human resource management in health care...human resource management in health care principles and...

Human ResourceManagement in Health Care

Principles and Practice

L. Fleming Fallon, Jr., MD, DrPH, MBAProfessor of Public Health

Bowling Green State UniversityBowling Green, Ohio

Charles R. McConnell, MBA, CMHealth Care Management andHuman Resources Consultant

Ontario, New York

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Library of Congress Cataloging-in-Publication DataFallon, L. Fleming.Human resource management in health care : principles and practice / L. Fleming Fallon Jr. and

Charles R. McConnell.p. ; cm.

Includes index.ISBN-13: 978-0-7637-3531-9ISBN-10: 0-7637-3531-01. Health facilities—Personnel management. 2. Personnel management. 3. Personnel depart-ments. I. McConnell, Charles R. II. Title. [DNLM: 1. Health Manpower—organization & administration. 2. Personnel Management—

methods. W 76 F196h 2007]RA971.35.F38 2007362.1068—dc22

60482006037752

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To Marie and Cynthia, two wonderful human resources.

LFF

To Kate, for the years of support and encouragement.

CRM

D E D I C A T I O N

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Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiiiAcknowledgments . . . . . . . . . . . . . . . . . . . . . . . . xvAuthors and Contributors . . . . . . . . . . . . . . . . . xvii

Chapter 1 An Overview of Human Resources . . . . . . . . . . . . . 1

An Evolving Department . . . . . . . . . . . . . . . . . . . . 3

What’s In a (New) Name? . . . . . . . . . . . . . . . . . . . 7

The Focus Broadens . . . . . . . . . . . . . . . . . . . . . . 10

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Chapter 2 How Human Resources Fits into an Organization . . 15

Human Resources in the Organization: The Macro View . . . . . . . . . . . . . . . . . . . . . . . 17

Line and Staff . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

The Appearance of Human Resources . . . . . . . . . 20

The Human Resources Internal Organization . . . 24

Human Resources and Senior Management . . . . . 24

The Relationship Between Human Resources and Other Departments . . . . . . . . . . . . . . . . . . 26

Health Care Human Resources and the Changing Scene . . . . . . . . . . . . . . . . . . . . . . . . 28

Human Resources Reengineered . . . . . . . . . . . . . 30

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Chapter 3 The Legal Framework of Contemporary Human Resources . . . . . . . . . . . . . . . . . . . . . . 39

A Regulated Environment . . . . . . . . . . . . . . . . . . 40

The Growing Regulatory Environment: An Annotated Chronology of Legislation . . . . . 42

Greater Responsibilities and Increased Costs for Organizations . . . . . . . . . . . . . . . . . . . . . . 57

A Cumulative Effect . . . . . . . . . . . . . . . . . . . . . . 58

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

C O N T E N T S

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Chapter 4 Human Resource Activities and Managers . . . . . . 65The Activities of Human Resources . . . . . . . . . . . 67

Human Resources from a Different Perspective . . 77

Where Department Managers and Human Resources Personnel Meet . . . . . . . . . . 79

Human Resources and the Organization . . . . . . . 84

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

Chapter 5 The Manager-Employee Relationship . . . . . . . . . . 93Every Supervisor a Manager of

Human Resources . . . . . . . . . . . . . . . . . . . . . . 96

The Heterogeneous Work Group . . . . . . . . . . . . . 96

Employee Participation and Input . . . . . . . . . . . . 97

The People-Focused Manager . . . . . . . . . . . . . . . 99

Visibility and Availability . . . . . . . . . . . . . . . . . . 99

The Essential Downward Orientation . . . . . . . . 103

Essential Individual Relationships . . . . . . . . . . . 104

The Cost of Ignored Employees . . . . . . . . . . . . . 107

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

Chapter 6 Position Descriptions . . . . . . . . . . . . . . . . . . . . . 113Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

Position Analysis . . . . . . . . . . . . . . . . . . . . . . . . 115

Role of a Position Incumbent . . . . . . . . . . . . . . . 116

Elements of a Position Description . . . . . . . . . . . 117

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

Appendix A: Sample Position Description . . . . . 122

Chapter 7 Department Managers and the Recruiting Process . . . . . . . . . . . . . . . . . . . . . 125

Legal Concerns in Recruiting . . . . . . . . . . . . . . . 127

Partnerships with Human Resources . . . . . . . . . 127

Reference Checking and the Department Manager . . . . . . . . . . . . . . . . . . . 131

The Manager’s Role in Finding Candidates . . . . 134

Promotion from Within . . . . . . . . . . . . . . . . . . . 137

Salary Bumping . . . . . . . . . . . . . . . . . . . . . . . . . 139

Recruiting during Periods of Shortage . . . . . . . . 140

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Every Employee a Recruiter . . . . . . . . . . . . . . . . 142

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142

Chapter 8 Civil Service Systems . . . . . . . . . . . . . . . . . . . . . 147

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148

History of the Federal Civil Service System . . . . . 148

History of State and Local Civil Service Systems . . 149

Using a Civil Service System . . . . . . . . . . . . . . . . 150

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

Chapter 9 Conducting a Successful and Legal Selection Interview . . . . . . . . . . . . . . . . . . . . . 159

Legal and Other Prerequisites . . . . . . . . . . . . . . . 161

Before the Candidate Arrives . . . . . . . . . . . . . . . 161

Conducting an Interview . . . . . . . . . . . . . . . . . . 164

Interview Questioning: To Ask or Not to Ask? . . 166

Probing for Intangibles . . . . . . . . . . . . . . . . . . . . 175

Very Few Exceptions . . . . . . . . . . . . . . . . . . . . . 176

When Forbidden Information is Volunteered . . . 176

After the Interview . . . . . . . . . . . . . . . . . . . . . . . 177

Behavioral Interviewing . . . . . . . . . . . . . . . . . . . 178

The Interviewer’s Behavior . . . . . . . . . . . . . . . . . 179

Résumé Fraud: Lies and Embellishments . . . . . . 181

An Acquired Skill . . . . . . . . . . . . . . . . . . . . . . . . 183

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183

Chapter 10 Employee Training . . . . . . . . . . . . . . . . . . . . . . . 187

Introduction: The Role of Training and Development . . . . . . . . . . . . . . . . . . . . . . 188

The Manager’s Role in Employee Training . . . . . 189

New-Employee Orientation . . . . . . . . . . . . . . . . 190

Training to Correct Performance Problems . . . . . 191

Determining Departmental Learning Needs . . . . 191

Employee Training Within a Department . . . . . . 192

Cross-Training for Efficiency . . . . . . . . . . . . . . . 193

On-the-Job Training . . . . . . . . . . . . . . . . . . . . . . 193

Effective Mentoring . . . . . . . . . . . . . . . . . . . . . . 194

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Developing Potential Managers . . . . . . . . . . . . . 195

How Human Resources Can Help . . . . . . . . . . . 196

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198

Chapter 11 Compensation and Benefits . . . . . . . . . . . . . . . . 201

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202

Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . 202

Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207

Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . 213

External Agency Investigations . . . . . . . . . . . . . . 214

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216

Chapter 12 Performance Appraisals . . . . . . . . . . . . . . . . . . . 219

Performance Appraisal Defined . . . . . . . . . . . . . 221

The Need for Performance Appraisal . . . . . . . . . 221

Conducting a Performance Appraisal . . . . . . . . . 222

Managers and Rating . . . . . . . . . . . . . . . . . . . . . 223

Obstacles to Performance Appraisal . . . . . . . . . . 223

Personality-Based Evaluations . . . . . . . . . . . . . . 224

Performance Appraisals . . . . . . . . . . . . . . . . . . . 227

The Appraisal Interview . . . . . . . . . . . . . . . . . . . 234

Self-Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . 238

Team Appraisals . . . . . . . . . . . . . . . . . . . . . . . . . 239

The Appraisal Form . . . . . . . . . . . . . . . . . . . . . . 240

Legal Implications of Performance Appraisals . . 240

The Role of Human Resources . . . . . . . . . . . . . . 244

An Essential Process . . . . . . . . . . . . . . . . . . . . . . 245

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246

Chapter 13 Managers and Employee Problems . . . . . . . . . . . 249

People Problems are Inevitable . . . . . . . . . . . . . . 251

Primary Purpose: Correction . . . . . . . . . . . . . . . 253

Separate Issues of Performance and Behavior . . . 254

Addressing Performance Problems . . . . . . . . . . . 255

Addressing Behavior Problems . . . . . . . . . . . . . . 256

Employee Absenteeism . . . . . . . . . . . . . . . . . . . . 267

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Employee Assistance Programs . . . . . . . . . . . . . . 269

When Termination is Necessary . . . . . . . . . . . . . 270

Partnership with Human Resources . . . . . . . . . . 271

Prevention when Possible . . . . . . . . . . . . . . . . . . 271

Elements of Effective Corrective Action . . . . . . . 272

Document, Document . . . . . . . . . . . . . . . . . . . . 273

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274

Chapter 14 Addressing Problems before Taking Critical Action . . . . . . . . . . . . . . . . . . . . . . . . 279

Prevention when Possible . . . . . . . . . . . . . . . . . . 281Employee Privacy and Confidentiality . . . . . . . . 282Personal Relationships . . . . . . . . . . . . . . . . . . . . 286Sexual Harassment . . . . . . . . . . . . . . . . . . . . . . . 287Violence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289Employee Participation and Involvement . . . . . . 290Counseling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293

Chapter 15 Documentation . . . . . . . . . . . . . . . . . . . . . . . . . 297Paper Remains Important . . . . . . . . . . . . . . . . . . 299Legal Implications of

Employment Documentation . . . . . . . . . . . . . 299Human Resources and Personnel Files . . . . . . . . 302The Department Manager’s Responsibilities . . . . 303Department Manager’s Employee Files . . . . . . . . 306Do the Paperwork . . . . . . . . . . . . . . . . . . . . . . . 307Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307

Chapter 16 Terminating Employees . . . . . . . . . . . . . . . . . . . 311Involuntary Termination . . . . . . . . . . . . . . . . . . 313Individual Terminations . . . . . . . . . . . . . . . . . . . 313Reductions in Force . . . . . . . . . . . . . . . . . . . . . . 315Layoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317Related Dimensions of Termination . . . . . . . . . . 324The Survivors of Reduction . . . . . . . . . . . . . . . . 326Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328

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Chapter 17 Case Study: Balancing Needs . . . . . . . . . . . . . . . 331

Defining the Problem . . . . . . . . . . . . . . . . . . . . . 332

Moral and Ethical Issues . . . . . . . . . . . . . . . . . . 334

Acceptable Moral and Ethical Principles . . . . . . 335

Analysis: Ethical Decision Making . . . . . . . . . . . 337

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339

Chapter 18 Succession Planning . . . . . . . . . . . . . . . . . . . . . . 343

Introduction to Succession Planning . . . . . . . . . . 344

Why Organizations Should Create Succession Plans . . . . . . . . . . . . . . . . . . . . . . . 345

Motivating Factors Behind the Creation of Succession Plans . . . . . . . . . . . . . . . . . . . . . . . 345

Five Principles of CEO Succession Planning . . . . 347

Grooming a Successor . . . . . . . . . . . . . . . . . . . . 348

Why Organizations Have Not Created Succession Plans . . . . . . . . . . . . . . . . . . . . . . . 349

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351

Chapter 19 Relations with Labor Unions . . . . . . . . . . . . . . . 355

Why Workers Join Unions . . . . . . . . . . . . . . . . . 356

Why Organizations Try to Avoid Unions . . . . . . 358

The Legal Framework of Unions . . . . . . . . . . . . 358

The Department Manager’s Role . . . . . . . . . . . . 360

Decertification . . . . . . . . . . . . . . . . . . . . . . . . . . 366

Unions in Health Care . . . . . . . . . . . . . . . . . . . . 367

The Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368

Chapter 20 Directions in Employee Relations . . . . . . . . . . . . 371

The Evolution of Employee Relations . . . . . . . . . 373

The Emergence of Scientific Management . . . . . 375

Parallel Management Systems Develop . . . . . . . . 376

Opposing Views of Employees . . . . . . . . . . . . . . 378

Long-Term Trends in OrganizationalManagement . . . . . . . . . . . . . . . . . . . . . . . . . 380

Government Inspires a Major Shift . . . . . . . . . . . 381

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Where We Are, Where We Are Heading . . . . . . . 382

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382

Chapter 21 Human Resources Arbitration . . . . . . . . . . . . . . 387Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 388

Advantages of Arbitration . . . . . . . . . . . . . . . . . 390

Human Resources Arbitration . . . . . . . . . . . . . . 392

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392

Chapter 22 Using Human Resource Consultants . . . . . . . . . 395Using Consultants . . . . . . . . . . . . . . . . . . . . . . . 396

Types of Consultants . . . . . . . . . . . . . . . . . . . . . 398

Engaging a Consultant . . . . . . . . . . . . . . . . . . . . 399

Summary: Why a Consultant? . . . . . . . . . . . . . . 402

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402

Appendix A: Sample Contract Agreement forConsulting Services . . . . . . . . . . . . . . . . . . . . . 405

Chapter 23 Maintaining an Effective Human ResourcesDepartment . . . . . . . . . . . . . . . . . . . . . . . . . . 409

An Effective Human Resources Department . . . . 410

HR and Optimal Organizational Efficiency . . . . 415

Future Directions for Human Resources . . . . . . . 416

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421

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Under its earlier, more narrowly descriptive names, human resources be-gan to develop an independent identity in business organizations in the1930s. Its importance has steadily increased over the intervening decades,and as the new millennium gathers momentum, human resources con-tinues to grow in relevance and usefulness.

Non-health businesses, manufacturing foremost among them, were thefirst to recognize the utility of human resources. Out of necessity, healthcare provider organizations began to rely increasingly on human resourceprofessionals as legal protections relating to workers proliferated. Owingto characteristics of size and structure, however, some elements of health-related activity have not received the full benefit of modern human re-sources capabilities. For example, public health as a discipline has beenslow to embrace human resources partly as a consequence of relatively small individual work forces and budgets that limit the ability of publichealth organizations to afford full-time human resources employees.Similarly, various other health-related organizations such as independentlaboratories and free-standing clinics and group practices have insuffi-cient staffing to justify full-time human resources professionals.

This book introduces human resources to those who are preparing towork in any area of health care or health service. It is written for practi-tioners and students in all disciplines related to health, from practicingproviders to major medical centers to administrators who engage in healthin a broad range of settings. It is written for students, practitioners, andmembers of boards of health, the citizen supervisors of many public healthagencies. To accommodate such a diverse audience, we have endeavoredto provide a balanced approach to the subject.

Each chapter is intended to stand alone; chapters are not sequentialand can be addressed in any order. Each chapter opens with a case studythat introduces the reader to key topics and questions to ponder whilereading the material that follows. The case study is concluded at the endof the chapter with expert commentary and suggestions that can be uti-lized should the reader someday become interested or involved in a sim-ilar situation. Each chapter includes learning objectives, discussion points,and listings of resources (books, periodicals, organizations, and Internetsites) that provide supplementary materials.

Our goal was to produce a practical book. Discussions of theory areincluded to aid understanding of application guidelines, but pure theoryruns a far second to practicality in the pages that follow. Many examples

P R E F A C E

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and a number of sample forms and documents are included, drawn fromour professional experiences and supplemented with input from other ex-perts.

Thank you for sharing some of your time with us through using thisbook. We trust that the time is well spent. We freely share credit with oth-ers for successes, but we reserve for ourselves responsibility for errors thatmay have crept into the book.

L. Fleming Fallon, Jr.Bowling Green, Ohio

Charles R. McConnellOntario, New York

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We owe thanks to several people. Mike Brown believed in this project andhad patience when it was most appreciated. Kylah McNeill’s gentle butsure hand guided the project. The folks at Jones and Bartlett are graciousat all times; we could not work for a better or more professional team.

We express thanks to the contributors who enriched this book. Theirexpertise and experiences are greatly appreciated. Lee Forst was willingto take a chance many years ago. Thanks for exemplifying Theory Y.

Finally, thanks to our wives. They gave up the time that allowed thisproject to be completed.

L. Fleming Fallon, Jr.Charles R. McConnell

A C K N O W L E D G M E N T S

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L. Fleming Fallon, Jr., MD, DrPH, MBAFleming Fallon is Professor of Public Health at Bowling Green StateUniversity, Bowling Green, Ohio. He is also the Director of the NorthwestOhio Consortium for Public Health, an accredited MPH degree programthat is offered jointly by Bowling Green State University and the Universityof Toledo. He has many years of experience as a management consult-ant and has authored 6 books and more than 350 papers and book chap-ters on a variety of topics in addition to making presentations throughoutthe world. Dr. Fallon has written a weekly newspaper column entitledHealth Thoughts continuously since 1995. He was a consultant special-izing in human resources with A. T. Kearney. He has served as both amember and president of a local board of health.

Dr. Fallon is a physician with residency training in occupational andenvironmental medicine. He received a DrPH degree in environmentalhealth science from Columbia University, New York, his MD degree fromSt. Georges University School of Medicine, St. Georges, Grenada, and anMBA from the University of New Haven, New Haven, Connecticut.

Charles R. McConnell, MBA, CMCharles McConnell is an independent health care management and hu-man resources consultant and freelance writer specializing in business,management, and human resource topics. For 11 years he was active asa management engineering consultant with the Management and PlanningServices (MAPS) division of the Hospital Association of New York State(HANYS) and later spent 18 years as a hospital human resources man-ager. As author, coauthor, and anthology editor, he has published 24books and has contributed more than 350 articles to various publica-tions. He is in his 26th year as editor of the quarterly professional jour-nal, The Health Care Manager.

Mr. McConnell received an MBA and BS in Engineering from the StateUniversity of New York at Buffalo, Buffalo, New York.

The following people made significant contributions to this book.

Marie M. Fallon, MHSA (Chapter 17)Marie Fallon is the Executive Director of the National Association ofLocal Boards of Health that has its headquarters in Bowling Green,Ohio. She previously served as a Project Director for the same organi-zation. Earlier in her professional career, she served as a controller for

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two community hospitals. She has completed Public Health Leadershipprograms at the state and national levels.

Ms. Fallon is completing an EdD in Leadership from Bowling Green StateUniversity, Bowling Green, Ohio, has earned an MHSA degree from St.Joseph’s College, Standish, Maine, and has a BA degree in Accountingfrom the State University of New York at Buffalo, Buffalo, New York.

Anthony J. Santarsiero, MBA (Chapter 8)Tony Santarsiero is the Acting Chief of the Public Health and EducationSystems Branch, Division of Partnerships and Strategic Alliances, NationalCenter for Health Marketing at the Centers for Disease Control andPrevention, Atlanta, Georgia. Prior to joining the CDC, he was a hospitaladministrator in the U.S. Air Force.

Mr. Santarsiero received his MBA degree from Florida TechnologicalUniversity, and has a BBA from the University of Georgia, Athens, Georgia.He is a fellow in the American College of Healthcare Executives and hascompleted the national Public Health Leadership program.

Hans Schmalzried, PhD (Chapters 8 and 18)Dr. Hans Schmalzried is an Associate Professor of Public Health at BowlingGreen State University, Bowling Green, Ohio. He has served as the HealthCommissioner of the Fulton County Health District, Wauseon, Ohio andthe Commissioner of the Henry County/Napoleon City Health District,Napoleon, Ohio. He has been active in public health administration ac-tivities at the local and national levels through publications, presentations,and work on task forces.

Dr. Schmalzreid earned his doctorate at the University of Toledo, Toledo,Ohio.

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C H A P T E R

1

1

An Overview ofHuman Resources

Chapter Overview

After reading this chapter, readers will:

• Understand the history of human resources in health careorganizations, originating from a few scattered tasks to acentralized activity, assuming additional necessary responsibilitiesas they arose.

• Appreciate the rationale for having a human resources department.• Describe or formulate the mission of a human resources

department or area in a healthcare organization.

■ CHAPTER SUMMARYThe human resources department provides vital services to any organi-zation. Health care providers are no exception to this rule. The origin ofmost contemporary human resources departments was an overworkedadministrator who struggled to hire a sufficient number of employees tomaintain normal operations. Organizational growth and expansion ofservices provided far exceeded the original administrator’s ability to hireemployees. Delegating this task created a personnel office. Compensationissues were soon delegated to personnel. As other legal requirements wereimposed, the size and complexity of the personnel office increased. Thename of the department became Human Resources. Formal college-leveltraining programs for people wanting to spend their careers working inhuman resources have been developed in recent decades. Contemporaryhuman resource professionals continue to struggle for equal status withinthe ranks of an organization. The process of change has been ongoingand is expected to continue in the future.

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Case Study: Mrs. Jackson’s Dilemma

It is approximately 1930, give or take a year or two. A hospital located ina prosperous town was growing along with its community. Mrs. ClaraJackson was effectively the administrator of the hospital, although it isdoubtful that the title Administrator was applied. Hospital administrationhad yet to emerge as a specialized field of study and a profession in its ownright. This hospital had started as many others had begun, as a private clinicowned by physicians who eventually turned their operation over to a com-munity board that would operate it as a not-for-profit institution.

In 1930, few professions were represented in a typical hospital. Therewere physicians, most of whom were in private practice and admittedsome of their patients to the hospital. A pharmacist might have been inattendance at least part of the time as well as a few others working in oc-cupations that later developed into the health professions that are knowntoday. However, by far the dominant occupation in the hospital of thattime was nursing. Nurses originally did nearly everything that was re-quired by patients. Because nurses comprised the majority of the staffand the persons who were in the hospital all the time, it was natural fora senior nurse, in this case Mrs. Clara Jackson, to oversee the operationof the facility.

Growth was accompanied by the emergence of specialized tasks andactivities such as housekeeping and food service. Despite their presence,Mrs. Jackson remained the principal manager in the hospital. Her ad-ministrative responsibilities, however, cut into the time she could spendwhere she felt she belonged, which was involved in the nursing issues ofpatient care. The task that especially consumed much of her time was hir-ing employees. Even though she was able to delegate the hiring of non-nursing personnel to other group supervisors, Mrs. Jackson was oftenswamped with activities related to hiring nurses. She felt that she wastrapped. If she concentrated on nursing, where she believed she belonged,jobs went unfilled and conditions worsened. However, if she gave her fullattention to hiring nurses, she had inadequate time available for her pro-fessional nursing responsibilities. Her dilemma intensified when the hos-pital’s sole bookkeeper and paymaster began to complain of having toomuch work to perform for a single person in keeping up with staff addi-tions and departures. What options were open to Mrs. Jackson in 1930?What options would be available to her today? What other issues or re-quirements did Mrs. Jackson have to think about in 1930? With whatother issues, requirements or regulations would a contemporary hospi-tal have to cope?

2 CHAPTER 1 AN OVERVIEW OF HUMAN RESOURCES


■ AN EVOLVING DEPARTMENT

Common Origins Many people refer to activities when discussing the duties and responsi-bilities of a human resources department within a larger organization.Persons with specialized training in human resources often refer to thesame activities but use the name function (plural is functions) when re-ferring to the duties and responsibilities. The word function is sometimesapplied to an entire human resources group or organization. Using thatnomenclature, a human resources department becomes synonymous witha human resources function. In this book, we have tried to avoid using theterm function. We raise the issue so that readers will not be surprised whenencountering a reference to a human resource function. Throughout thisbook, we will use the interchangeable terms human resources and HR.

The human resources department, or office, as it is known today, orig-inated and developed in the same manner as other areas of a health careor any other kind of organization. That is, beginning from what now areconsidered to be a set of fairly narrowly defined responsibilities, humanresources originated and grew in the same manner as finance, purchasing,and other organizational areas. Bits and pieces of necessary work that havesome characteristics in common tend to be bundled or gathered together.This occurs partly because they are related to each other and partly becausetheir common tasks suggest the need for specialized skills and expertise.For example, activities that involve money, such as paying salaries, pay-ing bills, receiving payments, maintaining bank accounts, and handlinginvestments, have been collected and centralized. Thus, the finance areaevolved, and organizations acquired a division or department known asFinance. Activities that might once have been known as accounting, keep-ing track of money and reporting on its movements, and payroll, dispensingcompensation to workers, were bundled under the broader heading of fi-nance, the name ultimately given to the overall managing of money.

Before the title of human resources emerged, the bundled organiza-tional activities related to people were called “personnel.” In what is likelya minority of organizations, this activity remains known as personnel. Insome organizations, as the activities related to people have evolved and ex-panded, the change from personnel to human resources has indicated realchanges in overall scope and direction. However, in many organizations,the change from personnel to human resources occurred in name only,with the activities continuing unchanged in depth or breadth. The morepreferred title is being used but the scope of activities has not changed.

An Evolving Department 3


Development of the Employment Office Before personnel existed, there was an employment office. Before the emer-gence of a formal employment office, managers like Mrs. Jackson of theopening case study did their own hiring. In many instances, organizationswere extremely small by contemporary standards and the proprietor or mostsenior worker was often the sole manager. However, as businesses grewand the manager or managers became busier, they acquired help. The firstassistance was clerical in nature: a person to assist with hiring.

The employment office came into being in such organizations becauseof the growth and accumulation of tasks related to hiring. When a suffi-cient number of these tasks emerged, it made sense to concentrate theminto a single department. One of the reasons for bringing these tasks to-gether in one place was to relieve proprietors and managers of the grow-ing burden of work that did not generate revenue. Personnel work isessential but actually does little to produce an organization’s products orservices. The two primary benefits of establishing an employment officeincluded freeing managers from the necessity of personally having to findworkers and being able to establish consistency in hiring practices.

Initially, two significant activities pertained to employees and theirneeds. Workers had to be hired, and they had to be paid. Before these employee-related activities became centralized, they were ordinarily ac-complished by proprietors or their designees. In some instances, the taskof compensating employees became centralized before hiring. Many pro-prietors established the position of Paymaster. In many organizations, theactivities of the paymaster were merged into the newly established em-ployment office. In this way, the new area became known as the employ-ment office. The two primary activities became known generally as“employment” and “payroll.”

The responsibilities of employment and payroll both grew in scope andcomplexity as organizations were affected by legislation at all levels oftheir operations. With the introduction of wage and hour laws by stateand federal governments and the advent of income tax and Social Securitywith their requirements for employers to withhold monies from employ-ees, those who hired and paid employees acquired more and more tasksto perform within a business. These new tasks were in addition to com-plying with the requirements of other government agencies.

In a minority of organizations payroll remains part of human resourcesto this day. In most organizations of appreciable size, payroll has long beena subfunction of finance. The qualification “of appreciable size” ac-knowledges the practice by many smaller organizations of having the pay-roll activities provided by an outside vendor. This is an example ofoutsourcing. In such cases, the human resources office often retains the re-sponsibility for transmitting necessary information to the payroll service.



Tasks were added to the employment office as needs arose. These ad-ditions had one significant dimension in common: all were related to work-ers and the process of finding qualified people, hiring them, and maintainingthem as employees. The employment office finally reached a point at whichit encompassed much more than simply employment (and often payroll).Its name became less and less of an accurate descriptor of the department’sactivities and responsibilities.

Over time, the employment office began to be known as the personneldepartment. The title “Personnel Department” was considered to be farmore descriptive of what the department’s activities had become. All inall, the label of personnel was appropriate. The word personnel essentiallyreferred to people. All of the responsibilities of a personnel departmentrevolved around an organization’s people.

The Expanding Personnel Department Other forces emerged and additional external requirements were imposed.Employers began to offer forms of compensation other than wages. Somebegan to offer these on their own while others were spurred by unions.However, most instituted them as a result of competitive forces. These addedforms of compensation came to be called fringe benefits. They imposed ad-ditional responsibilities on an organization. People to support the new taskshad to be placed somewhere in the organization. Because they related toemployees and their family members, that is, to people, the personnel de-partment was a natural location for them.

In the economic boom that followed World War II, health insuranceprograms became part of many organizations’ benefits offerings.Government mandates such as Workers’ Compensation entered the pic-ture as statutory benefits. (Workers’ Compensation was originally calledWorkmen’s Compensation, but its name was changed in the 1960s.)Statutory benefits are those that an employer is required by law to provide.These include the employer’s share of Social Security taxes, participationin Workers’ Compensation and often state-mandated, short-term disabil-ity insurance programs. Retirement programs also proliferated, provid-ing more work for personnel.

A major piece of government legislation that caused a great deal of workfor some organizations was the National Labor Relations Act of 1935,more commonly known as the Wagner Act. This act provided legal protectionto labor unions and made the task of organizing workers considerably eas-ier for unions than it had been. It created a great deal of people-relatedwork for organizations that became subject to union organizing efforts.Once one or more unions were established, their interactions with the em-ployer had to be organized so that business could continue. Some union-related activities, such as running an anti-organizing campaign, conducting

An Evolving Department 5


negotiations or administering a contract, were occasionally taken on byline managers. In many organizations, these new activities fell to those whowere already in the people business. In contemporary organizations that haveunionized employees, an organizational entity known as Labor Relationsmay exist on its own or as a subsidiary operation within human resources.

Prior to the early 1960s, a typical personnel department was responsi-ble for most activities related to employment, record keeping related to em-ployees, some degree of compensation and benefits administration, andpossibly labor relations. Over the years leading up to the early 1960s, per-sonnel departments developed an image of a staff or service group thatran an employment office, kept records, and generally pushed paper. In theearly 1960s, however, the importance of the personnel department beganto expand. In 1964, personnel departments were required to adopt a sig-nificantly expanded and increasingly more important role. The pivotalevent in dramatically changing the activities of the personnel departmentwas passage of the Civil Rights Act of 1964. (A more complete chronol-ogy of this act and other relevant human rights legislation is contained inChapter 3.)

Beginning in 1964, the work of the personnel department became in-creasingly more complex and the level of responsibility involved signifi-cantly increased. Much more specific knowledge was required ofpractitioners working in the personnel office. Specialized education beganto develop, and personnel began to grow as a specific professional field.The title of human resources came into being but did not immediately en-joy widespread usage.

Even as personnel work grew more complex, more requirements wereimposed on the operation. More and different kinds of problems emergedand additional but different varieties of work had to be performed. The for-mer image of the personnel department, a group of people who found em-ployees, kept files, and pushed paper, continued to prevail. In many instancesthis older image was reinforced by personnel practitioners who, after twoor more decades in the field, were overwhelmed by the tide of change. Theirknowledge fell well behind the times and quickly became obsolete.

In academia, personnel administration became a specialized educationalfield, joining labor relations that had already become a formal field ofstudy. Several new sub-disciplines such as compensation analysis, benefitsadministration, employee testing and selection began to emerge. In themid-1970s, the personnel department became responsible for interactingwith a variety of external agencies and special interest groups involved inactivities such as Affirmative Action, Equal Employment Opportunity,safety, and social responsibility. Many new professionals came from thefield of industrial psychology. Others came from programs in manage-ment or administration.



Problems with Personnel: Real and Perceived Most of the personnel practitioners of the mid-twentieth century, from ap-proximately 1945 to 1965, were not educationally prepared specificallyto enter that field. When the great majority of these practitioners receivedtheir education, most formal training in personnel administration con-sisted of one or two courses included in other programs of study.

Health care organizations, especially hospitals, were once seen as fun-damentally low-pressure environments that offered an escape for individ-uals who have at times been described as industry dropouts. Manyadministrators, directors of finance, personnel managers, and others cameto work in hospitals from businesses and industries in mid-career. Somepersonnel managers, for example, left manufacturing and industrial posi-tions for hospital jobs as an escape from union involvement. Their previ-ous experiences in health care working environments were extremely limited.A strong attraction for making such a career change was to escape from unionsthat, at the time, were not common in health care organizations.

Many of the problems experienced with the image of personnel de-partments were surely due to the performance and behavior of personnelpractitioners of the time. The lack of educational training contributed tothe antipersonnel bias occasionally encountered. Many of these personsfound themselves in situations that far exceeded their training or experi-ence as the field became more complex and the pressures of the 1960s and1970s continued to mount.

Many people who spend their entire working lives in one particular jobor working environment do not readily adapt to change. Some of the prac-titioners of the old-school who entered health care personnel work be-tween 1945 and 1965 fell by the wayside as the field became more complex,tougher, and considerably more demanding. Some were unable to copewith unions and the demands of labor relations. Others became frustratedby Affirmative Action and newly introduced civil rights concerns and leg-islation. In the 1980s, some gave up when they perceived increasing gov-ernment regulation of benefits as creating a technical and legal nightmare.

Some undeniable image problems related to the personnel departmentstill exist. A minority of senior managers continues to view personnel asa relatively unimportant staff activity that does little more than hire peo-ple and file papers. A considerable number of employees view the opera-tions of personnel as a necessary bureaucratic activity that exists primarilyfor the benefit of a corporation and not for them.

■ WHAT’S IN A (NEW) NAME? Although today human resources, or HR, is the prevailing name for the de-partment that handles personnel matters, the HR label is far from universally

What’s in a (New) Name? 7


used. Many departments fulfilling the same overall responsibilities are stillcalled personnel departments. Other names are occasionally encountered,among them employee affairs, employee services, personnel informatics,benefits processing, and others. Most of the uncommon titles reflect a lim-ited portion of the activities that are performed by a contemporary, full spec-trum human resources department.

Is human resources more descriptive than personnel? Some experts con-tend that an organization’s ultimate resource is financial, and an organizationuses financial resources to acquire both things (material resources) and peo-ple (human resources). Therefore, in an organizational context, human re-sources means people, as does the older, alternate title of personnel.

Why the Change? Most scholars of the field agree that personnel became human resourcesin many organizations for one or more of the following reasons: the newname more appropriately reflects the workload of the department; thechange in name improves the image and elevates the status of the work be-ing performed; the new name enhances the professionalism of those whoare accomplishing the work.

Did the personnel department become human resources to escape theexisting and often negative image of personnel? For some practitionersand organizations, the change was made to overcome the outmoded andlimited view of personnel and to gain both professional acknowledgementand a measure of respectability.

A parallel transformation of organizational image occurred in finance.Once there was only bookkeeping, which eventually became accountingas reporting and analytical tasks were added to the simple business ofkeeping track of money in and money out. As organizations grew there de-veloped the necessity to raise money, invest money, and generally managemoney well beyond the needs of day-to-day operations, so the financefunction developed. In most instances those narrower money-related ac-tivities such as payroll and accounting were brought under the umbrellaof finance. This particular transformation is incomplete and far from be-ing universally accepted; many contemporary accounting and finance prac-titioners are dismissed as number-crunchers or bean-counters. Marketingprofessionals incur a similar lack of professional respect or identity. Despiteextensive efforts to modify their image, many marketing departments arestereotypically referred to simply as sales, a term that has existed for decadesand frequently carries derogatory connotations.

Practitioners in every field are required to learn and grow. The alternativeis to fall behind and eventually fail. Change occurs at various rates in dif-ferent occupational fields. In the field of personnel or human resources,



several bursts of change occurred within a sufficiently brief period to im-pact the career spans of many practitioners.

Bias, whether real or perceived, cannot be overcome by a simple changeof name. Neither can respectability be acquired by a change of name.Respect, however, can be earned over time as a new image emerges, onethat has nothing to do with the department’s title other than shedding thenegativity that some associate with the name personnel. Human resourcesis taking its place among those activities now viewed as being essential tothe success and survival of a modern organization. It required decades toform and solidify the image of personnel as being neither especially diffi-cult nor demanding. The transformation of that image has been under-way for years, yet it is far from complete.

Not everyone associated with the field has been enthusiastic about thename change to human resources. One personnel director described thetrend to change the name of the company personnel office to the depart-ment of Human Resources as “An excellent example of corporate pom-posity.”1 The article argued that employees are human and special, notjust another resource similar to real estate or spare parts. As an interest-ing side note, not long after the article appeared in the professional jour-nal Personnel, the publication changed its name to HR Magazine. Regardlessof whether or not one approves of the name change, no title alone willconfer respect. That is a commodity that must be earned through per-formance. When performance is forthcoming, respect will follow.

Here to Stay For a number of years, human resources has been the growing name of choicefor this service activity of an organization. The HR name has been adoptedby professional organizations, academic programs and publications for-merly designated as serving personnel. This is a fairly good sign that thetitle of HR will probably dominate for the next few decades.

The changeover of name was most evident during the decade of the1980s. Surveys indicated that in 1986, some 40% of such departmentsused the HR designation. Just 42 months later, the proportion using theHR designation was at 60% and still climbing. Also, the HR title was moreprevalent in larger organizations, in use in 80% or more of organizationshaving 2,500 or more employees.2

The title of Human Resources is more prevalent in larger organizations.Professional organizations have also changed their names. The AmericanSociety for Personnel Administration has become the Society for HumanResource Management.

A number of additional surveys conducted by professional HR organ-izations during the 1980s and 1990s seemed to focus primarily on the de-gree to which the name change from personnel to human resources hadaffected the status of the department within its organization. Historically,

What’s in a (New) Name? 9


the position of the head of HR has carried the title of director or manageramong supposed peers who enjoy the title of vice president. The head ofHR frequently reports to a vice president rather than directly to the pres-ident or executive vice president.

The component duties and responsibilities of HR are not uniform acrossorganizations. Changes are being made, but the relative status of HR withinmost organizations is improving only slowly. Many HR departments re-main in stages of transition, and some have made little progress. However,they are changing and continuing to evolve to be better able to addressnew and more complex responsibilities.

Experts disagree as to the present status of an HR department withinthe health care industry. However, most do agree on several broad points.First and foremost, HR must continue to evolve so that it can remain cur-rent with the changing needs of health care organizations. Next, HR muststrive to transcend its traditional reactionary role and adopt a more proac-tive outlook and approach. Human resources should be available to min-imize undesirable occurrences to an organization through the systematicidentification of potential problems. The next step is working to avoidthem or similar ones in the future.

In addition to performing all of the expected duties in support of an or-ganization’s employees, an effective contemporary HR department servesas a full-fledged partner on an administrative team, participates in orga-nizational strategic planning as a full-fledged member, guides successionplanning for an organization, and works as an agent for necessary andhealthy change.

Throughout the remainder of this book, the title human resources willbe used as the prevailing name for the department or functional area. Thisuse is not to be construed as claiming that any group that is called personnelor another name is any less legitimate than a human resources department.True differences do not reside in labels.

■ THE FOCUS BROADENS For all practical purposes, in the first half of the twentieth century humanresources in the health care industry essentially meant human resources inhospitals. Until the 1960s, acute-care hospitals were perceived as beingthe center of the American health care system. Virtually all services pro-vided to people were delivered in a hospital. Those that were not providedin hospitals were rendered in physicians’ personal offices. One has only tolook briefly at the different health care provider organizations in existencetoday to appreciate that human resources in health care is now practicedin a variety of settings and organizations that are both large and small.



Identifying only a small sample of organizations that deliver health careservices will help to make an important point. Contemporary componentsof the health care system include free-standing surgical centers; urgent careproviders; community health centers; public health agencies; long-termcare providers; groups specializing in imaging, physical therapy, labora-tory testing, and other activities; and several forms of medical and surgi-cal group practices of varying sizes. All of these organizations, from thesmallest partnership or group practice to the largest acute-care hospital,require the presence of human resources knowledge and expertise. In largerorganizations, this expertise is provided by a human resources depart-ment. In a small organization, HR expertise may be provided by an in-house individual whose time and duties wholly or partly focus onpersonnel-related activities. Human resources needs may be outsourced ormet by an external consultant who provides them on an hourly basis orwhose services are shared among several small health provider offices.Regardless of size, however, human resources needs are essential to orga-nizational operating in today’s health care environment.

■ CONCLUSION The typical human resources department has grown from a single-person op-eration into a multifaceted, complex organization. In some organizations,a single person continues to perform all of the needed tasks although thishas become an exception rather than the rule. The volume of governmentregulations has greatly increased in recent decades. The scope of duties per-formed has also increased. Changing the departmental name from person-nel to human resources reflects these developments. People are now receivingspecialized training in colleges and universities for subsegments of humanresource activities. However, they continue to struggle for professional recog-nition and equal status with their organizational counterparts.

Returning to the dilemma posed in the initial case study, the first stepthat Mrs. Jackson took in lightening her load of non-nursing responsibil-ities was to hire a helper. The selected person was a combination secretaryand general assistant who coordinated most of the hiring activities for thehospital. In effect, this helper was the hospital’s first personnel worker. Itis likely that the first personnel records section was a drawer in this indi-vidual’s desk or file cabinet. At the time, employee hiring was the only element of a personnel worker’s position description or list of job duties.No government regulations had yet been introduced in 1930. The SocialSecurity Act and automatic withholding of employees’ contributions wasnot created until 1935. Affirmative Action and Equal Opportunity legis-lation was not enacted until the mid-1960s. The Americans with DisabilitiesAct added additional duties in 1990.

Conclusion 11


Mrs. Jackson’s helper was a staff of one that became the hospital’s em-ployment office. Within a few years this office evolved into a personnel de-partment. Mrs. Jackson was extremely relieved to be able to delegate thegrowing burdens of securing employees and looking after many of theirneeds. She continued to be involved in employee acquisition to the extentof interviewing potential employees for her own area, but she no longerassumed the responsibility to find and screen all job applicants. Furthermore,she did not have to process them into and out of the organization.

References1. Hoey, J. T. (1987). ‘Human Resources’ versus ‘Personnel.’ Personnel, 64(5), 72-75. 2. Dave Stier, “More Use of Human Resource Title,” Resource, Society for Human

Resource Management (SHRM), October 1989. p. 2. (SHRM was formerlyASPA, the American Society for Personnel Administration.)

3. Townsend, R. (1970). Up the Organization. New York: Alfred A. Knopf.

Discussion Points

1. Describe how you believe the business of locating, hiring, and main-taining employees was accomplished before the establishment of anemployment office. List the activities that were probably performedand who was most likely to have performed them.

2. With specific reference to activities found within health care organi-zations, describe how three departments or functional areas other thanhuman resources might have evolved in a manner similar to the evo-lution of HR. In each instance, describe the activities that might haveinitially existed and then accrued to form the basis of each activity asit is known today.

3. In your opinion, what did senior managers in the past believe were theprimary benefits of gathering a variety of employee-related tasks to-gether to form an employment office?

4. In your opinion, what were the two or three earliest changes that in-fluenced the development of a centralized operation to address mat-ters related to employees? Why?

5. Why might some people consider the term fringe benefits to be misleadingat best or completely erroneous at worst? Why is the value of thesebenefits most appropriately included as part of total compensation?

6. Comment concerning the industry dropout phenomenon as it con-cerned earlier full-time human resources managers in health care. Isthe somewhat derogatory label of “industry dropout” reasonably orunreasonably applied? Why?

7. Do you personally agree with changing the name from personnel tohuman resources? Why or why not?



8. Do you support or oppose the abolition of a central personnel de-partment in favor of having individual managers assume the respon-sibility for all such activities for their own departments? Why?

9. Do you believe that changing the name of personnel to human re-sources substantially improved the image of the department or ser-vice area? Why?

10. Comment on the following quotation from Up the Organization(Townsend, 1970): “Fire the whole personnel department. Unless yourcompany is too large (in which case break it up into autonomousparts), have a one-girl people department (not personnel department).”3

Keep in mind that this passage was written in the late 1960s.

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Conclusion 13


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How HumanResources Fits intoan Organization

Chapter Overview


• Understand the placement of human resources within anorganizational hierarchy

• Be able to distinguish between line and staff activities andestablish human resources as an essential staff operation

• Describe several models for organizing a human resourcesdepartment

• Describe how the human resources operation is commonlyorganized to best serve an organization

• Appreciate the relationship between human resources andexecutive management and other organizational departments

• Understand the role of human resources when implementingchanges within an organization

• Have reviewed the effects of re-engineering on services providedby human resources

• Appreciate contemporary trends regarding outsourcing humanresource services

■ CHAPTER SUMMARYThe person heading a human resources (HR) department should reportto an organization’s chief executive officer. A variety of organizationalstructures are used in HR departments. These include models based on

C H A P T E R

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clerical tasks, counseling, industrial relations, control and consulting. SomeHR professionals have proposed similar approaches to HR organization.

