete and maladaptive, and also
for a possible new role beginning to emerge for trade unions.” (Trist E., op cit., p.89)
With these brave words Trist describes here something skin to the Task Ideology of Harrison
(Harrison R. -1972 Understanding Your Organization's Character. Harvard Bus. Rev. 50 (3) 119-28)
and as Ideal Type; hardly the coalition of interests that characterize the Socio-technical Systems
Concept. We would argue that where Task Ideology is dominant, an organization we may expect to see
the introduction of new technology without loss of status for the 'displaced' workers, since their role
self-perception will be enhanced as will be the degree of direction over their working tasks. However,
when 'role' or 'power' ideologies are dominant, or are significant influences in an organization, the
reverse can easily occur. In these circumstances, individual worker discretion is prescribed and handed
down from above. If the skill of the worker is rendered obsolete by new technology his / her discretion,
because of the perceived to have also decayed. The worker, therefore, comes to be seen as a 'button
pusher' with neither skill nor discretion and with a consequent lowering of status and job satisfaction.
There is also the tendency for management to impose change without consultation with the workforce
of planning the change with them. This is vital if change is to be managed effectively. (Barnard C.
-1948 Organization and Management. Harvard University Press).
We would regard the 'natural' organizational ideology or 'culture' of health teams, in operating
theaters, in the community, in paramedical departments and laboratories and indeed in almost every
care grouping, to be that of the Task Culture. That being so, we would expect health workers who

possess both skill and knowledge to be able to evaluate new technology without fear, to adapt to its use,
where appropriate, without being threatened and to enhance their role by its adoption. This means, of
course that the health organization for its part must freely acknowledge the role and worth of its
workers by confirming the increased discretion that will be their natural expectation.
However, the Health care organizations has a well developed, overall role culture prescribing
job titles and role definitions and ascribing expectations of normative behavior to employees in most
occupational groups, Harrison states “Predictability of behavior is high in the role-oriented
organization, and stability and respectability are often valued as much as competence. The correct
response tends to be more highly valued than the effective one. Procedures for change tend to be
cumbersome; therefore, the system is slow to adapt to change”.
With such institutionalized rigidity an organization is unlikely easily to grant its imprimatur to
de facto role development brought about by technology and in this sense one may continue to
encounter , if in a milder and symbolic form, the undesirable elements that were identified by Trist and
Bamforth in the longwall method of coal-getting.
There is also a strong power culture within health care which is the traditional prerogative of the
medical profession. 'The different attitudes of the power and role orientations towards authority'. Says
Harrison 'might be likened to the differences between a dictatorship and a constitutional monarchy.'
(Brown W. -1965 Exploration in Management. Harmondsworth, Elican, pp. 147-149). This is not to say
that such an orientation cannot occasionally be useful both in the practice of medicine and in assisting
organizational change but in general it rankles and annoys other health workers who regard themselves
as coworkers with their medical colleagues but who fail to find honest definition, winners and losers:
the status of the former is gained at the expense of the latter. This is not necessarily so in other
organizational ideological types. Recognition of co-workers, therefore, may become improve
relationships, and may even destroy them, as role changes because of new technology.
It is frequently identification with task ideology, as well as dedication to patient care, that
provides the major maintenance factor in the service and paramedical professions of health care.
Genuine and acceptable recognition is given and received within the task group from which the power
ideologies tend inevitably to be excluded. The above par endeavored to highlight the interdependence
of both the social and technical sub-systems within organizations.
De Skilling:
The second important aspect of the introduction of new technology is that of de-skilling, or the
fear of it, that has long brought conflict to industrial situation. Harry Braveman advanced the thesis that
de-skilling has been a dominating process in the creation of modern work organizations. During his
time of publishing he observed the impact of computers (new technology) on office skills from the
1950s on ward.
He sees the detailed division of labour as the means of control, destroying whole occupations
and rendering the worker inadequate for carrying through any complete production process, as occurs
for example on production lines. He also sees F.W. Taylor's Scientific Management movement as
product of the need to control the activities of workers in ever-larger, monopolistic organizations.
Taylor's ideas contained three main principles which are fundamental to all advanced work design,
organization and method study and industrial engineering today. These are:
• The gathering and development of knowledge of the labour processes;
• The concentration of this knowledge as an exclusive province of management;

