About Scripps Healthcare, and how it came out of crisis. A case study dealing with Managing Human Resources in an organisation

1. Case : Pay for performance
enhances employment
Management, Scripps Health

2. TOPICS COVERED :
• SCRIPPS HEALTH : About the Organization
• The CEO and his philosophy
• The Case Analysis
• Questions and Solutions

4. • Year of Establishment : 1924
• Location : San Diego, California
• Founder : Ellen Browning Scripps
• Current CEO : Chris Van Gorder
• Scripps has earned a national reputation as a premier
employer, named by FORTUNE magazine as one of America’s
100 Best Companies to Work For, since 2008

5. • Born out of philanthrophy, in 1924 Ellen Browning
Scripps made charitable gifts to create Scripps Memorial
Hospital and Scripps Metabolic Clinic.
• A $1.8 Billion, Non-Profit health care system and a growing
network of 2600 physicians , 14, 000 employees , 5 hospital
campuses with specialty centres, 4 emergency
departments and 3 urgent care centres.
• The financial crisis of 2000 and the No layoff philosophy.

6. CHRIS VAN GORDER
• Name : Chris Van Gorder
• Designation : CEO/ President, Scripps. Over 15 years of
experience with the organisation.
• Author : The Front-Line Leader - Building a High Performance
Organization From the Ground Up"
• Currently holds the position of Commissioner at U.S National
Commission for UNESCO.
• Popularly known for his No layoff philosophy, PLC and
Transparency in Management.

7. The Case :
• A Non Profit organisation, eventually losing its revenue.
• The Financial crunch in the company in 2000.
• CEO and many executives resign.
• Chris Von Gorder appointed as the new CEO at the time.
• Identified the key elements.
• Developed a crisis management strategy.
• Strategy works out and delivers favourable results

8. The Strategy
• NO LAYOFF STRATEGY : Keeping personnel motivated and
simultaneously creating a sense of ownership, accountability
amongst them towards the organisation.
• PLC : Physician Leader Collaboration Model. The model was used to
redevelop the broken relationship between the administrator and
the physician sample. Physicians were now involved in decision
making.
• REDEVELOPING THE COMMUNICATION : Along with Senior VP of
HR, Victor Buzachero, Chris laid stress on redeveloping the broken
bond inside the organisation, amongst the different departments
and Hierarchy Level.
• THE COMPENSATION : Providing a Competitive compensation was
amongst the most appreciated steps, based on continuous
evaluation of the employee and the job content. Helps in employee
retention and reducing turnover.

9. The Compensation
• A competitive one amongst the other players.
• Maintaining the 65th percentile mark in the compensation
market, neither amongst the highest nor lowest employers.
• Bi-annually Studying the labour market to stay in touch with
the competing organisations.
• Annually performance based evaluations and regular audits
leading to merit increases, thereby providing a motivating
source for improvement and output. Weak and Strong areas
could be easily identified.
• Upto 5% increase in salary after evaluation.
• In case of poor performance, the employee send for
development and enhancing the skill set instead of firing him.

10. Results :
• In the 2008 survey, 68% of employees responded positively to
the statement, "People are paid fairly for the work they do,"
compared with 54 % in 2005.
• Scripps allocated more than $13 million for salary adjustments
and an additional $18 million for merit increases; the average
employee merit increase was 3.5 percent.
• Employee turnover fell to 10.9 % in fiscal 2008—enviably
below industry standards of 13 % in California.

11. Questions :
• Discuss how this case illustrates how compensation can be
used as a method for improving employee satisfaction and
motivation ?
- Herzberg’s theory of motivation and hygiene.
- Motivation and hygiene factors
• Identify some of the ways that performance-based pay
systems should be developed based on the experiences at
Scripps Health ?
- Regular monitoring of employees by 360 Degree appraisal
and Employee of the month scheme.