Line and staff employees perform different tasks for an organization.Line operations advance the work of an organization. Staff operationssupport and enhance the work of an organization by making it possibleto continue producing products or delivering services as intended.

The degree of effectiveness of HR depends on a chief executive officer’sattitude toward that activity. As a staff operation, HR does not issue com-mands and is vulnerable to changes that result from reengineering.Outsourcing human resource services is relatively common.

Case Study: What Shall It Be and Where Do We Put It?

“Things were much simpler when we were just a small-town hospital witha four-person personnel department,” said personnel director Sharon Kellyto her immediate superior, chief operating officer Don Thomas. “But nowthat we’re a so-called health system, it’s almost impossible to tell who issupposed to be doing what for whom on any given day.”

Sharon’s allusion to a system was in reference to the recent merger oftheir facility, Community Hospital, with a somewhat smaller rural facil-ity located 15 miles away. At the time of the merger, Community Hospital,newly renamed the Affiliated Community Health and Education System(ACHES), acquired an organization consisting of three health centers thatbecame satellite facilities for the system, and became affiliated with twosizeable group practices, one medical and one surgical.

Sharon continued, “And now, as I understand it, we’re going to be calledhuman resources, not personnel. Is that right?”

Don nodded. “Yep, it’ll be HR from now on.” He grinned and added,“We might as well call it HR. That’s what every other place is doing.”

“Don’t get me wrong,” Sharon said, “I’m not complaining. I’m reallypleased with being named personnel, that is, HR director for the system.But look at what we’ve got to work with. There are four of us here atCommunity. Two people are in the department at the other hospital andone personnel person at the biggest of the satellites, with just a secretarytaking care of personnel stuff at the other two satellites. Office managersat the group practices are overloaded trying to take care of personnel mat-ters along with a dozen other concerns. And now we’ve got such a far-flung setup that if I were to get in my car and make a circuit of all of ourfacilities, I’d travel more than 60 miles. What can we do with all of this?”

Still smiling, Don said, “That’s what we want to know. We want toknow how to organize the new HR department to best serve the AffiliatedCommunity Health and Education System. Every essential base has to becovered, but keep in mind that nothing is forever, given that we’ll proba-bly continue to grow and change.”

16 CHAPTER 2 HOW HUMAN RESOURCES FITS INTO AN ORGANIZATION


“But what does the CEO want from pers . . . ah, human resources?”Don shrugged. “In some respects your guess is as good as mine. You

know how she’s been about your area since she’s been here. She expectsus to recruit good employees for the hospital system and keep good records.Keep the system out of legal trouble, but don’t make waves.”

At that moment Sharon had very little idea of the direction she shouldrecommend.

How would you respond to Don’s request? How should the new HRdepartment be organized? What issues should the HR department focuson first? What aspects may change over time? Why?

■ HUMAN RESOURCES IN THE ORGANIZATION: THE MACRO VIEW

In healthcare facilities, the individual in charge of HR usually reports toone of the organization’s two top executives. The preferred reporting re-lationship is with the president or chief executive officer (CEO). In somehealth care organizations, this individual is referred to as administrator,director, or some other title. The next best choice is the executive vice pres-ident or chief operating officer (COO). This person may be known by an-other title such as associate administrator or assistant administrator thatdesignates the number two executive in the organization. In many con-temporary health care organizations, people heading HR departments re-port to the top executive. In a small facility, there may be no second levelof executive management so the human resources head will be likely to re-port directly to the CEO.

Having HR report to a level other than executive management is inap-propriate. Doing so impairs the potential effectiveness of the department.Even reporting to the second executive level, COO, or associate adminis-trator can result in conflict with other organizational departments that re-port to the CEO. The chief operating officer has responsibility for all of theoperating departments. This includes the majority of employees. Other staffoperations, for example finance, typically report directly to the presidentor CEO. Instances can arise in which finance and HR are in disagreement.It can seem like HR belongs to operations alone when HR reports to thechief operating officer. In such an arrangement, HR might be incapable offair and equitable dealings with others in the larger organization.

■ LINE AND STAFF Two important distinctions must be made when using the terms line andstaff. How do people in these different positions operate within an or-ganization and how do they differ? Although the actual relationships may

Line and Staff 17


be different, how does organizational authority, that is, the chain of com-mand, apply to both?

Doing versus Supporting Simply stated, the difference between line and staff in an organization isas elementary as the difference between doing and supporting. Line de-partments actually perform an organization’s work while staff depart-ments facilitate the work, striving to enable overall efficiency andeffectiveness.

Another way to describe a line operation is to say that it advances thework of an organization. In the manufacture of a physical product, eachline activity that is performed changes the physical shape or state of a prod-uct and brings it closer to completion. When a service is being provided,each activity performed advances the state of completion of the service. Ifa line operation is ignored or omitted, the final physical product remainsincomplete or unfinished; if a service is not delivered in a satisfactory man-ner or if an activity that should have been performed along the way isomitted, then the service is incomplete. In the food service area of a hos-pital, for example, if one station on a tray assembly line is missing, thenthe meals that are assembled on that line will be incomplete. In anotherexample, if a nurse neglects to administer a particular medication whenscheduled, then the services delivered to the affected patient will be in-complete.

A staff operation does not advance the work of an organization or has-ten its completion. Rather, it supports and enhances the work of an or-ganization by making it possible to continue producing products or deliveringservices as intended. Staff positions may be removed and the productivework of an organization will usually continue, at least for a time. However,the organization is likely to become inefficient and will eventually ceaseworking without the necessary staff support. Staff areas within a healthcare organization include HR, finance, housekeeping (or environmentalservices) and maintenance (or engineering). While none of these activitiesdirectly advances the provision of services, if they are not performed, thenpatient care will eventually experience both inefficiencies and losses inquality. The primary role of staff or supporting areas is to maintain an or-ganization’s service environment and capability, making it possible for lineoperations to continue in an optimal manner.

In most instances, it is possible to determine whether an activity is lineor staff by imagining what would happen to the workflow if the activitywere to cease. If an activity or position is abandoned and the workflow isimmediately disrupted, then it is a line operation. If there is no apparentshort-term effect on workflow, then it is a staff operation.



What happens when individuals engaged in line activities disagree abouthow services should be provided or supported with those who performstaff operations? If a conflict between line and staff cannot be resolved bythe managers of the respective departments, then it is ordinarily referredto higher management.

The Chain of Command The concept of line and staff can become somewhat confusing when con-sidered in conjunction with the chain of command. In every department,whether line or staff, there is a line of authority that runs downward fromthe department manager. This line includes all subordinate supervisorsand eventually reaches all rank-and-file employees. The line of authorityis known as the chain of command. A manager of a staff activity is also aline manager, but only within that operational area. For example, the di-rector of finance has line authority over the employees in finance, but thatauthority does not extend beyond the boundaries of the department. Thedirector of finance can exercise authority within but not outside of finance.Every staff position has a limited chain of command embedded within it.The line of authority does not extend outside of the department. In lineoperations, the chain of command can extend through several organiza-tional levels and include more than one department. For example, the CEOhas authority over the COO who, in turn, has authority over the directorof materials management who has authority over others and so on to thefinal link in the chain of command. The line of authority extends throughall levels.

As described earlier, HR is a staff organization. The line and staff dis-tinction is extremely important when considering where HR is located andhow it operates. The manager in charge of HR has line authority onlywithin HR. As a staff operation that provides services, HR has no au-thority over any employees outside of its departmental boundaries. TheHR department may be an organization’s expert and official voice re-garding personnel policies, compensation, and benefits and many of thelegalities of employment, but HR has no power of enforcement. A smallminority of HR professionals object to this contention. They operate witha control model under which HR assumes some enforcement authority.

Occasionally, an operational area straddles the boundary between lineand staff. An obvious example is dietary services, which has the responsi-bility to feed patients, administer therapeutic dietetics (both line activi-ties), and prepare cafeteria and snack shop meals (both staff activities).

An Essential Staff Activity Managers working in a health care organization must understand that al-though HR may ultimately report at or near the top of an organizational

Line and Staff 19


structure, it is a staff operation. Its role is largely service and rendering ad-vice. As such, HR has no authority over any other operational areas or de-partments in an organization. The HR department exists to provide advice,guidance, assistance, and whatever other services may be deemed appro-priate according to the mission of the organization and the needs of otherdepartments.

■ THE APPEARANCE OF HUMAN RESOURCES

Perceived Human Resources Models Human resources may be viewed in a variety of ways depending on itsplacement in an organization’s hierarchy. Relevant aspects include how itis perceived by other employees, the behavior of HR management andstaff and the expectations of senior HR managers. Other influences in-clude the traditional role of HR within an organization, the demandsplaced on HR by the larger organization, and the education, training, andexperience of HR staff and personnel. Previous perceptions of an HR de-partment are often viewed as models for HR service delivery. One authordiscussed five recognizable models of HR organization: clerical, counsel-ing, industrial relations, control, and consulting.1

TThhee CClleerriiccaall MMooddeell The clerical model represents the long-held and unflattering stereotypicalview of personnel. Under this model, an HR department exists to processand file paper, maintain records, track statistics and key dates, and ad-minister employee benefits plans. Under the clerical model, the top man-ager of HR is likely to be experienced as a benefits administrator or havea similar practitioner orientation. In organizations where this model stillexists, HR is rarely called upon to go beyond these expectations.

TThhee CCoouunnsseelliinngg MMooddeell This model is relatively common in hospitals and other service organiza-tions where the total cost of employees represents a relatively large pro-portion of the budget, and where an organization places an emphasis onmaintaining employees as effective producers. Under this model, HR islikely to act as an advocate for employees, provide a resource to managersfor people problems, resolve disputes and disciplinary issues, place a highpriority on preserving privacy and confidentiality, stress training and de-velopment throughout the year at all levels of an organization, lag behindthe state-of-the-art in effective compensation and benefits administration,and maintain a posture that is primarily reactive.



TThhee IInndduussttrriiaall RReellaattiioonnss MMooddeell The industrial relations model typically develops in organizations in whichthe work force is unionized and there are periodic contract negotiations.Another aspect of this model is considerable activity having to do withgrievances, arbitrations, and similar confrontations. Under this model, anHR group is likely to have its activities and procedures specified by con-tract and performed automatically with little innovation. Because they aredirected by a contract, employees have few opportunities to display flex-ibility or judgment as they perform their job duties. Human resources em-ployees are viewed as powerless within an organization’s structure. Sucha view is usually limited and not especially positive.

TThhee CCoonnttrrooll MMooddeell Infrequently encountered in American organizations, under the controlmodel HR has substantial power. This usually stems from the charisma, per-sonality, or individual strength of its top manager and key staff. A control-model HR department usually exerts dominance over any aspect ofoperations having HR implications. Consistent with this model, manymanagerial decisions are made only following clearance by HR personnel.Human resources staff members must be current and knowledgeable con-cerning applicable legal requirements and must understand policies and pro-cedures. Other work rules must be consistently applied. Under the controlmodel, an HR departmental executive is a key member of an organiza-tion’s administrative team. With this model in place, managers of other de-partments may feel stifled and see the larger organization as being inflexible,bureaucratic, and rule-bound. Under the control model, employee in-volvement activities receive minimal if any support.

TThhee CCoonnssuullttiinngg MMooddeell This model is ordinarily found in larger organizations. Here, HR practitionersare usually expert resources. Employees, department managers, and exec-utive management rely upon them. The services provided by HR person-nel are determined by demand. However, this is primarily a reactive modelthat provides effective service wherever an apparent need is identified butleaves some organizational needs either unmet or unidentified.

The foregoing models describe some dominant perceptions of HR. Thesemodels are unlikely to exist in their pure forms. Rather, most organizationsfeature a mix of the characteristics of two or three models. This commonlyprevails because of differing philosophies introduced by a succession of HRheads. However, one particular model will usually prevail in the percep-tions of employees and their department managers. Most HR profession-als agree that an effective HR department is best utilized as a consultantor advisor. Ineffective HR departments are relegated to providing clericalservices.

The Appearance of Human Resources 21


The greatest single problem with all of the foregoing models is that theyare primarily reactive. All of the HR services provided by the models areneeded. They should be delivered without any single model dominating oroverwhelming an organization. However, managers at all organizationallevels must constantly work to make HR a true strategic partner in theachievement of an organization’s mission.

Alternative Human Resources Models In the late 1980s, another approach to providing human relations ser-vices emerged. Driver, Coffey, and Bowen created alternate models basedon the operational areas of an organization.2 Organizations would, intheory, adopt the model that best reflected the most dominant aspect oftheir mission or core business. The next models to be described are sim-ilar to those already discussed. However, they reflect different points ofview. The HR activities and services of an organization can be accuratelydescribed by using a combination of the foregoing classic models and thenext revised models. The next models include approaches based on al-ternative clerical approaches, the law, finance, management, humanism,and behavioral science.

TThhee AAlltteerrnnaattiivvee CClleerriiccaall MMooddeell This is similar to the clerical model described earlier. According to thismodel, the primary role of HR is to acquire data, maintain records, andfile required reports. Human resources personnel perform routine tasks,process paperwork, comply with regulations, provide a steady pool ofprospective employees, and meet the needs of existing and retired work-ers. This model presents HR as passive and relatively weak.

TThhee LLeeggaall MMooddeell Under the legal model, an HR department derives its primary strength andreputation from its knowledge and expertise concerning legislation that af-fects employment. Compliance with all applicable laws is the overridingconcern of all who work in such a department. Others in an organizationmay view HR as a bureaucracy. Occasionally, others may judge it to be in-trusive, obstructive, or both. The legal model is frequently present whenpart of a workforce is unionized. An advantage of the legal model is its ex-pertise and ability to negotiate contracts, monitor contract compliance,and address grievances.

TThhee FFiinnaanncciiaall MMooddeell An HR department operating under the financial model displays maxi-mum attention to human resource costs. Particular attention is paid to in-direct compensation costs such as health and dental insurance, life insurance,retirement plans, paid time off, and other benefits offered to employees.Successful human resource practitioners working under this model are fre-



quently well versed in matters of finance. A potential hazard of this modelis placing financial matters above all other employee relations issues.

TThhee MMaannaaggeerriiaall MMooddeell Under a managerial model, HR personnel often work within the same bottom-line productivity oriented framework as do most line managers.They share the same goals and values as line managers and make decisionsin accordance with organizational managerial objectives. This model lendsitself to decentralization of HR activities and services, under which line man-agers perform many of the tasks typically reserved for HR personnel. Thismodel sometimes results in inconsistency in the application of HR prac-tices because of having organizational guidelines interpreted by so manydifferent persons. A potential drawback of the managerial model is thatan organization may end up having no particular strategic outlook or in-volvement in long-range planning.

TThhee HHuummaanniissttiicc MMooddeell The central tenet of the humanistic model of HR is that it exists primarilyto foster human values and potential within an organization. Individualemployees are the primary focus of HR practitioners. Individual develop-ment and career planning are emphasized. The model assumes that en-hancing the working life of each individual enhances the overall effectivenessof an organization. Experts claim that the rising level of education and thegeneral sophistication of employees and their expectations of a high-quality work experience provide support for this model.

TThhee BBeehhaavviioorraall SScciieennccee MMooddeellThe behavioral science model assumes that disciplines such as psychol-ogy, social psychology, sociology, and organizational behavior provide thefoundation for most HR activities. This model is frequently used when de-signing performance appraisal systems, job evaluation classifications, re-ward and incentive programs, employee development plans, and employeeinterest and attitude surveys. Increasing sophistication of both managersand employees provides some support for this approach.

As with the first set of models introduced, the alternative HR modelsare unlikely to be found as pure types. For example, many managers con-tinue to assume that HR provides clerical services. Despite how modernand sophisticated HR becomes, organizations will continue to maintain asignificant number of records. Unless there is a marked change or rever-sal in the amount of legislation impacting employment, the legal model willappear to prevail. Nevertheless, for many HR departments, one or twoparticular models will predominate, or at least seem to according to theperceptions of line managers and rank-and-file employees.

The Appearance of Human Resources 23


■ THE HUMAN RESOURCES INTERNAL ORGANIZATION An HR department will customarily be organized according to an orga-nization’s expectations, reflecting the prevailing goals and structure of theorganization that it serves. Smaller organizations typically employ HRgeneralists. This is typically made necessary by staffing limitations. The re-quirements of a small organization can usually be satisfied by a single per-son sometimes working less than full time. Larger organizations employa mix of specialists and generalists. Their requirements cannot be met bya single person and they have the resources to employ several individuals.In larger health care organizations, specialists are most often used. Theyare listed in descending order of the frequency with which they are mostlikely to be encountered.

1. Employment2. Compensation and benefits3. Employee relations4. Training and development5. Labor relations6. Equal Employment Opportunity (EEO)7. Security8. Safety

The individuals or customers served by an HR department vary. Internalcustomers include all existing or former employees at all organizationallevels. External customers include potential employees or applicants foremployment.

■ HUMAN RESOURCES AND SENIOR MANAGEMENT The attitude of an organization’s CEO toward HR usually sets the tonefor the rest of the organization. Tone includes attributes such as the rela-tive standing of an HR department within the larger organization and therespect that is accorded to HR by others throughout an organization.Translated, tone determines how much power or influence an HR de-partment will be able to exercise. Human resources departments that havepower or influence are respected and vice versa. Respect leads to involve-ment and interdependence throughout an organization. The respect is fun-damentally based on the expectations of the CEO.

What CEOs Expect from Human Resources Chief executive officers have some common expectations of HR depart-ments. Most want their HR department to supervise recruitment, admin-



ister compensation and benefits programs, and maintain personnel records.These are the activities that HR experts include as the minimum or basicsof the profession. While many other activities can be assumed or providedby an HR department, some senior managers demand only the basics.

A considerable number of CEOs expect their HR departments to pro-vide advice and counsel on employee matters. Many expect the head of HRto serve as a personal advisor for personnel issues. In unionized workingenvironments, CEOs may expect someone in HR to monitor activities re-lated to labor relations.

Occasionally, a CEO wants to have an HR department that providesthe basic services but does so in an unobtrusive manner. In other words,such an HR department should not make waves. It should be seen but notheard. In reality, this is a difficult assignment. Human resources is expectedto meet basic personnel expectations in a competent and professional man-ner but must not become advocates for innovation or positive changes.The CEOs making such demands on an HR department often have largeor oversized egos.

Many CEOs say that they want a truly professional and innovative HRdepartment. However, those that mouth the words are more numerousthan individuals who truly desire, appreciate, and utilize competent andprofessional HR services and advice.

The personal and organizational priorities of CEOs influence their ex-pectations of an HR department. If senior managers are content with sim-ply maintaining the status quo, then few changes are likely to emerge fromHR. Such executives are not oriented to the future or instituting changes.They usually overlook HR’s potential value in business and strategic plan-ning, personnel and career path development, and the development of dif-ferent or innovative HR strategies.

Some management experts have observed that HR-related tasks havedramatically expanded over the last four decades. Most of these additionalrequirements have been mandated by legislation that began with the EqualEmployment Opportunity Act of 1972. Human resources departmentshave become much larger as they attempted to keep pace with legal demands,to create and update necessary systems, and to add and expand services.Because of this reactive posture, the discipline of HR has missed an op-portunity to become more of a full partner in organizational management.Many critical observers have wondered whether HR is a full planner anddecision-maker or simply a firefighting activity.

This distinction is related to the attitudes of senior management. Humanresources becomes a more integral and important member of a manage-ment team to the extent that senior managers regard an HR departmentas a professional specialty. Furthermore, they ensure that HR is staffedand led by competent people who have been appropriately educated and

Human Resources and Senior Management 25


trained. They provide support for an HR department in an open and con-tinuous manner.

How does a department whose responsibilities are continually chang-ing and evolving remain current? Further complicating this question is thewidely held perception that HR is an entity to be tolerated rather than em-braced because it does not generate a profit. Many managers are surprisedat the level of expertise displayed by HR personnel. Expressed differently,how does an HR department become a strategic organizational partner withits leader a full-fledged member of senior management? The field of HRhas been wrestling with this question for three decades without reachingany satisfactory conclusions. It has gained status in some health care or-ganizations, but in many, it has yet to become a reality.

■ THE RELATIONSHIP BETWEEN HUMAN RESOURCES AND OTHER DEPARTMENTS

From the perspective of departmental personnel, HR has traditionally beenviewed as more administrative than advisory, more as an enforcer of poli-cies than policy makers. Many individuals throughout almost every or-ganization regard HR as a group of paper pushers. It acquired this sobriquetby virtue of its employment-related activities. Recent governmental re-porting requirements have reinforced this perception. In short, in the mindsof many people, HR merely hires people and files papers.

The proliferation of laws and regulations governing almost all aspectsof employment relationships has been a major factor in the changing roleand relative organizational position of an HR department. However, or-ganizational managers outside of the HR department often cannot see orappreciate the legal and regulatory obstacles that must be avoided. Rather,they see only the portion of HR that applies to their own departments.Furthermore, they often lack the perspective to appreciate why HR makesthe demands that it imposes on other organizational units. For many, HRappears to be a rule-bound, bureaucratic group that, in their opinions, istrying to prevent them from undertaking tasks that they feel are necessary.Even persons who have a partial appreciation of the regulatory environ-ment in which HR must operate often come to view HR as little more thana necessary evil.

Many of the prevailing views or, more accurately, stereotypes, of an HRdepartment prevent managers from seeking appropriate counsel or assis-tance until their needs or problems have become critical. The time to callupon experts from HR for assistance is when the earliest signs of a prob-lem appear. When personnel-related issues involve discipline or legal ac-tion, many opportunities for intervention have already been lost. Full-blown



problems can be resolved, but the cost is usually far greater than it couldhave been if advice had been sought at an earlier juncture.

If an HR department exists to serve an organization, then why is it stilloften viewed as an obstacle? Resistance sometimes emerges as a result ofa particular department’s approach or the attitude of its practitioners.When individuals in an organization perceive a group as a miniature bu-reaucracy, the reasons for the perception can usually be found in the be-havior of the HR staff. In addition, the reasons why persons in an HRdepartment may offer recommendations that are contrary to the expecta-tions of department managers are not clearly communicated. Consider thefollowing example.

A department manager has had a key position open for several weeksand the lack of a person to fill the position is impacting the department’soutput. It is affecting other staff members who have been obliged to coverthe vacancy through mandatory overtime. An ideal candidate appears, isreferred to the manager by HR, is interviewed, and is immediately offeredthe position. This ideal candidate accepts and indicates an ability to beginwork at any time. The manager responds to HR by saying, “I want thisperson to start work tomorrow.”

However, protocols used by HR call for a delay. The recruiter in HRresponds to the departmental manager by saying, “We must have time tocheck references and properly clear this candidate. Even on a fast track,the earliest starting date we can give you is in a week.” Although the man-ager understands that proper clearance means concluding reference checksand completing a pre-employment physical examination, the manager in-sists on a next-day start and says, “The reference checks and the physicalcan be concluded next week. In the meantime, we can get a start on attackingthe backlog of work that has accumulated.”

Because HR refuses to authorize the immediate start, the departmentmanager proceeds to complain about HR’s inflexibility and unwillingnessto cooperate to other peer and senior-level managers. The involved HR rep-resentative stands firm, without appreciating the fact that the complain-ing department manager may not be aware that regulations (at least insome states) legally prohibit a new employee from starting work in a healthcare position before being medically cleared, or that the organization, re-inforced by personnel policy, has an obligation to make a good-faith ef-fort to check references before accepting an individual as an employee.

In this example the HR representative is bound by state regulation andcorporate personnel policy. If this is not fully understood by the other de-partment manager, then HR’s opposition will appear as arbitrary resist-ance. It does little good for personnel from the HR department to simplycite organizational policies and regulations to a manager. Such an ap-proach, coming from HR, usually sounds like more HR rules and gener-ates division. Education of line managers concerning existing legal and

The Relationship Between Human Resources and Other Departments 27


regulatory restrictions that affect aspects of an employment relationshipand have an impact on their activities is required.

When interacting with HR, it is helpful to remember that HR does notcommand. Rather, it merely advises or makes recommendations. However,as in the previous example, the department has the responsibility not onlyto make a recommendation in favor or against a specific action but alsoto advise others of the possible consequences of the proposed action.

Human resources does not issue commands. An HR department man-ager should never expect to issue mandates and should avoid allowing HRto command by default. “This was really personnel’s decision,” or, “HRmade me do it,” are two laments commonly heard by executives or sen-ior level managers when lower level supervisors are unhappy with a rec-ommendation made by HR. These defenses can transform an HRrecommendation into an HR command. Human resources managers mustexplain the reasons for their recommendations and be sure that they areclearly understood. Human resources is purely a staff activity that oper-ates by advising, counseling, suggesting, recommending, and occasionallyby negotiating, persuading, or convincing. It should never issue commands.

■ HEALTH CARE HUMAN RESOURCES AND THE CHANGING SCENE

As with any other organizational activity, HR must adapt to a frequentlychanging environment. Changes external to the health care industry andchanges within the industry itself affect the ways that health care is beingdelivered. In turn, these affect how the services of HR are provided. Threekinds of changes are faced by a modern health care organization: techno-logical, financial, and social. Not only are the three interrelated, but alsothese major areas of change have resulted in many specific changes in theways in which health care is organized and delivered.

Technological change encompasses advances being made in methodsof diagnosis and treatment, including all new or improved equipment, newprocedures, and new or improved drugs. In short, this encompasses mostadvances made in any dimension of restoring health and preserving life.But technological changes collide with considerations of finance becausethe cost of having the benefits of the latest and best equipment and the in-formation that it can produce conflict with the pressures experienced tostem the rapid increase of health care costs. Social change becomes a stronginfluence as the population ages and society experiences the changing at-titudes of contemporary generations.

The three major categories of change mutually affect each other. Theresults of this interplay can be seen in a number of changing forces withinthe health care industry. Financial pressure increases as revenues are con-



strained from growing in a manner that is consistent with actual cost in-creases. In some instances, available funding is being reduced. Competitionis increasing as elements of a shrinking hospital system struggle to acquireor retain a share of the available business in a particular area.

There is a growing emphasis on outpatient care. Technological advancesand financial pressures are continually conspiring to transfer more modesof treatment to outpatient settings. Free-standing specialty centers thatperform some of the same services provided by hospital departments areproliferating. Corporate restructuring is occurring as provider organiza-tions consummate mergers or other affiliations and form ever-larger healthsystems.

Turnover rates among health care executives are increasing. Some or-ganizations are folding under mounting pressures while others are dis-covering that mergers result in fewer executive positions. Medicalentrepreneurship is increasing as individual providers establish specialtiesor attempt to tap specific market segments. Emphasis on productivity isgrowing, and getting more output from the same or less input becomes nec-essary as financial constraints and other shortages occur.

Chronic shortages of critical care-giving staff are occurring as occupa-tional and professional groups react to the combination of financial pres-sures that restrict earning potential and the stresses of working underincreasing demands while short of critical staff. An increasingly better ed-ucated and more sophisticated workforce of employees is finding that theyare less likely than members of earlier generations to accept what they areoffered without expressing what they want.

Change within a health care organization or in any enterprise occurs inone of two ways. Change is either intentional, being planned and executedfor some specific purpose, or it is forced, coming about in response to cir-cumstances beyond the control of an organization. Healthcare organiza-tions, especially hospitals, experience far more reactionary changes thanplanned changes.

Several reasons contribute to these developments. Change is difficult topromote unless it is driven by a crisis. Few organizations engage in plan-ning that creates change. Because of workload and other continuing prob-lems, top managers have little time to focus on change. Resistance to changeis often prevalent throughout many organizations. Middle managers anddepartment managers do not view themselves as agents of change. Finally,few managers are skilled or effective at creating and managing change.

Experts often suggest that managers at all levels should be agents ofchange. In HR departments, fostering a climate that is conducive to con-structive change is especially important. This belief should be communi-cated in all of HR’s interactions with organizational managers and employees.Contemporary health care organizations benefit from a culture of changethat encourages innovation, rewards risk taking, and values employee

Health Care Human Resources and the Changing Scene 29


participation and input. Human resources can best communicate its be-lief in a change process by implementing up-to-date policies and proce-dures that convey respect for the capabilities of every employee.

Job descriptions should be flexible and should allow room for innova-tion and employee participation and input. A modern performance ap-praisal process that permits employees to set objectives for themselves andparticipate in their own growth and development fosters change.Opportunities for promotion and transfer from within reinforce employ-ees’ personal growth and development. A compensation structure that in-cludes the opportunity to influence earnings through performance and aflexible benefits structure that recognizes the divergence of individual needsalso supports change.

Given its unique relationship with all line and staff operations and itsmission to provide service for all employees, an HR department is ideallypositioned to be a health care organization’s primary driver of internalchange. Whether it is used as such is up to executive management andHR’s leadership.

■ HUMAN RESOURCES REENGINEERED

A Process by Any Other Name Reengineering is intended to make work processes easier and more pro-ductive. Reengineering, a term used to describe many improvement-oriented activities, is far more complex than many people realize. The termliterally means engineered again. It involves addressing something that ispresently being done and redesigning a process so that a different objec-tive related to the same result is achieved, for example, savings in time orlabor or direct savings in money. Practically, this may be a reduction in ma-terials or supplies consumed or an improvement in quality without an in-crease in cost. As applied to an entire organization or significant subunit,reengineering is the systematic redesign of a business’s core processes, start-ing with desired outcomes and then establishing the most efficient possi-ble processes to achieve those outcomes.

At the heart of traditional methods-improvement or problem-solvingprocesses is the way that something is presently being done. These processesbegin with the present method and look for ways to eliminate steps ormake improvements. By contrast, reengineering ignores how something ispresently done and focuses only on desired outcomes. Abandoning a fa-miliar routine is difficult. Overcoming the comfort of familiarity is thechallenge of reengineering.

Reengineering is a business term that has replaced a number of otherbuzz words. These include reorganizing, downsizing, repositioning, right-



sizing, revitalizing, and modernizing. The term reengineering has evolvedas the intent has gradually clarified. It is now the preferred term becauseit connotes more of a focus on process and thus less of a focus on people.Despite this meaning, an announcement of impending reengineering hascome to be synonymous with the likely loss of jobs.

Human Resources Meets Reengineering As organizations change, the need to improve services and reduce costs isthe driving force behind most reengineering efforts. Reengineering con-sistently results in reductions of staff. Many instances of reengineeringhave been undertaken specifically to reduce the cost of services by reduc-ing staff. Human resources is so labor intensive that, with the exceptionof reducing employee benefits, there is no way to achieve significant costsavings other than reducing staff. As a consequence, HR is often unaf-fected by staff reductions driven by reengineering programs.

Effects on Human Resources Staffing Human resources staffing ratios in different areas of organizational ac-tivity vary. Health care organizations have approximately half of the num-ber of staff persons per 1000 employees compared to HR departments inindustries such as manufacturing or finance. Human resources depart-ments in contemporary health care organizations have approximately onestaff member for every 100 to 150 total employees.

The Flatter Organization Organizational flattening, the elimination of layers of management suchthat the institution’s organization chart becomes flatter, often accompa-nies reengineering. As many managers have discovered, when an organi-zation is flattened, middle managers are often eliminated. The responsibilitiesof remaining managers, usually first-line supervisors, are increased.

A typical HR department, even in a mid- to large-size health care or-ganization, has only three layers. The middle layer, usually comprised ofspecialist-managers for activities such as employment or compensationand benefits, may vanish, leaving only HR staff and a departmental su-pervisor. When this occurs, an organization’s department managers mustthen relate directly with several staff-level individuals rather than withtwo or three specialist-managers.

Centralization versus Decentralization Reengineering can lead to changes in an organization’s degree of cen-tralization as it seeks more cost-effective ways of getting its work done.Decentralization is a more common outcome of reengineering than is

Human Resources Reengineered 31


centralization. Whichever outcome occurs affects not only HR person-nel and how they do their jobs, but also department managers.

When its activities are decentralized, individual managers must be moreaware of HR concerns because decisions must be made closer to an orga-nization’s lowest levels. For example, if some aspects of employment aredecentralized, then a department manager may then have to screen in-coming applications and decide which applicants have the qualificationsfor a particular open position, which is something HR would have donebefore decentralization.

Some forms of technology, for example computerized telephone sys-tems, have led to the centralization of question-and-answer protocols andother systems for geographically scattered organizations. When usingnewer communication systems, employees at multiple locations have beenable to transact business about their benefits without having to travel toan HR office. In turn, this can enable an organization to maintain a smallerHR presence at satellite locations while handling all business centrally.For widely dispersed organizations, toll-free numbers for employees whohave benefits questions provide an effective and financially viable partialreplacement of HR staff with technology.

Outsourcing Outsourcing is defined as having an external vendor provide, on a continuingbasis, a service that would normally be provided within an organization.4

Although outsourcing is frequently linked to staff reduction in HR de-partments, budget cuts and staff reductions are not always the leading rea-sons for outsourcing. Exhibit 2-1 lists common reasons for outsourcing inapproximate order of their frequency of occurrence.


Exhibit 2-1 Order of Importance of Commonly Cited Reasons for

Outsourcing Selected Human Resource Services (From most to least

frequently cited)

• Use the expertise of specialists (for example payroll, pension planadministration and Workers’ Compensation administration)

• Conserve staff time when addressing required tasks• Reduce administrative costs• Allow staff to focus on needs more relevant to an organization’s

purposes• Compensate for overload caused by increasing responsibilities• Reduce human resources staff• Make organizational and departmental budget cuts


Cutbacks related to economic pressures and reengineering have createdopportunities for companies that specialize in HR services. Exhibit 2-2lists a number of activities that are commonly outsourced and the reasonsfor so doing.

Payroll is the most commonly outsourced activity, although it is nownormally based in the finance department. Payroll processing requires con-siderable detailed knowledge of the details of the Fair Labor Standards Actand related regulations that affect payroll deductions and other aspects of

Human Resources Reengineered 33

Exhibit 2-2 Human Resources Activities Frequently Subject to

Outsourcing

• Payroll. Payroll is often a responsibility of the finance department.Payroll input often flows through HR. Where payroll is processedhas an effect on HR staff.

• Outplacement services. This is outsourced because it isintermittently or infrequently needed.

• Employee assistance program administration. This is outsourcedto maintain confidentiality for employees.

• Employee training and development. Many organizations contractwith training specialists or consultants for services because theyare intermittently needed.

• Relocation services. This is outsourced because the need for it isintermittent or infrequent.

• Benefits administration. Many benefit programs are internallyadministered. Pension plans and self-funded insurance programssuch as dental and short-term disability are often administered byexternal trustees.

• Compensation planning and administration. This is occasionallyoutsourced, especially when executive incentive compensationplans are involved.

• Recruitment and staffing. Some elements are outsourced.Organizations experiencing rapid expansion or adding a significantservice may outsource application and resume screening and initialinterviews.

• Candidate background checks. Very few health care organizationsattempt to perform their own background checks. This activity isnearly always outsourced.

• Safety and security. Few organizations entirely outsource theseactivities. Most organizations contract with specialists to supply suchservices.


payment. Firms that specialize in payroll have created automated systemsthat fully account for all of the detailed requirements of wage payment.Users submit input information. The payroll service creates paychecks ordirect deposits and generates all necessary records. This particular form ofoutsourcing has eliminated a great deal of frustration for businesses. It isusually less expensive than an internal payroll operation. Because manysmaller health care organizations have small payrolls, purchasing an auto-mated payroll system is cost efficient.

Some of the downsizing of HR operations has resulted in outsourcingto save money. In 1999, 58% of all companies were outsourcing at leastone HR activity. In 2002, this number had increased to 74%.5

Many small facilities lacking the resources to employ adequate full-timeHR staff rely heavily on outsourcing, particularly on firms known as pro-fessional employer organizations (PEO). A PEO takes over and providesall HR services. When an organization or business contracts with a PEO,its employees become co-employees of the PEO. A PEO charges a per-centage of payroll, typically 2–4%, for its services. These ordinarily in-clude benefits administration as well as payroll. In one instance, bycontracting with a PEO, a small health care provider organization reducedits costs of personnel administration from 9% of payroll to 3%.6

Reengineering aside, HR departments have outsourced activities be-cause doing so often makes economic sense. Activities such as administeringa self-funded health insurance or disability program or coordinating an em-ployee assistance program are frequently provided by non-organization em-ployees for reasons of confidentiality. This prevents the company fromhaving to reveal employees’ personal and medical information to the per-sons administering the programs.

Additional outsourcing of HR activities is often one of the results ofreengineering. As HR staff members are eliminated, adjustments are madein the HR workload. However, essential tasks that remain may occur soinfrequently that it is inefficient to retain and pay staff to perform them.Almost any HR operation can be a candidate for outsourcing. Commonlyoutsourced HR activities include payroll, insurance claim processing, EAPadministration, retirement and savings plan administration, employee ed-ucation, and employment candidate background checks.

Effects on Corporate Culture Corporate culture is comprised of the shared basic assumptions and be-liefs developed by an organization over time. It requires time for an orga-nization’s culture to develop to the extent that those entering can tell thekind of organization they have entered in a relatively short time.

It also takes time for an organization’s culture to mature and to adaptto change. Time is required for an organization’s culture to adapt to change.



Reengineering is inevitably accompanied by change. In order for an orga-nization’s culture to successfully absorb and accommodate, change shouldoccur in increments that can be absorbed without trauma. The pace ofchange should allow full assimilation of one significant modification beforeanother is introduced. In many health care organizations, the pace of changehas been so rapid that the corporate culture has had no opportunity toreach a new equilibrium before once again being thrown off balance.

Reengineering inevitably introduces turmoil into an organizational cul-ture. Mergers; acquisition and other forms of re-affiliation; downsizing,rightsizing, and other forms of reorganization; increasing external regu-lation; and all forms of cost-cutting involve organizational turmoil.

■ CONCLUSION To ensure maximum effectiveness in all organizational relationships, theindividual in charge of HR should report to the CEO. Line and staff tasksare different. Line and staff employees perform different tasks for an or-ganization. Line operations advance the work of an organization. Staff op-erations support and enhance the work of an organization by making itpossible to continue producing products or delivering services as intended.

A variety of organizational paradigms are used in HR departments.These include organizational models based on clerical tasks, counseling,industrial relations, control, and consulting. Alternative models are rec-ognized by some HR professionals.

The degree of effectiveness for HR depends on the attitude of a CEOtowards HR. Human resources does not issue commands. It is vulnerableto changes because of reengineering. Outsourcing HR services is relativelycommon.

Returning to the opening case study, Sharon, the HR director for thenewly designated health system, reports to the COO. This is the secondbest of the two acceptable reporting relationships for HR. Her organiza-tional standing is compromised from the outset.

Sharon was wise enough to realize that she could not immediately es-tablish the kind of HR department that she would like to have. Despite achange in name, the CEO still thinks of HR as personnel. Uniting all ofthe scattered elements of personnel into an HR department to serve the newhealth system’s needs was a significant challenge. Her present HR struc-ture, a combination of the clerical and counseling models, would have toprevail until she could get HR properly organized and transform it into afull-fledged business partner. She realized that this might not occur untilthe current CEO left.

Sharon’s initial recommendations included opting for partial decen-tralization of some HR activities, with the senior person at the smaller

Conclusion 35


hospital, a single HR person at the largest satellite, and the office managersat the other satellites and the group practices handling local matters. Theseincluded making changes to the employee information and benefits databases and addressing employee matters as they arose. In addition, theywould serve as channels for policy interpretation.

Sharon decided to keep recruiting centralized, primarily to maintain con-sistency in such matters as formulating salary offers, explaining benefits,checking references, and initiating background checks. She was concernedabout organizational consistency in pre-employment activities. She optedto maintain all personnel files centrally, but created a procedure to ensurequick access by managers at any location when necessary. Finally, she es-tablished a help-line for employees to call at any time. Through this service,employees could learn where and how they might access HR or benefit in-formation or secure assistance in addressing problems related to benefits.

Sharon realized that she would have to provide direct support to herHR staff by visiting the satellite facilities in person. She planned to ensurethat all of her HR managers were trained. She would send them to localcolleges or universities for instruction by HR experts. Supervisors havingthe least HR experience would be the first to receive training. Sharon es-tablished a personal goal to make HR activities as easy as she could forthe managers who had only a part-time involvement in HR matters.

References1. Andrews, J. R. (1986). Is there a crisis in the personnel department’s identity?

Personnel Journal, 65(6), 86-93.2. Driver, M. J., Coffey, R. E., & Bowen, D. E. (1988). Where is HR management

going? Personnel, 33(1), 28-31. 3. Greene, R. J. (1995). Culturally compatible HR strategies. HR Magazine, 40(6),

115-119.4. Harkins, P. J., Brown, S. M., & Sullivan, R. (1995). Shining new light on a

growing trend. HR Magazine, 40(12), 75-81. 5. Knight Ridder News Service. (2002). Outsourcing human-resource tasks.

Democrat & Chronicle, Rochester, NY, February 17.6. Perl, L. (1996). Outsourcing, Health-Care Style. Detroiter: For Business in

Greater Detroit, November, 26-27.

Discussion Points

1. Describe a specific outsourcing practice about which you are knowl-edgeable, and explain what you believe are the primary benefits achievedby having the services provided by outside persons rather than keep-ing them within an organization.



2. Why do experts contend that a primary characteristic of line person-nel is present within a clearly defined staff activity such as HR orFinance?

3. What is the fundamental difference between a line activity and a staffactivity? Provide two examples of each in a health care setting.

4. What problems develop when the head of HR reports to any execu-tive other than the chief executive officer?

5. Under what organizational circumstances could the following mod-els of HR be successful in a health care organization: Clerical Model,Control Model, Industrial Relations Model, Legal Model, ConsultingModel, and Financial Model?

6. Which of the HR models appears most appropriate for managing per-sonnel in a health care organization? Why?

7. Describe how an HR department in a health care organization mightevolve through different organizational models as a department growsand matures.

8. How do the expectations of an organization’s CEO shape the modelor manner in which HR services are delivered?

9. What are the primary areas of conflict between HR and departmentmanagers? How might these conflicts be reconciled?

10. What are the advantages of a decentralized organization for deliver-ing HR services? What are the risks?

11. What is organizational flattening? Why is it practiced? 12. What are the primary shortcomings of reengineering as it is practiced

in contemporary health care organizations? How does reengineeringdiffer from minor modification of existing practices?

Resources

BBooookkssBarbeito, C. L. (2004). Human Resource Policies and Procedures: For Nonprofit

Organizations. New York: John Wiley. Hunter, C. W., & Reiboldt, J. M. (2004). Physician Compensation Strategies (2nd

ed.). Chicago: American Medical Association. Learning Initiative. (2005). Human Resources for Health: Overcoming the Crisis.

Cambridge, MA: Harvard University Press. Manion, J. (2005). Create a Positive Health Care Work Place!: Practical Strategies

to Retain Today’s Workforce and Find Tomorrow’s. Chicago: Health ForumPublishing.

Society for Human Resource Management. (2005). SHRM Health Care SurveyReport: A Study by the Society for Human Resource Management. Alexandria,VA: Society for Human Resource Management.

Conclusion 37


Thomas, M., & Keagy, B. (2004). Essentials of Physician Practice Management.New York: John Wiley.

Walburg, J., & Bevan, H. (2005). Performance Management in Healthcare. London:Taylor and Francis.

PPeerriiooddiiccaallssAnonymous. (2005). Excess, shortage, or sufficient physician workforce: How

could we know? American Family Physician, 72(9),1670-1675. Burritt, J. E. (2005). Organizational turnaround: The role of the nurse executive.