• The use of this monopoly of knowledge to control each step of the labour process
and its mode of execution.
Scientific Management concepts have thus led to the divorce of production, the manual
execution of the task, form the conceptual, brain-work functions—a separation of the two essential
aspects of labour. Braveman shows that people are trapped into new production methods as competitors
see the need to develop similar processes to compete effectively.
Studies at Harvard (Bright J.R.-1958 Automation and Management, Boston, Harvard Business School)
have produced evidence that automation had reduced skill requirements not only of the operating
workforce but occasionally of the entire factory force, including the maintenance organization.
Neither is this effect confined to craftsmen. Within the organization Leavitt a Whisler (Leavitt
H. J. and Whisler T.L.-1958 Management in the 1980s. Harvard Business Review 36(6), 41-8) see the
impact of computers, programming and operational research on middle management roles as making
them more highly structured and covered by sets of rules governing day-to-day decision making. New
technologies allow up top management to control their middle management while top mangers become
more innovative and creative, particularly with programmers and R&D (Research and Development)
people moving into top positions. Because of highly programmed systems, middle managers will
require and have less autonomy and skill.
The prediction of this statement has been moderated to some extent by economic and other
factors including organizational culture and tradition. However, organizations are now poised on the
threshold of an information technology explosion, which, we believe, will effect a substantial change in
the way large organizations are managed. Although the capability of fulfilling Leavitt and Whisler's
prophecy is at hand, new technology is likely to place more information in the hands of middle and first
line mangers. In the Health care organization with accountability pushed downwards, if this actually
occurs, the authority to act, to take decisions and to manage must be similarly delegated. Junior
mangers are likely to demand an acceptable degree of autonomy or room to move as well as the right to
contribute to the overall objective setting process. Once again industry has the choice of
complementing systems that meet human and social needs as well as technological and business
requirements, rather than placing all the emphasis on the latter.
It is evident that many skills have been and will be made redundant by new technology. Such is
mankind's identity with work, many people are likely to experience a feeling of society's rejection of
their skills and of the contribution they have made and which has provided a social identification for
them over many years. Some workers may fear loss of respect or of status or even of employment itself
when alternative ways of meeting society's needs are found and implemented. The introduction of
technology into production processes has long been a focus of conflict. (Pelling H-1963 A History of
British Trade Unionism. Harmondsworth, Penguin, p.28)
An example of the de-skilling in the Health care industry can be illustrated by the displacement
of the traditional skills of the practical chemist in both the pharmacy and the clinical chemistry
laboratory. Some clinical chemistry workers have largely abandoned the glass burette and volumetric
pipette for complex automatic chemical analyzers which frequently use quite different chemical
reactions than were employed in manual analysis. Indeed, skills acquired in operating and maintaining
early analyzers of the 1960s, 70s and 80s have already been displaced by yet more complex and
sophisticated and instruments of the current era and this process is likely to be continue.
As new technology becomes ever more widely applicable to medicine many more occupational
skills could be threatened and will require to undergo metamorphosis if some workers are to avoid loss

of employment or, at least, reduced job satisfaction.
Changes we have described have an important bearing upon staff the acquisition of basic but
highly portable skills rather than those specific techniques which characterized the apprenticeship
training model. Because in older times one's occupation and craft were believed no to change
substantially, skills learned during an apprenticeship would effectively support the workers through his
work life. This model is inadequate for the science-based professions. If skill displacement is to result
in re-skilling and role development then training and retraining must become an involuntary feature of
organizational activity, the cost becoming an overhead of the effective use and implementation of
advancing technology.
Since this applies to both to knowledge as well as to skill acquisition, many health professions
are moving 'up-market' for their recruits, seeking higher educational attainment with wider employment
applicability than was deemed necessary before. In the light of such developments, graduate-only entry
does not now seem to us an unjustifiable objective for health care professions provided that the
discretionary element of their work remains high.
Redundancy:
The third problem associated with new technology is that it may facilitate staff redundancy,
although its track record thus far has not wholly supported this genuine fear amongst the health care
related workers / employees. The dumping of workers whose skills are no longer required or whose
role is no longer compatible with changing technological requirements is waste of human resources.
This ought not to occur except by mutual consent. In case of employee redundancy due to new
technological requirements the employer and the employees must show flexibility in case of employee
redundancy arrangements.
Thurley (Thurley K. Personnel Management in the UK: An Urgent Case for Treatment) has
called for a new range of employment contracts protecting emplacement but no job security and
thereby eliminating waste by the utilization of the potential of people for a variety of jobs during their
careers. In this, the reward system of an organization would need to include worker development as
flexibility would become a key characteristic of the new high-tech workers.
Such a commitment to each satisfactory employee would raise morale and facilitate
technological progress by the elimination of uncertainty and the maximization of co-operation. Some
health authorities already operate a tentative policy in this direction. However, many workers remain
fearful that automation, new technology and computers will be used as tools of economic displacement
and will be deployed preferentially to human resources in an attempt to reduce the labor-intensive high
costs of the Health Care Related services.
Future Employment Level:
This is a convenient point at which to examine the evidence as to the likely effects of
introducing new technology into the health services. Most, but by no means all, of this technology is
computer-based. That is to say a computer, or a microprocessor, is incorporated into a machine or
instrument in such a way as to render some human tasks, whether manual, clerical or administrative,
unnecessary. As computers are also expected to become increasingly useful in the area of decision
making the breadth of this influence on working practices is potentially very wide. Some writers have
predicted that the nature of work itself will be catastrophically changed. Clearly some analytical tools
are needed with which to identify and assess the expected changes.
Rajan and Cooke propose a model for the examination of the effects on employment of