Journal of Nursing Administration, 35(11), 482-489.Chen, L. C., & Bouford, J. I. (2005). Fatal flows—doctors on the move. New

England Journal of Medicine, 353(17), 1850-1852.Desselle, S. P. (2005). Job turnover intentions among Certified Pharmacy Technicians.

Journal of the American Pharmacy Association, 45(6), 676-683.Greene, J. (2005). Should ASCs hire RNs from the hospital? OR Manager, 21(11),

25-26, 28.Higginson, L. A. (2005). Profile of the cardiovascular specialist physician work-

force in Canada, 2004. Canadian Journal of Cardiology, 21(13), 1157-1162.Lucas, A. O. (2005). Human resources for health in Africa. British Medical Journal,

331(7524), 1037-1038.Mannion, R., Davies. H. T., & Marshall, M. N. (2005). Cultural characteristics

of “high” and “low” performing hospitals. Journal of Health OrganizationManagement, 19(6), 431-439.

Northam, S. (2005). Views on the nursing faculty shortage. Journal of NursingEducation, 44(10), 440-442.

Nys, J. F. (2005). Shortage of nurses in the Western World. Review of Disease,114(1), 10-11.

Rondeau, K. V., & Francescutti, L. H. (2005). Emergency department overcrowding:The impact of resource scarcity on physician job satisfaction. Journal of HealthcareManagement, 50(5), 327-340.

Scalise, D. (2005). Physician supply 2005. Hospital Health Network, 79(11), 59-65. Smith, A. P. (2005). Misery finds collaborative company: Addressing the health work-

force shortage through a multidisciplinary approach. Nursing Economics, 23(5),261-264.

Sox, H. C. (2006). Leaving (internal) medicine. Annals of Internal Medicine, 144(1),57-58.

Thorgrimson, D. H., & Robinson, D. H. (2005). Building and sustaining an ade-quate RN workforce. Journal of Nursing Administration, 35(11), 474-477.

Yamamoto, L. G. (2005). We have a shortage of specialists. American Journal ofEmergency Medicine, 23(7), 895-896.



The LegalFramework ofContemporary

Human ResourcesChapter Overview


• Understand the evolution of the regulated environment withinwhich human resources must work in serving a health careorganization

• Trace the chronology of legislation affecting employment,beginning in 1932, with a brief explanation of each pertinent law

• Agree that 1964 was a pivotal year in legislation affecting humanresources

• Understand highlights of legislation enacted in 1964 and beyond• Acknowledge 1964 as the beginning of an effort by the federal

government to shift considerable social responsibility to employers • Describe the cumulative effects of employment legislation to date

■ CHAPTER SUMMARYThis chapter is intended to provide readers with sufficient background andknowledge of employment legislation to enable them to develop an un-derstanding of the effects of employment law on the activities of a depart-ment manager. It provides a review of the laws affecting aspects of theemployment relationship. These pieces of legislation are described using non-legal terminology. In each instance, how the pertinent piece of legislation

C H A P T E R

3

39


approaches its subject is discussed. The importance of each law is reviewedalong with the success each has had in addressing a societal need throughthe legislation’s stated intent. Effects of the more significant laws are re-viewed along with descriptions of some apparently unintended outcomes.

Case Study: Does Weight Constitute a Disability?

Susan J. applied for a position as a licensed practical nurse at CountyMemorial Hospital. She had generated an impressive record during hertraining, possessed good references from prior employment in two differ-ent private duty situations, and interviewed well. Susan was clearly veryheavy. Helen Harding, the Director of Nursing at County Memorial, es-timated her weight to exceed 300 pounds. An ideal weight for her five footfive inch body was 125 to 130 pounds. A reasonable weight range forsomeone of that height was 120 to 140 pounds. After the interview, Helenextended a tentative offer of employment to Susan. The offer was contin-gent on passing the hospital’s pre-employment physical examination.

The County Hospital employee health physician examined Susan butdeclined to approve her for employment unless she could first achieve asafer weight, in her case less than 275 pounds. Susan failed to get the jobbecause of her overweight condition. She then filed a complaint with theState Division of Human Rights charging discrimination based on dis-ability, citing Title VII of the Civil Rights Act of 1964 and the Americanswith Disabilities Act of 1990. She claimed that her only responsibility wasto demonstrate that she was capable of doing the job, and that in spite ofher physical handicap she could still adequately perform all required du-ties of the job. Her obesity, she claimed, was due to a medical conditionover which she had no control.

County Hospital moved for dismissal of the complaint on three grounds.First, it argued that obesity was not a true physical impairment under thelaw. Second, it claimed that Susan’s condition resulted from her own vol-untary actions. Finally, the hospital claimed that she could reduce and con-trol her weight if she so chose.

How might the foregoing situation be resolved? Is obesity truly a disability,or will a different argument prevail? Do you believe that the hospital willbe successful in getting the complaint dismissed, or will Susan successfullypersuade the Division of Human Rights to act on her complaint? Why?

■ A REGULATED ENVIRONMENT An important disclaimer is in order before proceeding with the contentsof this chapter. Nothing in this chapter constitutes legal advice, and nosuch advice should be inferred from its contents. Individuals with questions

40 CHAPTER 3 THE LEGAL FRAMEWORK OF CONTEMPORARY HUMAN RESOURCES


about the applicability of any particular point of law should take those ques-tions to the appropriate people in their organization. These may be per-sons in Human Resources (HR), Administration, or Risk Managementwho can provide or secure appropriate responses.

The pivotal year when HR began to change for all time was 1964.Internal operations that referred to people were still called personnel in mostorganizations. Sweeping civil rights legislation came into being with thepassage of the Civil Rights Act of 1964. The specific turning point wasthe appearance of Title VII. This legislation marked the beginning of sig-nificant changes in relations between government and business. It markeda change in philosophy that resulted in a completely new direction for gov-ernment in concern for the citizens of the United States.

Pre-1964: Regulation Minimal and Tolerable Before 1964, businesses were free to treat employees essentially as theychose, with only two exceptions: wage-and-hour laws and labor-relationslaws. Prior to 1964, the only laws that had noticeable impact on the em-ployment relationship were the Fair Labor Standards Act and related statelaws, and the National Labor Relations Act.

The Fair Labor Standards Act governs the payment of wages and otherrelated conditions of employment. This and similar laws existing in someof the states are commonly referred to as wage-and-hour laws.

The National Labor Relations Act governed relationships between workorganizations and labor unions. Similar laws existed in some but not allstates. They were relevant only to organizations where employees wereunionized or where active union organization efforts were underway.

Prior to 1964, managers did not have to be knowledgeable about manyregulatory requirements. Few legal restrictions impinged on HR opera-tions or on managers in general. The majority of business organizationscomplied with the wage-and-hour laws as a matter of operating routine.Leaders of organizations where there was a union presence, either beingorganized or already under contract, generally expected to comply withall applicable labor laws.

Other applicable legislation was in place before 1964, but the Fair LaborStandards Act and the National Labor Relations Act were the only oneshaving a visible influence on HR operations and department management.These two are discussed more fully in the chronology of legislation thatfollows.

The turning point of 1964 heralded a change in philosophy concerninggovernment’s relationship with business. For years, the governing philos-ophy had largely been one of hands-off to the maximum practical extent.Employers were only expected to concern themselves with wage-and-hourrequirements and restrictions imposed by labor relations legislation. Since1964, the government has been addressing many of the perceived needs

A Regulated Environment 41


of individuals by involving employers in meeting those requirements.President Johnson’s signature on the Civil Rights Act in 1964 initiated asignificant change in the actions that government would be taking on be-half of its citizens. This trend continues to the present day.

■ THE GROWING REGULATORY ENVIRONMENT: AN ANNOTATED CHRONOLOGY OF LEGISLATION

Some of the laws and legislation included in the following chronology willreceive little more than a brief, passing description because they are ad-dressed more thoroughly in subsequent chapters. These will be so identi-fied. For others, implications for HR and department managers are brieflyreviewed.

Norris-LaGuardia Act (1932) The first significant piece of legislation to address the growing organizedlabor movement in the United States was the Norris-LaGuardia Act of1932. This law reflected an important shift in public policy concerning la-bor unions, from a posture of legal repression of unions and their activi-ties to one of actual encouragement of union activity. Although theNorris-LaGuardia Act legalized union organizing activities and affirmedworkers’ rights to organize for collective bargaining purposes, it did littleor nothing to directly restrain employers in their conduct toward labororganizations. During the first three decades of the twentieth century, manyworkers who attempted to organize for collective bargaining lost theirjobs because of their involvement with the organizing process. Often, theirorganizational efforts were countered with violence. Presently the impactof the Norris-LaGuardia Act has waned. It is mentioned here because ofits role as a forerunner to subsequent labor legislation.

National Labor Relations Act (1935) Also known as the Wagner Act, the National Labor Relations Act (NLRA)established a number of rules for the conduct of both unions and employ-ers in labor organizing and collective bargaining situations. Although itseemed largely to favor unions and encourage their presence, the NLRA es-tablished some boundaries on what unions could do in their organizing ac-tivities. In addition to affirming the right of employees to organize, theNLRA made it illegal for an employer to refuse to negotiate with a union.This requirement assumed that the union had conducted a legal organiz-ing campaign and had won a proper representation (certification) election.

The NLRA created the National Labor Relations Board. This body wascharged with administering the Wagner Act by conducting representationelections to determine whether employees in particular groupings (called



bargaining units) wished to have union representation. The NLRA speci-fied that a union chosen by a majority of the employees in an appropriateunit would be the exclusive representative for all employees in the unit. TheNLRA delineated a list of unfair labor practices that were punishable byfines. Many unfair labor practices pertain to management reactions tounion organization activities. The NLRA has been modified by the Taft-Hartley Act and the Landrum-Griffen Act.

Social Security Act (1935) The Social Security Act established a basic system of contributory socialinsurance and a supplemental program for low-income elderly persons.In 1939 it was expanded to provide benefits to survivors of covered work-ers and dependents of retirees. The Social Security Act has been further ex-panded to cover workers who had become permanently disabled. Coverageunder the Social Security Act was again expanded in 1965 to provideMedicare health insurance coverage for the elderly.

Fair Labor Standards Act (1938) In part, the Fair Labor Standards Act (FLSA) was intended to reduce thehigh unemployment rate that typified the years of the Great Depression.Congress intended to reduce the length of a work week to a uniform stan-dard, thus spreading available work over a greater number of workers. Inaddition to defining a normal work week, the FLSA set minimum payrates, established rules and standards for the payment of overtime, andregulated the employment of minors. Over the years, FLSA has beenamended many times by raising the minimum wage due to changing cir-cumstances imposed by inflation and other economic and social concerns.The FLSA remains as the country’s basic wage-and-hour law.

Labor Management Relations Act (1947) The Labor Management Relations Act amended the National LaborRelations Act and is commonly referred to as the Taft-Hartley Act. Aspassed in 1935, the NLRA clearly favored unions over employers. Theprincipal intent and subsequent effect of the Taft-Hartley Act was to levelthe playing field to some extent by more appropriately balancing the re-sponsibilities and advantages of both unions and employers. Taft-Hartleylisted additional unfair labor practices. Although many experts still viewit as a law favoring labor unions, the Taft-Hartley Act was clearly a changein the direction of management’s rights.

Two points are of immediate interest concerning the Taft-Hartley Act.Most mentions of the NRLA are actually in reference to the NLRA asamended by Taft-Hartley. The Taft-Hartley Act was itself amended in 1975

The Growing Regulatory Environment 43


specifically to address not-for-profit hospitals by removing the exemptionthat had been in place since its original passage in 1947.

Labor-Management Reporting and Disclosure Act (1959) The Labor-Management Reporting and Disclosure Act is more commonlyknown as the Landrum-Griffen Act. It further amended the National LaborRelations Act. Because it amended the NLRA as amended by Taft-Hartley,it is sometimes jokingly referred to as an amendment to an amendment.Among its numerous provisions, the Landrum-Griffen Act required em-ployers, including not-for-profit hospitals and other nonprofit health carefacilities, to report any financial arrangements or transactions that wereintended to improve or retard the process of unionization in detail to theSecretary of Labor. Reporting and disclosure requirements were imposedon unions.

Equal Pay Act (1963) The Equal Pay Act was an amendment to the Fair Labor Standards Act.It prohibited the payment of unequal wages for men and women whoworked for the same employer in the same establishment performing equalwork on jobs requiring equal skill, effort and responsibility, and performedunder similar working conditions. Simply put, people doing the same workin the same place in the same way have to be paid equally regardless of gen-der. Although the Equal Pay Act came into being before 1964, it had nonoticeable impact on the activities of HR and no effect on roles of de-partment managers. As of 2006, equality of pay rates is not universal.Many men continue to earn more than women for comparable jobs.

Civil Rights Act (Title VII) (1964) This legislation has led to greater regulation of the employer-employee re-lationship by the government. Title VII provided the legal basis for all peo-ple to pursue the work of their choosing and to advance in their chosenoccupations subject only to the limitations imposed by their own individ-ual qualifications, talents and energies. This legislation defined unlawfulemployment discrimination as the failure or refusal to hire or to otherwisediscriminate against any individual with respect to compensation or otherterms, conditions, or privileges of employment because of that individ-ual’s race, color, religion, sex, or national origin. The Act prohibits settinglimits, segregating or classifying employees or applicants for employmentin any way that deprives them of employment opportunities or otherwiseadversely affects their status as employees because of race, color, religion,sex, or national origin.

The Civil Rights Act of 1964 established the Equal EmploymentOpportunity Commission (EEOC) to enforce the anti-discrimination re-



quirements of Title VII. The Act was amended in later years to compen-sate for perceived erosion of its strength and effectiveness owing to a num-ber of Supreme Court decisions.

Age Discrimination in Employment Act (1967) The Age Discrimination in Employment Act (ADEA) legally establishedthe basic right of individuals to be treated in employment situations on thebasis of their ability to perform the job rather than on the basis of age-related stereotypes or artificial age limitations. The ADEA prohibits dis-crimination in employment on the basis of age in hiring, job retention,compensation, and all other terms, conditions, and privileges of employ-ment. Originally enforced by the Department of Labor, in 1978 enforce-ment of the ADEA was transferred to the Equal Employment OpportunityCommission. The threshold for defining age discrimination is 40. Therefore,workers age 40 and older constitute a protected class for EEOC purposes.

The ADEA has had a direct effect on retirement. Before ADEA, em-ployers were free to mandate retirement at a specific age. The most com-monly mandated age for retirement was 65. When passed in 1967, theADEA raised the limit such that employers could no longer mandate re-tirement at any age younger than 70. When the ADEA was again amendedin 1986, the age 70 limitation was removed. This means that retirementcan no longer be required by any specific age. The sole legal criterion forcontinuing employment is an individual’s ability to fulfill the requirementsof the job. Some exceptions exist under which retirement by a stated agecan be mandated for a limited number of specific occupations. These in-clude police officers, firefighters, airline pilots, surgeons, and some policy-making executives. In many instances the ADEA has permitted people whowished to keep working to do so. This has ensured the continuing em-ployment of some workers who might otherwise have to depend on gov-ernment assistance.

Occupational Safety and Health Act (1970) Passed in 1970 and effective in 1971, the Occupational Safety and HealthAct (OSHA) is a highly influential piece of legislation concerning employeesafety in the workplace. The “A” in OSHA indicates either Act orAdministration, depending on the specific situation and reference. The in-tent of Congress in establishing the Occupational Health and Safety Actwas to provide all persons with workplaces free from recognized hazardsthat have the potential to cause serious physical harm or death to em-ployees. The Occupational Safety and Health Administration is authorizedto promulgate legally enforceable workplace safety standards, respond toemployee complaints and, as necessary, conduct on-site inspections to fol-



low up on employee safety complaints or on lost-workday injury ratesthat are considered excessive.

On May 25, 1986, OSHA began enforcement of the second phase ofan elaborate set of rules known formally as Hazard Communications.These rules provide workers with the right to know about any hazardoussubstances to which they are exposed or handle in the course of perform-ing their job duties. According to OSHA’s hazard communication rules,health facilities are required to create and deliver programs for informingand training employees about hazardous substances in their workplace, en-sure that warning labels on all incoming containers are intact and clearlyreadable, and inform and train employees in the nature and appropriatehandling of hazardous substances at the time of initial assignment. Suppliersare required to create and distribute a Material Safety Data Sheet (MSDS)for all products containing a hazardous substance that they produce. Thesemust be provided to all purchasers of their product. The OSHA hazard com-munication rules mandate that employers maintain copies of MSDSs forall hazardous substances in the workplace, supply copies of MSDSs to em-ployees upon request and maintain current copies of MSDSs for all prod-ucts so that they are accessible to any employee on all work shifts.

Under OSHA regulations, more than 1,000 substances are consideredto be hazardous. A number of the states have enacted right-to-know lawswith requirements that are similar to OSHA regulations. Federal and statestandards for the handling of hazardous substances require that employ-ers distribute material safety data sheets, ensure that warning labels are al-ways in evidence on workplace containers, and be able to produce a writtenemployee orientation program at any time. Department managers are typ-ically assigned the responsibility for ensuring that these regulations are fol-lowed and all requirements are fully satisfied within the department orareas under their direct supervision. Personnel from HR usually supplytraining materials and provide supportive services to department managers.

Health Maintenance Organization (HMO) Act (1973) This legislation was passed as part of a Nixon administration cost con-tainment initiative, preempting all state regulations that posed any barri-ers to HMO formation. It set conditions for HMOs to become federallyqualified and mandated that most employers offer an HMO option if a fed-erally qualified HMO in the area requested inclusion in their benefits of-ferings (this condition was eliminated in 1995). In theory the act wasintended to reduce costs by eliminating regulatory barriers to HMO de-velopment and encouraging the proliferation of what was seen as a morecost-effective health care delivery system.



Rehabilitation Act (1973) Although disabled persons were mentioned in the Civil Rights Act of 1964,they were addressed separately for the first time in the Rehabilitation Actof 1973. Congress recognized that the handicapped were subject to cul-tural myths and prejudices similar to those biases that existed againstwomen and ethnic minorities. However, this law applied only to employ-ees of the federal government and to employers doing a specified amountof business with the government.

One portion of the Rehabilitation Act prohibited discrimination in thehiring, promotion, and other employment of the handicapped, essentiallyparalleling Title VII of the Civil Rights Act of 1964. Another portion re-quired employers doing more than $2,500 in business with the federalgovernment to apply affirmative action guidelines so as to employ andpromote qualified handicapped individuals. Employers having more than50 employees and fulfilling government contracts worth $50,000 or morewere require to have written affirmative actions programs as required bythe Office of Federal Contract Compliance Programs. These employerswere required to make reasonable accommodations for the physical ormental limitations of employees or applicants. The Rehabilitation Act issignificant because it was a precursor of the Americans with DisabilitiesAct (1990).

Employee Retirement Income Security Act (1974) The Employee Retirement Income Security Act (ERISA) established fourbasic requirements governing employee retirement plans. The EmployeeRetirement Income Security Act mandated that employees must becomeeligible for retirement benefits after a reasonable length of service (alsoknown as vesting or being vested); adequate funds must be reserved toprovide the benefits promised under the plan; the persons who adminis-ter the plan and manage its funds must meet established standards of con-duct; and sufficient information must be made available on a regular basisso plan participants, auditors or other interested parties may determinewhether ERISA requirements are being met. The provisions of this actwere later reinforced by legislation included in the Retirement Equity Actof 1984 that greatly increased the complexity of ERISA and added multi-ple layers of Internal Revenue Service regulations.

Taft-Hartley Amendments of 1975 The Taft-Hartley Act, which, as noted earlier, was an amendment to theNational Labor Relations Act, was itself amended in 1975. This “amend-ment to an amendment” was created specifically to address not-for-profithospitals by removing the exemption that had been in place since Taft-Hartley’s original passage in 1947. Beginning in 1975, no longer could



not-for-profit hospitals be considered beyond the reach of labor unions.The exemption was removed, but specific rules were created in recogni-tion of the special circumstances of this vital service which deals in mat-ters of human life. For example, written notice must be provided by aunion to the health care institution and the Federal Mediation andConciliation Service 10 days prior to engaging in any picketing, strike, orother concerted refusal to work. No such notice is required prior to sim-ilar actions in other industries.

The 1975 amendments preempt all state labor laws that previously ap-plied to nongovernmental hospitals. Also, the 1975 amendments apply tohealth care institutions previously covered by the act, such as proprietaryhospitals and nursing homes, as well as to all those institutions broughtunder federal law by these amendments to the act.

A significant element of Congress’s intent in passing the amendmentswas to provide time to transfer patients from a struck or threatened insti-tution to another facility and to obtain limited assistance from another fa-cility without risking secondary strikes or boycotts against the assistinginstitution.

Pregnancy Discrimination Act (1978) The Pregnancy Discrimination Act decrees that discrimination on the ba-sis of pregnancy, childbirth, or related medical conditions was in fact un-lawful sex discrimination under Title VII of the Civil Rights Act of 1964.From this point forward, pregnancy has been considered to be a medicaldisability and is treated accordingly as a disability of some 6 to 8 weeksduration. The exact length varies and depends on whether federal or stateguidelines are applied.

Consolidated Omnibus Budget Reconciliation Act (1986) The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a com-plex piece of legislation that addresses many concerns. However, most per-tinent to employment is the provision that COBRA allowed for the extensionof group insurance coverage to employees and their dependents on a self-pay basis for set periods of time for those who would otherwise lose grouphealth or dental benefits due to a loss of employment, change in employ-ment status, or other defined events. The maximum period for COBRAbenefits is 36 months. The length of the period depends on the qualifyingevent or the reason for accessing COBRA. By making it possible for theseemployees and dependents to remain on the group contracts under whichthey had been covered, COBRA shifted to employers a portion of the costof health coverage for many individuals who would otherwise be unin-surable except under government programs. As far as health insurance isconcerned, COBRA simply provides temporary or stopgap coverage.



Persons who continue coverage under COBRA must secure other insur-ance after the eligibility period expires. Insurance coverage can be con-tinued up to 18 months for laid-off employees, up to 29 months for disabledindividuals, and up to 36 months for dependents following separation, di-vorce, or the death of the previously covered employee. However, shouldthe employer go out of business or for some other reason terminate itshealth insurance plan, all rights under COBRA immediately cease.

Immigration Reform and Control Act (1986) The Immigration Reform and Control Act (IRCA) requires employers toreview and, as necessary, modify their hiring practices. They must insti-tute procedures to verify that all job applicants are United States citizensor otherwise legally authorized to work in the United States. This law es-tablished civil and criminal penalties for knowingly hiring, recruiting, re-ferring, or retaining in employment persons designated as unauthorizedaliens. The act prohibits employers from discriminating against job ap-plicants on the basis of citizenship status or national origin.

Much initial business reaction to IRCA was strong, vocal, and negative.Because IRCA forces employers to take steps to screen out illegal immi-grants (the majority of whom enter this country with employment as agoal), many organizational heads have expressed the belief that businessesare being made to perform a function that more correctly belongs withinthe purview of the federal government. Skrentny provided the followingearly assessment of the act, “This onerous piece of legislation for businessturns every employer in the country, whether he or she hires a housekeeperor 10,000 auto workers, into an arm—an agent or a cop, if you will—ofthe Immigration and Naturalization Service (INS).”1

Most employment legislation specifies the minimum size organizationto which it applies. For example, the Family and Medical Leave Act ap-plies only to employers with 50 or more employees. The ImmigrationReform and Control Act pointedly applies to all employers of one or moreemployees. The basis for this requirement is the premise that a significantnumber of undocumented aliens find work as household help.

This legislation has created work in the form of a verification docu-ment known as the I-9 Form which is ordinarily completed in HR as partof the hiring process. Each new employee or employee-to-be must furnishspecified proofs of identity and, in the instance of legal aliens, proof of au-thorization to work in the United States. After examining (and usuallycopying) the appropriate proofs, a representative of the employer signsthe I-9 attesting to having seen the documents. An employer has three busi-ness days from the date of hire to complete an I-9 Form. This requirementchanges to the first day of employment if the term of hire is to be less thanthree days. Completed I-9 Forms are retained in employees’ personnel files,where they are subject to audit by the Immigration and Naturalization



Service. Financial penalties may be imposed for missing or incomplete I-9 Forms. Significant legal repercussions can be imposed if illegal aliensare discovered in the work force.

Some critics have claimed that the Immigration Reform and Control Acthas resulted in increased employment discrimination. Employment appli-cants who look or sound foreign, especially Asians and Hispanics, are of-ten faced with an increased likelihood of discrimination by employers whomay shy away from hiring them because they fear inadvertently hiring il-legal aliens and thus exposing themselves to action by the INS. Laws af-fecting employment have proliferated to such an extent that some of themoccasionally come into conflict with each other. Title VII of the Civil RightsAct declares that discrimination on the basis of race or national origin isillegal while the Immigration Reform and Control Act encourages closerscrutiny of applicants on the basis of national origin.

Pension Protection Act (1987) This act requires organizations with under-funded pension plans to makeadditional payments to the Pension Benefit Guarantee Corporation (PBGC).The PBGC is a government agency established to guarantee benefit pay-ments to participants of legally qualified defined-benefit pension plans. Inaddition to increasing employers’ payments to the PBGC, this legislationreduces or eliminates the deduction of contributions by employers for better-funded plans.

Drug-Free Workplace Act (1988) The Drug-Free Workplace Act requires organizations having $25,000 ormore in federal contracts or grants to make good-faith efforts to maintaina drug-free workplace and to establish drug education and awareness pro-grams for their employees. As a precondition to receiving a contract orgrant, the law requires an organization to certify that it will provide andmaintain a drug-free workplace. The manager of any department involvedin the fulfillment of any portion of an appropriate federal contract or grantwill be involved at several points in the following process. An organiza-tion must notify all employees in writing (via a published statement) thatthe possession, use, manufacturing, or distribution of a controlled sub-stance in the workplace is prohibited. The statement must include thepenalties that will be imposed for violations of company rules. Each or-ganization must establish a drug-free awareness program to inform em-ployees of the dangers of drug abuse in the workplace; comply with theexternal requirement of a drug-free workplace as a condition of seekingand accepting contracts and grants; note drug counseling, rehabilitation,or employee assistance programs that may be available to them; and enu-



merate the penalties to which the organization may be exposed for viola-tions that occur in the workplace.

An organization must require that each individual employee who is tobe involved in the fulfillment of an appropriate contract or grant possessa copy of the organization’s published statement concerning controlledsubstances. Furthermore, the organization must notify all employees re-ceiving the controlled substances statement that they are expected to abideby all terms of the statement and notify their employer of any criminaldrug statute conviction for a violation in the workplace no later than fivedays after conviction. Within ten days of receiving such a notice of crim-inal drug statute conviction, the granting or contracting agency must benotified of the conviction. Within 30 days of receiving notice of an employee’scriminal drug statute conviction, an employer must take appropriate dis-ciplinary action against the employee, or require the employee to com-plete an approved drug-abuse assistance or rehabilitation program in asatisfactory manner. Finally, each employer must make a good-faith effortto maintain a drug-free workplace through implementation of the foregoingprocedures and requirements.

All health care institutions have an interest in keeping their work envi-ronments free from dangers to patients, visitors, and employees created bythe use of illegal drugs or controlled substances. For a number of years,drug abuse in the workplace has made it necessary for employers to de-velop and implement different means of addressing this growing problem.Although the requirements of the Drug-Free Workplace Act apply only toemployees receiving federal contracts and grants, conscientious manage-ment practices suggest that a comprehensive policy and drug-free aware-ness program be implemented for all employees. Conscientious departmentalmanagers should have a strongly vested interest in displaying a high levelof concern for maintaining a drug-free work environment whether or notthere are external requirements for doing so.

Employee Polygraph Protection Act (1988) The Employee Polygraph Protection Act (EPPA) prevents most private-sector employers from requiring job applicants or current employees to takepolygraph (lie detector) tests. Under EPPA, the routine use of polygraphtests is permitted only in organizations that produce and distribute con-trolled substances and in those concerned with nuclear power, trans-portation, currency, commodities, or proprietary information.

In most organizations, an employee may be asked to submit to a poly-graph when other evidence gives management reason to suspect an indi-vidual of wrongdoing. This is sometimes referred to as reasonable suspicionor, somewhat inaccurately, as reasonable cause. However, an employeemay not be disciplined or discharged solely on the results of a polygraphtest. Under EPPA, an employer may not ask an employee or job applicant



to submit to a polygraph test other than in the situations already delineated.Furthermore, an employer may not take any adverse action against an em-ployee or applicant for refusing to take a polygraph test. Finally, the re-sults of a polygraph test to which a person has submitted for one specificreason cannot be used for a different purpose.

Worker Adjustment and Retraining Notification Act (1988) The Worker Adjustment and Retraining Notification Act (WARN) re-quires employers with 100 or more employees at any individual site toprovide advance notification of major reductions in force. An employermust provide 60 days notice of an impending layoff of 50 or more em-ployees, and must notify local government and the appropriate state agency,bureau or unit responsible for dislocated workers that provides employ-ment and training services.

Americans with Disabilities Act (1990) The Americans with Disabilities Act (ADA) provides individuals with dis-abilities with the same protections afforded to minorities and other pro-tected groups under the Civil Rights Act of 1964. The ADA calls for accessequal to that available to others in regard to employment, transportation,telecommunications, and ensuring that all services and facilities are avail-able to the public, whether under private or public auspices.

Disabilities are broadly defined under the Americans with DisabilitiesAct, including, in addition to physical limitations ordinarily thought of asdisabilities, hearing and visual impairments, paraplegia and epilepsy, HIVor AIDS, and literally dozens of other conditions. The list of recognizeddisabilities is long, and it continues to expand as legal challenges continueover what constitutes a disability.

The ADA prohibits potential employers from asking about a job ap-plicant’s medical conditions, if any, and imposing major limitations on pre-employment physical examinations. Under the law, a physical examinationcannot be conducted until after a job offer has been extended. If a phys-ical examination reveals a medical condition that does not affect the per-son’s ability to perform the major functions of the job being sought, anemployer may be expected to make a reasonable accommodation to theneeds of the applicant. The key to applicability of the ADA lies in an in-dividual’s ability to perform satisfactorily the major functions of a job.Thus, an individual cannot be denied a job because an impairment pre-vents performance of a minor or non-essential activity. Each employermay find it necessary to make a reasonable accommodation for the con-dition providing such accommodation does not cause unreasonable ex-pense or hardship.



From time to time each department manager may have reason to be fa-miliar with some aspects of the law concerning disabilities. Involvementsurely will be required should a need arise to make a reasonable accom-modation for one or more employees in the department. However, it isnot always possible to identify an individual who is disabled. Unlike raceor gender, disabilities may not be visually apparent.

Managers should not be concerned unless they know factually that adisability exists. To obtain protection available under anti-discriminationlaws, employees must identify themselves as being disabled. If a disabilityis neither apparent nor declared, then the employee in question should betreated the same as any other worker. Managers who suspect the presenceof a disability that has not been declared are advised not to inquire aboutthe situation with the employee in question. Furthermore, they should notoffer unsolicited advice to an employee about a possible but undeclaredproblem. Such a course of action has been ruled as treating an employeein a different manner and is against the law.

The Americans with Disabilities Act has frequently been in the news.A decade after its passage, lawyers argued before the Supreme Court thatthe ADA went too far in allowing disabled public employees to sue stateand local governments in federal court.2 States and localities generallyhave immunity against such lawsuits unless Congress has documented suf-ficient discrimination in the states to deny them that immunity. The fed-eral government must invoke its power under the 14th Amendment toensure that people have equal protection under the law. States have con-tended that Congress has been lax in demonstrating that individual stateswere not enforcing their disability laws.

In a 2002 decision, the Supreme Court unanimously narrowed the num-ber of people covered by the ADA. The opinion held that “Merely havingan impairment does not make one disabled for purposes of the ADA,”that a person’s ailment must extend beyond the workplace and affect every-day life, and that the ability to perform tasks that are of central importanceto most people’s daily lives must be “substantially limited” before an in-dividual can qualify for coverage under the original legislation that wasintended to protect the disabled from discrimination because of physicalimpairments.3 In other words, the Court ruled that individuals who couldfunction normally in daily living could not claim disability status becauseof physical problems that limited their ability to perform some manualtasks on the job.

In another opinion that was viewed by some as a defeat for disabled work-ers, the Supreme Court ruled that disabled workers are not always enti-tled to premium assignments intended for more senior workers.4 Thepractical implication of this ruling is that, in the majority of instances, seniority can take precedence over disability. In continuing its series ofclarifications and rulings limiting rights under the ADA, the Court ruled



that disabled workers cannot demand jobs that would threaten their livesor health.5 This ruling arose from a case in which a worker with a partic-ular medical condition wanted to return to his original position althoughit was considered medically risky for him to do so. The ADA’s require-ment for reasonable accommodation has always made exceptions for thosewho may be a threat to the health or safety of others on the job. This de-cision interpreted the exception as applying to workers who may presenta risk only to themselves. Legal scholars consider it likely that the Americanswith Disabilities Act will continue to be refined through Supreme Courtfuture decisions.

Older Workers Benefit Protection Act (1990) The Older Workers Benefit Protection Act (OWBPA) amended the AgeDiscrimination in Employment Act (ADEA) by clarifying the authority ofthe ADEA relative to employee benefits. Although still requiring equalbenefits for all workers, as a result of several legal decisions, the ADEAallowed reductions in benefits for older workers in situations where addedcosts were incurred to provide the benefits. The OWBPA removed em-ployers’ option to justify lower benefits for older workers. It requires thatany waivers or releases of age discrimination must be voluntary and partof an understandable, written agreement between employer and employee.In other words, this law prohibited an employer from unilaterally pro-viding a reduced benefit to an employee on the basis of age.

Civil Rights Act (1991 Amendments) Adding to the original Civil Rights Act of 1964, the 1991 amendments al-lowed employees to receive compensatory and punitive damages from em-ployers who committed violations with malice or reckless disregard foran individual’s protected rights. They allowed women and disabled work-ers to sue for compensatory and punitive damages, a right they previouslydid not have. This legislation provided for jury trials in such discrimina-tion cases. Previously, these had been handled with non-jury processes.For employers, the overall impact of these amendments was to increase thelikelihood of longer and costlier legal processes and to increase potentialpenalties.

Family and Medical Leave Act (1993) The Family and Medical Leave Act (FMLA) applies to eligible persons inorganizations having 50 or more employees. The FMLA defines eligibleemployees as those having been employed for at least one year and hav-ing worked at least 1,250 hours during the previous 12 months. Thesepersons are permitted to take up to 12 weeks of unpaid leave during any12-month period when unable to work because of a serious health condi-



tion, or to care for a child upon birth, adoption, or foster care, or care fora spouse, parent, or child with a serious health condition. Under specifiedcircumstances, leave may be taken intermittently or on some reduced timeschedule. This has the potential to extend any given leave over a periodlonger than 12 calendar weeks. Employees who are entitled to a set amountof paid time off are ordinarily required to use that time as part of their 12weeks. Most employees on leave ordinarily use up their available paid timeoff rather than experiencing their entire leave without pay. The Familyand Medical Leave Act does not take precedence over any state or locallaws that happen to provide greater leave rights.

While on approved leave, employees must continue to receive health carebenefits but are not entitled to accrue vacation, sick time, or seniority. Theemployer must guarantee that, upon returning from leave, an employee willbe reinstated to the previous position held or placed in a fully equivalentposition with no loss of benefits or seniority.

In many situations, the Family and Medical Leave Act has made lifeconsiderably more difficult for department managers. When an employeein an essential position takes leave, that position and its responsibilities mustbe covered. Some positions cannot be left vacant for a few days, let alonefor a 12-week period. Filling the position and later returning the employeeto an equivalent position is not readily accomplished. Courts and other ex-ternal agencies have repeatedly interpreted equivalent as essentially thesame in all aspects: pay, benefits, tasks, and responsibilities. Some courtshave ruled that equivalent extends to reinstating similar hours and shifts.Because equivalent has been so strictly interpreted, the safest course of ac-tion for managers is to preserve the original position of the person on leave.Managers are often advised to juggle coverage until the employee returnsfrom leave. This often requires the use of temporary employees, overtime,reassignments, and other means. The practical result of the FMLA is thatstaffing and scheduling has become more difficult and time-consuming forsome managers.

Retirement Protection Act (1994) The Retirement Protection Act strengthens and accelerates funding of under-funded pension plans and increases Pension Benefit GuaranteeCorporation (PBGC) premiums for plans that pose the greatest risk. It im-proves the flow of pension related information for workers and increasesthe PBGC’s authority to enforce compliance with pension obligations.

Small Business Job Protection Act (1996) Despite the title of this legislation, its provisions are not restricted to smallbusinesses. This legislation included the 1996 increase in the minimumwage. It increased pension protection and made it easier for workers to roll



over (change to another fund or plan) their retirement savings upon chang-ing employment. It simplified pension administration to an extent and re-duced the vesting period for selected multi-employer plans from 10 yearsto 5 years. The act allows specified smaller employers to establish simpli-fied 401(k) plans for their employees.

Health Insurance Portability and Accountability Act (1996) The full impact of the Health Insurance Portability and AccountabilityAct (HIPAA) was not felt until several years after its passage. Ironically,the portions of HIPAA causing the most frustration and necessitating themost effort by organizations and HR personnel had little or nothing to dowith the title of the act.

HIPAA consists of five sections or titles. Titles I, III, IV, and V addressthe issue of continuity and the ability to renew health insurance coveragefor employees who change employers or otherwise lose their jobs, pro-mote the use of medical savings accounts, and establish standards for long-term care coverage.6 HIPAA eliminated the possibility of individuals beingdenied coverage because of pre-existing medical conditions. It further re-quires insurance companies to provide coverage for small employer groupsor to individual employees who lose their group coverage.

The effects of Titles I, III, IV, and V of HIPAA on most HR departmentsand personnel were barely noticeable. In the majority of instances, re-quired legal notifications were taken care of by the administrative servicesof organizations’ different health plans. However, the true impact of HIPAAbecame felt in April of 2003.

In terms of effort required by health care organizations and HR per-sonnel, the significant section of HIPAA has been Title II, “PreventingHealth Care Fraud and Abuse, Administrative Simplification, and MedicalLiability Reform.” This is often referred to as “AdministrativeSimplification.” The irony in this nomenclature is that for many organi-zations, the impact has been anything but simple. Receiving the most at-tention of the contentious components of Title II has been the portionshaving to do with patient privacy.

The majority of health care organizations were required to be in com-pliance with HIPAA’s Privacy Rule by April, 2003. The same deadline ap-plied to other organizations that provided HR services related to healthcare and benefits. Two other pertinent deadlines for compliance includedthe Transactions and Code Sets Rule (October, 2003) and the SecurityRule (phased in on two dates). Healthcare providers with large healthplans, large employer-sponsored group health plans, and health care clear-inghouses were required to be in compliance by April, 2005. Providers ofsmall health plans had to be in compliance by April, 2006.



Compliance with the Security Rule usually begins by appointing a se-curity officer, often the same person who serves as a privacy officer. Thenext step is to assess risks related to information systems. The third stepis to develop policies and procedures and training programs that are ap-propriate for a particular organization. According to legal experts, com-pliance is an ongoing process that involves periodic audits, re-evaluationand implementing procedural changes as needed.7

The Privacy Rule has affected nearly all health care plans and all healthcare providers. Physicians’ offices, hospitals, laboratories, pharmacies,dentists, medical equipment dealers, billing services and others providingadministrative services have all been required to implement systems designedto protect patient information in all forms, protect all patient informationfrom malfeasance, implement specific data formats and code sets, providemechanisms to stop fraud and conduct periodic audits to prevent abuse.All subcontractors and suppliers coming into contact with patient infor-mation must comply with the Privacy Rule. All contracts and other arrange-ments must define the acceptable uses of patient data.

HIPAA has impacted not only HR but also very nearly all departmentsand divisions of any health care organization. Although there may be fu-ture modifications in some of its rules and mandated procedures, the height-ened emphasis on personal privacy and the confidentiality of patientinformation is here to stay.

■ GREATER RESPONSIBILITIES AND INCREASED COSTS FOR ORGANIZATIONS

The foregoing chronology is incomplete. There are state laws that oftenvary from state to state. Other federal statutes have employment implica-tions. These are introduced in other chapters.

An obvious conclusion from the foregoing chronology is that the finaltwo decades of the twentieth century were accompanied by the federalgovernment spreading its influence over an increasing number of aspectsof the employment relationship. In addition to creating added work for HRpersonnel by designating what cannot be done or imposing new require-ments, many of these laws have created new or tighter boundaries withinwhich managers must operate.

The pattern of employment legislation during the late twentieth andearly twenty-first centuries has been to compel employers to be more so-cially responsible for their employees. This is especially evident in signif-icant pieces of legislation such as the Americans with Disabilities Act andthe Family and Medical Leave Act. Legislation affecting social responsi-bility and rules of conduct for interactions between employers and theiremployees imposed added work responsibilities and supporting systems

Greater Responsibilities and Increased Costs for Organizations 57


to organizations. These requirements have increased the cost of doing busi-ness and thus increased costs to the ultimate consumers of all goods andservices.

It is true that some new laws have required only minor changes in pro-cedures or modest alterations in recordkeeping practices. However, mosthave clearly increased the cost of doing business because provider organ-izations and their customers are the only entities available to pay the in-creased costs. Legislators know very well that costs are associated withimplementing any new law. Legislators and senior managers are often farfrom agreement concerning the costs of implementing new legislation.When elected officials create new programs, they are undoubtedly awarethat only three options exist to cover the costs associated with implemen-tation. Legislators can discontinue an existing program to free up funds.This rarely occurs because it is politically unpopular. Legislators can raisetaxes. This is even more unpopular. In the current political climate, it istantamount to committing political suicide. Finally, legislators can findother parties or organizations (someone else) to bear the costs of new leg-islation. The entities that have been paying to implement most of theselaws affecting the employment relationship are businesses and other com-mercial enterprises. Ultimately, the costs are passed along and paid by in-dividual consumers.

■ A CUMULATIVE EFFECT Exhibit 3-1 presents a listing of all of the foregoing laws by decade of pas-sage. It is not difficult to see the shift from the pre-1964 concerns withcollective bargaining and wage and hour issues to the growing post-1964concerns with social responsibility.

A simple comparison of the pre-1964 years with the present day demon-strates how significantly the employment environment has changed.Although very few of the laws reviewed replaced features of earlier legis-lation, most of the legislation enacted since 1964 has exerted new and of-ten different influences on how work organizations treat employees andhow managers can direct their own departments. The accumulation ofnearly four decades of legislation affecting the employment relationshiphas transformed personnel from the days of an employment office to themodern HR department. A contemporary department manager must com-ply with countless rules for supervising and directing employees. Althoughthe accumulation of new legislation seems to have slowed somewhat, mostexperts agree that the future is likely to bring more, not less, regulation.

A new law can come into being in a relatively brief period of time, yetthe changes in human behavior required by that law can require a verylong time to implement. A useful illustration is provided by Title VII of the



A Cumulative Effect 59

Exhibit 3-1 Summary of Employment Legislation by Decade

1930s• Norris-LaGuardia Act (1932)• National Labor Relations Act (1935)• Social Security Act (1935)• Fair Labor Standards Act (1938)

1940s• Labor-Management Relations (Taft-Hartley) Act (1947)

1950s• Labor-Management Reporting and Disclosure (Landrum-Griffen)

Act (1959)

1960s• Equal Pay Act (1963)• Civil Rights Act (Title VII) (1964)• Age Discrimination in Employment Act (1967)

1970s• Occupational Safety and Health Act (1970)• Rehabilitation Act (1973)• Health Maintenance Organization (HMO) Act (1973)• Employee Retirement Income Security Act (1974)• Taft-Hartley Act Amendments (1975)• Pregnancy Discrimination Act (1978)

1980s• Consolidated Omnibus Budget Reconciliation Act (1986)• Immigration Reform and Control Act (1986)• Pension Protection Act (1987)• Drug-Free Workplace Act (1988)• Employee Polygraph Protection Act (1988)• Worker Adjustment and Retraining Notification Act (1988)

1990s• Americans with Disabilities Act (1990)• Older Workers Benefit Protection Act (1990)• Civil Rights Act Amendments (1991)• Family and Medical Leave Act (1993)• Retirement Protection Act (1994)• Small Business Job Protection Act (1996)• Health Insurance Portability and Accountability Act (1996)


Civil Rights Act of 1964. Employment discrimination has been prohib-ited by law for more than four decades, but problems of discriminationcontinue to exist in many organizations. However, the work force in theUnited States is becoming increasingly diverse. Organizations that elimi-nate discrimination will be the ones best able to properly value and man-age this diversity.

Discrimination cannot be legislated out of existence. Discrimination isextremely personal as it resides in individual attitudes, likes, and dislikes.It is the product of both home and culture. Therefore, no job is completelyimmune from the possibility of discrimination.

For the greater part of four decades employee rights have been an ex-tremely active legal topic in the federal and state legislatures and thus inthe courts. We can expect this interest in individual rights to continue,probably even to intensify from time to time. The employment environ-ment has changed and will continue to change. Those who manage withinthis environment must either change with it or be left behind.

■ CONCLUSION The legal aspects of HR have changed dramatically in the past 70 years.The emphasis on the right of workers to form unions and establishing ba-sic parameters such as length of a working week and establishing a mini-mum wage has changed. The emphasis of most recent legislation has beengrounded in social responsibility. Government has compelled employersto become more socially responsible. In the process, the costs of govern-ment-mandated changes have been shifted to consumers.

American workers can expect equal access to employment and receiveequal pay for similar jobs. They can expect to work in safe surroundingswithout being discriminated against on the basis of age, gender, race, re-ligion, national origin, or personal preference. Persons with disabilitiesmust be treated like any other workers. They can expect to work in an en-vironment that is free of drugs and harassment. American workers cantake time off during a pregnancy or illness. They can expect access to healthcare benefits after losing their jobs. To a degree, pension rights have beenestablished. Information related to one’s health is now protected and con-sidered to be private.

Human resources personnel must be familiar with the requirements ofthe legislation discussed in this chapter. This task has made the jobs andactivities of HR employees more complex and challenging. Compliance withthe legal requirements has imposed additional costs on organizations. Mostexperts expect that this trend will continue although the pace of implementingchanges is likely to slow.



Returning to the initial case study, it is reasonably certain that CountyHospital’s request for dismissal of the complaint will be unsuccessful. TheAmericans with Disability Act prohibits potential employers from impos-ing major limitations on pre-employment physical examinations. ConcerningSusan and her complaint, the potential employer should attempt to nego-tiate a reasonable agreement and offer her employment in some capacity,rather than allow the State Division of Human Rights to conduct a full in-vestigation and run the risk of imposing a costly settlement. The Divisionmight consider Susan to be a handicapped person (anyone who has a phys-ical or mental impairment that substantially limits one or more major lifeactivities). If it so rules, the Division can then sue County Memorial Hospitalon Susan’s behalf.

However, Susan’s case is far from cut and dried. Different jurisdictionshave rendered varying decisions related to any disability. For example, aNew York state court ruling declared obesity to be a handicap, but aPennsylvania decision stated that obesity can be but is not always auto-matically a handicap. As is often the case with disputes that arise undersome aspect of employment law, clarification of the law in its applicationis left to the courts. Courts in different jurisdictions and locations do notalways see the same situation in the same light.

References1. Skrentny, R. (1987). Immigration reform—What cost to business? Personnel

Journal, 66(10), 53-59.2. Hearst News Service. (2000). High Court Scrutinizes Disabilities Act. Democrat

& Chronicle, Rochester, NY, October 12.3. Newsday. (2002). High Court Limits Disability Law. Democrat & Chronicle,

Rochester, NY, January 9.4. Associated Press. (2002a). Seniority Outweighs Disability, Court Says. Democrat

& Chronicle, Rochester NY, April 30.5. Associated Press. (2002b). Top Court Disallows Dangerous Jobs for Disabled.

Democrat & Chronicle, Rochester, NY, June 11.6. Entin, A. (2001). Implementing HIPAA: A manager’s blueprint. The Health

Care Manager, 20(2), 49-59.7. Hagan, K. T. (2004). HIPAA Security Rule. Available at: http://www.schwabe.com/

showarticles.asp?Show=49]. Accessed December 22, 2005.

Discussion Points

1. Why is 1964 and the passage of the Civil Rights Act (Title VII) a turn-ing point in the evolution of HR? Stated differently, other than 1964representing the beginning of a steady flow of regulations to follow,what occurred that constituted a change of direction? Why?

Conclusion 61


2. Define and describe a contemporary bargaining unit as defined by theNational Labor Relations Act. How, if at all, does it differ from a bar-gaining unit in 1935?

3. When and how was the Equal Employment Opportunity Commissionestablished? What is its purpose?

4. What is a bona fide occupational qualification? Provide at least twospecific examples.

5. What is the intended goal of the right-to-know laws? In your opinion,have they been successful? Why or why not?

6. Well before the passage of the Americans with Disabilities Act, in someinstances employers were required to provide reasonable accommo-dation of the limitations of an employee or applicant. When did thisoccur, and what were the conditions under which this requirementapplied?

7. What appears to have been the primary intended purpose of theEmployee Retirement Income Security Act? Why was this legislationdeemed to be necessary?

8. What have been the primary effects of the Immigration Reform andControl Act on businesses?

9. Pose two hypothetical examples of situations in which a health careemployer might legally require a polygraph (lie detector) test as a con-dition of either initial or continued employment.

10. Viewing the Family and Medical Leave Act from the perspective of aworking department manager, describe the ways in which this legis-lation has affected a supervisor’s ability to manage.

Resources

BBooookkssBuckley, J. F., & Green, R. M. (2004). State by State Guide to Human Resources

Law 2005. Frederick, MD: Aspen. Guerin, L. (2005). Create Your Own Employee Handbook: A Legal and Practical

Guide with CD (2nd ed.). Berkeley, CA: NOLO Publishing. Kaiser, S. E. (2004). Develop an Affirmative Action Program as a Risk Management

Tool. Lincoln, NE: iUniverse. Shilling, D. (2004). The Complete Guide to Human Resources and the Law.

Amsterdam: Wolters Kluwer Company.

PPeerriiooddiiccaallssEdelman, L. B. (1992). Legal ambiguity and symbolic structures: Organizational

mediation of civil rights law. American Journal of Sociology, 87, 1531-1576.McGlothlen, C. A. (1999). 7th Circuit ruling allows employers to cap AIDS ben-

efits. AIDS Policy Law, 14(14), 7-9.



O’Brien, G. V., & Ellengood, C. (2005). The Americans with Disabilities Act: Adecision tree for social services administrators. Social Work, 50(3), 271-279.

Popovich, P. M., Scherbaum, C. A., Scherbaum, K. L., & Polinko, N. (2003). Theassessment of attitudes toward individuals with disabilities in the workplace.Journal of Psychology, 137(2), 163-177.

Ritchie, A. J. (2002). Commentary: Implementation of the Americans with DisabilitiesAct in the workplace. Journal of the American Academy of Psychiatry and Law,30(3), 364-370.

Sassi, F., Carrier, J., & Weinberg, J. (2004). Affirmative action: The lessons forhealth care. British Medical Journal, 328(7450), 1213-1214.

Schiff, M. B. (2004). A primer on case law under the Americans with DisabilitiesAct. Tort Trial and Insurance Practice Law Journal, 39(4), 1141-1196.

Takakuwa, K. M., Ernst, A. A., & Weiss, S. J. (2002). Residents with disabilities:A national survey of directors of emergency medicine residency programs.Southern Medical Journal, 95(4), 436-440.

Weill, P. A., & Mattis, M. C. (2003). To shatter the glass ceiling in healthcare man-agement: Who supports affirmative action and why? Health Services ManagementResearch, 16(4), 224-233.

Westreich, L. M. (2002). Addiction and the Americans with Disabilities Act. Journalof the American Academy of Psychiatry and Law, 30(3), 355-363.

Conclusion 63


Human ResourceActivities and

ManagersChapter Overview

After reading this chapter, readers will be able to:

• Identify the services that are almost always, often, andoccasionally provided by a human resources department

• Subdivide human resource services according to the major tasks ofacquiring, maintaining, retaining, and discharging or separatingemployees

• Identify the activities for which a department manager can expectcontact and involvement with human resources, and the likelyextent of that contact and involvement

• Compare and contrast line management and human resourcemanagement as to background

• Perspective, and other characteristics for the purpose of explainingsome of the tensions that develop between the two groups

• Understand and eventually overcome the apparent differencesbetween human resources personnel and line managers

■ CHAPTER SUMMARYA human resources (HR) department is involved in a number of activ-ities that together comprise four major activity groupings: acquiringemployees, maintaining employees, retaining employees, and separat-ing employees. Within these activities, the specific activities of em-ployment and recruitment, compensation and benefits administration,and employee relations are undertaken. Also to be found in many HR

C H A P T E R

4

65


departments are labor relations (if unions are present), training and de-velopment, employee health and safety, security, and childcare and otheremployee services. Generally, all of the activities that may be found withina given HR department relate in some way to acquiring, maintaining, re-taining, or separating employees.

Human resources services are provided by a staff (as opposed to line)activity. This means that no individual in HR has direct authority overemployees in any of the departments of a health care organization. Assuch, HR is oriented towards service. It exists to provide services to em-ployees at all levels of an organization.

Case Study: Who Has a Recruiting Problem?

Jane Cassidy is the Director of Nursing at Community General Hospital.The institution recently completed a physical expansion that included,among other additions, a new 36-bed medical/surgical unit. Until recentlyJane had worked in conjunction with HR employment manager CarrieSmith and had fared reasonably well in keeping her nursing staff up to re-quired levels in spite of a general shortage of nurses in the local area.However, the opening of the new unit has strained the nursing depart-ment’s resources to the extent of leaving the department short several reg-istered nurses.

Community General’s nursing shortage is particularly evident on theevening shift (3:00 PM to 11:30 PM). There are more than enough peoplewilling to work days. Jane has been fortunate in having a thoroughly sta-ble crew who prefer to work nights.

Employment recruiter Carrie has regularly gone out of her way to doeverything possible to locate candidates for nursing positions. Being ex-tra cautious about the possibility of scaring good candidates off beforethey can be interviewed, Carrie has been deliberately vague with candidatesconcerning available shifts and hours. Unless specifically asked, she has notmentioned to anyone that new graduates being hired are expected to workday-evening or day-night rotations.

In response to the long-running recruiting efforts of Jane and Carrie, awell-qualified registered nurse applies for employment. Both are impressedwith this nurse. She seems energetic and personable and is immediatelyavailable. She is quite willing to take a position on the evening shift.

Unfortunately, although this candidate is willing to work 3:00 PM to11:30 PM, she stated during her initial screening interview with Carrie thatshe cannot work any weekends. She will say only that weekend workcauses severe inconvenience in her family life, and she repeats her will-ingness to work evenings, straight evenings, but only Monday throughFriday. Nevertheless, Carrie refers this candidate to Jane, quietly suggest-ing that Jane see if she can talk her into rotating weekends. The applicant

66 CHAPTER 4 HUMAN RESOURCE ACTIVITIES AND MANAGERS


has yet to learn that scheduling practices in Community General’s nurs-ing department require everyone below the level of day, evening, or nightsupervisor to work every other weekend, although Carrie has becomeaware of a few situations that might constitute quiet exceptions to thescheduling policy.

Considering the critical need for nursing help on evenings as well asweekends, what can Carrie and Jane tell this applicant? If Jane has to ad-here rigidly to her scheduling policy and the candidate refuses to acceptthe job, what problems might Jane face? If Jane alters the scheduling pol-icy and offers the applicant a Monday through Friday without requiringweekends, a position that she accepts, what problems might Jane thenface?

How can Carrie, as an HR professional, provide further help to Jane,a supervisor in nursing services, as she attempts to recruit sufficient stafffor the nursing department?

■ THE ACTIVITIES OF HUMAN RESOURCES Finance, operations, and sales and marketing are examples of organiza-tional subdivisions that are encountered in most companies or businesses.The tasks performed within these functional areas are similar in most or-ganizations, as are the tasks performed within each functional area of ahealth care organization. Human resources, however, differs in that the tasksperformed by HR personnel may be quite varied. Only within the recenttwo decades have training programs been created to prepare people for ca-reers in the field of human resources.

Regardless of the form or operational purview of a particular health careorganization, whether hospital, long-term care facility, free-standing clinicor urgent care center, physicians’ group practice, or other entity, all HRdepartments have similar goals and pursue a similar overall mission. Theseworking groups exist to provide service to an organization and its em-ployees. However, not all HR departments are organized in the same fash-ion and not all provide the same services or perform exactly similar tasksor activities. Under some organizational structures, activities that are of-ten associated with HR may be performed by other departments or mayeven be separate departments in their own right.

In the sections that follow, we will subdivide the activities of HR intothree categories or levels. The first encompasses activities that are com-monly associated with HR and usually part of the HR department. Thesecond includes tasks that are often but not always performed by peoplefrom an HR department. The third discusses activities that are occasion-ally associated with HR or sometimes found outside of an HR departmentstructure.

The Activities of Human Resources 67


Category I: Typical HR Activities Of the four groups of activities that follow, the first three are invariablycomponents of HR. The fourth is usually part of HR if a union is presentin an organization.

EEmmppllooyymmeenntt oorr RReeccrruuiittmmeenntt This activity addresses the original function of what was previously describedas the employment office. Different names may survive from the past, butemployment or recruitment or some variant of either word is usually partof the organizational designation for this activity. The heart of this activ-ity is concerned with finding or identifying prospective employees, screen-ing them and providing them for interview by supervisors and managersthroughout a larger organization. The same employees extend official of-fers of employment and performing a number of other tasks that are nec-essary to bring new hires into an organization.

With a diminishing number of exceptions, employment for an entirehealth care organization is centralized in HR. The few exceptions that maystill be encountered, especially in hospitals of medium to large size, typi-cally involve nursing departments that continue to conduct their own re-cruiting. In the past, this was a much more common practice than at present,although some nursing departments maintain a designated nurse recruiterwho frequently works closely with HR. Physician recruiting is often co-ordinated by an institution’s medical director although the paper work isusually delegated to HR.

CCoommppeennssaattiioonn aanndd BBeenneeffiittss AAddmmiinniissttrraattiioonn Historically, administration of benefits was the second significant area ofresponsibility to be assigned to HR. Depending on an organization’s sizeand mode of operation, compensation and benefits may be combined asa single activity or may be pursued separately by individuals who special-ize in each. This latter situation (separation of the activities) is often thecase in larger organizations.

The activities associated with benefits administration ordinarily in-clude explaining benefits and the policies that govern them to employeesand answering questions related to benefits. These people assist employ-ees in accessing their benefits. They maintain relationships with benefitsproviders such as insurance carriers and pension overseers. These HRemployees must stay current with regulations that concern benefits andmust maintain employee benefits records. They participate in periodicassessments of the appropriateness of benefits. When necessary, they be-come involved in designing and implementing changes to benefits programsand packages.

Compensation activity is, by definition, concerned with wages andsalaries. Primarily, this includes recommending starting pay for new hires



that are consistent with their education and experience as well as takinginto account the compensation of existing employees. Compensation en-compasses answering questions related to wage and salary issues and rec-ommending corrective action when necessary. Specialists in compensationmonitor an organization’s wage structure to ensure that pay equity existsthroughout an organization. They recommend changes in the wage struc-ture that are consistent with pay changes in the local community, indus-try, and individual occupations as necessary.

EEmmppllooyyeeee RReellaattiioonnss Some may refer to an activity such as employee relations as being on thesoft side of HR. This is in contrast to elements that are on the hard side,primarily compensation and benefits. The distinction is based on the rel-ative ease with which matters can be quantified. Hard issues primarily re-fer to compensation and benefits that can be quantified using dollars andcents or other numerical measures. Soft issues encompass relations withpeople. An employee relations practitioner is likely to be involved, for ex-ample, in advising supervisors and managers on how to proceed in ad-dressing selected employee problems or monitoring applications of theorganizational disciplinary process. They may listen to troubled employ-ees and refer them to sources of assistance as needed. Experts in employeerelations counsel individual employees as needs arise and serve as em-ployee advocates when necessary. They may represent the organization inrelations or negotiations with external advocacy agencies such as the StateDivision of Human Rights. Names of agencies are not uniform and varyfrom state to state.

LLaabboorr RReellaattiioonnss Labor relations exists as a separately identified entity in larger organiza-tions but only when some or all of an organization’s non-managerial em-ployees are unionized. The emphasis is on larger organizations because ina smaller setting, even with a union present, there may not be enough con-tinuing activity to justify having a specialist in labor relations. When thisis the case, labor relations activities become part of another HR practitioner’sjob. For example, an employee relations specialist or the HR director maytake on labor relations activities when they become necessary.

The scope of labor relations includes continuing contact and ongoingrelations with elected officials of one or more unions representing someor all of an organization’s eligible employees. A majority of labor relationsactivities consist of hearing and resolving complaints. A collective bar-gaining agreement defines steps for processing grievances. A labor relationsspecialist represents the employer in related matters such as arbitrationhearings and other formal processes. Many organizations have personnelwho are actively involved in promoting labor relations or trying to pre-vent unionization when additional union organizing occurs. After a union



is formed, specialists in labor relations participate in contract negotiationsand other related activities when necessary.

Category II: Frequent HR Activities Depending on the size of a particular institution, the way in which it is or-ganized, and how its activities are distributed, some of the following mayexist as separate departments. Others may be housed within HR. Some maynot require an individual that is solely dedicated to the task so the few du-ties are incorporated into the job descriptions of other HR practitioners.

EEmmppllooyyeeee HHeeaalltthh aanndd SSaaffeettyy These may be separate activities. Employee health is often located sepa-rately from safety. In small organizations, they are frequently combined.Either or both may be components of HR. Almost as commonly, they maybe contained within other organizational units. Employee health is oftenfound within one of the organization’s medical divisions. However, sucha reporting arrangement can create problems with confidentiality of records.The arrangements can become confusing. In theory, employee health shouldbe a subsidiary component of HR, with the director of employee healthreporting directly to the chief of HR. The rationale for such an arrange-ment is that employee health renders service to employees by performingpre-employment physical examinations. This is clearly related to HR’s em-ployment section. However, because physicians render the services, theyshould report to an institution’s medical director or chief of medicine. Thisis just as clearly not a section of HR.

TTrraaiinniinngg aanndd DDeevveellooppmmeenntt Training and development is often a subsidiary activity of HR. However,depending on organizational size, it is frequently situated as a separate,free-standing entity with a reporting relationship to another department.In health care settings, training and development is often a component ofa nursing department or an equivalent group with a more broadly encom-passing name such as patient care services. Many nursing departments havedeveloped and maintained educational capabilities. These evolved long be-fore spreading to other disciplines because activities of long-standing con-tinuing education (in-service) requirements that were developed by thenursing profession. As a result, in some quarters training and developmenthas long been the province of nursing alone. When educational needs of otherprofessions emerged, nursing simply attended to them. Thus, in many healthcare organizations, this remains the norm: education originates in nursingand is provided by nurses but easily crosses departmental boundaries.Sometimes training and development are split. Clinically-oriented educa-tion remains in the nursing department, originating and being presented



by nurses. Other training that is not clinically-based often originates andis presented by personnel from HR.

SSeeccuurriittyy The security department is typically self-contained. The exception occursin small organizations where it may have a reporting relationship to plantmaintenance or building services. A distinctly separate security depart-ment with a manager of its own may report to the head of HR. Equallylikely is a reporting relationship within the plant facilities chain of com-mand or directly to the administrator who oversees general services for anentire organization.

CChhiilldd CCaarree If a health-care organization operates a child-care center or child-care pro-gram, it is equally likely that the individual who manages child care willreport either to the chief human resource officer or to another person suchas the administrator for general services. Because a child care center is sub-ject to unique state licensing arrangements that govern staffing and facil-ities, it usually appears as a distinct and separate entity. The rationale forattaching it to HR is the service to employees aspect of the activity. Thereare differences in how health care organizations having child care pro-grams define their scope of services. Some limit themselves exclusively toan employee clientele, but many are open to any member of the commu-nity. Often, child care programs give priority to employees, but after meet-ing employees’ needs, they fill the remaining capacity from other personsin the community.

AAwwaarrdd aanndd RReeccooggnniittiioonn PPrrooggrraammss Responsibility for award and recognition programs will ordinarily bepart of some department or group’s assigned duties rather than being aseparate entity. Exceptions occur in extremely large organizational set-tings. The most common exception is a large teaching institution that isan element of a university and thus served by the parent organization’saward and recognition group. In smaller health care organizations, awardsare often coordinated by a member of a public relations or communityrelations department or, occasionally, by an administrative assistant. Forthe majority of health care organizations, award and recognition pro-grams are the responsibility of HR and often fall to an employee rela-tions practitioner.

EEqquuaall EEmmppllooyymmeenntt OOppppoorrttuunniittyy//AAffffiirrmmaattiivvee AAccttiioonn If separate offices for Equal Employment Opportunity (EEO) or AffirmativeAction (AA) exist within an organization, then they will usually, althoughnot always, be found within the HR department. A person who is desig-nated to be responsible for compliance with EEO regulations is frequentlyan employee relations practitioner or HR executive. This person has the



primary responsibility for monitoring the organization’s compliance withall applicable anti-discrimination laws. The individual in this position willbe charged with some of the responsibilities that were described withinthe realm of employee relations, particularly those that relate to externaladvocacy agencies such as a state Division of Human Rights and the localbranch of the federal Equal Employment Opportunity Commission (EEOC).

Affirmative Action programs are no longer actively mandated for theorganizations to which they formerly applied. As a result, HR personnelwho had responsibility for Affirmative Action programs have frequentlybeen assigned to other duties. Affirmative Action required organizationsholding government contracts to demonstrate that positive efforts werebeing made to align the composition of an organization’s work force withthose living within the organization’s labor market area. In other words,the goal of an Affirmative Action program was to achieve a work force inwhich the percentages of women and minorities mirrored those of womenand minorities in the labor market area. Most of the compliance require-ments have been reassigned and are now included in EEO mandates. EEOmonitoring of workforce composition and compliance with regulationscontinues.

Category III: Infrequent, Occasional or Outsourced HR Activities The following activities are sometimes found within the structure of an HRorganization.

RRiisskk MMaannaaggeemmeenntt Risk management is present in most health care organizations, indeed, inmost organizations of any size or type. Interests of risk management in-clude monitoring malpractice and liability actions brought against the or-ganization while overseeing and constantly evaluating forms of insurancecoverage. Risk managers study loss trends such as costs associated withWorkers’ Compensation. The goal of these activities is to manage risk inan effort to achieve an appropriate balance between costs of doing busi-ness and potential exposure to a variety of legal risks.

Although formerly a component of HR in some organizations, riskmanagement is currently found elsewhere in the administrative structure.With its increasingly significant legal implications, risk management is fre-quently coordinated by a person that reports to the organization’s legal coun-sel. Increasingly, if risk management duties are assigned to more than oneperson, then risk management may become a separate department and itsmanager often has a legal background.

EExxeeccuuttiivvee CCoommppeennssaattiioonn AAddmmiinniissttrraattiioonn This activity is rarely left to persons in HR. More commonly, it is takencare of at the executive level within finance. If executive managers are not



included in an organization’s payroll system, then executive compensa-tion is most likely to be accomplished through an external confidentialpayroll service. Such an arrangement is quite uncommon in health careorganizations although it is far more likely to be encountered in other busi-nesses. Executive compensation is almost certain to be externally admin-istered if an organization’s top executives are under individual contractsor their salary arrangements include incentive compensation.

OOrrggaanniizzaattiioonnaall DDeevveellooppmmeenntt Organizational development encompasses a wide variety of tasks. In someorganizations, it is little more than management development under a dif-ferent name. True organizational development, however, goes beyond sim-ply providing the continuing education necessary to keep managers currentwith developments in health care as well as to helping them cope with thechanging times. Organizational development encompasses the changing re-quirements of an entire organization. It asks an ongoing question: Howshould this organization be changing its philosophy, mission, and vision,and its organizational structure to meet the demands brought on by chang-ing social and economic environments and the changing health care deliverymilieu? In many organizations, organizational development is consideredto be a luxury. It is often among the first departments to be cut when budg-etary limitations or other economic hard times occur.

A comprehensive approach to organizational development needs shouldinclude succession planning. Succession planning complements manage-ment development and expands upon it by preparing managers and otherindividuals at all levels not only to keep current but also potentially to ad-vance within the organization. This facet of organizational developmentemphasizes the internal development of managerial talent. A comprehen-sive approach to organizational development usually includes some meansof identifying and educating potential supervisors and managers fromamong the employees who do not hold management positions.

Organizational development exists as a separately identified activity ina minority of healthcare organizations. The work is typically coordinatedby a person reporting directly to the director of HR. Organizational de-velopment activities are often conducted in parallel with employment,compensation and benefits, and other HR work. In rare situations, typi-cally very large health care provider entities, organizational developmentmay be found as a separate office in parallel with HR. In such a situation,its head reports to the same executive as the director of HR.

Category IV: Employee Assistance ProgramAn employee assistance program (EAP) is intended to assist employees inaddressing particular personal problems that can affect their work per-formance. It is ordinarily described as an employee benefit. An employee



assistance program is primarily a referral program that helps individualsto identify and focus on their own needs and problems. Employee assis-tance programs help to secure professional referrals for troubled employ-ees. A capably functioning EAP can help control absenteeism, tardiness,and other circumstances that can affect job performance. Addressing suchpersonal problems usually contributes to improvements in quality andproductivity. Employee assistance programs commonly address alcoholand drug abuse, family and marital difficulties, legal and financial prob-lems, compulsive gambling, and other personal problems and issues.

A majority of healthcare organizations have EAPs. The initial referralpoint within a healthcare organization is usually an office located in HRor in employee health. The latter may itself be a component of HR. Theprofessionals that provide assistance to workers are often employed by anoutside entity and provide their services on a contract or retainer basis.Employees may use EAP resources with the assurance that no one withintheir organization has to know about their personal problems. This im-proves confidentiality and reduces the opportunities for embarrassing sit-uations to develop in the workplace. The HR role is limited to simplyputting an employee who expresses a need in touch with the external EAPcoordinator.

OOuuttppllaacceemmeenntt SSeerrvviicceess Outplacement involves assisting displaced employees in finding new em-ployment. Outplacement services are offered and provided in instances ofreductions in the work force or elimination of specific management posi-tions. Occasionally, they are offered to individuals as part of a severanceor termination package. Because it is costly and not needed on an ongo-ing basis, outplacement usually does not exist as a permanent componentof HR or any other organizational element. However, something that mayresemble formal outplacement occasionally occurs when someone in HRor elsewhere in an organization is able to assist a displaced employee infinding a position with another employer.

PPaayyrroollll The activities of payroll were once a common adjunct to the employmentactivities of early personnel departments in many organizations. Both ofthese basic needs impact all employees. Before benefits became common,the only activities required for all employees were hiring them and payingthem. There was a compelling logic in having these two activities locatedin adjoining offices and coordinating their activities. As time passed, pay-roll requirements became increasingly more complicated.

Financial activities have become increasingly more sophisticated. As aresult, payroll was organizationally relocated.

In some organizations it is still possible to find payroll attached to HR.However, these instances are uncommon and their number is steadily de-



clining. Today, most payroll activities are performed in one of two loca-tions. In the majority of organizations that process their own payrolls, thisactivity is part of the finance department. Another department such asdata processing or information systems, which may or may not be part offinance, will actually print and distribute checks and reports. A growingnumber of organizations, especially those of small to medium size, utilizeexternal contractors that specialize in payroll services. When outside pay-roll services are used, the input information from which they work is usu-ally submitted to them by the finance department. Only occasionally issuch information supplied by HR.

The foregoing activities are summarized in Exhibit 4-1.

OOuuttssoouurrcciinngg Outsourcing is the business term that is currently used to describe thepractice of having services that were once performed by organizationalemployees supplied by an outside party or vendor. Outsourcing some-time becomes necessary because of changes in organizational structure,


Exhibit 4-1 Human Resource Department Organizational Areas or

Activities

Usually components of HR:• Employment or recruitment• Compensation and benefits administration• Employee relations• Labor relations (if one or more unions are present)

Often components of HR:• Employee health and safety• Training and development• Security• Child care• Award and recognition programs• Equal Employment Opportunity/Affirmative Action

Occasionally components of HR:• Risk management• Executive compensation administration• Organization development• Employee Assistance Program• Outplacement services• Payroll


the reduction in number of employees, or mergers. Reengineering en-compasses these circumstances. Reengineering is not the only reason thatorganizations seek outsiders to perform needed services. A business ororganization might consider outsourcing for any of several reasons. Theservices to be performed may require special skills or expertise. The de-mand for such services may not be sufficient to justify hiring a skilled per-son to do it. A reasonable example is managing pension fund investments.

Also, outsourcing is often the solution when a given task requires ex-pensive equipment but there is insufficient work to justify purchasing theequipment. For example, an organization may want to have its annual re-port printed on multi-colored, special paper. If owned, the printing equip-ment would be unused during the rest of the year. By virtue of specializationor sophistication, an outside supplier may be able to perform a task moreeconomically than could company employees. This is one reason why out-placement services for displaced executives are provided on a contract ba-sis by an external entity. Reductions in staff sometimes create a need fortasks that must be completed for which no time is available among em-ployees who are not discharged. Such necessary organizational require-ments are sometimes referred to as orphans or orphan functions. A particularnecessary task may occur irregularly and require insufficient time to jus-tify training and retaining someone to do it. Preparing, publishing, andprinting an employee newsletter provides a convenient example. Finally,some work is of a sufficiently sensitive nature that confidentiality is bestserved by having it performed by an outside vendor. Coordinating an EAPand administering an executive compensation program are two examplesof sensitive programs.

The decision to outsource any particular task will ordinarily involveconsiderations of cost, capability, and confidentiality. Many outplacementdecisions are driven by staff reductions brought about by reengineering ororganizational downsizing. Often when a decision is made to eliminate aposition, many of the responsibilities associated with that job may be elim-inated, modified, or transferred to another person. Remaining essentialsmay have to be outsourced.

Among the HR activities described in this chapter, the most likely can-didate for outsourcing is outplacement services. This is not only logical,but also understandable because it is a specialized activity that is only oc-casionally required. The next most likely activity to be outsourced is anEAP. This is done to maintain employee privacy and confidentiality. Othercommonly outsourced HR services are pension plan administration andWorkers’ Compensation and disability programs administration.

External vendors (outsourcing) are being used for two other importantservices: payroll and legal services. Increases in complexity of compensa-tion programs, changes in tax withholding requirements, concern for se-curity, and achieving economic savings are driving the trend to use outside



vendors for processing payroll. And most health care organizations arenot sufficiently large to justify employing a full-time attorney, so legal ser-vices are most commonly provided by a law firm engaged on a retainer.

■ HUMAN RESOURCES FROM A DIFFERENT PERSPECTIVE The foregoing discussion of HR analyzed the services by categories. Eachcategory included services on the basis of their likelihood of being includedin a typical HR department. Alternatively, the services supplied to an or-ganization by HR can be discussed by dividing them into groups on thebasis of how they relate to an organization’s employees. These general-ized activities include employee acquisition, support or maintenance, re-tention, and separation. This section reflects such organizational groupings.

Employee Acquisition This category of activities includes everything that is undertaken to findemployees and bring them into an organization. In most health care or-ganizations, this means all employment or recruitment activities. Humanresources personnel may attend job fairs at local colleges and training fa-cilities or travel to regional or professional meetings to recruit prospectiveemployees. Placement of advertisements for employees is coordinated byHR although other persons in the organization may provide input on thecopy or text of such ads. Pre-employment testing is usually coordinatedby HR even if the actual services are provided by persons elsewhere in theorganization or external to it. A critical HR activity is checking referencesand verifying credentials. All new employees are given the same initial or-ganizational employee orientation by HR. In general, HR coordinates orsupplies any activities that are undertaken from locating employees to suc-cessfully situating them in their positions within the organization.

Employee Support or Maintenance Many HR activities are intended to support or maintain employees by ad-dressing needs that arise relative to their employment. These activities in-clude administering compensation and benefit programs, enforcingpersonnel policies and procedures for the entire organization, and coor-dinating disciplinary and other corrective processes as needed. In union-ized environments, the latter includes formal grievance procedures asoutlined in the collective bargaining agreement. Human resources main-tains or coordinates personnel record keeping. This includes ensuringthat employee records are maintained in a secure location for long peri-ods of time. Human resources may administer Workers’ Compensationand disability programs or coordinate them if the services of an externalvendor are used. Other ongoing activities related to employees that are

Human Resources from a Different Perspective 77


often provided or coordinated by HR include employee assistance pro-grams, labor relations activities, security and parking, communicationsto large groups of employees, and any other service that may be providedfor the purpose of supporting or maintaining employees as effective pro-ducers. Services that are sometimes coordinated by HR include operat-ing an employee health clinic, maintaining a cafeteria for employees andmembers of the general public, and coordinating savings and investmentprograms.

Employee Retention Significant overlap can exist between the tasks of maintaining and retain-ing employees. Compensation and benefits administration provides a con-venient example. If compensation is not perceived by the persons employedin a particular position as being fair or equitable when compared withother positions or with community standards, then compensation alonewill provide little incentive to retain employees in the organization. Likewise,if the contents of a benefit package are clearly less than other employersare providing, then benefits will have minimal to no effect in retaining em-ployees. The importance of compensation and benefits in retaining em-ployees is embodied in the need to keep them competitive so that valuedemployees will be encouraged to remain loyal to the organization.

Immediate monetary compensation, such as pay and benefits, are notsufficient to motivate good employees. Numerous other incentives, activ-ities, or perquisites are offered to help retain employees. The variety ofsuch incentives is limited only by the imaginations of organizations offer-ing them or employees requesting them. However, some are fairly common.These include retirement plans, performance appraisal and performancemanagement programs, and award and recognition programs. Other non-cash incentives that organizations may offer include opportunities fortraining and development, tuition assistance programs, and career devel-opment and succession planning programs. Some programs may appealto a relatively small cadre of employees. However, for those who needthem, employee assistance programs and child-care assistance are highlyappreciated. These are important in both maintaining and retaining em-ployees. All employees not only appreciate but have come to expect phys-ical safety and security in all organizational facilities and reasonable parkingaccommodations.

Succession planning is critical to the success of any organization. Manyin health care plan only for the succession of the top few executives.Employees appreciate the chance to have input into their careers and wel-come the assistance that is often provided by HR. Some relatively large or-ganizations are able to provide opportunities for career development.Promising employees are identified and offered positions on task forces,



committees, or other temporary teams. In very large organizations, careerladders and parallel path progressions are possible.

Employee Separation This category includes all activities involved in separating employees froman organization regardless of the reasons for separation. Some paperworkand filing always accompanies any separation. When an employee is dis-charged for cause, all disciplinary actions must be documented. Activitiesafter discharge may involve external agencies. Employees who are laid offmust be reported to the state so that they may receive unemployment com-pensation. Outplacement or access to similar services may be offered.Individuals who retire often appreciate counseling and planning assistance.Administrative work related to a pension plan is required to begin the flowof financial benefits. Occasionally, HR coordinates or arranges retirementcelebrations. All voluntary separations should include an exit interview.Most separations from an organization involve cessation of benefits. Aninterview or some other contact with HR is required to complete the nec-essary paperwork. When selected benefits are to be continued (for exam-ple, health benefits under COBRA legislation), HR usually completesalternative paperwork to ensure that services continue to be provided with-out interruption.

The foregoing are summarized in Exhibit 4-2.

■ WHERE DEPARTMENT MANAGERS AND HUMAN RESOURCES PERSONNEL MEET

This section will initially identify the points at which a department man-ager can expect to come into regular contact with employees from HR orwith the programs and activities that HR coordinates. A department man-ager will benefit by learning how to optimally utilize the services offeredby HR to the fullest extent possible.

A typical department manager can expect to have frequent contact andconsiderable involvement in activities involving employment, employeerelations, and labor relations (if there are unions present). Depending onthe nature of a manager’s supervisory responsibilities, periods of active in-volvement with training and development will be the norm. A managershould expect to have some involvement with activities involving com-pensation, benefits, safety, employee health, and payroll. The degree ofinvolvement will depend on how such services are organized and providedas well as on the rate of turnover of departmental employees. The samemanager should expect minimal involvement with HR personnel relatedto security, parking, child care, risk management, and other HR concerns.

Where Department Managers and Human Resources Personnel Meet 79



Exhibit 4-2 Human Resource Department by Four Major Activities

Employee Acquisition: • Employment and recruitment activities• Attend job fairs and professional meetings• Coordinating advertisements• Preemployment testing• Reference checking and verification• Initial organizational orientation

Employee Support or Maintenance:• Compensation administration• Benefits administration• Personnel policies and procedures• Performance appraisal programs• Disciplinary and corrective programs• Coordinating grievances (in unionized environments)• Personnel record keeping• Worker Compensation programs• Disability programs• Employee assistance program• Labor relations (in unionized environments)• Parking• Communication programs• Employee health clinic• Cafeteria• Savings and investment programs

Employee Retention:• Retirement plans• Performance appraisal and management programs• Award and recognition programs• Education, training, and development• Tuition assistance• Child-care assistance• Succession planning programs• Career development opportunities• Career ladders and parallel path progression

Employee Separation:• Discharge and dismissal procedure documentation• Unemployment compensation• Outplacement services• Retirement counseling• Exit interviews• Terminal benefits processing


Contact with these services usually occurs when individual employees en-ter or leave a department’s workforce.

The background, education, and experience of most department man-agers in health care organizations are usually based on their basic educa-tion or on their technical or professional specialties. A few have somegeneral business knowledge but the majority are not overly familiar withHR processes and requirements. Some basic HR knowledge and involve-ment with HR is necessary for individuals who want to supervise and co-ordinate their department’s employees in an effective manner.

Employment A successful manager must remain involved in recruitment and employ-ment processes as a normal part of department activities. The intensity ofthis activity will depend on the turnover rate in the department and onhow much employment activity is necessary.

When a manager finds it necessary to acquire a new employee, the ini-tial step is to create or update a job description as necessary. A personnelrequisition must usually be secured from higher management before HRcan be contacted.

In some instances, a manager may be able to submit a personnel req-uisition directly to HR if the need is for a direct replacement of a depart-ing employee. The requirement for such approval depends on the personnelpractices of the organization. If the requisition seeks an additional em-ployee, however, it usually requires thorough justification and subsequentapproval by one or more managers in higher positions in the organiza-tion. This requirement intensifies when budgets are tight.

When a personnel requisition is received by HR, it is typically assignedto an employment recruiter who identifies an appropriate number of can-didates. A department manager’s next involvement is usually when HRsends a file containing several applications or resumes of applicants whomeet the stated minimum requirements of the job. The manager then re-views these documents and advises the HR recruiter which ones should becalled for interviews.

An HR recruiter will conduct screening interviews. As long as the can-didates remain appropriate after being reviewed by others for compliancewith EEOC, ADA, and other legal requirements and with organizationalhiring guidelines, HR will arrange interviews for them with the depart-ment manager. Following the interviews, the manager compiles a list thatranks the candidates. This list is sent to the HR recruiter who contacts theselected candidates. Depending on the size of an organization, the recruiteror a senior administrator or executive negotiates with the candidate andreaches an agreement on starting pay and other relevant details. One ofthese people extends a formal job offer and sets the desired starting datefor the new employee.



For a variety of reasons that will become evident, formal offers of em-ployment should originate only from HR. The responsibilities of mostmanagers focus on providing services or producing products or informa-tion, but HR personnel are people professionals. Some senior executivesmay extend offers of employment should that be the norm for a given or-ganization. Direct supervisors should not negotiate salaries with candi-dates because of the potential for ill feelings (if a particular salary requestis not granted) after the job has been accepted. An offer is ordinarily madecontingent upon positive reference checks and having the applicant pass-ing a pre-employment physical examination. Once an applicant has beencompletely cleared and begins to work, it is a department manager’s re-sponsibility to ensure that the new employee is oriented to the departmentand properly started on the job in all other respects.

Benefits A department manager will have no active role in administering employeebenefits. However, the department manager is ordinarily an individual em-ployee’s primary source of information about the organization as well asthe job (or is least perceived as such by most employees). For this reason,managers can expect to receive regular questions about benefits from theiremployees. This suggests that a manager should become familiar or havea reasonable working knowledge of commonly used benefits such as paidtime off (vacation, sick time, personal time, and holidays). Answers toroutine questions will save time and allow HR personnel to concentrateon questions concerning more problems. When large numbers of man-agers reply to all questions related to benefits with “I don’t know, go askHR,” HR appears to be lax in sharing information. This impression doesnot support HR in the short term. Over a longer period, an organizationwill suffer.

Most managers will benefit by having two levels of knowledge aboutHR. The first is knowing how the organizational benefits structure per-sonally affects a manager. This knowledge will enable a supervisor to an-swer many common questions that employees might ask. The second isknowing from whom in HR employees should seek answers to more com-plex questions.

Compensation A department manager must be familiar with an organization’s compen-sation structure because it affects the pay of all departmental employees.This includes knowing about relevant wage scales, what they mean, wheredepartmental employees are relative to the scales and the relative positionof each employee. Information about relative positions is needed to answerquestions that are related to others who perform similar tasks, have sim-



ilar lengths of employment but who might be paid at different rates. Amanager should have sufficient knowledge of the compensation structureto recognize when inequities have crept into the department’s pay ratesand to raise questions about these inequities to HR.

The best information about how a job is performed resides with theperson who does the job and the manager who directs that individual indoing the job. The department manager and an individual employee on thejob are the primary repositories of knowledge of how a particular job isor should be performed. A manager must be able to apply this knowledgewhen creating, reviewing or maintaining job descriptions. An accurate,up-to-date job description is an absolute necessity when determining thepay grade and salary range for any particular job. Thus, this essential com-ponent of compensation administration is largely the responsibility of adepartmental manager. Human resources ordinarily participates in writ-ing and updating job descriptions but cannot create quality job descrip-tions without departmental input.

Employee Relations Each time a problem arises concerning an employee, the potential existsfor a department manager to interact with HR. This involvement can comeabout because of complaints about employees. These may be made by or-ganization employees or by persons from the outside. They may be infor-mal or formal, such as a grievance. Complaints may be filed with agenciessuch as Human Rights or an Equal Employment Opportunity Commission.They may originate as lawsuits or disciplinary actions. They may be broughtby a department manager or other person.

One employee-related activity that requires a manager’s direct interac-tion with HR on a regular and recurring basis is compiling and filing per-formance appraisals. Human resources will ordinarily administer theappraisal system, keep the system up to date, provide training in the sys-tem’s use, and follow up on appraisal completion. A manager’s role is toperform the appraisals of employees who are directly supervised accord-ing to the guidelines established by HR and in accordance with timetablesestablished by the organization.