information technology in the financial service industry. (Rajan A. and Cooke G.-1986 The Impact of
Information Technology on Employment in the financial Services Industry. Nat. Wes. Bank Qurat. Rev.
Augus issue, 21-35) While their model lacks universal applicability it may nevertheless have relevance
in other service industries such as the Health care organizations. Rajan and Cooke identify a number of
factors that influence employment, some of which are capable of moderating adverse effects on
employment and others that might accelerate them. These are economic, social and organizational
factors.
In the health services generally there has been some investment in new technology, arguably of
a broader and different kind from that of other service industries. While this may have led to some
occupational re-skilling, employment levels, in health care since beginning have also continued to rise,
particularly in the professions supplementary to medicine. It is mainly these professions which have
borne the brunt of the introduction of new technology.
Of course, employment levels are determined by many factors of which new technology is one.
However, one factor in the Health care services which is in common with banking is the continual rise
in the amount of work undertaken. In the health service there has been a phenomenal increase in, for
example, the work of the medical laboratories, the pharmacy and clinical activities of all kinds. The
effect of the steady reduction in the numbers of hospitals beds brought about by faster postoperative
rehabilitation probably outweighs any impact that labour saving technology has made.
Economic Moderator:
The economic moderators that characterized health care center on the steady growth in demand,
and as Culyer has put it, ‘the utilization of health services has, on almost every indicator, increased
continually since beginning. The more efficient the system becomes at meeting needs, the more needs
may be met. In the present context, demand, as indicated by, say the length of hospital waiting lists
(and waiting time) has not been satiated by any means, including new technology. In health care new
technology has usually required the acquisition of new skills, or new employees, but th overall number
of posts has continued to increase. Where individual worker productivity has risen it has quickly
become saturated by increased client demand. By considering the demand side as well the supply it is
evident that the relationship between new technology and unemployment in health care is from a
simplistic one.
As it appears in other service oriented organizations i.e. banking, new technology has itself
created the possibility of new avenues of services in the health care and stimulated demand. Renal
dialysis, bone marrow cancer treatments, and transplant technology generally, are examples of this
phenomenon. Neither should this or any other treatment be reviewed solely as clinical activity. For
example, the use of many new drugs associated with these treatments requires monitoring by
measuring the blood level of the drug, or its metabolite, in the circulation of the recipient. Special
patient monitoring and follow-up are required. Various 'function' tests will be conducted by
paramedical staff. Special physiotherapy, perhaps counseling and rehabilitation, may be requested.
These are some of the knock on effects of the technology which permits these new treatments and
which themselves stimulate demand.
Because all such treatment is necessarily administered on an individual basis, expansion in the
service is likely to require some additional trained staff whose work may be made more effective by
new technology rather than be entirely replaced by it. The principal economic factor in the
implementation of new technology is Exchequer funding. As we have seen, capital monies are largely
divided between building and equipment which will include new technology. Therefore, the funding of

Impact of Quality HR on Healthcare Performance

Impact of Quality HR on Healthcare Performance

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (17)

Similar to Impact of Quality HR on Healthcare Performance

Similar to Impact of Quality HR on Healthcare Performance (20)

More from Muhammad Asif Khan Awan

More from Muhammad Asif Khan Awan (6)

Recently uploaded

Recently uploaded (20)

Impact of Quality HR on Healthcare Performance