Personnel Records Human resources maintains an organization’s personnel records. Departmentmanagers have a few regular areas of contact with personnel records. Muchof the information that is filed comes to HR from department managers.Performance appraisals and disciplinary actions are the most common ofthese items. Managers occasionally have a need to review some fact or ele-ment of a subordinate’s personnel record. Such requests often pertain tothe work record and qualifications of someone who wishes to transfer into



the department. Organizations create their own guidelines regarding ac-cess to personnel records. In general, information contained in personnelrecords is highly confidential and should not be available to any supervi-sor without a valid reason for access. Requested information should be pro-vided by an employee from HR. Personnel records should be kept in asecure location with access restricted to as few people as possible. Competentlegal counsel should determine the parameters governing the long-termstorage of personnel records.

■ HUMAN RESOURCES AND THE ORGANIZATION It is no secret that in many work organizations there is a degree of strain,at times even some animosity, between HR and managers in other depart-ments. This is true of employees in health care as well as in other organi-zations. Often these differences simply slow down the normal flow ofbusiness. Occasionally, however, the differences develop into overt antag-onism that can significantly interfere with the efficient conduct of business.

“Line managers and staff human resource professionals spend a greatdeal of time talking at each other and often past each other and privatelyquestioning each other’s views about what goals and values are impor-tant.”1 Why do such differences between HR and department managersexist? An examination of the differences between line management and HRmay help to develop an understanding of why there is sometimes a credi-bility gap between the two.

Background and Qualifications The backgrounds of HR practitioners are often varied. Some, a relative fewbut increasing in numbers over the past 15 years, have received specific train-ing in HR. Despite the increase of people with specialized training, thereare people educated in a number of different academic backgrounds work-ing in HR, including business, psychology, sociology, organizational be-havior, industrial relations, and education. People who started their careersin clinical or technical specialties have assumed management positionsthroughout health care organizations but they are not commonly en-countered in HR.

Supervisors and department managers in health care organizations tendto be prepared in specific technical or professional occupations, invari-ably the operational areas that they manage. On average an HR practitioner’seducation has been liberal and nonspecifically focused. In terms of scien-tific training, personnel from HR are likely to have training in a so-calledsoft science such as those already mentioned. In contrast, other supervi-sors and managers in health care organizations are likely to have trainingin so-called hard sciences such as biology, chemistry, and physics. The ed-



ucational focus of persons with hard science training tends to be narrowerthan their colleagues with softer science training. The different educationalbackgrounds are relatively unimportant; they are simply different. However,people’s initial training often sets a tone for their later outlook on organi-zational values and how they embrace concepts and facts or how they viewtheory and practice.

Staff Managers Line managers frequently have to supervise and coordinate a variety ofpeople who bring a mix of values into their jobs. Some of these people willrequire close, nearly constant supervision, while some are capable of in-dependent work. The members of a manager’s working group may includean extremely broad mix of skills and educational backgrounds within asingle discipline. Consider, for example, a nursing manager who may su-pervise a group including nurse practitioners who have training at the mas-ters level as well as a variety of other nursing personnel with training thatranges from a bachelor’s degree (registered nurses) to an associate’s de-gree (registered nurses, licensed practical nurses, and nursing assistants)to persons with a high school education (clerical personnel). Such a di-versity of educational preparation often poses managerial challenges.Human resources organizations, in contrast, are usually considerablysmaller than most line departments. They tend to be relatively cohesivegroups that are composed of people who share similar values and have acommon occupational outlook.

Management Style and Approach The supervisor of a line department will ordinarily tend to manage witha downward orientation. Many decisions and supervisory interventions areaccomplished on a one-to-one basis. The downward orientation clearlymarks the subordinates of such a manager as being subordinates in theoverall scheme of operations. A manager may sometimes have to performthe duties of a practitioner but, depending on department size and work-load, such instances tend to be relatively minor components of a man-ager’s responsibilities.

With the exception of clerical support staff, HR employees (HR prac-titioners) are more likely to view themselves as colleagues who are com-parable with each other rather than as part of a hierarchical structure.With the exception of the largest health care organizations (multi-site sys-tems, teaching hospitals and the like), in most health care settings the chiefHR officer is likely to have some practitioner duties in addition to super-visory responsibilities. Because of this mix of duties, people throughout theHR department regard them as organizational equals.

Human Resources and the Organization 85


Expectations The positional goals and expectations placed on line managers are usuallyrelatively clear and easy to define. Line managers are expected to performtheir assigned job duties to ensure consistency of quality and output. Theyare simultaneously expected to adhere to policies and procedures of theorganization. Furthermore, they are expected to remain faithful to the mis-sion, vision, and goals of the organization.

The expectations of an HR department may not be nearly as clear orrecognizable as those placed on line departments. The expectations asso-ciated with HR will influence the manner in which line departments re-gard HR. Human resources may be perceived as being expected to controlthe affairs of other departments, retain the status quo, avoid making waves,or innovate. These perceptions will influence whether line departmentsregard HR with apprehension, indifference, contempt, or caution, or em-brace HR as a helpful or useful organizational ally. As long as the expec-tations of HR and the line departments differ noticeably from each other,there is likely to be a degree of tension between them.

Orientation and Training In regard to matching an appropriate person with each task to be per-formed, line management tends to hold the belief that selection is the mostimportant factor. Put differently, line managers feel that selecting the rightperson for a job is the most important factor related to accomplishing thetask. Human resources practitioners, on the other hand, tend to believe thatdevelopment is the most important factor. With proper development, anyof several people have the potential to complete a given job. This some-times leads to sharp differences between line management and HR in thearea of recruiting. Human resources may supply several candidates allhaving the potential to execute a particular job as expected if they areproperly developed. However, none of the candidates may appear to havethe exact qualifications or experiences or be precisely the right person forthe job. This perception develops because a manager, knowingly or oth-erwise, often holds out for an ideal fit between candidate and position.

Participation Line managers frequently exhibit a tendency to believe that employee par-ticipation in decision making is a notion that is no more than a theoreti-cal abstraction, one that complicates matters by slowing things down andgenerally failing to contribute to departmental success. Human resourcespractitioners have a different view of employee participation in decision-making. Human resources proponents generally feel that when participa-tion is properly implemented it can generate improved organizationalperformance and increased employee satisfaction.



Employee Empowerment The highest priority for line managers in a health care organization is tak-ing care of patients and delivering services. As a result, they are often hes-itant to delegate important tasks. More frequently, they adopt an approachthat managers or supervisors have the ultimate responsibility to provideneeded services. In the extreme, they (the managers) will provide the re-quired services themselves. The philosophy and priorities of HR are dif-ferent. The highest HR priority is performing a particular job or supplyinga needed service. They often advocate employee empowerment as a vehi-cle for individual growth and development. This approach is taken becauseof their belief that in order to grow, people must have the freedom to fail.

Control Line managers frequently act according to the belief that exercising con-trol protects a department’s staff and enhances an organization’s ability todeliver. The human resources view, however, is that a controlling managerstifles creativity, discourages employee participation, and impedes em-ployee growth and development.

Staff Performance Line managers, especially in departments having a considerable mix ofstaff skills, qualifications and educational levels, will ordinarily have to in-tegrate or cope with varying levels of individual performance. As a con-sequence, managers must occasionally provide counseling, criticism,disciplinary action, and termination. Such people problems can consumea considerable portion of a line manager’s time. In contrast, an HR man-ager usually supervises professionals and a few support personnel havingcomparable skills. As a result, their people problems are fewer and theyare far less likely to have to take corrective actions.

Reward Assumptions Line managers often tend to believe that compensation is the most effec-tive means of influencing performance and that their staff members are pri-marily motivated by the promise of material rewards. Human resourcespractitioners tend to place organizational culture, supportive management,employee participation and opportunities for personal development abovemonetary compensation as providing motivation for employees over thelonger run.

Regarding Change The belief system of line managers seems to be that effective change occurs slowly over time. As a consequence, true organizational change isalways slow and incremental. The HR view is generally that genuine

Human Resources and the Organization 87


organizational change is achievable and can occur over a short term if itis driven and supported by top management.

Outlook The orientation of line managers ordinarily views success or failure as oc-curring in the short run. The typical HR view usually involves a longer-term perspective.

What Results in Practice In summarizing the apparent differences between line management andHR, the following are useful. Line managers believe that HR departmentsimpede progress by frequently obstructing what a department managerwants or needs to do. Furthermore, they view HR as being largely ob-structionist and commonly citing laws to support their positions on whyparticular actions cannot be taken. In contrast, HR personnel feel that de-partment managers regularly try to evade laws and policies and generallyinsist on making decisions and taking actions that have the potential to causelegal problems for the organization.

What Can Be Done Many rank-and-file employees, along with some department managers, donot trust HR. This often exists to the extent that some employees nevergo to HR with their needs because they feel that doing so will endangertheir employment. As a result, these employees never utilize the HR processesthat are available to them. Many employees apparently do not perceive HRas a resource available to them. Rather, they view HR as a departmentthat relates primarily with their managers and thus mainly serves the cor-porate hierarchy.

Department managers and HR personnel can both improve their situ-ations by giving each other the benefit of the doubt concerning their mo-tives. Translated, this means that HR’s mission in life is not to obstruct andfrustrate department managers and that department managers should notpour their energies into finding ways around HR. Rather, each should tryto use every instance of disagreement as an opportunity to know moreabout the other.

A top priority of HR should be communicating how HR can be an im-portant resource for all employees. This must be demonstrated to rank-and-file employees as well as managers. If HR is not communicating thiscritical information, then department managers and administration per-sonnel should ensure that this does occur. The HR department shouldnever forget why it exists. Human resources represents employees and isan advocate for them. Human resources must ensure that managers are awareof employee needs and are motivating them to perform; HR must contin-



ually propose and champion programs and services that appear to be mostneeded by the employees of the organization that they serve. Senior man-agement must never allow HR to forget why it exists and that it is neededby all in the organization.

■ CONCLUSION The activities of HR are reviewed from different perspectives. Most HRdepartments provide three basic services: employment or recruitment, com-pensation and benefits administration, and employee relations. Whenunions are present, HR frequently coordinates labor relations. Human re-sources provides other services in some but not all health care settings andmay also coordinate employee health and safety activities, training anddevelopment, security, child care, award and recognition programs, andEqual Employment Opportunity and Affirmative Action responsibilities.The following activities are occasionally coordinated by HR: risk man-agement, executive compensation administration, organizational devel-opment, employee assistance programs, outplacement services, and payroll.Alternatively, some of these latter activities may be outsourced.

Viewed from a different organizing perspective, HR activities may begrouped in an alternative manner. The groupings include employee ac-quisition, employee support or maintenance, employee retention, and em-ployee separation. Line managers throughout an organization and personnelfrom HR interact most commonly on issues involving a small number ofbasic issues or areas. These include employment, benefits, compensation,employee relations, and personnel records.

Despite these similarities, readers must remember that all HR depart-ments or operations are not the same. Furthermore, the training and ex-periences of most line managers and HR managers are different. As a result,the expectations of people in these two groups are often different.

Concerning the nurse recruiting situation at Community GeneralHospital, one might question the degree to which nursing director JaneCassidy and employment manager Carrie Smith are actually working to-gether. Carrie seems to be putting forth a fair amount of effort to locatecandidates. However, she is deliberately vague about hours and shifts.Although she is appropriately sensitive about scaring off good candidatesbefore they can be interviewed, she creates extra work for nursing staff andherself by not being open about hours and shifts and other scheduling re-quirements. When talking to new graduates, her hesitation in discussingthe nursing department’s rotation practices is unfounded because manynew nurses seeking hospital employment expect to rotate shifts.

Jane might be considered luckier than many other nursing directors be-cause of the availability of a group of nurses who prefer working steady

Conclusion 89


nights. She has the good fortune to have staffing problems that are con-centrated on one shift instead of two shifts as is often the case.

Before Carrie and Jane talk with their recent applicant, they shouldquickly review their scheduling situation and current practices. If Janecontinually has to adhere rigidly to her scheduling policy and the candi-date nurses refuse the job as a result, then the shortage situation will worsen.A method must be found to recruit and hire qualified nurses during a timeof shortage, even if doing so requires some compromise among existingemployees and the internal movement of personnel to lessen the impact ofany remaining schedule restrictions.

The nursing department and HR’s recruiting personnel should considercloser collaboration. A key component of any new collaboration shouldinclude assembling a group of persons from both departments to reviewall of the nursing department’s scheduling practices to look for creative al-ternatives to replace the apparently rigid practices now used when sched-uling nurses. The policies and practices governing nurse scheduling mustbe revised to reflect the reality of the nursing marketplace. Jane and Carriemust both be involved in this effort. With creative scheduling practices inplace, no acceptable reason should exist to reject a qualified nurse appli-cant during a time of shortage. Considering the fact that quiet exceptionsalready exist, creative scheduling is already being practiced. This shouldease the difficulty of the task.

Reference1. Leskin, B. D. (1986). Two different worlds. Personnel Administrator, 31(12),

58-63.

Discussion Points

1. Outline a long-term approach that you would recommend for nar-rowing a credibility gap that might exist between an organization’sHR department and its department managers.

2. Advance an argument either for or against having the employee healthand safety clinic located within an HR department.

3. Describe the objectives and activities of risk management. Is risk man-agement essential in a contemporary health care organization? Why,or why not?

4. Why is it a common practice to outsource an organization’s EmployeeAssistance Program (EAP)?

5. List several elements of a hypothetical organizational developmentprogram. Explain how and why such a program differs from man-agement development.



6. Why is it preferable for a department manager to respond directly tothe majority of employees’ HR-related questions, rather than simplytelling employees to “go ask Human Resources”?

7. What are screening interviews? Where and why are they ordinarilyconducted?

8. Provide several reasons for why a department manager should be fa-miliar with the organization’s compensation scales even though themanager is not expected to make specific salary quotations or nego-tiate salaries with prospective employees.

9. List three or four differing academic backgrounds that might be foundamong HR practitioners. What are the advantages or disadvantagesof each in equipping an individual to provide HR services?

10. Describe the components of a typical outplacement service package.Explain why such services are almost always provided by an externalvendor.

Resources

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Sudbury, MA: Jones and Bartlett. Fisher, C. (2005). Human Resource Management. Boston, MA: Houghton Mifflin. Mello, J. A. (2005). Strategic Human Resource Management (2nd ed.). Mason, OH:

Thomson South-Western. Society for Human Resource Management. (2005). SHRM Human Resource

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Conclusion 91


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The Manager-Employee

RelationshipChapter Overview


• Recognize that groups comprising the majority of health careorganization departments are typically heterogeneous

• Appreciate the value and importance of employee participationand input

• Be able to compare and contrast production-centered managementand people-centered management, recognizing that most healthcare activities require people-centered management

• Understand the importance of having a department managerremain visible and available to the staff

• Explain the value of a true open-door policy• Describe a manager’s essential downward (toward the employees)

orientation as opposed to an upward (toward higher management)orientation

• Appreciate the importance of establishing and maintaining a solidone-to-one relationship with each employee in the department andthe need to know each as a whole person to be an effective people-centered manager

• Understand the department manager’s key role in employeeretention

C H A P T E R

5

93


■ CHAPTER SUMMARYThis chapter advances the belief that every manager is truly a coordinatorof human resources (HR). Furthermore, this essential coordination isplayed out within a one-to-one relationship that an effective managershould have with each employee. However, all work groups are composedof individuals, most of whom are different from each other in some way,so that a manager’s relationship with each employee may likewise be dif-ferent in some respect from all other such relationships. All health care ac-tivities must be more people-focused than production-focused. Managersmust lead by example, remaining visible and available to employees whileencouraging employees yet depending on their participation and input. Ahealth care manager must cultivate a genuine open-door attitude towardemployees and must exhibit the essential downward orientation that says,“Although these persons are members of management, their primary con-cern is for an organization’s clientele and the employees who provide ser-vices.” A manager’s task is to ensure that all employees are valued for whatthey can contribute.

Case Study: “She Knows It All, Just Ask Her”

Two or three months ago, occupational therapist Alice Walters said toKelly Miller, her manager and the director of rehabilitation services, “Kelly,it’s obvious to me that we’re not approaching the departmental budgetsensibly. All we do is carry last year’s actual expenditures forward, tackon some amount for an inflation factor and pile on some other guesses.We should be budgeting from a zero base, building up every line item andmaking each one justify itself every year.”

Kelly replied something about simply following the budgeting instruc-tions issued by the finance department and doing it the way they were toldto do it.

Within a few days of the budget question, Alice approached Kelly withanother question. “Shouldn’t we change the way we perform performanceevaluations? Surely most smart managers know that it’s better to evalu-ate employees on their anniversary dates than it is to evaluate them all atthe same time, on the same day, as we do it.”

Kelly responded as before. As a manager, she was simply complyingwith the policies and practices of the organization. They discussed the mat-ter for another five minutes. Although Kelly was not willing to take onhigher management and work to change the evaluation system, she con-ceded that Alice had brought up a number of good points. To Kelly, itseemed as if Alice were picturing an idealized evaluation system in text-book-like terms. It was flawless but only in theory.

94 CHAPTER 5 THE MANAGER-EMPLOYEE RELATIONSHIP


In the following weeks, Alice said more and more to Kelly about howboth the organization and the department should be managed. It had takenAlice only a matter of days to get beyond generalized techniques such asbudgeting and evaluation and to start offering specific advice on the man-agement of rehabilitation services.

Kelly soon realized she could expect Alice to offer some critique relatedto most of her actions in running the department and many of executivemanagement’s policies in managing the organization. Kelly was disap-pointed with this annoying change in her relationship with an otherwisegood employee. Kelly had always seen Alice as a better-than-average per-former as a therapist and somewhat opinionated but not to any harmfulextent. Recently, however, she had come to regard Alice as a sort of abra-sive conscience, a critical presence who monitored her every move.

The worsening situation came to a head one day when Alice tried tointercede in a squabble between two employees. When Alice entered thesituation, she proceeded to criticize Kelly’s handling of the matter in thepresence of the other employees. Kelly immediately took Alice into heroffice for a one-on-one discussion. She first told Alice that although shewas free to offer suggestions, opinions, and criticisms regarding man-agement, she was never again to do so in the presence of others. Kellythen said, “Lately, it seems that you have a lot to say about managementin general and about how I run this department in particular. Why thissudden interest?”

Alice responded, “Last month I finished my first course in the man-agement program at Community College, Introduction to ManagementTheory. Now I’m in the second course, Supervisory Practice. The conceptsare not difficult. When I see things that aren’t being done right, I feel thatI have an obligation to speak up.”

Kelly ended the discussion by again telling Alice that she expected allsuch commentary to be offered in private and never again in front of oth-ers. Overall, the conversation did not go well. On one or two occasions,Kelly felt that Alice’s remarks were edging toward insubordination. Becauseof the uneasy feelings left after the discussion, Kelly requested a meetingwith Carl Mason, the organization’s director of human resources.

After describing her relationship with Alice in some detail, with a ges-ture of helplessness Kelly said, “She knows everything, I guess. Just ask her,she’ll tell you. On the strength of a course or two of textbook management,she suddenly has all the answers. What can I do with her?”

Consider how Kelly Miller might address the problem presented byAlice Walters. Can Kelly do anything to curb the intrusions of an appar-ent know-it-all employee? If you were in Kelly’s position, how could youencourage Alice to modify her apparently superior attitude? What sug-gestions would you offer to Kelly as she attempts to move her relationshipwith Alice to a more productive level?

Chapter Summary 95


■ EVERY SUPERVISOR A MANAGER OF HUMAN RESOURCES Some managers, particularly those who cling to apparently old-fashioned andinappropriately narrow views of management, regard many employee-relatedconcerns as things they call employee relations rather than management.Their concepts of management are referred to as production-centered. Theyare concerned first, foremost, and always with getting the work done.

In organizations where HR practitioners are utilized to the maximumpossible extent or nearly so, some managers have come to rely on them soheavily that, by default, they have transferred the primary responsibilityfor addressing all people-related issues to the HR department. Regardlessof HR’s strength and relative position in an organization, local depart-mental managers should retain responsibility for day-to-day employeeconcerns and remain involved with employee problems. However, HRshould always be available for advice and assistance. By definition, this isan important role for HR. Many issues involving employees should not au-tomatically default to HR. Most recurring, common people-related tasksshould be part of a manager’s job and should not be referred to HR.

In the minds of some people, HR is an unnecessarily elaborate and stuffytitle encompassing activities that were formerly called personnel. Rememberthat personnel means people. In some modern organizations, the depart-ment that many refer to as HR is known by other names such as “peoplesystems” or “employee affairs.” In no way should HR manage the peoplewho perform the tasks in an organization. In providing the people sys-tems, literally the processes and procedures for serving all employees, HRsimply provides a framework within which relations with employees shouldbe conducted.

■ THE HETEROGENEOUS WORK GROUP Workers in health care organizations bring with them an extremely broadrange of educational backgrounds and levels of sophistication. Within asingle group of directly reporting employees, a manager may have em-ployees who require regular or even constant supervision (virtual hand-holding). In contrast, they may supervise employees, such as healthprofessionals, who have been trained to act independently, make most oftheir own decisions, and determine most of their own behavior. These per-sons often require only the most general of directions.

Consider some examples appearing in many hospital organizations.Food service personnel can vary widely from entry-level employees whoare hired without any specialized skills or training to therapeutic dietitianswho possess master’s degrees. A manager in such a setting may be re-sponsible for several levels of staff, each of which may have different needs.



Diagnostic imaging (radiology) employees may range from entry-levelclerks and transporters to highly skilled special-procedures technologistsand even physicians with whom a department supervisor must maintainworking relationships even though they do not report directly to the man-ager. The manager in this venue may be responsible for as many levels ofstaff as a food service manager while additionally relating to physicianswho can be either medical staff members or employees of the organization.

Other possible scenarios involve patient billing and housekeeping. Ineither activity, a single manager may be responsible for a number of per-sonnel all of whom are at the same level of education and sophistication(depending on how the activity is organized). In a modestly sized nursingunit, a nurse manager may have several levels of staff such as nursing as-sistants and unit clerks, licensed practical nurses (LPNs), registered nurses(RNs), and nurse clinicians. Managing people with such diverse back-grounds requires skill.

In addition to multiple levels of education and sophistication, a het-erogeneous work group can present its manager with another potentiallytroublesome condition, namely differences among employees regardingtheir work ethic. For instance, significant differences in work ethic some-times appear between newer employees and more established (experienced)employees or between older (in years) members of a group and youngerworkers. Although peoples’ attitudes toward work and employment haveshifted over the course of several generations, not all problems related towork ethic can be attributed simply to younger or newer workers havingless experience.

Variations in work ethic suggest that within a single working unit orgroup, a manager may have some employees who would never willinglymiss a day’s work or never intentionally shirk a responsibility, and someemployees who think nothing of missing work on a whim and allowingresponsibilities to go unfulfilled. In addition to working on bringing outthe best in each employee, a department manager must provide an exam-ple of a continually positive work ethic for others.

■ EMPLOYEE PARTICIPATION AND INPUT An anonymous person—more likely several such anonymous people—claimed that, “When all is said and done, there’s much more said thandone.” In few circumstances does this hold to be truer than it is in em-ployee participation. Most managers claim that they believe in employeeparticipation and remain open to input from their employees; however,for the majority, their behavior contradicts their words. Managers repeatwords that they believe ought to be said or are politically correct be-cause that is what experts are saying about contemporary management.

Employee Participation and Input 97


This is especially true in best-selling management books. Although theyspeak phrases and concepts from Management 101 and say what theybelieve they are expected to say, on a day-to-day basis they continue tofunction as they have for years.

As noted in an earlier chapter, some managers speak of their belief inparticipation, but in practice, they only superficially tolerate it. They maybelieve themselves to be participative managers when in fact their style isconsultative. A consultative manager is usually honest, conscientious, andcompletely well intended. However, such a person can rarely relinquishenough control to allow employees to participate or realize their full po-tentials. For managers who behave in this fashion, any experience or processthat involves sharing authority or control with employees smacks of ab-rogating responsibility and is perceived as a weakness. Too often, thisstreak of authoritarianism remaining in modern management stifles em-ployee participation.

Management has evolved for decades and will continue to do so foryears to come. At the start of the twentieth century, management, forall practical purposes, was largely authoritarian. In most settings, theboss was the only person in charge, and was to be obeyed without ques-tion. During the same era, the top manager was likely to be the owneror major stockholder of the organization. The human relations move-ment in management, a twentieth century phenomenon, began to takehold in the 1930s. Throughout the 1940s and 1950s, it steadily ex-panded. Today, many managers have been educated specifically for man-agement. However, like their supervisors and others who have precededthem, they have acquired much of their managerial perspective fromrole models that they have observed and for whom they have worked.It is not surprising to find residual authoritarianism among many whomanage today. Remember that their role models have been at least partlyauthoritarian. Authoritarianism in management is steadily weakening,but it is far from gone.

Department managers should always make it clear to subordinates thatemployees’ ideas are valued and that their input is not only welcome butalso needed. Employee participation should be valued and promoted. Evenconsultative managers who reserve the right of final decision are well ad-vised to solicit employee input, consider it carefully, and occasionally useemployee ideas. In the end, such an approach or strategy usually pays div-idends for both individuals and organizations.

When it comes to sources of knowledge about how to perform workbetter, faster, or more economically, the person who knows the innerworkings of a job best is someone who performs the duties day in and dayout. Successful department managers remember this fact. The most suc-cessful managers are those who have learned how to tap into this sourceof knowledge.



■ THE PEOPLE-FOCUSED MANAGER Depending on the particular work environment and kinds of work performed, most managers will tend to be either production-centered orpeople-centered. Because of the nature of some tasks such as manufac-turing, a manager is required to be production-centered. In production-centered situations, the work is ordinarily highly repetitive, many units ofoutput are similar, output can be scheduled with some accuracy, and jobscan be rigidly defined in considerable detail. In a production-centered sit-uation, employees are ordinarily assigned to workstations. Other thankeeping up with the pace of an assembly line, they have little control overhow they complete their jobs. In an assembly environment, the speed ofthe line determines the rate of output. If a particular employee does notkeep pace, then another employee is substituted at that workstation. In aproduction-centered situation, a manager’s priority concerns are usuallykeeping supplies and services entering the process and thus keeping theoutput flowing. In a production-centered environment, processes controlthe people. A manager’s primary focus is on output.

In a people-centered environment, the willingness of employees to workmaintains output rather than the pace at which the work arrives or themanner of supplying the processes. In people-centered situations, the workis often irregular and varied. Rarely are two units of output identical. Forthis reason, scheduling output with true accuracy is very difficult. Jobscannot be rigidly defined because demand on workers can be so highlyvariable. In people-centered environments, employees control the processes.A manager’s primary focus is on people, who are the producers, ratherthan machines.

Most situations found in a health care organization require people-centered management. In a healthcare organization, people primarily con-trol the processes. Thus, people must be the primary focus of a successfulmanager. The following sections discuss some of the principal require-ments of an effective people-centered manager of health care workers.

Exhibit 5-1 compares and contrasts several dimensions of production-centered management and people-centered management. Based on thecharacteristics encountered in the majority of health care delivery settings,it is evident that a manager using a people-centered approach to supervi-sion best handles most situations that exist in health care settings.

■ VISIBILITY AND AVAILABILITY

Reality and Perception A health care department supervisor must be generally visible to em-ployees and must be both perceived as available and actually available.

Visibility and Availability 99


The matter of perception is stressed because, as far as employees are con-cerned, much of a manager’s state of being visible and available is psy-chological. Although employees may never articulate the thought, seeinga manager around in a department and knowing that the manager can beaccessed should the need arise provides most people with a level of com-fort. Many employees are able to work independently for prolongedstretches. Some may even prefer to do so. However, on those occasionswhen a manager’s judgment or expertise is required, they should knowhow to reach the manager in a reasonably short amount of time. Eventhough only a few employees may be affected, a manager’s presence in andaround a work group will tend to limit inappropriate behaviors.

Consider the case of a manager who looked forward to moving fromher small, glass-encased cubicle in the corner of the department to newand larger quarters some distance away from her staff. Formerly, all em-ployees in the department could see that the manager was available. Afterthe move, it was impossible to know her availability without leaving thedepartment and traveling through 300 feet of corridor. Within weeks fol-lowing the move, complaints about the manager had noticeably increased.“Now she’s hard to find when we need her.” “She pays more attention tohigher management than to us.” “She no longer cares about us and ourneeds. Just look how she couldn’t wait to get away from us.” Her formerlyhappy employees uttered these phrases. Over the weeks and months thatfollowed, staff absenteeism and tardiness increased, productivity decreased,and interpersonal problems among staff members increased. Absenteemanagement may be appropriate in some retail business situations, but itis rarely appropriate when managing a department of people in an orga-nizational setting.


Exhibit 5-1 Comparison of Production-Centered and People-Centered

Management

Production-Centered People-Centered

Nature of the work Repetitive Variable

Nature of the output Homogeneous Heterogeneous

Pace controlled by The process Employees

Character of labor More manual More intellectual

Manager’s primary focus The process Employees

Arrival of work More predictable Less predictable

Completion of work Predictable intervals Irregular Intervals


Absence Impedes Communication A manager often creates communication problems by not being reasonablyaccessible. When employees are forced either to wait to get answers or totake chances and act independently, time and material resources are wastedthrough delay and error. This may be especially troublesome in emergencieswhen time must be devoted to tracking down a missing manager.

Employees should perceive a department manager as the employees’direct conduit when communicating with other organizational elementsor supervisors. This is especially true for interactions with higher man-agement. Employees may perceive a manager who is not readily visible oravailable as being uninterested and uncaring. This is true for supervisorswho seem dedicated primarily to activities such as meetings, committee work,conferences, and the like that occur outside of a department. If allowed toremain unresolved, this relationship may become cold and distant. In anyevent, employees see such a supervisor as indifferent and impersonal. Formany members of a working group, their department manager is a repre-sentative of the organization itself. This supervisor is the one member ofmanagement that these employees know best and may be the only mem-ber of management with whom they have a speaking relationship. If em-ployees perceive their supervisor as being cold, uncaring, and impersonal,then they are likely to perceive the entire organization in the same man-ner. In most instances, a first-line manager is a worker as well as a man-ager. These supervisory responsibilities provide an additional resource toa department. When a manager is unavailable, a potentially productiveresource is lost.

A Genuine Open Door Attitude and ActualityManagers may occasionally use phrases that they learned in Management101. Words alone are not sufficient. Managers must back up the words withactions. Few managers have not said, “My door is always open.” Unlessthe door is, in fact, usually open, employees quickly perceive reality. Fewsupervisors or managers are able to practice a truly open-door policy.Supervisors are usually busy people, especially in times of shrinking man-agerial hierarchies and expanding responsibilities for individual managers.Contemporary managers must wrestle with problems, attend a myriad ofmeetings, make and take telephone calls, and generally engage in many time-consuming activities. The effect of these responsibilities makes it nearly im-possible for supervisors to sit behind desks, inside rooms with physicallyopen doors just waiting for employees to drop in.

Some managers are not easily accessible at any time because they aregenuinely too busy. Even though a manager has said, “My door is alwaysopen,” the manager’s attitude says, “The door may stand open, but Idislike interruptions and you should not consider entering without an

Visibility and Availability 101


appointment.” The reality of an open door policy depends as much ona supervisor’s attitude as in the position of the door. Even managers whoare generally visible and available to their employees most of the timecan discourage contact by projecting an attitude that discourages employeesfrom approaching.

Easier for a First-Line Manager An honest open door policy, or a condition approaching that goal, is eas-ier for a first-line supervisor to maintain than it is for someone at a higherlevel of management. A first-line supervisor can usually address manyproblems and issues that enter via an open door in a direct manner. Personsin more senior managerial positions, however, usually must exert greatercare when addressing issues brought directly to them by rank-and-file em-ployees because of an espoused open-door policy. The actions of highermanagement must not subvert the authority of an employee’s immediatesupervisor. Thus, a higher manager’s response must often consist of refer-ring the matter down to the first-line supervisor or other source of assis-tance, such as the HR department or another intermediary.

A policy of easy access to first-line supervisors is often very successful.First-line managers should remain appropriately visible and available andshould strive to offer reasonably accessible open doors. They should ob-serve an open door whenever possible. When other tasks require them torestrict access, they should have an alternative means for employees toschedule specific appointments. Barring an emergency, managers shouldalways keep these appointments.

Show, Don’t TellAs suggested, many supervisors trap themselves with their own words bysaying, “My door is always open.” It quickly becomes obvious that, inmost instances, employees cannot have direct access to their manager, andemployees immediately realize the inconsistency between the manager’swords and actions. A similar dilemma sometimes develops when supervi-sors claim to believe in participative management. Immediately followingthe very first instance in which a manager fails or is unable to allow em-ployee participation, employees perceive the inconsistency between thesupervisor’s words and actions.

Contemporary supervisors are subject to the nearly constant tempta-tion to say the right things, that is, to repeat phrases that are well inten-tioned, trendy and intended to convey the impression that employees alwaysstand high among the manager’s concerns. These proper statements rep-resent people-centered management right out of textbooks. However, nomatter how well intentioned a supervisor may be, it is not always possi-ble to completely live up to words even though the supervisor may speak



them with utmost sincerity. Such statements create inconsistencies thatmost employees eventually recognize. When inconsistencies between whatone says and what one does become evident, contradictory perceptionsresult. The majority of employees see only that the leader has claimed tohave one guiding belief but has acted contrary to that belief. When this oc-curs, a leader’s credibility suffers.

Individual employees’ perceptions of their manager’s behavior may becorrect, partly correct, or not at all correct. The actual degree of correct-ness is irrelevant. The perception itself is relevant because to the perceiverperception is reality. If an employee perceives a leader or supervisor to beuntruthful for saying one thing and acting contrary to it, then the percep-tion becomes the truth.

It is rarely beneficial for supervisors to tell employees what kind ofleader they are. This invariably leads to negative perceptions at the firstsign of contradictory behavior. Successful managers do not attempt to ver-balize their supposed leadership style to employees. Subordinates are quitecapable of deducing a leader’s style from actions and behavior on the job.In other words, supervisors should show others their leadership styles andtraits rather than talking about them.

■ THE ESSENTIAL DOWNWARD ORIENTATION Strongly related to visibility and availability is the perception of whethera departmental manager or area supervisor is oriented upward or down-ward in the organizational structure. There is a strong and natural in-clination for individual managers to be upwardly oriented, that is,spending more time being oriented to organizational superiors and ex-ecutives than being focused on their subordinates. Contemporary collegestudents use the term “sucking up” to describe such an orientation. Toa degree, such behavior is needed because persons higher in an organi-zational hierarchy control the resources that an individual seeks or de-sires. Supervisors receive praise and rewards from their own managers.Such an upward orientation may lead to some increased organizationalstatus and promotional visibility. Associations with organizational su-periors and executives often provide managers with enhanced feelingsof importance and self-worth.

The forces encouraging people to embrace an upward orientation canbe relatively strong. Pressures to maintain a downward orientation to-ward members of the immediate work group and their needs may not benearly as strong. However, downward is the direction in which the de-partment supervisors must look because successfully leading subordinatesis the primary reason for the existence of this particular managerial posi-tion. A first-line manager or supervisor is the leader of a group of people

The Essential Downward Orientation 103


who perform the hands-on work for an organization. They depend ontheir leader for guidance. Therefore, supervisors should have an orienta-tion that is primarily downward toward their own departments and totheir own employees and the persons that they serve or the services thatthey provide. The manager is primarily the leader of a department’s em-ployees and is only secondarily a member of a greater organizational hi-erarchy called management.

A manager who is career minded and who wishes to advance within anorganization is often inclined to seek the visibility obtained by maintain-ing an upward orientation. Although it may appear counterintuitive, su-pervisors who display an obvious interest in accomplishing the work ofthe department and who remain solidly oriented in a downward directionare most successful over time. Managers whose primary orientation is totheir subordinates gain the most valuable experience for themselves andturn out the best work. They also build a reputation of caring for theirsubordinates. Simple visibility coupled with an ability to talk in a con-vincing manner has led to the promotion of many supervisors with lim-ited people skills and capability. However, truly effective individuals inupper management are more likely to make promotions based on actualoperating results rather than on superficial indicators. Quality leaders andmanagers require time to mature. Reputations require time to be established.Once they are exposed as being shallow, they are rarely rebuilt without chang-ing employers.

As with other elements of leadership, employees will readily perceivethe fundamental orientation of their supervisor. A manager who employ-ees view as having an upward, self-serving orientation is likely to be seenas being separate from the working group and insulated from other em-ployees by virtue of trying to belong to upper management. A downwardoriented supervisor is not only more readily accepted by subordinates butalso more respected by employees as being an advocate. Subordinates gen-erally view such a person as a full-fledged team member for whom theywill willingly produce.

■ ESSENTIAL INDIVIDUAL RELATIONSHIPS A successful department manager must assiduously cultivate and main-tain a one-to-one relationship with each employee. This requires consciouseffort. Effective avenues of communication are essential but they are notautomatically formed. Establishing and maintaining such a relationship witheach employee should be a key concern of every department supervisor.This activity may receive higher priority treatment than departmental pro-ductivity for brief periods. Maintaining a department’s productive capac-ity is an ongoing priority concern. In labor-intensive working environments



such as health care organizations, a department’s productive capacity re-sides in its people.

Managers should treat each employee as a full-fledged, contributingmember of a team. This is one of the most effective means of maintaininga labor-intensive department’s productive capacity. This requires deliber-ate action to forge and maintain relationships between the supervisor andeach employee. Managers should ensure that no one is excluded, althoughindividuals will occasionally exclude themselves.

Most department managers are busy people, often having more de-mands placed on them than can reasonably be met on any given work day.This being the case, many supervisors tend to ignore employees who sim-ply perform their job duties in an acceptable manner, never complainingor causing difficulties. Troublesome employees are relatively uncommon,but they often consume inordinate amounts of a manager’s time.

In any work group, consider who is noticed and who is not. Employeeswho perform at an outstanding level or who exceed the expectations of their positions are usually seen. They often do not require much of amanager’s time, although they surely do attract a supervisor’s attention.Troublesome employees get a manager’s attention and consume time. Thesepeople consistently make mistakes, have performance problems, violate workrules or policies, or do not meet the minimum expectations of their posi-tions. The majority of employees, positioned between the outstanding per-formers and the troublesome ones, frequently go unnoticed and thus receivelittle or none of their manager’s time and attention.

The 80–20 rule nicely summarizes this relationship. The rule states that20% or fewer of employees consume 80% or more of a supervisor’s time.The majority of employees in the middle group produce acceptable workday after day. They are neither outstanding nor problematic. Their workis always acceptable. They are the quiet ones who, for all practical pur-poses, managers ignore.

However, even the quiet ones should receive some attention from thesupervisor if they are to maintain their output at an acceptable level andnot become troublesome employees. Unless supervisors maintain rela-tionships with these subordinates, their productivity often spontaneouslydeteriorates.

Other than addressing task-related matters, some supervisors only con-vene face-to-face meetings with subordinates on two occasions. They meetto appraise performance, usually once each year. When necessary, theymeet to address problems via counseling, disciplinary action, or other cor-rective processes. The invitation, “Come into my office,” raises consider-able apprehension under such circumstances.

We recommend periodically meeting with each employee even in theabsence of a pressing reason or need to do so. The agenda can be conver-sation about the job or some discussion about the department’s role or the

Essential Individual Relationships 105


organization and its future. Such meetings foster open environments andcreate opportunities for employee to ask questions and air perceived prob-lems or complaints. These meetings can be instrumental to maintaining pos-itive relationships with individuals. An occasional few minutes of ordinarysocial conversation that is totally unrelated to work can nurture essentialrelationships.

We are underscoring the importance of knowing each subordinate as awhole person, not simply as a producer of services or output. Doing so notonly ensures continued steady performance from an employee but alsoprovides additional advantages for a supervisor. By knowing and under-standing each employee, a supervisor will acquire knowledge other thanthat normally associated with individual capabilities. A manager will learnwho occasionally needs more guidance or assistance. A supervisor will un-derstand which subordinates are sufficiently motivated to take on addi-tional tasks or learn new skills. Understanding employees allows a managerto evaluate potential candidates for promotion.

Regular communication with employees is a necessity for persons as-piring to be effective employee-centered managers. This means commu-nication in a variety of settings and personnel combinations. Regular staffmeetings should include the entire department. Project teams, work-improvement committees, and ad hoc working groups allow subordinatesopportunities to experience and develop leadership skills. Against a back-drop of regular meetings and interactions, formal or semi-formal one-on-one meetings such as appraisal interviews and counseling or disciplinarysessions become less threatening. Frequent informal or one-on-one con-versations facilitate positive employee relations.

To elevate one’s visibility and availability and to promote informal chan-nels of communication with subordinates, supervisors should simply walkaround and talk with their workers. Employees appreciate meeting on theirown territory. Managers can also visit mobile persons on their job sites toexchange a few words. Some experts refer to this as management by walk-ing around. This is an extremely effective employee relations practice.

A Team is Comprised of Individuals We hear much about the necessity for teamwork in the effective deliveryof health care as well as in other endeavors. However, one does not createa strong departmental team without being attentive to the needs of indi-vidual employees. It is essential that a department manager strive to cre-ate a team environment in which all individuals are encouraged to feel thatthey are important elements of the group.

People who feel they are on the inside, that they are included, knowl-edgeable, and appreciated parts of the team will prove to be more satis-fied and productive than if they feel they are excluded or otherwise left out.



A supervisor’s treatment of subordinates and the relationship with eachemployee are the most important factors in determining whether an indi-vidual worker feels included or excluded.

■ THE COST OF IGNORED EMPLOYEES Regarding their employees, some managers have adopted an attitude thatcan be summarized by, “If this person doesn’t work out, there’s no problem—I can always hire another one.” However, associated with such an approachare costs that are not always readily apparent. Employees who are ignoredor taken for granted contribute to turnover. Costs associated with turnoverare both obvious and hidden (direct or indirect).

Aspects of turnover that contribute to the overall cost of doing businessinclude the diminishing efficiency of an individual who is preparing toleave. Each departing employee should be interviewed (called an exit in-terview) to gather information about the reasons for leaving. Such data canhelp to avoid problem situations in the future. The employee may be en-titled to severance pay. Some departing employees may be eligible for un-employment compensation. The company may offer outplacement services.Such services are relatively uncommon at lower organizational levels, butcompanies generally provide them to senior managers and executives.Outplacement services are often costly. In addition, clerical time is requiredto modify benefits and close out company records. While these costs areunavoidable and may be difficult to quantify accurately, they do representreal expense to any organization.

Other costs associated with losing an employee include the value ofoutput that is lost while a position remains vacant. A new replacementemployee is not as efficient in executing the duties of a position. The em-ployee must take time to learn the new job. New employees require ori-entation and initial training. Until they have acquired proficiency, mostpeople require additional supervision. The organization must supplynew persons with equipment such as an identification badge, an em-ployee handbook, and keys. The HR department frequently coordinatesthese activities. The HR department routinely processes paperwork anda myriad of forms.

Less-obvious expenses related to employee acquisition include attend-ing job fairs and developing and producing recruitment literature. Thecost of a pre-employment physical and other testing is often allocated tothe HR department. Recruiting for executive and senior managerial posi-tions may involve travel and relocation fees. If an external source was in-volved, then an agency or finder’s fee may be due.

Costs related to turnover are easily overlooked because so many of themare hidden. In summary, turnover is important to an organization because

The Cost of Ignored Employees 107


it is both costly and disruptive. Much turnover stems from how employ-ees feel about their employment milieu, their supervisors, and how theyare treated. Employees are more likely to remain if they feel valued as in-dividuals and as producers and if they feel accepted as part of a group.Employees who remain loyal to their employers find acceptable amountsof challenge and interest in their work and see opportunities for personalgrowth and advancement.

Programmatic options to retain employees are available. However, gen-erous benefits and employee-friendly programs alone will not retain allemployees. Among the strongest influences in determining whether par-ticular employees will remain or depart are the relationships that employeeshave with their direct supervisors or department managers.

Consider that an individual’s feelings of being accepted and valued, ofbeing challenged and finding interest in the work, are entirely controllableby a manager. Depending on organizational policies, a manager may ex-ert some influence on opportunities for growth and advancement. In thecontemporary labor market, top performers, especially professional andtechnical employees, rarely encounter much difficulty finding new em-ployment when they want it. For some occupations, such as nursing andmedical technology, competing organizations are ready and willing to re-cruit good employees.

Two aspects of supervisor-employee relationships critically influencethe likelihood of continued employment: how employees are treated andhow employees are used. Treatment as individuals is equally important toall employees. Generally, fair and respectful treatment has a positive in-fluence on all employees while the opposite makes negative impressions.The effect of employee utilization varies with individual levels of enthusi-asm and motivation. Being effectively used, continually challenged, hav-ing their ideas heard, being given responsibility, and having opportunitiesfor growth, are extremely important. Top organizational performers findpositive and encouraging responses from managers to be motivating.Managers strive to retain these people. Some of them will leave an organ-ization for other opportunities to advance their careers. While organiza-tionally challenging, such actions are preferable to premature departuresbecause of dissatisfaction.

Individuals are unlikely to remain loyal or maintain their employmentif they feel unwelcome, excluded, or otherwise think that they have fewopportunities to excel or advance. Moreover, one of the most importantfactors in determining whether valued employees will choose to remain ordepart is an individual relationship with their immediate supervisors or thedepartment manager.



■ CONCLUSIONEvery supervisor has responsibilities in the realm of human resources.Local supervisors work as extensions of regular HR personnel. Healthcare workers and providers have broad and varied backgrounds. Theirneed for active supervision varies. Their individual work ethics vary.

The words and actions of supervisors and other managers must be con-sistent. Supervisors must support open door policies with time that can bedevoted to listening to employees. They must forward and act upon so-licited input. Persons making suggestions or providing input should re-ceive feedback from the supervisor to whom the suggestion was initiallymade. Workers often know more about production processes and prob-lems than do specialist engineers. Prudent supervisors listen to suggestionsthat subordinates offer.

The willingness of employees to work is crucial in a people-centeredworking environment. Successful supervisors are perceived to be avail-able. Not being present is detrimental to a supervisor’s effectiveness. Theperception of absence may be because of a closed door, physical separa-tion from a working environment or a reputation for not listening. The re-sult is similar: ineffectiveness and decreased productivity.

Effective managers and supervisors have bi-directional orientationsrather than simply being fixated on upper management and personal ad-vancement. Supervisors who earn reputations for personal gain have ex-treme difficulty overcoming them. In many cases, starting over in anotherorganization is the only way to shed a poor reputation.

Most people appreciate some individual attention. Supervisors whotake the time for one-on-one relationships usually are rewarded with pos-itive employee attitudes and increases in productivity that far exceed thetime invested in employee interactions. Though 20% of employees require80% of supervisor time, effective managers are able to devote some timeand attention to all subordinates. Understanding employees as personsusually facilitates earning their loyalty and respect. Regular communica-tion with all employees, even if it means walking around and having briefconversations, promotes respect for supervisors by their subordinates.

Teams are composed of individuals. The weakest member limits a team’sstrength. Conscientious and caring supervision can augment a team’sstrength and utility to an organization. Ignored workers become unhappyemployees. In time, they may leave. Recruitment and replacement arecostly. Avoiding these expenses by effective supervision contributes to anorganization’s financial vitality and success.

Returning to Kelly and Alice, to moderate a disruptive influence in thedepartment (and contribute to her own peace of mind), Kelly should makea serious effort to curb Alice’s know-it-all intrusions. Kelly could benefit

Conclusion 109


by working with Alice in a one-to-one situation. Alice’s superior attitudeis based on book learning and some common sense. Kelly should put Aliceinto situations in which she is compelled to use the knowledge that sheclaims to have. This may require some thoughtful delegation on Kelly’s part.However, people who must act on their claims of knowledge and exper-tise often learn how reality tempers abstract learning. If Alice is success-ful, then the organization may identify a potentially effective manager. Ifthe situation is not critical, then Alice can have an opportunity to fail with-out incurring serious costs to the organization. Alice should learn and ben-efit from either outcome. Alice may discover that the gap between classroomand work station is much greater than she may have imagined. GivingAlice a structured opportunity has a high probability of succeeding for allconcerned. Kelly, Alice, and the organization will learn more about Aliceand her true capabilities.

Kelly must directly address Alice’s know-it-all attitude and behavior.Alice must understand how others in the department perceive her ac-tions and attitude. However, Kelly must acknowledge Alice’s initiativeand willingness to learn. This requires some care and good judgment byKelly. If Alice demonstrates that she is indeed knowledgeable, then Kellycould profit by using Alice as a sounding board for ideas and potentialsolutions to problems. Alice may have plenty to offer, but Kelly mustlearn to guide Alice so that the outcome is beneficial for the departmentand organization.

Discussion Points

1. Why does this chapter advance the idea that every manager is, orshould be, a manager of human resources?

2. Describe a health care organization or department that has a hetero-geneous work group consisting of at least three levels of staff that dif-fer in their educational backgrounds and job responsibilities.

3. Explain what the following statement means: The streak of authori-tarianism remaining in modern management stifles participation.

4. Provide two or three examples each of activities that you believe couldthrive under production-centered management or proceed most ap-propriately under people-centered management. Are these related tohealth care? Why or why not?

5. In your opinion, what is usually the major problem associated with amanager’s claim to having an open-door policy? Why?

6. Why should it be necessary for a department manager to pay any par-ticular attention to employees who steadily fulfill their responsibili-ties and cause no problems?



7. “This is a simple job we’re filling. It is a no-brainer,” the department manager said, “so just send me a warm body. If the first person doesn’twork out, we can always get someone else, and we’ve lost nothing.”Comment on this statement. Why do you feel as you do?

8. Why is a department manager’s visibility and availability to employ-ees considered to be important?

9. How does a department manager come to know which employees re-quire what kinds of attention at what times?

10. If teamwork is so critically important in contemporary health care or-ganizations, then why does this chapter place such strong emphasison one-to-one relationships between supervisors and each of theiremployees?

Resources

BBooookkssBorkowski, N. (2005). Organizational Behavior in Health Care. Sudbury, MA: Jones

and Bartlett. Cranwell-Ward, J., & Abbey, A. (2005). Organisational Stress. New York: Palgrave

Macmillan.Furnham, A. (2005). People Business: Psychological Reflections of Management.

New York: Palgrave Macmillan.Kenton, B. & Yarnall, J. (2005). HR—the Business Partner. Burlington, MA:

Butterworth-Heinemann.Kulik, C. T. (2004). Human Resources for the Non-HR Manager. Mahwah, NJ:

Lawrence Erlbaum Associates, Inc. MacLennon, N. (2005). Coaching and Mentoring. London: Ashgate Publishing. McConnell, C. R., & Umiker, W. O. (2005). Umiker’s Management Skills for the

New Health Care Supervisor (4th ed.). Sudbury, MA: Jones and Bartlett. Ulrich, D. (2005). The HR Value Proposition. Cambridge, MA: Harvard University

Press. VanDeVeer, R., Sinclair, G., & Menefee, M. L. (2005). Human Behavior in

Organizations. Upper Saddle River, NJ: Prentice Hall.

PPeerriiooddiiccaallssBarrick, M. R., Patton, G. K., & Haugland, S. N. (2000). Accuracy of interview judg-

ments of job applicant personality traits. Personnel Psychology, 53, 925-951.Chang, E. (2005). Employees’ overall perception of HRM effectiveness. Human

Relations, 58(4), 523-544.James, N. (1992). Care = organization + physical labor + emotional labor. Sociology

of Health and Illness, 14, 488-509.Koch, M. J., & McGrath, R. G. (1996). Improving labor productivity: Human resource

management policies do matter. Strategic Management Journal, 17, 335-354.Leibman, M., Bruer, R. A., & Maki, B. R. (1996). Succession management: The

next generation of succession planning. Human Resource Planning, 19(3),16-29.

Conclusion 111


Morris, J. A., & Feldman, D. C. (1996). The dimensions, antecedents, and conse-quences of emotional labor. Academy of Management Review, 21, 986-1010.

Parker-Oliver, D., Bronstein, L. R., & Kurzejeski, L. (2005). Examining variablesrelated to successful collaboration on the hospice team. Health Social Work,30(4), 279-286.

Sy, T., Cote, S., & Saavedra, R. (2005). The contagious leader: Impact of the leader’smood on the mood of group members, group affective tone, and group processes.Journal of Applied Psychology, 90(2), 295-305.

Varma, A. (2005). The workforce scorecard: Managing human capital to executestrategy. Human Resource Management, 44(3), 359-361.

Yammarino, F. J., & Atwater, L. E. (1997). Do managers see themselves as otherssee them? Implications of self-other rating agreement for human resources man-agement. Organizational Dynamics, 25, 35-44.



PositionDescriptions

Chapter Overview


• Understand the importance of a properly prepared position orjob description

• Know how to conduct a position analysis• Appreciate the contribution made by a position’s incumbent• Know the components of a position description• Know how to create a position description

■ CHAPTER SUMMARYPosition descriptions or job descriptions are the documents upon whichthe day to day operations and activities of the employees of an organi-zation are based. They should support the mission, goals, and objectivesof the organization that creates them. All job descriptions in an organi-zation should use the same format and a common vocabulary. Well-written position descriptions include statements that clearly delineateduties and responsibilities and fully describe compensable factors suchas the level of responsibility, the number of persons supervised, the re-sources controlled, and the experience and minimum level of educationneeded to successfully complete the job.

Case Study: Creating a New Job Description

Julie Miller, the Health Officer of a large suburban health department,was planning for the future. The board had discussed creating a new po-sition for someone to conduct training for employees of the health de-partment. Registered sanitarians are the most common classification of

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employees in the health department. They are not only difficult to recruitbut also difficult to retain. Providing them with additional and ongoingtraining should help with retention.

Matt Jefferson has been employed as a registered sanitarian for the pastsix years. He recently completed a Master of Public Health degree. He ap-proached Julie to ask for the training position, briefly making his case thathe was the best person to become the trainer. Julie told Matt that, ac-cording to departmental rules, a search would have to be conducted tofind the best candidate for the position. Matt replied that if the job de-scription were written carefully, a sanitarian clearly would be the best can-didate. After thanking Matt for his thoughts, Julie began to work on theposition description, which she thought could be completed in half anhour. What comments or advice would you offer to Julie?

■ INTRODUCTIONLists of activities delineating a particular employee’s tasks are called jobdescriptions or position descriptions. The term job description is older andevolved from the field of industrial psychology. Position description is anewer, more inclusive designation. The two terms are interchangeable.With changes in the flow of work, position descriptions change. This is es-pecially pronounced in fields related to health. Managers must be awareof such changes and ensure that the descriptions of the activities that theiremployees perform remain current and accurate. This is relatively easy forsupervisors to address with an annual review of the descriptions for theirsupervisees. Human resources (HR) must be willing to record changes inan organization’s master files.

Managers or supervisors must conduct a job analysis when preparing po-sition descriptions. The format of a position description varies among andwithin organizations. However, one general format is usually found through-out a single organization. Health departments may use separate formats forclerical, nonexempt positions and managerial, exempt positions. “Exempt”refers to the status of a position relative to the Fair Labor Standards Act(FLSA) of 1938 and its subsequent amendments, meaning exempt from theovertime provisions of FLSA. The FLSA established the length of a workingweek in the United States, which is currently set at 40 hours. It requires em-ployers to pay affected employees at a rate of one and one-half times theirhourly wage for hours worked in excess of the maximum work week. Allwork performed in excess of the maximum working week is called overtime.

According to the FLSA a position may be designated as exempt if itmeets certain requirements addressing salary, level of responsibility, andthe management or supervision of others. As long as a job meets the FLSAtest as professional, administrative, or executive, it is a “salaried” position

114 CHAPTER 6 POSITION DESCRIPTIONS


exempt from the overtime requirements of FLSA. Such positions typicallyinclude those of managers and supervisors, and any time these employeeswork in excess of 40 hours is assumed to be a part of their normal job du-ties. Employees who are paid by the hour are fully covered by FLSA reg-ulations; they are referred to as being non-exempt.

A position description generally has three main parts: identifying in-formation, a job summary, and a list of the principal duties performed.The process of generating a position description begins with an analysisof the job or position.

Positions, not individuals, are classified. Occasionally, the temptationexists to write a position description for a specific individual, tailoring therequirements and experiences so that a pre-selected person becomes thebest candidate in a job search. This should be avoided. If that person leavesthe position, then the specifications will not readily change. Finding a re-placement may then become difficult. It is better for all concerned that aposition description be written for a job and not for a particular person.

■ POSITION ANALYSISA job description is the most obvious and visible output of a job analy-sis. Comprehensive and accurate job descriptions, developed as a resultof job analysis, are used when selecting, training, evaluating, and com-pensating employees.

The basis of any employment decision is job analysis, the most funda-mental activity in human resource management. Accurate informationabout all positions is required to direct and efficiently control the activi-ties and operations of any organization. Federal regulations and compe-tition have both increased the importance of job analysis. HR does notproduce revenue, yet HR requires significant cash outlays in an organiza-tion’s annual budget. Supervisors and managers must have current andaccurate information about all positions in order to operate their busi-nesses, deliver services, and conduct programs in an efficient and timelymanner. Smaller healthcare provider organizations and health departmentshave often omitted compiling complete sets of position descriptions. Theyrely on the professional nature of many employees’ duties for guidance insupervising and evaluating professional employees.

Position descriptions provide more than just guidance for an employee’sday. They are integral to an organization’s efforts to be fair and equitableto all employees. Organizations providing healthcare services that do nothave current position descriptions for all employees become vulnerablewith regard to accusations of discrimination in employment practices. Oneway to defend against charges of unfair employment practices is to con-duct job analyses and prepare job descriptions.

Position Analysis 115


A job analysis involves extensive studying of a specific position and yieldsinformation for a position description. The person conducting a job analy-sis gathers information about positions from several sources. These includeinterviews with people currently in the position (also referred to as job orposition incumbents), observing their performance of the job’s duties ortasks, worksheets or questionnaires completed by employees, and infor-mation from sources such as the Dictionary of Occupational Titles.

Position analysts will compile their findings and review the resultingjob analysis with the current position incumbent. Once agreement is reachedwith regard to the job description’s accuracy, the preliminary document isgiven to an incumbent’s supervisor for review. Supervisors may add, delete,or modify descriptions of duties, knowledge, skills, abilities, or other char-acteristics. After supervisors approve individual position descriptions, theyare forwarded to upper management for final approval. A final positiondescription is prepared, signed, and dated. Copies are given to both in-cumbent and supervisor. A copy is also filed for future reference.

■ ROLE OF A POSITION INCUMBENTJob incumbents have an important role in the process of generating accu-rate position descriptions. Position incumbents can assist in the process ofanalysis by taking time to think about their jobs. They should keep a di-ary of work-related activities or make notes about their job duties. Theseshould include all activities that occur during one complete cycle of du-ties. Typically, a year may be required to complete all job duties. Unlessjob analysis occurs when budgets are being prepared, budget-related tasksmay be overlooked.

At the beginning of an analysis interview, incumbents should explaintheir concept of the job to the analyst. The analyst should try to make thejob incumbent focus on the facts. Job incumbents should avoid overstat-ing or understating characteristics of a position, such as duties, requiredknowledge, skills, or abilities. Both analyst and job incumbent should re-main focused and should minimize discussion of extraneous issues. Analystsare only concerned with the position. Personal performances, fairness ofwages, complaints, and relationships with supervisors or coworkers arenot relevant.

Senior managers determine the extent of a position’s impact on an or-ganization and the boundaries of a job. Position analysts do not determineconsequences as part of their work. Such decisions are made by seniormanagers. For example, salaries will not be reduced or a position elimi-nated because of the analysis process. An analyst may recommend titlechanges or other position realignments, but the final decisions are madeby senior management.



■ ELEMENTS OF A POSITION DESCRIPTIONA position description usually includes the following elements: job iden-tification information, a job summary, a principal duties performed sec-tion, and a job specification section.

Job Identification InformationJob identification information must include, at a minimum, the positiontitle, the department location, and the last date on which the content ofthe position description was verified. Other data, such as the title of thesupervisor, help to show how the position fits within a larger organization.

Job SummaryThe job summary provides an overall rendering of the purpose, nature, andextent of the tasks performed by the person in the position. In a well-constructed system, the job summary should relate to the mission state-ment of the department in which the position is located and to the globalmission of the organization.

Principal Duties PerformedThis section presents job facts in an organized and orderly fashion. Whenpreparing the principal duties performed section, a job is normally brokendown into approximately five to eight different tasks or functions for thepurpose of describing the position. The job tasks should be listed in orderof decreasing frequency or occurrence. This means the task that requiresthe most time to complete or that is the most critical for a given positionshould be listed first. For each duty listed in this section, a description ofthe job’s activities (i.e., what is done on the job), how the task is accom-plished, and why it is necessary should be provided. This is a convenientmethod of organizing a position description. It quickly and effectivelycommunicates a great deal of information about a position to a readerwho is unfamiliar with the job or position.

Position descriptions should be written using sentences that are com-plete, clear, and brief, using action verbs and the present tense. In prepar-ing a job summary, the purpose of the position must be clearly stated. Thisstatement should be as brief as possible while still accomplishing its pur-pose. Words should be carefully selected to convey the maximum amountof specific meaning. General or vague terms should be avoided unless theyare absolutely essential as a substitute for a long and detailed explanation.

The principal duties performed section follows the job summary andincludes major job tasks, as previously outlined. Many organizations in-clude a fourth section in their descriptions that covers job specifications.

Elements of a Position Description 117


Job SpecificationThe job specification section outlines the minimum specific skills, effort,and responsibilities required of an incumbent in the job. Job specificationsprovide the basis and justification for values that will be assigned to fac-tors used in evaluating a position. Factors are elements created by a jobanalyst and subsequently used when comparing different positions withina single organization. Job specification statements must describe the ex-tent to which a given factor is present and the degree of difficulty en-countered in the position for that factor.

When writing job specifications, individual statements should be defi-nite, direct, and to the point. Any unnecessary embellishments or compli-cated sentences should be avoided except where they materially add to anunderstanding of the details contained in the statement. Any specificationsthat apply only to occasional duties should be indicated accordingly sothat the percent of time or frequency with which the specification applieswill not be overestimated.

Education requirements for a position description must be supportedby the analysis of actual duties. Higher educational requirements are le-gal but must be such that the skills or training can only be acquired throughformal education. Minimum levels of schooling must be used. Artificiallyhigh educational requirements have been adjudged to be a form of dis-crimination. They are not only illegal, but also unethical. Skills must besupported by position analysis. These are factors that are linked to com-pensation. Other factors that must be compensated include the level of re-sponsibility expected of an incumbent, the number of people supervised,the amount of funds managed, and the resources controlled.

Job specifications are then translated into position descriptions. Thesedescriptions are for specific job categories, for example, Secretary 2, NurseAide 1, Sanitarian-In-Training, or Environmental Supervisor 1. The titleindicates the major duties of a position. The number after it may indicatethe level of the position in the organizational hierarchy. Higher numbersusually denote more senior or more responsible positions. Whereas jobspecifications may be recorded for individual incumbents, position de-scriptions are developed for general categories of jobs. Well-written posi-tion descriptions should contain the items listed in Table 6-1. An exampleof a completed job description in the described format appears in AppendixA, which can be found at the end of this chapter.

A position description becomes a vitally important HR managementdocument for managers and supervisors in that it sets out the major du-ties and responsibilities for persons in specific positions. In many cases, theposition description may be detailed to the level where it can be used forperformance appraisals and employee evaluations.



The preparation and verification of a position description and itsspecifications comprise the first step in developing a base salary com-pensation program. The next step in the process involves rating posi-tions, or job evaluation. Job evaluation is essentially a comparison ofavailable information for each position with rating scales that have beenestablished to assist in determining order among many different posi-tions. Job evaluation establishes the relative position of each individ-ual position with respect to all jobs in an organization. Typically, anHR department performs the job evaluation. If it is a new or highly con-troversial position, then an interdisciplinary job evaluation committee,composed of members from various sectors of an organization, mayevaluate a job.

■ CONCLUSIONMany people consider position descriptions to be dry and uninteresting.However, they are important documents for any organization. Positiondescriptions should be closely linked to organizational goals and objectives.They are used when determining compensation levels. Job descriptionshave a regular format, style, and language. They should be prepared withcare and periodically reviewed for accuracy and currency.

Returning to Julie, the Health Officer who began to write a job descriptionfor the new training position, a pause is in order. Job descriptions are not

Conclusion 119

Table 6-1 Position Description Components

Component Explanation

Title Specific title for the jobStatus Exempt or nonexemptSummary of duties Major tasks to be performedSalary range The minimum, midpoint, and maximum

for the jobKnowledge required Specific training needed to perform the

job; specific experience, both type and amount needed to perform the job

Skills required Specific skills expectedEffort required Both mental and physical; any heavy liftingResponsibility Consequences of an errorWorking conditions Hazards or other poor working conditionsGeneral statement “Other duties as required”


essays. They are based on an analysis of the new position. A thorough position analysis usually requires more than 30 minutes to complete.

Julie apparently intended to specify a Master of Public Health degreeas the minimum level of education for the job incumbent. While such a de-cision might appear to create a good opportunity for the sanitarian, for-mal schooling is not the only place where expertise in training can beobtained. An employee with several years of work experience who hashad some leadership responsibilities should be able to become a success-ful trainer. Artificially high educational requirements are a form of dis-crimination. Julie should be reminded that job descriptions are written forpositions, not people. To ignore this advice is to court problems when seek-ing a replacement for the proposed new employee.

Discussion Points

1. What is the principal difference between “exempt” and “nonexempt”employees?

2. What are the main provisions of the Fair Labor Standards Act?3. What is a job analysis?4. Why is a job analysis important?5. Briefly describe each of the main elements of a position or job description.6. What, if anything, does a job incumbent contribute to a position

description?7. How is the education level required for a position established?8. Describe several uses for a position description.9. In addition to actual duties performed, what other information is con-

tained in a properly prepared position description? Why is it included?10. Why is the statement, “Job descriptions are written for positions, not

people” important?

Resources

BBooookkssByars, L. L., & Rue, L. W. (2003). Human Resource Management (7th ed.). New

York: McGraw-Hill.Cushway, B. (2006). The Handbook of Model Job Descriptions. London: Kogan Page.Farr, J. M., Ludden, L. L., & Shatkin, L. (2001). Dictionary of Occupational Titles

(2nd ed.). Indianapolis, IN: JIST Works, Inc.Mader-Clark, M. M. (2006). The Job Description Handbook. Berkeley, CA:

NOLO Publishing.



Plachy, R. J., & Plachy, S. J. (1997). More Results-oriented Job Descriptions: 226Models to Use or Adapt—with Guidelines for Creating Your Own (2nd ed.).Chicago: AMACOM.

Wilson, M. (2004). Volunteer Job Descriptions and Action Plans. Loveland, CO:Group Publishing.

PPeerriiooddiiccaallssBarber, A. E., & Roehling, M. V. (1993). Job postings and the decision to inter-

view: A verbal protocol analysis. Journal of Applied Psychology, 78, 845–856.Cohen, J. (1992). A power primer. Psychological Bulletin, 112, 115–159.Conway, J. M., & Peneno, G. M. (1999). Comparing structured interview ques-

tion types: Construct validity and applicant reactions. Journal of Business andPsychology, 13, 485–506.

Fooks, C. (2005). Health human resources planning in an interdisciplinary careenvironment: To dream the impossible dream? Canadian Journal of NursingLeadership, 18(3), 26–29.

Hall, A. (2005). Dialing for jobs: How to make the most of a phone interview.Biomedical Instrumentation and Technology, 39(5), 377–378.

Kristof-Brown, A., Barrick, M. R., & Franke, M. (2002). Influences and outcomesof candidate impression management use in job interviews. Journal ofManagement, 28, 27–46.

Rosse, J. G., Stecher, M. D., Miller, J. L., & Levin, R. A. (1998). The impact of re-sponse distortion on pre-employment personality testing and hiring decisions.Journal of Applied Psychology, 83, 634–644.

Smaglik, P. (2005). Seeking soft skills. Nature, 438(7069), 883–885.Van Iddekinge, C. H., Raymark, P. H., & Roth, P. L. (2005). Assessing personal-

ity with a structured employment interview: Construct-related validity and sus-ceptibility to response inflation. Journal of Applied Psychology, 90(3), 536–552.

Van Iddekinge, C. H., Raymark, P. H., Eidson, C. E., & Attenweiler, W. (2004).What do structured interviews really measure? The construct validity of be-havior description interviews. Human Performance, 17, 71–93.

Wichroski, M. A. (1994). The secretary: Invisible labor in the workworld of women.Human Organization, 53, 33–41.

Conclusion 121


Appendix A

Sample Position Description

Job Title: Community Practice Facility Controller

Unit or Section: Administration

Status: Exempt

Department: Finance

Salary Range: (intentionally left blank)

Basic Function: Plans, directs, and coordinates, on an efficient and eco-nomical basis, all facility accounting operational ac-tivities, including cost accounting, financial accounting,general accounting, information systems, and generaloffice services

Scope: Work encompasses involvement in a broad range ofaccounting activities that are essential to the mainte-nance of facility operations and the dissemination offinancial information to the board, senior managersand owners

Summary of Duties:

1. Coordinates all essential accounting operational functions in a timelyand accurate manner, developing methods geared to providing man-agement with information vital to decision-making processes.

2. Directs the development of methods and procedures necessary to en-sure adequate financial controls within each of the facility’s opera-tional areas.

3. Performs analysis and appraisal of the facility’s financial status.4. Prepares recommendations with respect to future financial plans, fore-

casts and policies.5. Works closely with the Chief Executive Officer on confidential fi-

nancial matters and expedites such matters to conclusion.6. Directs this operation within the accounting parameters established by fa-

cility, third party provider, state, federal and GAAP rules and regulations.7. Manages the organizational area in a manner that fully complements

and interfaces with all other coordinating agencies or business partners.8. Performs other duties and responsibilities as directed by the CEO.



Number ofSupervision Exercised: Employees:A. Direct: General supervisors in operational areas 2–3B. Indirect: Other facility supervisors, administrative

and clerical personnel 15–20

Training and Education:

Certified Public Accountant (CPA) required; graduation from an accred-ited school

Experience:

Must have at least five years of experience in accounting with somesupervisory responsibility.

Responsibility:

Budget of $3,500,000 per yearResponsible for all required insurance, hospital, state and federal filings

for tax and other financial purposes

Effort:

Minimal physical effort required; no liftingMental effort requires ability to concentrate on numbers for long periods

of time and to work under occasionally severe deadlines

Working Conditions:

Works in well-lighted office; no exposure to hazards in the normal courseof work.

The above constitutes a general summary of duties. Additional duties maybe required.

Approvals:

Supervisor: Date:

Department manager: Date:

HR Department: Date:

Reviews:

Person: Title: Date:

Appendix A: Sample Position Description 123


DepartmentManagers and theRecruiting Process

Chapter Overview


• Recognize and describe the steps in the recruiting process• Understand the essential partnership between a department

manager and human resources in recruiting employees• Be sensitive to the problems potentially encountered through a

department manager’s active involvement in checking referencesor answering references requests

• Know the preferred reference checking approaches andunderstand the concepts of defamation and negligent hiring

• Understand a department manager’s role in locating job candidates• Recognize both the advantages and occasional disadvantages of

promotion from within the organization• Appreciate special recruitment concerns, such as recruiting during

periods of labor shortage

■ CHAPTER SUMMARYEvery department manager should participate in recruiting as an active part-ner with the employment section of human resources (HR). This collabo-ration begins with determining and approving a staffing need, identifyingrecruiting channels to be used, and agreeing on the contents of a positiondescription (also called a job description). The content of an existing job de-scription must be revised and updated as necessary. The partners specify

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any special recruiting requirements that may be present, consider both in-ternal and external candidates as they become available, and conduct pro-fessional interviews to identify the most appropriate of available job candidates.

Because of contemporary legal concerns, primarily the risk of chargesof defamation or negligent hiring, a department manager’s involvement inchecking references and responding to reference requests should be mini-mal or nonexistent. This task is best left to HR. Of special interest to de-partment managers is the advisability of promoting from within anorganization. This is helpful during periods of staff shortage. Employeesoccasionally maneuver to enhance their salaries.

Case Study: “Didn’t Cut It? Hire Another”

Kathy Gray was hired by Meadows Nursing Home for the position ofbusiness manager. Hers would be a small department: two employees otherthan herself plus one open clerical position. Although she had consider-able experience with business office operations, this was Kathy’s first su-pervisory position.

One of the first tasks facing Kathy was hiring someone to fill the openclerical position. She asked the individual who handled HR matters for helpin finding some candidates for her to interview. There was no HR de-partment as such, just one person who also coordinated purchasing for thehome. Kathy’s manager, nursing home administrator Sam Weston, choseto sit in on the interviews, citing Kathy’s newness to supervision as his rea-son. Because Kathy had never interviewed or hired before, Weston rea-soned that he should assist her in the process.

Kathy and her boss jointly interviewed four candidates. Of these, two ap-peared to be reasonably qualified for the job. One of these was a youngwoman named Louise Bennett who worked in the home’s food service de-partment. The other was a young woman named Emily Smith whose totalwork experience consisted of working in a convenience store for a few months.

Following the interviews Kathy expressed her desire to hire LouiseBennett from food service because she seemed to have the ability and ex-hibited a strong desire to better herself. She reasoned that selecting Ms.Bennett would show a commitment by the home to develop employeesfrom within the organization. Weston disagreed, telling Kathy that shecould do the hiring “the next time a job opened.” Weston himself madethe decision to hire the other candidate and personally communicated theoffer to Emily Smith.

As the 30-day probationary period progressed it became increasinglyevident to Kathy that Emily was not shaping up in a satisfactory manner.Even after providing Ms. Smith a good orientation, providing her withreasonable guidance, and extending her every benefit of the doubt because

126 CHAPTER 7 DEPARTMENT MANAGERS AND THE RECRUITING PROCESS


she had been “the boss’s choice,” Kathy still had to conclude that the nurs-ing home would be making a mistake by keeping Emily.

On the twenty-eighth day of Emily Smith’s employment, Kathy Graywent to see Sam Weston. She had kept Weston informed, so it was no sur-prise to him when Kathy said they should let Smith go and start over.

“Okay,” Weston replied. “She didn’t cut it? Hire another person.”Kathy hesitated, then finally said, “I don’t believe I should be the one

to let her go. I’m not the one who hired her.”“She’s your employee,” Weston said, “so you get rid of her.”What management errors were committed? Remembering that Emily

Smith reported to Kathy even though Weston had hired her, do you believethat Weston dodged his responsibility by ordering Kathy to get rid ofEmily? How might this whole situation have been handled in a more pro-fessional manner? What effect might the Smith incident have on the futurerelationship between Kathy Gray and Sam Weston?

■ LEGAL CONCERNS IN RECRUITINGMany laws and other legal requirements exert considerable influence onthe employment process. Especially pertinent are those having to do withopportunities for equal employment, particularly Title VII of the CivilRights Act of 1964.

An HR department is primarily concerned with much of the legislationalready reviewed. However, there are implications for a department man-ager. Managers must be aware of many aspects and nuances of HR lawwhen interviewing prospective employees.

■ PARTNERSHIPS WITH HUMAN RESOURCESObtaining employees is an area of activity in which a department managerand HR personnel must usually work closely together. Although the processmay vary somewhat from one organization to another, the following dis-cussion represents a fairly standard recruiting relationship between HRand the other departments in an organization.

Initially, the department manager provides an approved personnel req-uisition to HR. The requisition may specify replacement for an employeewho is resigning, retiring, or being discharged. Alternatively, it may re-quest an employee to fill a position that did not previously exist. A de-partment manager will have procedures to follow involving steps mandatedby the organization before HR receives the requisition. The specific stepsto be taken are usually related to the nature of the requisition.

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If a request is for a new employee who represents an addition to a de-partment’s work force, in the majority of organizations, the departmentmanager will be expected to go through a justification process to secureapproval for the added position from higher management. This process mayor may not involve input from HR. However, for a new or additional po-sition, HR will be unable to recruit without approval from higher man-agement. In some organizations, if the personnel requirement is for a directreplacement, then a department manager is empowered to initiate a req-uisition and submit it directly to HR.

Close attention may be brought to bear on staffing levels. In organiza-tions that are experiencing financial difficulties or undergoing reengi-neering or a significant rearrangement of personnel, senior managers mayelect to review all positions that become available to determine if theymust remain unfilled. In such an environment, higher management mayreserve the right of review and approval for all staffing requests, even di-rect replacements.

Once a personnel requisition is approved, it travels from a departmentmanager to HR. The HR department may or may not know a particularrequisition is coming. Human resources will expect a requisition if it is toreplace a retiring employee or person who has been discharged because HRwill have been involved in processing the retirement or the discharge. Ifthe requisition is for an employee to fill a newly created position, then HRmay not receive advance notification.

The next step involves the job description for the position in question.A department manager or direct supervisor usually has the responsibilityto provide an accurate job description that is either new or updated, as ap-propriate. If a requisition is for a direct replacement that was known inadvance to HR, then the appropriate job description will usually be recoveredfrom company files and reviewed. A department manager and direct su-pervisor will typically be asked to examine the position description and de-termine if it should be updated. If a request is for a newly created position,then HR will expect to receive a new job description along with or im-mediately following the requisition. The HR department is often able toassist in developing or updating a job description. However, most of theinformation necessary for doing so will be available to a direct supervisoror department manager rather than to HR.

An accurate job description is essential for getting the recruiting processproperly underway. Human resources will require an understanding ofthe major job duties for the open position so that they can produce a jobposting seeking internal applicants, if possible, and to advertise for ex-ternal applicants. As soon as people begin to apply for the position andscreening interviews are started, HR will require information from thejob description to describe the position to applicants in an accurate andcorrect manner.



At the time an approved personnel requisition is submitted, a departmentmanager should have an accurate, up-to-date description of job duties anda check list of the experience and qualifications to look for in the individu-als who are to be interviewed. This information is contained in a compre-hensive and correctly written job description. A department manager shouldbe prepared to review appropriate internal candidates as well as those fromoutside, interview the best prospects for the position in question, and haveall applicants’ references checked and academic credentials verified as nec-essary. These steps must be completed for all applicants. Typically, betweentwo and five applicants are interviewed for an open position.

When the HR department receives a personnel requisition, its initialconsideration is to determine whether the position is to be posted andcirculated within the organization. Most organizations, especially largeones, maintain job-posting systems for use by existing employees. Theseprovide opportunities for promotion or transfer to present employees. Insome locations, internal posting and external advertising will commenceat the same time. Typically, an organization-wide employer posting sys-tem will provide a reasonable time period, typically a week, for internalcandidates to apply before external candidates are considered. An ex-ception occasionally arises when a position requires specialized trainingor a specific skill that is known to be missing among present employees.Such positions usually involve skilled technical or professional expertise.In such a situation, an external search is started immediately upon re-ceipt of a requisition.

Regardless of the source of candidates, HR has the job of providing adepartment manager with a number of candidates who meet the stated min-imum qualifications of the position. The number of candidates to be sup-plied varies. Salient factors involve normal departmental or organizationalpractices, considerations of equity and diversity, and the labor market fromwhich candidates are to be sought. Conducting interviews is costly in termsof time and expense. Some high-skill professions may be in such short sup-ply or high demand that an organization may have only one or two quali-fied candidates. For most entry-level positions, HR should be able to providea department manager with five or six reasonably qualified candidates with-out consuming too much time conducting screening interviews.

When hiring entry-level personnel, a department manager should beable to select one suitable employee from among five or six candidateswho all meet the published minimum requirements for the position. Humanresources and department managers do not always agree on the appro-priate number of candidates. Managers may insist on interviewing an ex-cessive number of candidates, searching for one who significantly exceedsthe minimum requirements of the position, looking, in short, for the idealperson. Finding the ideal candidate would reduce or eliminate the needfor training. However, the effort and expense involved in searching for an

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ideal candidate usually exceeds what is allocated for the search and re-sults in extra work for the recruitment system. An ideal candidate rarelyappears. If a position requires an ideal candidate (for example, an assis-tant for a senior executive), then the minimum requirements submitted ina requisition should be adjusted to reflect such a need.

When applicants are plentiful, HR may simply forward the resumes ofpeople who appear to be minimally qualified. Such a determination ismade by reviewing statements that have been made on paper and not byactually conducting screening interviews. Managers then review the ap-plications and select candidates to interview. While some managers pre-fer to work in this manner, such an approach creates more work for themand subverts the effectiveness of an established system. These managersare conducting their own initial screening as well as interviewing candi-dates. Human resources is usually and inappropriately blamed when apoor selection decision is made.

Human resources time that is spent finding and referring candidatesand a department manager’s time that is spent interviewing are normal or-ganizational costs related to recruiting. Lost productivity as well as train-ing and orientation activities must be included when calculating the truecost of recruitment. The latter are indirect costs, but they are real. The ex-tent that department and HR personnel are able to cooperate in recruit-ment will directly affect the efficiency of the process.

When meeting with candidates, department personnel should avoid dis-cussing compensation except in the most general terms, such as describ-ing the pay range for a position. Discussion or explanation of employeebenefits should not be attempted by departmental personnel. Benefits in-formation can rapidly become complicated, especially when an organiza-tion has a benefits structure that includes choices and when HR is the onlydepartment prepared to address or explain benefit options.

Managers are strongly advised not to extend an offer of employmentduring a departmental interview. This admonition is even more importantwhen a candidate interviews well and the manager is being swayed by theperformance. All offers of employment are ordinarily processed throughHR. Formal offers must be extended conditionally and considered firmonly upon completion of successful reference checks and receiving propermedical clearance via a pre-employment physical examination.

An occasional point of contention between a department manager andHR is the timeliness of having a new employee start once an offer has beenmade and accepted. Managers often feel that new persons ought to be ableto start work immediately unless there must be a period of notice for an-other employer must be made.

Human resources will ordinarily take all reasonable steps to havenew employees begin work quickly and efficiently. Reference checking



is absolutely essential and requires time. An organization’s employeehealth service or employee health physician, not HR, controls ap-pointment times for pre-employment physical examinations.

Human resources may be pressured by line management to short-cutthe process by allowing a new hire to begin work immediately and takecare of reference checking and the physical examination during a person’sfirst two or three days of work. This practice is extraordinarily dangerousand should be avoided. It may be difficult or impossible to reverse the hir-ing decision if a person is already on the payroll when reference checks comeback negative. A contingent offer can be withdrawn before a new personbegins work, but once that individual is hired the contingency is gone.Also, removing a new hire from the job after officially starting presents somedifficulties if the individual fails the physical examination. In many partsof the country, state codes prohibit workers from starting employment ina health care facility without passing a proper pre-employment physicalexamination that includes a screening test for tuberculosis.

■ REFERENCE CHECKING AND THE DEPARTMENT MANAGERDepartment managers who want to become personally involved in check-ing applicant references or personally answering reference requests shouldbe strongly discouraged or forbidden from doing so. Let a centralized ac-tivity such as HR take care of reference checking. References are bestchecked, and reference information on past employees is best given out,through a single, central point where the people conducting the activity arefamiliar with all applicable laws, can check all pertinent applicant refer-ences in a similar way, and can respond to all reference information requestsin a consistent manner.

Exchanging reference information is another activity that generates fric-tion between HR and managers of other departments. On the surface, al-lowing health professionals who manage other health care employees toexchange reference information with other organizations without HR in-tervention seems logical. Paraphrasing a manager who insisted on per-sonally requesting and dispensing reference information about high-techemployees, “It requires someone with my level of specialized knowledgeto render judgments on an individual’s capabilities.” The reason why amanager should not become involved in exchanging reference informa-tion is contained in the statement. The key word is judgment.

Judgments have no place when responding to a reference request. Referenceresponses should include nothing that is subjective in any way. This prohibi-tion includes opinions as well as judgments. Subjective statements can alwaysbe challenged because they cannot be rendered as absolute, objective truths.Only information that can be verified in a personnel record is completely safe

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to give out when answering a reference check. Furthermore, only informa-tion that is relevant to the request should be offered.

Reference requests are best answered by someone who has access to apersonnel file. The comments from a person who was not well acquaintedwith the employee in question are more objective than are comments froma person who was personally acquainted with the employee being con-sidered. All reference requests should be answered impersonally and di-rectly from the record. Time and again, attorneys and advocates have toldus, “Information that is not in a file or record does not exist.” Documentationto substantiate statements made in a reference conversation is imperative.Anything said in response to a reference request must be verifiable in apersonnel file.

Organizations often become overwhelmed with fear of legal repercus-sions resulting from reference requests on both the receiving and sendingsides—especially on the sending side. Many have adopted the practice ofeither not answering at all or limiting their answers to the verification ofjob titles and dates of employment. Some organizations exhibit an obvi-ous double standard concerning references. When checking references ofpotential new hires, they try to obtain as much information as possiblefrom prior employers. In contrast, when they respond to reference requests,they limit their responses to minimum levels of content, verifying onlydates, titles, and occasionally salaries.

There are opposing sides concerning the legal dangers involved in giv-ing and receiving reference information, with one side receiving far moreattention than the other. The more obvious apparent risk is being chargedwith defamation. Many employers fear being sued by an unsuccessful can-didate who feels a job opportunity was lost because of comments receivedfrom a reference. As a precaution, many former employers tend to limittheir answers to reference-information seekers and to disclose as little in-formation as possible.

The other potential legal hazard related to reference checking is negli-gent hiring. This potentially occurs when an applicant’s references are notchecked prior to extending an offer to hire. A negligent hiring charge mayoccur when a hiring organization does not make a good-faith effort tocheck references on an incoming employee who later causes harm to peo-ple or property. Many people do not consider this to present as much riskas defamation, but it has the potential to inflict serious harm on an or-ganization. Assume that an employer hires a new employee without check-ing references and that employee has a record of serious misdeeds knownto the former employer. If that employee causes harm while working forthe organization that failed to check references, then the organization isat risk of being charged with negligent hiring. A secondary danger existsfor the person’s past employer. If the past employer had relevant and doc-umented knowledge of a serious problem (for example, assault or theft)



and did not reveal that information upon request, the former employercould be at risk for legal action brought on by the new employer.

Charges of defamation are relatively common. Unsuccessful candidatesfile a charge of defamation, claiming that they were not hired because ofsomething said in a response to a reference request. A few such complaintsgo on to become legal cases that can require months or years to resolve. Theyare time-consuming and can be costly. For department managers who chooseto give reference information, they can become extremely frustrating. Legalactions involving negligent hiring are not nearly as common as those involvingdefamation, but negligent hiring cases tend to be considerably more seri-ous and decidedly more expensive. A final reason for restricting all refer-ence contacts to HR is simply practical. Should a charge of defamation ornegligent hiring become a full-scale legal battle, HR, not an individual de-partment, assumes the responsibility for all legal issues and activities.

Organizations are usually fairly safe in answering reference requestswith documented truth from the personnel record, as long as what is saidis pertinent in assessing the person for the job being sought and as long asthe information is not conveyed with malicious intent. Those who are re-sponsible for answering reference requests should do so without attempt-ing to interpret the record. They should supply information directly froma former employee’s record. For example, concerning attendance one mightsay, “Absent nine times and tardy twelve times in three months,” butshould never say, “Frequently late or absent. The person can’t be dependedupon to be there when needed.” The former is in the record and cannotreadily be disputed. The latter is imprecise and renders a judgment.“Frequently” does not have a quantifiable definition. The judgment aboutdependability is a personal opinion or interpretation. Judgments and opin-ions are subjective. An exception to this guideline can sometimes occur ifa supervisor has rendered a judgment in writing; relaying the words of an-other can sometimes be considered an objective recitation of informationthat is already contained in the record. But one must remain cautious indoing so; if the judgment that is repeated is inflammatory or otherwisecontroversial, the effect might be to simply shift some of the emphasis fordefamation charges to the individual rendering the original judgment.

Even if no HR department exists, as is the case in some very small or-ganizations, reference requests should still be centrally addressed. The per-son responsible for maintaining the organization’s personnel files shouldhandle the request.

A note documenting the information in a reference call should be addedto the personnel record. The date, information provided, name of the or-ganization, contact information and person receiving the information, andthe name of the person supplying the information should be noted on aseparate sheet and added to the permanent personnel file. Such informa-tion is usually sufficient to resolve most legal claims.

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Regardless of precautions and guidelines about handling reference requestsand information, there is often a tendency for some managers to exchangesuch information with peers and colleagues. In most locations, many of thepeople in the organizations comprising the local health care communitytend to be well acquainted with each other. Managers are ordinarily ac-quainted with their counterparts as they often attend conferences togetheror belong to the same professional organizations. It is often natural formanagers to speak with each other about employee capabilities, especiallyas employees change jobs and move from employer to employer within thesame community. A manager who engages in such conversations is essen-tially trading reference information. Although this is likely to continue, su-pervisors should nevertheless observe the essential rule: offer no judgmentsand convey nothing that cannot be verified in the personnel file.

The foregoing advice was disputed by a department manager who saidin effect, “It’s no one’s business what I might say in a private conversationwith a friend and colleague. We can discuss anything we wish and nobodycan do anything about it.” That manager was asked to consider the following:“If you find yourself in the witness chair in federal court, under oath, andyou are asked specific questions about a particular conversation with yourfriend and colleague, how will you answer? How will your friend and col-league answer?” It is best to avoid the possibility altogether by leaving thegiving and receiving of reference information to the HR department.

■ THE MANAGER’S ROLE IN FINDING CANDIDATESA constant concern of HR is finding and retaining people with the skillsand talents needed by the organization. This should be a continuing con-cern for a department manager.

AdvertisingNewspaper advertisements are only one method for finding employees.They are not nearly as effective as some may believe, although they are prob-ably the most readily visible means of locating people with specific skillsets. Differences often arise between a department manager and HR con-cerning the frequency of advertising and the size of ads. Some managerstend to miss advertising deadlines or see them as unrealistic.

In most communities, the Sunday newspaper is best for running em-ployment advertising. Most employment ads appear on Sunday, and thatedition offers the greatest variety of size and category options and usuallyincludes special sections of interest such as Medical or Health Care. Anewspaper’s deadline for Sunday advertising is commonly noon on Thursday.Display advertising may have earlier deadlines. Given the volume of busi-ness in both HR and line departments during any given week, meeting the



advertising deadline often presents a challenge. Managers who are unableto get an ad approved and accepted until Friday will see the advertisementin print the following week. Remember that the deadline is imposed by thenewspaper, not HR. For this reason, HR will frequently issue remindersof advertising deadlines to managers whose departments have open per-sonnel requisitions.

Special health care employment publications exist to serve with national,regional, and local markets. Professional journals with national circulationsoften carry employment advertising. With all of these publications, longerlead times are involved because of publication schedules. This is especiallytrue of professional journals. Organizations planning to use such focused ad-vertising must often extend the length of their recruiting schedules.

An advertising executive once said that half of every dollar spent onadvertising was wasted. Unfortunately, he was unable to identify which halfwas wasted. Some HR employment recruiters have said that they obtainno more than one-third of new employees as a result of print advertising.Others have commented that no more than 30% of all jobs ever get ad-vertised in print.

NetworkingA considerable proportion of the better-paying jobs such as technical, pro-fessional and managerial positions, are filled through networking.Networking ordinarily works in the following manner. Someone seekinga position makes personal contacts among friends, relatives, acquaintances,and former colleagues. Individuals who are serious about networking con-tact people working within or in organizational proximity to their field ofinterest. These activities spread the word that one is seeking a particularkind of position. By forwarding networking contacts and referrals to otherindividuals, the original person often encounters a series of individualswho would otherwise have been unknown, unidentified, or unavailable,and who are then able to be directly accessed. This series of contacts, re-ferrals and subsequent contacts constitutes the network.

In attempting to establish networks, people should begin with the rel-evant personal contacts with whom they are best acquainted. They shouldfollow leads or referrals to others through a series of networking or cour-tesy interviews. At each encounter or meeting, the job seeker should leavea current resume. Serious job seekers are advised to carry a supply of busi-ness cards and several copies of their resume at all times. The timing orexistence of networking or potential employment opportunities cannot bepredicted.

Employers engage in networking to find people to fill specific positions.Recruiters attend professional society meetings, conferences and conven-tions, and other gatherings of people who work in the occupation of interest

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to actively build networks of potential candidates. Many department man-agers have made initial contact with people they later hired at such gath-erings. Considerable networking also takes place at job fairs.

Job FairsJob fairs are gatherings of employers who are interested in gaining expo-sure for their organizations and promoting them as good places to work.A typical job fair is organized in a fashion that resembles a vendor’s roomat a convention. All individual employers have tables and displays of in-formation about their organizations. An employer’s table will commonlybe staffed by one to three people, usually an employment recruiter fromHR and a department manager or employee of a particular specialty.

Job fairs are sponsored by municipalities, business organizations, tradeassociations, Chambers of Commerce, colleges and universities, and otherorganizations. They are usually well publicized. Candidates who attend jobfairs are reminded to bring a supply of current resumes. Universities orother organizations that educate health care workers, for example, a schoolof nursing or a college of Health and Human Services, hold job fairs thatare attended by its graduating seniors. Local and regional health care em-ployers are invited to attend.

Recruiting TripsA department manager may become involved in recruiting trips. Humanresources should be notified and involved with the planning of such ex-cursions. These trips may involve going to conferences, conventions, col-leges and universities, and other gatherings of persons that have the skillsdesired by an organization.

A department manager’s participation in such trips may be essentialwhen recruiting professional employees such as registered pharmacists,nurses, and physical therapists. Before leaving for such a trip, an HR re-cruiter provides information about the organization. During the recruit-ing trip, the department manager addresses questions asked on aprofessional-to-professional level. Experience has shown that recruiting tripsinvolving a department manager or other professional from within thespecific department who is seeking an employee tend to be more success-ful than a trip made by an employment recruiter alone. After the trip hasidentified candidates, HR should provide the same services that it doeswhen recruiting for any other position.

Search FirmsSearch firms are frequently referred to as headhunters. They are often uti-lized to locate and secure employees for some hard-to-fill jobs. These areusually middle or upper management positions or professional positions



that are in short supply on the labor market. The services of search firmsare also used when an organization does not want to publicize a vacancyor wishes to conduct a confidential search.

The department manager may have occasion to suggest the use of asearch firm. However, it is usually HR that engages the services of a searchfirm, and it usually does so only with administrative or executive concur-rence. Search firms charge for their services. These changes are commonlyequal to 40% of the annual salary of the person being recruited. Giventhe fiscal climate within health care in recent years, search firms are en-gaged by many organizations only after other options have been exhausted.

The InternetBy way of resume-posting websites such as Monster.com orCareerBuilders.com, the Internet offers HR and department managers asometimes fast and efficient means of assessing the state of the supply ofjob seekers in any given occupation. Few pertinent postings can indicatea seller’s market in which the available few can expect to command gen-erous offers; many pertinent postings can indicate a buyer’s market withmore people seeking positions than there are available.

The Internet can also be used to some extent to assess supply and demandregionally, recognizing that available individuals in any occupation will notnecessarily be evenly distributed throughout the country. We say “to someextent” because not all job seekers will be registered with these services.

The department manager is cautioned to coordinate the contacting ofpotential candidates located via the Internet with HR. It is HR that must dothe actual contacting. Another caution to observe in looking up potential jobcandidates on the Internet: It is likely that not everyone who posts a resumeis seriously seeking new employment. Many, of course, are doing just that,but there are also those who are not actively looking to change jobs but havesimply posted in case the “ideal” position should seek them out.

■ PROMOTION FROM WITHINSenior managers of most organizations endorse a philosophy of develop-ing and promoting employees from within their organization. Many healthcare organizations have sent written copies of policies to this effect to allemployees. Such policies recognize that one of the job-related conditionsimportant to many employees is the opportunity for personal promotionand growth.

Despite having written policies, however, some department managerstend to look outside for their new employees. This practice frequently cre-ates conflict because employees hear one message but see something dif-ferent occur in practice.

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It is necessary to strike a balance between internal transfer and pro-motion and external recruiting. To a considerable extent, an organizationbenefits by filling vacancies from within and promoting employees as va-cancies occur. External recruitment is used to fill the entry-level positionsvacated by those being promoted. However, filling all responsible posi-tions by promotion from within can create organizational stagnation aspeople who think and act in the manner of their organizational role mod-els simply perpetuate that behavior. From time to time, new personnel arenecessary. Coming from outside of the organization, new people bringnew or different ideas with them.

Filling all of the better jobs from outside can demoralize existing staff,many of whom desire to be promoted. After being passed over or deniedpromotion when management hires someone from outside, they becomekeenly aware of the contradiction between the espoused organizationalpolicy of internal development and the actuality of external recruiting. Inreaction to such a situation, the more promising employees tend to leaveand seek employment elsewhere. The less promising employees stay, tothe long-term detriment of an organization. Over time, employees fromboth groups find ways to seek personal equity.

As already mentioned, an important condition of employment for manypeople is the opportunity for growth and promotion within their organi-zation. The important word in this statement is opportunity. Employeeswill know whether such opportunity is or is not present. Individuals whomay never take advantage of it are nevertheless demoralized by its ab-sence. The perceived absence of opportunity for growth and promotionimposes a figurative ceiling on potential advancement for all employees.

Most HR departments in health care operate a job posting system thatprovides information to employees about opportunities for promotionand transfer. These systems usually give existing employees a few days tobid on transfer or promotional possibilities before the jobs are made avail-able to external applicants.

It is healthy for an organization to promote from within for nontechni-cal, nonprofessional positions, especially those for which most of an appli-cant’s expertise is developed through on-the-job training and experience indepartments that provide service and support for a larger organization. Thisleaves entry-level openings that can then be filled by outside applicants. Thispractice makes a great deal of sense because it permits managers to fill po-sitions of increasing responsibility with people who are familiar with the or-ganization and have proven themselves in entry-level positions.

Some department managers frequently tend to look externally becausethey are unsure that internal candidates, obviously untested at a higherlevel, can perform the required duties. However, this is a risk common toall placements whether from inside or outside. If a supervisor knew for cer-tain that a particular person could handle a more responsible job, then the



move might not represent a growth opportunity for the individual. Whetherany particular employee comes from within or from the outside, there isalways a risk associated with the placement. Some highly experienced man-agers have hired external candidates possessing marvelous qualificationswho turn out to be disastrous for an organization. Growth and develop-ment require learning. Sometimes learning is not successful and results inmistakes. People learn from making errors. The goal of any supervisor isto limit the magnitude of possible mistakes.

There is an additional reason why department managers are encouragedto look closely at potential internal candidates before looking to the out-side. When a qualified internal candidate who is a member of a protectedclass under Equal Employment Opportunity does not get a desired posi-tion that subsequently is given to an external candidate, there is always thelikelihood of a charge of discrimination. Many HR practitioners have re-ceived formal complaints that can be summarized by, “I didn’t get the pro-motion because I was discriminated against because I am a member of aprotected class.” Protected classes include people identified on the basisof their race, creed, color, national origin, religion, gender, age, or sexualorientation. For this reason, and in support of development from within,department managers are always encouraged to look closely at qualifiedinternal candidates before resorting to recruiting external candidates.

■ SALARY BUMPINGSalary bumping ordinarily involves skilled occupations that are in shortsupply in a given community or for which the supply in an area is mar-ginal. As a result, openings in these occupations usually take longer thanaverage to fill. Salary bumping begins when a group of employees at oneorganization applies pressure for more money. They may exert this pres-sure themselves or use an advocate. An advocate may often be a physicianwhose income depends, in part, on the occupation in question. For ex-ample, an anesthesiologist may be an advocate on behalf of nurse anes-thetists or a surgeon may be an advocate for surgical physician assistants.

The group or the advocate requests higher pay for practitioners of theoccupation, citing supposedly higher pay at other organizations in the areaand expressing the fear that these better-paying employers are going tolure away some members of this group. Some present employees may evenmoonlight (use their professional skills and work for a second employerin the off-duty hours from their primary employers) for other employersin the area and can produce proof of higher pay at these other places.People who moonlight usually do receive higher hourly rates than regularemployees to compensate for the absence of benefits. The group or the ad-vocate attempts to trade on the fear that other local employers will lure

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away the best employees unless the group’s salaries are increased acrossthe board, that is, for every present employee in the group.

Some organizations do try to lure people with scarce skills away fromother employers in their area, and sometimes they succeed. Pay rates for theoccupation in question get bumped upward as organizations recruit eachother’s employees. However, this process does nothing to alleviate the shortsupply of individuals with the needed skill in the local area. It does noth-ing to recruit more help into the area. Salary bumping simply raises personnelcosts for all local employers while the shortage continues to exist.

Some professional employees project an attitude of free agency. Theybehave as though considering themselves readily available to change or-ganizations for what might appear to be a better deal. These employeesfeel greater loyalty to an occupation or profession than to any organiza-tion. They are prepared to move freely, usually for more money, amongcomparable institutions as long as they feel that the professional experi-ence remains about the same from one employer to another. Their profession,rather than any particular organization, holds their allegiance.

Free agent employees are becoming more common among personstrained in occupations that remain in chronic short supply. As free agentsmove among organizations, they have the effect of raising the price fortheir skills in the community without altering the supply.

A department manager who hears stories to the effect that other localhealth care employers are threatening to recruit away the best peopleshould appreciate that this may be true. However, an alternative explanationis salary bumping. When a manager hears such stories, he or she must re-sist the temptation to join the voices calling for increased salaries. Intelligentinvestigation is a more suitable alternative activity. Take the informationto HR who will have the means to verify or refute such claims.

■ RECRUITING DURING PERIODS OF SHORTAGERecruiting becomes more difficult during periods of low unemploymentand at times when particular important skills are in short supply. Whenworkers with particular skills become difficult to find or recruit, the spe-cialists in demand have their choice of employers. Economists describethis as a seller’s market. Under such conditions of shortage, a number ofspecial approaches may be taken to attract new employees.

Internship programs have proven themselves to be effective for recruitingscarce professionals. For example, a hospital that provides an internshipexperience for one or two pharmacy students may find the students will-ing to return as employees after graduation. An individual who has had apleasant internship experience as a student is more likely to become anemployee than is a candidate for whom the organization is new and strange.



Moving expenses may be paid or partial moving allowances offered toprofessional and managerial employees recruited from out-of-town. Thisis essentially a standard practice when recruiting top management per-sonnel. As particular professionals become more scarce and in greater de-mand, organizations are more likely to offer such inducements whenrecruiting needed personnel.

Some organizations assist spouses in locating suitable employment aspart of the recruiting process for scarce professionals. Dual-career cou-ples are becoming increasingly more common. Supplying employment as-sistance to a spouse may determine the difference between success andfailure when recruiting a sorely needed professional.

Signing bonuses have been used as incentives during periods of em-ployee shortage. As of this writing, numerous advertisements for nursingpersonnel offer signing bonuses to new employees. A common industry prac-tice is to pay one-half of the bonus when the person is hired and pay thesecond half when the individual has been successfully employed for a statedperiod of time, usually between three months and one year. Personnelshortages that continue often contribute to salary bumping.

During shortage periods, a finder’s fee or bounty may be offered to or-ganizational employees who refer candidates for specific positions. Thefinder’s fee or bounty is paid to the person making the referral when a newcandidate is then hired to fill a vacancy in a shortage occupation. This pro-cedure is often called an employee referral program. The finder’s fee is or-dinarily paid out in the same manner as a signing bonus, one-half of thebonus when the new person is hired and the second half when the new in-dividual has been successfully employed for a stated period of time, usu-ally between three months and one year. Occasionally, a signing bonusand finder’s fee are both paid to secure the services of a single new employee.However, a sound employee referral program increases in usefulness asthe job market tightens and fewer good people are readily available.

In spite of the visible costs involved, an employee referral program cansave money when compared to the costs of advertising. In many instances,a signing bonus and finder’s fee together add up to less than the cost of amodest sized display ad placed in an area newspaper. The savings gener-ated by an employee referral program can be significant when comparedwith the cost of using a search firm. An employee referral program can of-ten be shown to generate new employees at the lowest cost per hire of allrecruiting practices.

Generally, hiring managers, executive management, and HR personnelare not eligible for finder’s fees. Other rules may apply in an employee re-ferral program. For example, an employee will usually be barred from re-ferring a family member or other relative into a job in the referring person’sown department. Most organizations have policies governing nepotismor the employment of family members.

Recruiting during Periods of Shortage 141


Finally, extremely specialized arrangements may be made with indi-viduals who are needed to fill critical positions. It is common to employphysicians, for example, using individual or personal-service contracts.Another occasionally used practice involves an arrangement to pay off anindividual’s outstanding student loans in exchange for a contractual agree-ment to remain with an organization for a specific amount of time.

■ EVERY EMPLOYEE A RECRUITERAll department managers can have a considerable impact on the extent towhich their organizations appeal to prospective employees as reasonableplaces to work. A manager’s leadership style and treatment of employeessets the tone for the department and helps to create a particular image forthat work group. The attitudes of workers are clearly visible if they are com-fortable with their working environment. Such an attitude is usually visi-ble well beyond departmental boundaries. If enough departments projectthis kind of a positive image, then an employer earns a reputation as agood place to work.

Whether referral and reward programs do or do not exist, a fundamen-tal truth of recruiting remains. Whether they are satisfied directly or indi-rectly, satisfied employees are often an organization’s most effective recruiters.

■ CONCLUSIONLegal constraints affect recruitment. The HR department provides ser-vices in partnership with other departments in an organization. An accu-rate position and job requisition are usually required before HR can beginto recruit. The HR department provides a procedural template for orga-nizational recruitment. This must be followed to avoid legal difficulties.

References are critical elements in any recruitment activity. They mustalways be checked by HR personnel. Responses to reference requests mustbe factual and objective, reflecting only information that is contained inwritten personnel records. Department managers are strongly advised torefer all reference inquiries to HR.

Several strategies are available for locating and recruiting suitable em-ployees. These include print and media advertising, networking, job fairs,recruiting trips and search firms. Promotion from within is a sound orga-nizational practice that is not universally observed. Salary bumping oc-curs when organizations succumb to pressure to increase the salaries of scarcepersonnel beyond their market value. Other recruiting plans include in-ternships, paying for moving expenses, assisting spouses of candidates tosecure appropriate employment, paying a signing bonus or finder’s fee, or



making other, specialized arrangements to successfully recruit specificneeded personnel. Happy, satisfied employees are often an organization’smost effective recruiters.

Returning to the case study, on the surface it appears as though new-comer Kathy Gray knew more about some important aspects of manage-ment than did her boss. Believing that he was helping her because of hernewness to the organization, Sam Weston actually undercut what little au-thority Kathy may have had as a new supervisor. As long as Weston hadput Kathy in place, he had an obligation to let her do her job as she sawfit, while he made himself available in the event that she asked for help.As long as Kathy knew the correct steps to take, Weston should have al-lowed her to take care of the hiring without his help or interference.

It is fundamental to the hiring process that the person who will directlysupervise the new employee serve as the primary interviewer and makethe hiring choice. Because Weston did the actual hiring, a case can be madethat he should be the person to terminate the person’s employment.

The future relationship between Kathy Gray and Sam Weston may be in-fluenced by this experience for some time into the future. At the very least,Kathy will have to be sensitive to the possibility of micromanagement onWeston’s part. This will continue until she is able to prove to him that she knowsthe job and does not require his close supervision on an ongoing basis.

Discussion Points

1. It has been said that an appropriately operated HR department actu-ally hires no one in the sense of selecting a person who will be offereda position. Why is this so?

2. When an employee provides notice of termination or a manager oth-erwise learns of an employee’s impending departure, a manager’s veryfirst action should be to submit a requisition for a replacement. Do youagree or disagree with this statement? Why?

3. Describe in detail at least three important uses of complete and up-to-date job descriptions.

4. Why is it important to begin the search to fill a position by consider-ing persons already employed by the organization?

5. A colleague of yours who supervises a similar department in anotherlocal institution telephones you and asks for your assessment of a for-mer employee of yours who is applying at his institution. Should youcontinue the call? Why? How much and what kinds of informationshould you provide? Why?

6. Explain the concept of negligent hiring and provide a hypothetical ex-ample of it.

Conclusion 143


7. Explain the rationale for insisting that all checking of employmentreferences and providing of information in response to reference re-quests should be concentrated at a single point in an organization.

8. Describe the principal hazards in espousing a policy of developmentfrom within an organization while aggressively recruiting from theoutside.

9. Provide three examples of the free-agent type of employee and de-scribe the circumstances that create free-agent status for them.

10. How is it possible that employee referral programs, which often in-clude the payment of signing bonuses and finder’s fees, can often gen-erate the lowest cost-per-hire of all recruiting practices?

Resources

BBooookkssEvers, A., Voskuijl, O., & Anderson, N. (2005). Blackwell Handbook of Personnel

Selection. Malden, MA: Blackwell.Maitland, I. (2005). How to Recruit. London: Ashgate Publishing.Sidney, E. (2005). Managing Recruitment (4th ed.). London: Ashgate Publishing.Singer, M. (2005). Fairness in Personnel Selection: An Organizational Justice

Perspective. London: Ashgate Publishing.Strayer, S. (2005). Vault Guide to Human Resources Careers. New York: Vault.com.Weddle, P. (2005). Weddle’s Directory of Employment-Related Internet Sites: For

Recruiters and Job Seekers 2005/6 (5th ed.). Stamford, CT: Weddle’s Publishing.WetFeet. (2005). WetFeet Insider Guide to Careers in Human Resources 2005.

San Francisco: CA, WetFeet, Inc.Widdop, D., & Jones, D. (2005). 34 Activities for Recruitment and Selection.

London: Ashgate Publishing.

PPeerriiooddiiccaallssAnonymous. (2005). HSJ awards 2005. Reducing health inequalities. Winner:

Recruiting workers provides a valuable link with hard to reach groups. HealthService Journal, 115(5982), supplement 48–49.

Cable, D. M., & Turban, D. B. (2001). Establishing the dimensions, sources andvalue of job seekers’ employer knowledge during recruitment. Research inPersonnel and Human Resource Management, 20, 115–163.

Casey, B. R. et al. (2005). Rural Kentucky’s physician shortage: Strategies for pro-ducing, recruiting, and retaining primary care providers within a medically un-derserved region. Journal of the Kentucky Medical Association, 103(10),505–513.

Ferris, G. R., Berkson, H. M., & Harris, M. M. (2002). The recruitment interviewprocess: Persuasion and organization reputation promotion in competitive la-bor markets. Human Resource Management Review, 12, 359–375.

Gatewood, R. D., Gowan, M. A., & Lautenschlager, G. J. (1993). Corporate im-age, recruitment image, and initial job choice decisions. Academy of ManagementJournal, 36, 414–427.



Goltz, S. M., & Giannantonio, C. M. (1995). Recruiter friendliness and attractionon the job: The mediating role of inferences about the organization. Journal ofVocational Behavior, 46, 109–118.

Gullatte, M. M., & Jirasakhiram, E. Q. (2005). Retention and recruitment: Reversingthe order. Clinical Journal of Oncology Nursing, 9(5), 597–604.

Kristof, A. L. (2000). Perceived applicant fit: Distinguishing between recruiters’perceptions of person-job and person-organization fit. Personnel Psychology,53, 643–671.

Lee, R. J., & Mills, M. E. (2005). International nursing recruitment experience.Journal of Nursing Administration, 35(11), 478–481.

Mathias, J. M. (2005). Hospital focuses on recruiting new grads. OR Manager21(10), 35–36.

Conclusion 145


Civil ServiceSystems

Chapter Overview


• Be able to provide a brief history of the development of state andlocal civil service systems

• Understand the purpose of the civil service system jobclassification

• Know the difference between a classified and an unclassified employee• Explain why position classification and compensation are very

important and controversial parts of public administrationorganizations governed by civil service

• Describe the general recruitment process for persons interested inbeing employed by healthcare organizations governed by civilservice systems

• Discuss the objectives of discipline and appeals systems

■ CHAPTER SUMMARYMany contemporary healthcare organizations are administered throughstate and local governments and therefore are governed by a personneladministration process known as the civil service system. Civil servicesystems are defined by either state or local laws and are overseen by abody that is typically referred to as a civil service commission. Some ofthe main features of personnel administration governed by civil servicelaw include position classification, compensation, hiring, promotion,and dismissal. The methods used by the administrators for these typesof healthcare organizations to recruit, select, and develop their employ-ees is crucial to the quality of care offered to people and the effective useof tax dollars.

C H A P T E R

8

147


Case Study: Only One Year until Retirement

Jerry Quinn has been employed as a laboratory technician at a small mu-nicipal hospital for the past 29 years. The hospital is covered by the city’scivil service commission. For efficiency purposes, administrators at the fa-cility recently decided to contract with a local company to provide all lab-oratory services for the hospital. As a result, the hospital will be abolishingall laboratory technician jobs, and Jerry is being laid off. Jerry is very up-set because he needs only one more year to retire, and, except for a fewclerical vacancies at the hospital, there really aren’t any other jobs avail-able in the community. What is Jerry to do at this point in his life? Whatare Jerry’s career options?

■ INTRODUCTIONContemporary state and local healthcare organizations that are governedby civil service law are likely to be at least partially publicly funded.Examples of such organizations include hospitals operated by state and lo-cal governments, state and local health departments, and mental health clin-ics. Almost 1.4 million people in the United States are employed by publiclyadministered state and local healthcare organizations. Persons employedby these organizations include physicians, nurses, medical laboratory tech-nicians, information technicians, hospital attendants, and health aides.Employees working in healthcare organizations that are covered by civilservice are government employees even though they may not seem to fitthe stereotypical role of a government worker.1

This chapter briefly describes the evolution of federal, state and localcivil service systems. Uses and expectations of the system are discussed, in-cluding a review of some of the merits and disadvantages with these sys-tems. Readers must understand that civil service laws and practices at boththe state and local levels vary widely and, as a result, generalization is dif-ficult. Ohio’s civil service system will be the model most often referencedin this chapter. It is typical of civil service systems encountered in other states.

■ HISTORY OF THE FEDERAL CIVIL SERVICE SYSTEMFrom the beginning of the country, employees were needed by the federalgovernment. A system that was based on merit began in 1789 and evolveduntil the 1880s. The American Civil War introduced problems. In the yearsfollowing the end of the war, federal workers were hired on bases otherthan merit. History has termed this approach a spoils system that allowedofficials in the federal government to reward friends by giving them jobs.

148 CHAPTER 8 CIVIL SERVICE SYSTEMS


On December 6, 1881, Senator George H. Pendleton of Ohio, chairmanof the Senate committee on Civil Service Reform, introduced a reform bill.The spoils system was denounced by the press and from pulpits, butCongress, apparently underestimating the strength of the popular feeling,still dragged its feet on civil service legislation. When finally enacted onJanuary 16, 1883, Senator Pendleton’s bill marked the beginning of the meritsystem in federal service.

The new Civil Service Act established basic principles that have notchanged in 120 years. They were incorporated into similar legislation byindividual states as they created civil service systems for hiring state em-ployees. The modern era of personnel administration began in 1938.Corruption had reentered the process of hiring government workers.Beginning in the late 1950s, the focus of federal personnel activities shiftedto attracting and retaining highly qualified employees. The federal work-force became more diverse, largely because of legislative and outreach pro-grams. Reforms of the federal civil service system were made between 1977and 1979. These reforms reshaped the institutions responsible for the meritsystem ideal and launched the federal personnel management system in anew direction.

The Civil Service Reform Act of 1978 marked the beginning of a pe-riod of change for government personnel management. The intent of thelaw was to strengthen and diversify the federal civil service system. TheCivil Service Reform Act included a statement of fundamental merit sys-tem principles. For the first time, it included prohibited personnel practices.The intent was to define principles rather than procedures.

■ HISTORY OF STATE AND LOCAL CIVIL SERVICE SYSTEMSThe civil service systems that cover most state and local public employeesevolved in the late nineteenth century. Before civil service systems were adoptedby state and local governments, people were hired and fired largely on thebasis of the spoils system. Under the spoils system, elected officials felt theyhad the right to reward their friends and supporters with government jobs.

The impetus for reform can be traced back to 1877 through the actionsof the New York Civil Service Reform Association. The hard work of thisassociation led to the elimination of the spoils system and the establish-ment of merit principles for public service employees in New York City andNew York State. In 1883, New York was the first state to pass a civil ser-vice law that applied to state and local public employees. This movementwas slow to catch on. By 1934, only eight other states had passed civilservice laws.

In the early twentieth century, external forces were at work that con-tributed to the demise of the spoils system. During this time period, a

History of State and Local Civil Service Systems 149


rapidly growing private economy with well-paying jobs made govern-ment employment less attractive. Not only were workers in the privatesector paid more, but also they were not required to return or kick backany part of their salaries to political affiliates.

States took more interest in adopting civil service regulations in 1939when the federal government required them to establish civil service sys-tems for state employees administering federal Social Security Board pro-grams. State civil service systems quickly caught on and became more ofthe norm from that point on.2

The basic structure of the traditional civil service system evolved as aseries of rules that were designed so that all employees were treated in asimilar manner. This basic organizing approach included common salarystructures and position classifications that were based on employee re-sponsibilities. Furthermore, job security was enforced by a civil servicecommission. The overarching goals of contemporary civil service systemsremain remarkably similar to those that existed at the beginning of themovement. These goals include recruiting and promoting professionallytrained employees and insulating them from political pressures. Elaboraterules and regulations designed to protect employees from political inter-ference and the promotion of professional competence are essential com-ponents of a civil service system.

■ USING A CIVIL SERVICE SYSTEMBoth disadvantages and merits are associated with personnel adminis-tration of state and local healthcare organizations governed by civil ser-vice laws. Personnel administrators have a responsibility to clearlyunderstand and adhere to applicable civil service laws. State and localcivil service systems typically govern four key components of personneladministration. The four key components are classification and com-pensation, hiring and promotion, layoff, and dismissal and appeal.Although there are some overlaps, each of these components will be dis-cussed separately in more detail.

Classification and CompensationThe basis of civil service systems is the position and classification system.The fundamental theory behind position classification is that positions areclassified, not people. Position classification involves identifying the du-ties and responsibilities of each position in an organization and then group-ing the positions according to their similarities. Everyone working in thesame classification and step should have the same qualifications, receivethe same pay, and experience similar levels of work responsibility.2



In a typical classification system, a job analysis is conducted for eachposition. This is accomplished by collecting information about work du-ties and activities so that a position description can be written and the jobcan be classified. The position description usually includes the position’sduties and responsibilities, the scope of the job, and the nature of super-vision. The ultimate goal is to align each job in its proper place within anorganizational structure.

Each position is actually an occupation or type of job. In most classifi-cation systems, each position has a number or series associated with it.For example, in Ohio’s civil service system, a nurse is an occupation orposition title made up of a series of nurse positions (e.g., Nurse 1, Nurse2, Nurse 3, and Nurse 4). A Nurse 2 has more responsibilities than a Nurse1, but fewer responsibilities than a Nurse 3. Usually, a higher number ina series connotes more responsible duties, with the degree of supervisionbeing received becoming less frequent.3

Based on the duties and responsibilities involved, each job classificationis assigned a pay range. For most classified employees, pay ranges consist ofa series of steps. New employees are normally appointed at step one. Stepincreases are generally given after a probationary period is completed andannually from that time. As long as an individual maintains satisfactory per-formance on the job, step increases continue until the maximum step isreached. A basic tenet of the step increase system is a learning curve. Thisimplies that the longer persons work in a particular position, the better theyknow their jobs and the more productive they become. Once an employeereaches the maximum step, it is assumed that all individuals with at least thatlevel of experience will be performing at the same level. Additional com-pensation after a person has reached the maximum step (i.e., stepped out orred-lined) normally results from increases given because of increases in cost-of-living allowances.4 Exhibit 8-1 provides an example of a pay schedulefor a classified position, Nurse 1, hired by a healthcare organization.

Typically, individuals employed in a healthcare organization adminis-tered by a state or local government are placed into classified (protected ornonexempt) or unclassified (exempt) service. Persons placed in unclassifiedservice positions are usually employed as principal managers, supervisors,

Using a Civil Service System 151

Exhibit 8-1 Pay Schedule for Nurse 1

Range Step 1 Step 2 Step 3 Step 4 Step 5

Hourly $19.89 $20.39 $21.42 $21.96 $22.51Annually $41,371 $42,411 $44,554 $45,677 $46,821

Source: Ohio Department of Administrative Services, 2005.


and employees with special duties including trust and financial responsibil-ity. Persons placed in classified or nonexempt service are usually line staffworkers. The latter may be represented by a labor union or otherwise knowncollective bargaining unit.3

Union or collective bargaining agreements can supersede many aspectsof civil service law. It is important to note that collective bargaining rightswere given to many state and local public employees in the 1960s and1970s. Collective bargaining includes a mutual good faith obligation tonegotiate between a public employer and a union with designated repre-sentatives. Typically, subjects to be bargained include wages, hours, termsand other conditions of employment.

Union or not, a classified employee can be subject to taking an exami-nation when applying for a position at a state or local healthcare organi-zation. A brief discussion about examinations is warranted, although fewerand fewer organizations require examinations. There are times when in-dividuals with the basic qualifications are hired into positions without tak-ing an examination even though an examination is required. This usuallyhappens when an examination for a particular position is not availablewhen the position has to be filled.

In organizations in which examination is a requirement to qualify for acivil service position, a classified employee will be classified as certified orprovisional. A certified employee has passed a civil service examination andhas been appointed from an eligibility list or has been in the same classifi-cation series for two years without an opportunity to take an examination.

A provisional employee is hired without taking a formal civil service ex-amination and has not been in the same classification series for two years.Provisional employees must pass a civil service test when it is available ormust serve in the same class series for at least two years to become certified.3,4

Pay ranges for unclassified employees typically consist of a minimumand maximum rate. New, unclassified employees may be appointed any-where within the range, depending upon their qualifications. Increasesgenerally are based on the ability of employees to administer their dutiessuccessfully and usually given no more frequently than once every sixmonths. Exhibit 8-2 provides an example of a pay schedule for an un-classified position, Director 1, hired by a healthcare organization.


Exhibit 8-2 Pay schedule for Director 1

Range Minimum Maximum

Hourly $42.43 $59.80

Source: Ohio Department of Administrative Services, 2005.


When recruiting individuals for employment in both classified and un-classified positions, if a candidate’s qualifications exceed those required fora position, then the additional qualifications have no effect on how thatindividual is classified or considered. Future opportunities may exist withinan organization for over-qualified candidates. Otherwise, being over-qualified generally has no benefit. For example, a person with a graduatedegree in hospital administration applying for a position as a hospital or-derly, would, if hired, be placed in the same classification and pay rangeas a candidate holding only a high school diploma.

The classification system works well for organizations in which em-ployees are assigned duties and responsibilities that are routine and pre-dictable and have little or no variation. Theoretically under such conditions,administration and staff should enjoy a fairly congenial relationship. Whatemployees do and what they are paid are standardized and predictable. Theclassification system works fairly well with lower level jobs that are nothighly specialized.

Classification systems become difficult to manage when different posi-tions involve a variety of duties. In these situations, selecting the correctseries is important because it can determine the qualification requirementsfor a job, the salary that will be paid, and even the position’s potential forcareer advancement.

Classification systems have become increasingly complex as jobs in thework environment continue to become more specialized. Healthcare or-ganizations for the most part require a highly specialized workforce al-lowing for flexibility and teamwork. An overly rigid classification systemdoes not work well in this type of environment. Furthermore, it has be-come increasingly difficult to compare highly specialized jobs to one an-other in a reliable way.

Rapid advancements in technology in general and personal computersin particular have increased the difficulty for personnel administrators whotry to accurately inventory all of the duties associated with any position.For example, in the past a nurse might create a rough draft of a letter for asecretary to type. With word processing software, the same nurse can typeand print the letter. The duties of the nurse and the secretary have changed.The secretary has more time available for additional duties. Although thismay seem efficient from an organizational perspective, the nurse has lessavailable time for activities requiring professional preparation.

Position classification systems are closely linked to different systemsthat are used to establish pay rates. Equal pay for equal work provides theunderlying rationale. In other words, individuals in the same job classifi-cation are paid the same. This is considered to be a viable system andworks well in organizations where each employee in a similar classifica-tion produces an equal quantity of work at the same level of quality.



One potential problem with pay setting systems that are linked to po-sition classification systems is that administrators cannot pay valued orharder working employees more than other employees in the same classi-fication. In short, the system is not well designed to recognize and rewardhighly motivated employees. Furthermore, pay setting systems connectedwith position classification systems are not designed for flexibility whenhiring entry-level employees. This can hinder recruiting high quality can-didates in cases where entry level salaries are considerably less than salariesthat an entry-level person in that job could earn outside the government.2

In summary, for many organizations, the position classification systemcan be an effective management tool. However, in order for it to remaineffective, a position classification system must be kept current. Personneladministrators are challenged trying to keep up with this responsibility. Likeposition classification, compensation systems for state and local publicemployees are an important and controversial component of civil serviceemployment systems. In order for civil service classification and compen-sation schedules to work effectively, they must be considered by employ-ees as both adequate and equitable.

Hiring and PromotionThe hiring process for individuals seeking employment by state and localhealthcare organizations often begins by qualifying to take a civil serviceexamination. A civil service commission typically administers such exam-inations. Examination announcements are advertised in a variety of mediato reach people in different segments of the population. Once an applica-tion is obtained, interested individuals must pay close attention to the min-imum qualifications required for taking the examination. For those whoqualify, competitive examinations are meant to ensure that the public hasaccess to public jobs. Competitive tests are meant to determine the most qual-ified persons for a job based on their performance on the examination andtheir ability to demonstrate appropriate knowledge, skills, and abilities.5

Civil service examination methods vary and may include any one ormore of the following elements: written, oral, physical, demonstration ofskill or an evaluation of training, education or experience, or a measureof learning ability. Requirements for examinations are established prior tothe examination and are specified in the examination announcement.3

Once a competitive examination for a position is completed, an em-ployment list based on the examination results is established and namesof highest scoring individuals are certified to the organization’s personneladministrator for selection. Civil service laws often have a provision thatadds extra points to examination scores of veterans. Personnel systemsusually follow the rule of three, which permits the person authorized todo the hiring to choose among the top three certified individuals.



The governor of Ohio appointed a task force to study and make rec-ommendations about civil service examinations. The task force observedthat civil service examinations for state employees were not related to jobperformance.3 The task force recommended a de-emphasis of written jobknowledge tests. Other concerns by the task force were related to exces-sive reliance on civil service testing when it does little to measure impor-tant criteria such as past performance, work ethic, previous attendancerecords, and reference checking for potential employees.6

For positions not requiring competitive testing, the hiring process forstate and local healthcare workers is similar to that used in the private sec-tor. This method is referred to as competitive hiring and involves select-ing applicants using a series of screening techniques. These includecompetitive interviews, reference checks and, when applicable, job relatedtests whereby the best candidate is selected for a job. From this process,candidates for employment are objectively rated and results of interviewsand tests are quantitatively scored.

Good employees working for state and local healthcare organizationsusually have opportunities for promotion to higher-level positions. Civilservice systems typically require that new positions and vacancies beposted internally before attempting to fill them from the outside.Organizations usually turn to the outside only when there are an insuf-ficient number of well-qualified individuals for internal consideration. Insome state and local healthcare organizations, a competitive promotionalexamination may be required.

The practice of promoting from within can serve to maintain an orga-nization’s vitality and competence without harming employee morale.However, there is always a potential to become too organizationally ho-mogenous when filling positions from the inside.

In summary, hiring and promoting appropriate people for healthcareorganizations has an obvious impact on the quality of services provided.Recruitment techniques vary among organizations covered by civil servicelaw. Typically, organizations will issue public announcements of job va-cancies and schedule examinations when applicable. Organizations undercivil service have a reputation of being very slow in the recruitment andpromotion process. This is often attributed to the number of regulationsassociated with the civil service system. This slowness can discourage ap-plicants who may have opportunities with other employers.7

LayoffLayoff of an individual working in a state or local healthcare organizationis the involuntary separation of an employee because of lack of funds, lackof work, or job abolishment. Civil service laws govern layoffs. State andlocal healthcare organizations with budgetary problems often view layoffs



as the only alternative. This is one of the most unpleasant tasks adminis-trators have to perform. Most will avoid it as long as possible.

Layoff procedures under civil service law have the potential to be com-plicated. Layoffs must be made on the basis of job classifications, not in-dividual employees. In addition, when determining the order of a layoff,a retention point formula may be required. Retention points usually includefactors for seniority and performance evaluations. Seniority and per-formance evaluation ratings are incorporated to determine which em-ployee will be laid off. Bumping rights often exist. These allow more senioremployees to bump or displace less senior employees from positions forwhich they meet minimum qualifications. Unless there are restrictions (e.g.,bumping is not allowed outside an identified bargaining unit), layoffs cancause serious disruption of organizational operations. Persons who arebumped can, in turn, bump other, less senior employees. Once the bump-ing process has run its course, which can take months, it is entirely possi-ble for a mid-level manager to assume a clerical position.2,4

Dismissal and AppealDisciplinary procedures are typically well addressed by civil service law gov-erning state and local healthcare organizations. Early corrective actions usu-ally have positive effects and prevent the ultimate removal of any employee.It is essential for personnel administrators to follow procedures and keepgood records. A written file must be created. The importance of goodrecord keeping cannot be overemphasized. Discipline must always be basedon a careful assessment of facts.

Discipline under civil service takes on many forms. Oral and written rep-rimands are the most common. If reprimands continue to be ineffective,only then should a more severe form of discipline be considered: reduc-tion in position, suspension, reduction in pay, or removal.

The main causes for disciplinary action include incompetence, inefficiency,dishonesty, drunkenness, immoral conduct, insubordination, discourte-ous treatment of the public, and neglect of duty.

A positive approach can be developed through the principle of correc-tive discipline. If lower levels of discipline prove ineffective, then more se-vere forms of discipline must be considered. More severe forms of disciplinesuch as suspension or demotion are less than satisfactory, except when anoffense is very serious or flagrant. Suspension creates hostility. Reductionin pay or position can hamper organizational performance by reducing anemployee’s motivation. For very serious or flagrant offenses, immediate sus-pension may be warranted. Dismissal should be made only after allowingtime for a thorough investigation and assessment of relevant facts.

Civil service laws will typically have provisions for employees to appealdisciplinary decisions made by administration. Some organizations have



an independent appeal system apart from their civil service system. Forthose with unions or bargaining units, this provides an additional avenuefor appeal. In some cases, workers who are unsuccessful with a collectivebargaining appeal have the option of shifting to a civil service procedure.

Due process standards must be adhered to during any appeals process.Due process normally involves an oral hearing, an attorney to representan employee, and an opportunity to cross-examine witnesses. The proce-dures are generally cumbersome and time-consuming. Experts agree thatthey often favor an employee. Terminating a civil service employee whois a consistently poor performer can be a daunting task. Personnel man-agers going through the appeals can be consumed by the process and ac-complish little other work.2

■ CONCLUSIONPersonnel administration of healthcare organizations that are governedby civil service systems has both merits and disadvantages. Reform meas-ures have been underway for years to help correct some of the problemswith the systems. The rapid pace of change in the workplace resulting pri-marily from advances in technology has accelerated the need for reformin some key areas of civil service. Attracting and maintaining a competentworkforce for health-related organizations governed by civil service shouldbe a main goal of reform efforts.

Returning to the case study at the beginning of this chapter, Jerry Quinnwas told that he would be laid off as a result of the hospital closing downthe laboratory and abolishing his job. He was perplexed because he hadonly one year before he could retire. Jerry met with the hospital’s person-nel administrator and was informed that he could stay employed at the hos-pital and get his last year in and retire if he were to bump down to a lowerposition for which he might be qualified. Jerry agreed to the offer and ac-cepted a clerical position. The job consisted of handling all the paperworkfor laboratory results. It paid less, but he was able to complete his last yearof service and retire. Without the civil service system, Jerry would not havebeen able to pursue his retirement dream.

References

1. Heilig, G., & McKay, D. R. (1999). Civil Service Handbook: Everything YouNeed to Know to Get a Civil Service Job. San Jose, CA: IDG Books.

2. Hays, S. W., & Kearney, R. C. (2003). Public Personnel Administration: Problemsand Prospects. Upper Saddle River, NJ: Prentice Hall.

3. Ohio Department of Administrative Services. (2005). Available at www.das.ohio.gov/.Accessed September 27, 2005.

Conclusion 157


4. County Commissioners Association of Ohio. (2005). Available at www.ccao.gov/.Accessed September 25, 2005.

5. Columbus Civil Service Commission. (2005). Available at www.csc.colum-bus.gov/. Accessed September 27, 2005.

6. Ohio Civil Service Employees Association. (2005). Available at www.ocsea.org/.Accessed September 27, 2005.

7. Ohio Municipal League. Available at www.omunileague.org/. Accessed September26, 2005.

Discussion Points

1. What are three advantages of a civil service system?2. What are three disadvantages of a civil service system?3. Do you favor a civil service system? Why or why not?4. Is testing the best way to identify the best candidate for a job? Why

or why not?5. List two alternatives to testing that can be used to identify the best

candidate for a job. How do they compare with testing? Why?6. Discuss the advantages and disadvantages of classification and com-

pensation systems.7. Should civil service employees be allowed to unionize? Why?8. Why are layoffs under a civil service system more difficult to accom-

plish than layoffs in private companies?

Resources

BBooookkssMaidment, F. H. (2004). Human Resources 05/06 (15th ed.). New York:

McGraw-Hill.Noe, B. G., Hollenbeck, J., & Wright, P. (2005). Human Resource Management: Gaining

a Competitive Advantage with OLC Card (5th ed.). New York: McGraw-Hill.Pynes, J. E. (2004). Human Resources Management for Public and Nonprofit

Organizations. San Francisco, CA: Jossey-Bass.Rees, D., & McBain, R. (2005). People Management: Challenges and Opportunities.

New York: Palgrave Macmillan.Renckly, R. B. (2004). Human Resources. New York: Barrons.

WWeebbssiitteessColumbus Civil Service Commission; www.csc.columbus.gov/.County Commissioners Association of Ohio; www.ccao.gov/.Fedworld.com; http://www.fedworld.gov/jobs/jobsearch.html.Office of Personnel Management; http://www.opm.gov/.Ohio Civil Service Employees Association; www.ocsea.org.Ohio Department of Administrative Services; www.das.ohio.gov/.Ohio Municipal League; www.omunileague.org.



Conducting a Successful and Legal

Selection InterviewChapter Overview


• Be familiar with the specific laws that have implications for theinterviewing process

• Know how to prepare for an interview prior to an applicant’s arrival• Understand the interviewing process from the perspective of an

interviewing manager• Know the specific kinds of questions that can and cannot legally

be asked in an employment interview• Know how to recognize and apply methods useful when probing

for additional information that could be helpful in arriving at anemployment decision

• Understand how an interviewer should respond or react whenreceiving legally forbidden information that is voluntarily given

• Understand the present-day concept of “behavioral interviewing”and how it may or may not differ from what one might consider“ordinary” interviewing

• Recognize that some applicants have a tendency to interview theinterviewer and know how to address this mode of behavior

• Be aware of the potential for fraud and distortion on résumés andapplications, and know how to address suspicions concerningsuch material

C H A P T E R

9

159


■ CHAPTER SUMMARYMany laws, foremost among them Title VII of the Civil Rights Act, affectthe interviewing process and provide a number of potential legal traps foran unwary interviewer. Interviewing is not to be entered into lightly andinterviewers must be fully prepared. An interviewer must know all aboutthe job that an applicant is seeking and must know as much about eachapplicant’s background and qualifications as is practical. Customary in-terviewing guidelines must always be followed. Interviewers must con-stantly be vigilant to stay within legal boundaries when asking questionsand conducting interviews. An interviewer must always be conscious ofthe possibility that an applicant may interpret a statement or question asbeing discriminatory. Therefore, interviewers must always remember to keepan interview focused on the job and on an applicant’s ability to performit rather than on personal attributes. An experienced interviewer’s strongesttool is often silence paired with effective listening. Selection interviewingis an acquired skill in which people can improve with time and experience.

Case Study: “It Wouldn’t Be Fair to Her”

Nurse recruiter Carrie Taylor was experiencing some of the same problemsas others in the region who did the same kind of work. Because of a wide-spread nursing shortage, she had positions that often required weeks ormonths to fill. Candidates of all skill levels and degrees of desirability werechronically in short supply. Carrie’s needs were particularly acute in crit-ical care areas and in her medical center’s transitional care unit, wherepeople were sent for rehabilitation services or to await placement in long-term care facilities. In view of these acute needs, Carrie was especiallycheered when she received an application from an experienced nurse whodesired a position in the transitional care unit.

The applicant was a registered nurse named Lynn Taylor. She was notrelated to Carrie, but their common name provided a perfect conversa-tional ice-breaker. Lynn interviewed well, but Carrie was dismayed bysome of what she saw and much of what she heard. Lynn’s small stature,frail build, and apparent age disappointed Carrie. Lynn Taylor appearedto be in her middle fifties. Carrie was put off because she knew how de-manding, both physically and mentally, the transitional care unit couldbe. When Carrie asked Lynn about a significant gap in her work history,without going into great detail Lynn said enough so that Carrie could read-ily conclude that Lynn had undergone breast cancer surgery.

Based on the interview, Lynn Taylor was not offered the position for whichshe applied. Carrie felt badly about not having anything to offer Lynn butwas convinced that Lynn would be unable to keep up with the demandsof the transitional care unit.

160 CHAPTER 9 CONDUCTING A SUCCESSFUL AND LEGAL SELECTION INTERVIEW


Some weeks after the Lynn Taylor interview, the transitional care positionremained unfilled. At the same time, the medical center received a complaintLynn had filed with the State Division of Human Rights. The documentclaimed that Lynn Taylor had been illegally denied employment based on ageand disability. Because the complaint entered the organization via the humanresources (HR) department, the HR director met with Carrie in an attemptto determine whether the charge of discrimination might be valid. Carrie ex-plained the basis for her decision, adding, “She seems like nice lady and she’sa knowledgeable nurse, but she’s older and physically limited. It just wouldn’tbe fair to put her in a position where she’s bound to fail.” Consider CarrieTaylor’s reasoning. Was it sound? Should she have offered the position toLynn? How would you respond to the allegations in the complaint?

■ LEGAL AND OTHER PREREQUISITESLegal statutes affecting employment practices are discussed in Chapter 3. Thelaws having the most effects on interviewing include the Equal Pay Act (1963),Title VII of the Civil Rights Act (1964), the Age Discrimination in EmploymentAct (1967, amended in 1986) and the Americans with Disabilities Act (1992).Most states and many municipalities have enacted laws and ordinances thataddress local issues. All requirements in this legislation must be met.

As employment legislation has been enacted, many of the questions andpractices that had been used on most application forms and employmentinterviews have become illegal. Over the past three decades, approximatelytwo-thirds of the information formerly requested on a typical employmentapplication has become inaccessible because of legal constraints. Theseprohibitions apply to interview questioning and designate what can orcannot legally be asked of job applicants.

This chapter encompasses the process of employee recruitment frompreparation for an interview to appropriate follow up after interviewshave been concluded. The concerns presented here extend beyond the le-galities of an interview. The perspective is that of a department managerinterviewing a prospective employee. Pertinent legal precautions are pre-sented as appropriate in the process.

■ BEFORE THE CANDIDATE ARRIVES

Review the Job DescriptionAll position descriptions in every department should be reviewed at reg-ular intervals and updated as necessary. These reviews should be con-ducted each year. A job description should be reviewed for completeness

Before the Candidate Arrives 161


and accuracy whenever a manager is preparing to interview a candidateto fill an open position.

Before interviewing any candidates for a position, the position de-scription should be thoroughly reviewed and updated as necessary. Ideally,this should be undertaken as soon as authorization is received to fill a newor vacant position. Both the manager and the HR recruiter need the jobdescription early in the process. This is why a revised or new position de-scription should accompany the personnel requisition to HR.

The individual who supervises an unfilled position is most familiar withits characteristics and requirements. An outside manager or HR recruitermay be only generally familiar with a particular job’s structure and re-quirements if there are a number of different positions within a single areaof responsibility.

An interviewer should review the appropriate job description shortlybefore an interview is scheduled so that pertinent information about theposition is fresh in the interviewer’s mind. Reviewing a job description forreference during an interview is sometimes acceptable. However, inter-viewers are cautioned not to rely on the position description during an in-terview. Recruiters are expected to know about the position and what willbe expected from employees that are hired for that position.

Review the Application or RésuméAn individual’s job application or résumé should be thoroughly reviewedbefore an interview begins. Reviewing an application or résumé for thefirst time during an interview is unprofessional and rude. Such behavioris unsettling for applicants.

Sometimes an interviewee will be sent to an interviewing manager witha résumé or an application in hand. When this occurs, the interviewershould take a few minutes in private to go over the material before start-ing the interview. Human resources should not ordinarily send an appli-cation or résumé along with the applicant unless recruitment is urgent andthe organization has agreed to accept and interview applicants on a walk-in basis. Under normal recruiting conditions, an interviewer should havethe résumé or application in advance of the interview. If this is not routinein an organization, then HR should review its standard operating proce-dures for recruiting.

In reviewing an applicant’s information, interviewers should be espe-cially sensitive to any gaps in the individual’s employment record and back-ground. Periods of months or years for which no information is suppliedshould be a reason for caution. Such omissions often obscure informationan applicant would prefer not to reveal. If gaps are detected, then make anote to ask about them during the interview. Both the HR recruiter and



the department interviewer should similarly look for gaps in the screen-ing process.

Be alert for the possibility of exaggeration or out-and-out fraud in anapplicant’s background, especially in the areas of education and work ex-perience. Résumé fraud is discussed in detail later in this chapter.

Arrange an Appropriate Time and PlaceArrange for a place to conduct the interview where the interviewer and ap-plicant will be reasonably comfortable and can talk without interruption.Borrow a private office or use a conference room if possible. A private of-fice with a door is preferred. An open-topped or doorless cubicle is not pri-vate. If open space must be used, then a semi-enclosure or a corner tablethat is at some distance from the nearest person should provide a modicumof privacy. The area used should allow for a conversation without beingoverheard. Trying to conduct an interview within the hearing of otherscan be distracting for an interviewer. To an applicant, it is not only unset-tling but also unfair.

Physical comfort is a consideration. Surroundings do not have to beplush or elegant, but the seating should be comfortable and the tempera-ture should be reasonably controlled. If using a desk or table, the interviewerand applicant should face each other across a corner of the surface or outin an open area rather than across the full expanse of the desk or table.An expanse of surface can be intimidating to an applicant.

Make sure to allow adequate time for the interview. How long an in-terview should take depends on the kind of position that is being filledand the depth to which an interviewer wishes to probe. For entry-level po-sitions, thirty minutes should be adequate. For technical and professionalpositions, an hour is a minimum length of time. Promising candidates maybe given more time, especially if other activities, such as providing a fa-cility tour, are components of the interview.

Interruptions hamper the exchange of information. Experienced man-agers do not take or make telephone calls when conducting interviews.Drop-in visitors should be tolerated only in an absolute emergency be-cause they disrupt the rhythm of an interview. In addition to being ex-tremely disruptive to applicants, interruptions disturb an interviewer’strain of thought and increase the difficulty of establishing a conversationalrapport with the applicant.

Prepare Some Opening QuestionsHave three or four relatively easy, non-threatening questions prepared toinitiate the conversation. A careful review of an applicant’s résumé usu-ally presents some useful elements for starting a conversation.

Before the Candidate Arrives 163


■ CONDUCTING AN INTERVIEWRemembering a few basic guidelines can assist interviewers when con-ducting professional, effective interviews.

Be on TimeShort of encountering a dire emergency, there is no reason to be late for aninterview. If an interviewer is late, then the reason should be plausible andpreferably visible. An employee selection interview is as important an eventfor an organization as it is for an applicant. By extension, it should be im-portant to an interviewer. Casual tardiness by an interviewer displays dis-regard for the value of an applicant’s time and can leave an applicant witha less-than-desirable impression of the organization.

If Possible, Help the Applicant to RelaxMost experts suggest beginning an interview with a bit of small talk orsome inconsequential social chatter to help get the conversation started.With most applicants, this is sufficient to initiate a conversation. Althoughsome applicants remain nervous, it is still best to make an attempt at help-ing them to relax.

Never forget that applicants may be intimidated by their interviewersand the authority of their positions. An interviewer’s position in an or-ganization may not be particularly important, but to applicants, inter-viewers are authority figures who are perceived to have strong voices indetermining whether or not they are hired.

Interviewers have a psychological upper hand in an interview situation.The interview is taking place in their territory. They are representatives ofthe organization who may have the power to extend or withhold em-ployment. Applicants react to perceived differences between themselves andtheir interviewers by becoming nervous, so any step an interviewer cantake to relax an interviewee and put the conversation on an equal footingwill contribute to a more productive interview.

Adjust Language to Accommodate an ApplicantSuccessful interviewers put themselves on an applicant’s level of educa-tion and sophistication when choosing their words by using terms that aninterviewee is most likely to understand. Avoid the use of acronyms or ab-breviations without explanation, and do not use jargon. This helps to di-minish feelings of being an outsider. This suggestion can be ignored whenan applicant is known to be an equal in terms of job experience. Use lan-guage that is appropriate for the position under discussion. The use of ap-propriate language is important in health care. A single manager may havedirect responsibility for persons with a variety of educational levels. For



example, interviewers use different language when conversing with nursepractitioners than with applicants for a nursing assistant position. Politenessand humility always contribute to effective communications.

Avoid Both Short-Answer and Open-Ended QuestionsAn important interview objective is getting an individual to speak aboutknowledge, experience, reasons for seeking a particular position, personallikes and dislikes, and career goals. Interviewers will not learn much of sub-stance if their questions can be answered by single words such as yes orno or by brief phrases. Effective questions require individuals to speak atleast a sentence or two in response. In only a few instances are short-answer questions fully appropriate, as in, for example, “Do you have a cur-rent nursing license?”

In contrast, interviewers should not ask completely open-ended ques-tions that provide no clear guidelines to applicants as to appropriate con-tent or when to stop speaking. A classic example is the opening line oftenused by interviewers who believe they are being clever and insightful, “Tellme all about yourself.” A request of this nature has no recognizable bound-aries and any answer can ramble on for a considerable time without pro-ducing much value. Because the question provides no guidelines as to howmuch a person is expected to say, it is inherently unfair to an applicant.

The most effective questions are those that require some thought andcan be reasonably answered in three or four sentences. Interviewers shouldtry to get applicants to talk about themselves relative to potential em-ployment. However, they should do so in such a way that they can main-tain control over the conversation and avoid causing an interviewee toeither talk without closure or freeze from confusion when asked an unfair,open-ended question. Examples of appropriate questions include, “Howdid you become interested in this occupation?”; “What part of your mostrecent position did you like best, and why?”; “Of what accomplishmentof the last year or two are you most proud?” and “Tell me about some-thing that went wrong on the job, and what you learned from it.”

Interviewers should be sure to allow a pause between an applicant’s re-sponse and the next question. This gives the applicant a chance to embel-lish the response, because most applicants tend to fill in periods of silence.

Avoid Leading QuestionsBe careful to avoid leading applicants toward a desired response. This isa particular hazard when interviewing someone who is making a positiveimpression. Interviewers in such a situation often begin to ask their ques-tions in a manner that encourages an applicant to provide answers that theywant to hear. A sharp applicant will recognize leading questions and co-operate by providing “correct” responses. For example, if the interviewer

Conducting an Interview 165


asks, “You left County Hospital because you weren’t being sufficientlychallenged, right?” the applicant knows the answer the interviewer wantsto hear.

Avoid Writing during an InterviewInterviewers who find it necessary to make written reminders during aninterview should limit them to one-or-two word notations. If more de-tailed notes are required, then the brief reminders can be expanded intosentences or paragraphs after the interview is concluded.

There are two sound reasons for not writing while an applicant is speak-ing. First, it is unnerving. In addition to causing the applicant to wonder whatis being written down, it is impolite, it restricts eye contact, and it conveysthe impression that an interviewer is giving less than complete attention.Second, it is not possible to listen carefully while writing. This is simultane-ously performing two important communication tasks. Few people can dothis without both processes suffering. It is far better to give an applicant un-divided attention and save writing until an interview has been concluded.

Promise and Ensure Follow-UpAt the conclusion of every interview, indicate to all applicants that they willbe advised of the outcome after all interviews for the position have beencompleted. Pledge follow-up, but provide nothing else. Do not promisethat an offer will be forthcoming, even if the person who has just inter-viewed is the leading candidate. A manager or supervisor should not makean offer or quote a salary without confirmation from HR. An applicant’sspecific questions about pay and benefits should be answered by HR andnot by an interviewing department manager.

Having promised follow-up on behalf of the organization, interview-ers have an obligation to ensure that the steps or activities are undertakenand delivered. It is extremely important that all applicants who have giventheir time for an interview receive closure within a reasonable period fol-lowing the interview. Allowing unsuccessful applicants simply to fade awaywithout acknowledgment creates ill will toward the employer among mem-bers of the community.

The foregoing interview steps are summarized in Exhibit 9-1.

■ INTERVIEW QUESTIONING: TO ASK OR NOT TO ASK?Inquiring about an applicant’s personal life, beliefs, values, and attitudesis illegal. Information about an individual’s personality is restricted to ob-servable phenomena. In an employment interview, the focus must remainon the position and whether an applicant has the skills needed to accom-plish a given task for the organization. Experienced interviewers speak of



evaluating interpersonal chemistry. To the extent that this is assessed, theevaluation cannot be made using words. In short, an employment inter-view provides an opportunity to develop some knowledge of what a prospec-tive employee can contribute to an organization.

As a general rule, keep all interview questions related to an applicant’scapacity to perform the job in question. The following sections discusssubjects and provide commentary about the legal status of topics that mayarise in an employment interview.

Race, Color, Religion, Creed, National Origin, Sex, Marital Status, Birth Control PracticesThese subject areas are addressed together because there are no questionsconcerning them that legally can be asked. This means that an interviewermay not ask questions about the origins of a person’s name or where theindividual’s family came from. Asking about the existence of a family isnot permitted. This prohibition extends to questions that can be inter-preted as fishing for forbidden information. A judge in a court of law per-forms any needed interpretations. Information of this nature cannot berequested or collected on an employment application.

The reasoning behind these prohibitions is to eliminate the possibilityof discrimination based on such information. For example, at one time itwas common to ask young female applicants if they were engaged, and ifso, when they planned to marry. Married women of childbearing age wereasked if they planned to have children. Divorced or separated women wereasked if they were single parents and how many children they had.Information obtained in responses to such questions was used to makehiring decisions. Many managers believed that avoiding people who mightnot remain with an organization for very long or who might experiencemore absences than others who lacked particular responsibilities simplyreflected prudent business practices.

Anti-discrimination legislation has imposed changes. It is now illegal tomake employment decisions based on personal information. Contemporary

Interview Questioning: To Ask or Not to Ask? 167

Exhibit 9-1 The Manager and the Interview Process

Be on timeHelp the applicant to relaxAdjust language to accommodate an applicantAvoid both short-answer and open-ended questionsAvoid leading questionsAvoid writing during an interviewPromise and ensure follow-up


interviewers must do their best to determine whether or not an individualis capable of performing a given job, not to determine the likelihood of be-ing absent from work or leaving employment.

AgeThe only legal question that an applicant can be asked about age is: “Areyou at least 18 years old?” It is permissible and sometimes necessary to askthis because the employment of workers younger than 18 years is gov-erned by state child labor laws. Many employment situations are prohib-ited for those younger than 18 years.

With the exception of being younger than 18 years, prohibitions onquestions about age relate to discrimination laws. The Age Discriminationin Employment Act, passed in 1967 and amended in 1986, prohibits dis-crimination on the basis of age. Under the law, only a small number ofbona fide occupational qualifications exist when age can be considered tobe a legitimate employment criterion. For the vast majority of employ-ment situations, the single criterion that prevails is an individual’s abilityto perform a job.

DisabilityThe Americans with Disabilities Act prohibits employers from asking whetheran applicant has a disability or has ever been treated for any number of spe-cific medical conditions. Employers are forbidden to ask about an appli-cant’s Workers’ Compensation history at any time prior to making an offerof employment. The only questions that can be asked before an offer of em-ployment has been made are questions concerning a person’s ability to per-form the duties of the job under consideration. Questions asked prior toemployment cannot be phrased in such a way as to solicit information aboutmedical conditions or physical limitations. For example, if a job requiresdriving, then an interviewer may ask if an applicant has a driver’s licensebut may not ask if the person has any visual limitations.

When inquiring into an applicant’s ability to perform the major dutiesof a job, an interviewer can ask persons if they have any medical, physi-cal, or mental impairment that might interfere with their ability to performthe specified job duties, or whether there are positions for which theyshould not be considered because of an impairment. It is illegal, however,for an interviewer to inquire about the nature of any impairment. The keyto questioning in this area is to focus on ability, not disability.

NameIt is permissible for an interviewer to ask whether an applicant has ever workedfor the organization under a different name. Employers have this right becausethey are entitled to have access to an applicant’s prior work record. Interviewers



may ask whether any additional information is available concerning a namechange or using different names to adequately complete reference checks. Aninterviewer is forbidden to ask a female applicant’s maiden name or the orig-inal name of any applicant whose name has been changed by court order.

Address and Duration of ResidenceIt is permissible to ask an applicant’s place of residence and how long theperson has been a resident of that municipality.

Birthplace and Date of BirthNo questions can legally be asked concerning an applicant’s place of birthor the birthplace of an applicant’s parents or any other family members. Inmost instances, because age cannot legally be considered when making hir-ing decisions, it is illegal to ask an applicant’s age. For similar reasons, em-ployers are prohibited from requiring applicants to submit birth certificates,baptismal records, naturalization records, or any other proof of age.

PhotographThe practice of requiring applicants to supply photographs with their ap-plications is illegal. Even suggesting that a photograph may be submittedat an individual’s option is blatantly illegal.

CitizenshipIt is lawful to ask whether an applicant is a citizen of the United States,but it is unlawful to ask of what country an individual is a citizen. Thisquestion is construed as asking about national origin. Applicants who arenot citizens can legally be asked whether they intend to become citizensor if they have the legal right to remain and work in the United States.This legal permission takes the form of the well-known “green card.” Itis not permissible to ask whether an applicant or an applicant’s parents orspouse are naturalized or native-born United States citizens. An applicantcannot be required to produce naturalization papers.

LanguageIt is legal to ask what foreign languages applicants are able to speak andwrite with fluency. However, it is not legal to ask them about their nativelanguage or to ask individuals how they acquired the ability to read, speak,or write a foreign language.

EducationIt is legal to ask about an applicant’s academic, vocational, or professionaleducation and the public or private schools that he or she attended. This



discussion can and should include the relevance of particular programs orcourses taken.

ExperienceInterviewers should concentrate most of their questions in this area. Theprimary objective during this phase of interview conversation should beto gather sufficient information about an applicant’s work history to makean informed decision about whether an individual’s experience is applicableto the position being discussed. When talking about employment experi-ence, it is usually most helpful to begin with an applicant’s present or mostrecent position and work backward in time.

RelativesIt is permissible to ask the names of an applicant’s relatives who are alreadyemployed within an interviewer’s organization without specifying theirrelationship. This includes a spouse. This is relevant when an organizationhas rules about nepotism. However, prospective employers may not askabout relatives and specify the relationship as this is interpreted to be dis-criminatory on the basis of family status. It is illegal to solicit any infor-mation concerning an applicant’s spouse, children, or other relatives whoare not employed by the interviewer’s organization.

Notify in Case of EmergencyIn the pre-employment stage of recruiting, it is illegal to ask an applicantfor the name and address of a person to be notified in the event of acci-dent or other emergency. This is one of the elements of information (alongwith date of birth, marital and family status, and other personal infor-mation) that organizations are not permitted to solicit until an offer ofemployment has been extended and accepted.

Military ExperienceIt is permissible to ask about the nature of an applicant’s military experi-ence in a branch of the armed forces of the United States. However, inter-viewers may not ask about general military experience without specifyingarmed force of the United States or a branch thereof. Furthermore, inter-viewers are not permitted to ask applicants about the character or termsof their discharge or separation from military service.

ArrestAlthough the question of arrest was standard on employment applicationsand during interviews for many years, it is no longer legal. It is, however,permissible to ask if an applicant has ever been convicted of a crime andto ask for details associated with the conviction.



Information acquired through this line of questioning must be usedwith care. If an individual is rejected for employment because of a crimi-nal conviction, then there should be a reasonable relationship between thenature of the crime and the position for which the person is applying. Forexample, an organization may be acting reasonably and properly by re-jecting a convicted embezzler for a finance position or by rejecting some-one with a drug-related conviction for a pharmacy position. The sameorganization would be likely to encounter a claim of discrimination for re-jecting someone with a felony Driving While Intoxicated conviction for aposition as a cook or housekeeper.

OrganizationsIn the past, employment applications routinely asked applicants to list allclubs, societies, and other organizations to which they belonged. This isnow illegal, because the names of many organizations allow prospectiveemployers to infer personal information such as national origin or religion.

One absolute prohibition concerning external memberships involvesinquiries into whether an applicant is or ever has been a member of a la-bor union. Employers, especially those who may be union-free, ordinar-ily do not want to knowingly hire people that they fear might attempt tospread interest in union organizing. Legal history has provided many in-stances of applicants claiming that they were rejected for employment be-cause of union affiliations. Asking about prior membership in a laborunion is considered to be an unfair labor practice.

To remain legal, any inquiry about organizations must be limited to ask-ing about membership in groups that applicants consider being relevant totheir ability to perform the duties required by the position under considera-tion. For all practical purposes this limits questions about organizations totechnical and professional societies related to an applicant’s occupational field.

Job applicants may reveal personal information during the course of aninterview. Such admissions are legal and within the realm of their personalrights. Interviewers may not respond with questions on the same topics.Potential employers may not use such information when making hiringdecisions. The latter activities are illegal. As an example, a female appli-cant may talk about her recent divorce, her three dependent children, andthe fact that her church is assisting her to pay for cancer treatment that isthought to be due to benzene exposure on her last job. An interviewer maynot ask for any details and must not use any of the offered informationwhen making a hiring decision. The only relevant consideration is whetheror not the applicant has the ability to perform the duties and responsibil-ities of the position for which she is applying.

Exhibit 9-2 provides a number of specific questions as examples of pro-hibited inquiries. These questions, or variations of them, may not be askedof a job applicant whether in an interview or on a job application.




Exhibit 9-2 Examples of Forbidden Pre-Employment Questions

General:

Concerning an applicant’s general history, in a pre-employment in-terview, a potential employer may not ask the following:

1. Do you attend church regularly? What church do you go to, andwho is the pastor?

2. What religious holidays do you observe?3. What is your nationality, ancestry, descent, parentage, or lineage?4. Of what nationality are your parents? Your spouse?5. What is your native language?6. Are you married? Divorced? Separated?7. Where does your spouse work? What does he (or she) do for a

living?8. Do you have children? What are their names and ages? Do you

have a reliable arrangement for child care?9. Was your name ever changed by marriage or court order? If so,

what was your original name?10. When were you born? How old are you?11. Where were you born?12. Where were your parents born? Where was your spouse born?13. Of what country are you a citizen?14. Are you a native-born or naturalized citizen of the United States?15. Do you own your own home or do you rent?16. How did you acquire the ability to read, write, or speak English?17. What is the name, address, and relationship to you of the indi-

vidual to be notified in case of accident or emergency?18. What kind of discharge did you receive from the United States

military?19. To what clubs, societies, lodges or fraternal organizations do

you belong?20. How many children do you plan to have?21. Have you ever had your wages garnisheed or attached?22. Have you ever filed for bankruptcy, either personally or as a

business owner?23. Has your spouse ever worked here?24. What is your height? Your weight?25. Would your spouse approve of your employment here should

you be hired?


Exhibit 9-3 provides a number of examples of legal pre-employment in-terview questions.


Exhibit 9-2 Examples of Forbidden Pre-Employment Questions (cont.)

Medical:

Concerning an applicant’s medical history, in a pre-employment in-terview, a potential employer may not ask the following:

1. How is your health in general?2. Do you have any relevant medical problems or conditions?3. Have you or any member of your family ever been treated for

any of the following diseases or conditions? This is followed bya check-off list that may include: cancer, heart disease, highblood pressure, diabetes, epilepsy, AIDS, back problems, carpaltunnel syndrome, hearing loss, contact dermatitis, drug or al-cohol abuse, tendonitis, arthritis, tuberculosis, sexually trans-mitted diseases, and mental illnesses.

4. Are you taking prescription medication? What drugs, prescribedfor what conditions?

5. Have you ever been hospitalized? For what conditions?6. Do you have any disabilities or medical, physical or mental lim-

itations that could prevent you from performing the duties ofthe job in question?

7. Are you in any way disabled or do you have a disability?8. If you are presently out of work because of a disability, what is

the prognosis?9. Will you require time off for medical reasons?

10. Have you ever been injured on the job or had any other work-related accidents?

11. Check off on a list of potentially disabling impairments, anyphysical limitations that you may have.

12. Is any member of your family disabled?13. Have you ever filed a Workers’ Compensation claim?14. Have you received any payment for a Workers’ Compensation

claim?15. Are you disabled in any way? If so, how did you become

disabled?16. What is the prognosis of your disability?17. Will you require time off for treatment or medical leave due to

anticipated incapacitation because of your disability?



Exhibit 9-3 Examples of Legally Permissible Pre-Employment Questions

Concerning an applicant’s personal information, in a pre-employmentinterview, a potential employer may legally ask the following ques-tions or request the following information:

1. What is your full name?2. What is your address and the telephone number at which you

can be reached?3. What is your prior work experience? For each prior employer,

this may include:

• Employer’s name and address• Jobs or positions held• Duties performed• Skills needed to perform job duties• Tools, machinery, equipment, and vehicles used in

job performance• Name of immediate supervisor• Rate of pay received• Length of time on the job• Reason for leaving

4. What do you know about the requirements of the job for whichyou are applying?

5. What skills, education, training or experience have you had thatis relevant to performing the duties of this job?

6. Do you hold the licenses or certifications that may be required foremployment in the position in question, for example, a driver’slicense, an electrician’s license, a registered nursing license?

7. What were the primary duties and most important responsibil-ities on your most recent job?

8. What do you believe was the most difficult part of the job youhave been most recently doing? Why?

9. What safety procedures were you required to follow at yourmost recent employment?

10. Are you applying for full-time, part-time or temporary work?11. Are you able to work the particular shift or shifts on which this

job is ordinarily used?12. Are you able to work overtime or weekends when it is necessary?13. Are you able to meet this organization’s attendance standard?14. If hired, when are you able to begin work?


■ PROBING FOR INTANGIBLESAfter discussing more concrete subjects, such as qualifications and expe-rience, interviewers often spend some time discussing less tangible issues.They are attempting to develop an overall impression of an applicant’spersonality and attitude toward work and career. Because too much can-not be asked in an interview, it is important to develop a gut feeling orpersonal sense about each candidate. Gut feeling is highly subjective, butit is a legitimate part of the interview process. It refers to the feeling an in-terviewer develops about an individual during an interview. Such feelingscan provide clues about how other employees will regard the new personif an offer of employment is extended.

Exhibit 9-4 offers a number of possible questions that can be used whenassessing an applicant in areas other than specific qualifications and ex-perience for the position under consideration. In addition to assessing in-tangibles, an interviewer should keep another question in mind throughoutthe conversation: “How well do I believe this person would fit into the

Probing for Intangibles 175

Exhibit 9-4 Examples of Questions to Use in Probing for Intangibles

Concerning the information supplied by an applicant in a pre-em-ployment interview, a potential employer may legally ask the fol-lowing questions or request the following less tangible information:

1. What aspects of a job are most important to you?2. What are your own personal criteria for your success?3. What are your short-term career goals? What are your long-

term career goals?4. What are you seeking in the position under discussion that you

are not getting from your present position?5. What past goals have you set for yourself, and what have you

done to accomplish them?6. In what way would a position with our organization help meet

your career goals?7. What factors do you believe have contributed the most to your

growth?8. What has prevented you from moving ahead as rapidly as you

would have liked?9. What job would you choose if you were completely free to do

so?10. Which of your jobs did you enjoy the most? Why?11. How did you get each of the positions you have held?


present work group?” Whoever is hired will have to work, often closely,with current employees on a daily basis. Concern for how a new personmay relate to existing employees is very appropriate.

What Is an Applicant Really Seeking?While assessing intangibles and throughout an interview, an interviewershould be attempting to judge whether the applicant is trying to obtain amore desirable position or escape from something that is dissatisfying. Inothers words, an interviewer is trying to determine if an applicant’s driv-ing force is positive or negative. Is the applicant seeking advancement,more interesting work, better compensation, a preferred occupation, growthor personal satisfaction? Conversely, is the applicant trying to get away froman unpleasant environment, undesirable hours, an unpleasant supervisor,a quarrelsome mix of personalities, or some other unknown factor?

It is not always easy to determine whether a person’s motivations forseeking a new position are positive, negative, or mixed. However, the timeallocated to making a decision is still worth the investment. A person whois seeking a more desirable position is more likely to remain as a positiveperformer over time. An individual whose primary motive is to escapesomething is more likely to be a mediocre performer who is likely to leaveand become a turnover statistic.

■ VERY FEW EXCEPTIONSThere are some legitimate exceptions to the prohibitions against making hir-ing decisions based on some of the categories of forbidden information dis-cussed in this chapter. For example, physical condition and age can legitimatelybe considered as bona fide occupational qualifications for police officers,fire fighters, airline pilots, and surgeons. Gender may be relevant for ap-plicants applying for a position as an attendant for a men’s or women’s fit-ting room or to model gender-specific clothing. Having a driver’s license isa legitimate requirement for operating a taxicab.

■ WHEN FORBIDDEN INFORMATION IS VOLUNTEEREDAs already noted, forbidden information must never be used as the basisof an employment decision, even when it is voluntarily given.

Most interviewers receive forbidden information at one time or another.This puts an interviewing manager in an uncomfortable position of havingheard unsolicited information and then having to ignore it. This is easiersaid than done. The situation is similar to a comment made in court that isfollowed by a judge’s admonition to “Disregard that last remark.” It is easy



to disregard something that has not been heard, but it is not so easy to ig-nore something that has been heard. The information is known. The bestadvice is conscientiously to avoid using it when making a decision.

Applicants often volunteer personal information in a plea for sympa-thy that they hope will lead to a job offer. Examples of such pleas include,“I really need this job because I’m a single parent,” “I’ve been out of workfor months and my husband is ill,” or “We get our health insurance throughmy wife’s employer, so I could save you some money on benefits.”

On occasion, applicants deliberately drop items of personal informa-tion and later claim they were the victims of discrimination when the jobis given to someone else. An example of such an insertion is, “I happenedto mention that I was pregnant. I know that’s why I didn’t get the job.”Interviewers who hear comments that contain personal information are en-couraged to report them in writing to their supervisors as soon as is prac-tical after an interview is concluded. They should later file documentationsummarizing the strengths and weaknesses of each candidate and rank allpersons in the applicant pool. Finally, interviewers should note the rea-sons for recommending an offer of employment to the successful hire andthe reasons for not recommending other applicants.

To reiterate, no matter how it is obtained, forbidden information shouldnever be used as a factor in an employment decision. Because interview-ers may be required to defend a particular employment decision, an HRrecruiter and hiring manager should always be able to state succinctly andhonestly why one person was hired in preference to others.

■ AFTER THE INTERVIEWOrdinarily, an employment recruiter in HR has the responsibility to makea formal offer of employment. This includes the starting pay, which willhave been settled upon in conjunction with the department manager. It isfairly common practice for the offer to be conveyed by telephone and thenfollowed with a formal written offer by letter.

Human resources usually has the duty to notify unsuccessful applicantsand thank them for applying and making themselves available for inter-view. When conveying regrets, HR personnel will not tell unsuccessful can-didates why they did not get the position. Each is simply told that someonewho appeared to be more suitable or more appropriately qualified wasgiven the position.

Occasionally, unsuccessful applicants will call a department managerdirectly and ask specifically why they were not hired. Managers who re-ceive such calls can handle them in one of two ways. The caller can be po-litely referred to HR for the official response, or the manager can simplysay that the position went to the applicant who seemed best suited for the

After the Interview 177


position. Organizations must always be able to defend their reasons forrejecting any particular candidate should that become necessary. However,an organization is under no obligation whatsoever to explain to unsuccessfulapplicants why they were not chosen.

It is often helpful to maintain a brief written record of the reasons forrejecting candidates in a recruiting process, especially if many applicantsare involved and the final hiring decision might be seen as close or arbi-trary. However, interviewers should exercise care about what is written andhow it is expressed. Such notes can be made public in the event of a legalaction that follows a hiring decision. A good rule of thumb is never towrite anything about an applicant or employee that would be embarrass-ing if it appeared in the daily newspaper.

■ BEHAVIORAL INTERVIEWINGThe concept of behavioral interviewing is growing in popularity and is seenin many quarters as generating a greater degree of reliability than so-called“ordinary” interviewing. And it is receiving increasing visibility in man-agement literature. One needs to ask, however, if behavioral interviewingis truly something new or if this is but a new label describing a practice thatshould have been followed all along and which has in fact been followedby better (meaning more successful) interviewers. In other words, howmuch of behavioral interviewing is genuine improvement over older waysand how much simply represents a new name attached to a process that hasacquired a measure of tarnish for having been carelessly practiced by many?Just as “delegation” became so abused through improper application thatthorough and proper delegation became redefined as “empowerment,” somuch interviewing was so poorly accomplished that some apparently feltthe need for a unique label for proper, effective interviewing.

The fundamental underlying premise of behavioral interviewing is thebelief that the most accurate predictor of an individual’s future perform-ance is past performance in a similar situation. It has been described as arelatively new style of interviewing developed by industrial psychologistsduring the 1970s. It was perhaps given that name during the 1970s, butlong before it was so labeled, numerous insightful interviewers practicedthe process without the benefit of a special name. Many of the numeroussources of information about behavioral interviewing describe traditionalinterviews as including questions such as “Tell me all about yourself”(which really is not a question but rather is an open-ended instruction).Recall that an earlier section described questions like “Tell me all aboutyourself” as highly inappropriate. The same section included a pair of ex-amples that might have come directly from a list of behavioral interview-ing questions, specifically: “What accomplishment of the last year or two



are you most proud of?” and “Tell me about something that went wrongon the job, and what you learned from it.” Other examples include ques-tions like: “Describe an instance in which you had to go above and beyondthe call of duty to get a job done,” and “Have you ever had to sell an un-popular idea to others? How did you proceed, and what were the results?”Also note that many of the questions listed in Exhibit 9-4, “Examples ofQuestions to Use in Probing for Intangibles,” are applicable to behavioralinterviewing.

A behavioral approach to interviewing is preferred in the majority of in-stances of dealing with candidates for technical, professional, and manage-rial positions, especially when the candidates are experienced. The approachmay have to be narrowed somewhat in interviewing, for example, new grad-uates who have had no work experience in their fields. And one’s inter-viewing approach may have to be further narrowed in assessing personnelfor entry-level positions, especially those who are new to the work force.

Regardless of what the approach may be called, the premise is un-doubtedly sound: past performance in a similar situation is probably thebest predictor of future performance. However, behaviorally oriented ornot, selection interviewing is far from being a perfect process. No one hasyet devised a reliable way to separate the applicants who simply talk agood job from those who will later do a good job.

■ THE INTERVIEWER’S BEHAVIOR

A Second Possible DirectionOccasionally the process of an employee selection interview becomes re-versed and the applicant takes the lead and interviews the interviewer, ef-fectively interviewing an entire department or organization. Some applicantsseem to do so naturally, whereas a smaller number of sharp applicants de-liberately turn the focus of an interview around. This process requires theinterviewer to be able to recognize such a situation and then reclaim con-trol of the interview to end the reversal.

More Silence than TalkSome interviewers tend to dominate the conversation and speak at lengthabout the organization, their departments, and themselves. The object ofan employment interview is to get applicants to talk about themselves andto discuss appropriate job-related topics. An interviewer must control theinterview with proper questions and must concentrate on what an appli-cant is saying.

Non-stop talking by an interviewer limits the information that canbe gained from an applicant. It sends an inappropriate message about

The Interviewer’s Behavior 179


the organization to an applicant. The proper role of an interviewer in-volves more silence than speech. From the perspective of an interviewer,the most productive parts of an interview occur with one’s mouth shutand ears open.

More Points to Keep in MindEffective interview technique includes being in complete control of an in-terview situation without obviously appearing to do so.

Successful and experienced interviewers resist the temptation to makea hasty judgment concerning a job candidate. Research has demonstratedthat a majority of interviewers make up their minds about candidates dur-ing the first few minutes of contact. The remainder of the interview doeslittle to change that mind set. Always keep in mind that even though firstimpressions are sometimes proven to be correct, they are just as oftenproven to be incorrect.

Never encourage an applicant to criticize a present or past employer.Be wary of an applicant who voluntarily does so. Conversely, one indica-tor of a promising applicant is how diplomatically an individual describesan apparently unpleasant employment experience.

Remain aware of the nonverbal clues that may be exhibited during thecourse of an interview. Remember, too, to recognize the need of applicantsto compensate for normal nervousness. This is especially true for applicantswho have little or no interviewing experience.

Be conscious of the halo effect when interviewing. This occurs when in-terviewers allow one or two obviously positive traits to bias their judgmentfavorably when assessing unrelated characteristics.

In every interview, try to convey an overall positive picture of the or-ganization offering the employment opportunity. By espousing the beliefthat an organization is a good place to work, some of the positive view-point will be communicated to an applicant.

Be honest about the negatives of the job, if any. Most jobs include du-ties that are boring or repetitive. Some jobs include decidedly unappeal-ing tasks or situations that may be physically or emotionally discomforting.Remain upbeat overall, but do not overlook the negatives during an em-ployment interview. Applicants who accept a position only to discover theunpleasant parts after starting work are likely to feel that they have notbeen treated honestly.

ReferencesTo reiterate, a department manager should never become directly involvedin checking references. This is stressed because often department managershave been told, even in some of the management literature, to check refer-ences themselves. They are advised to go directly to applicants’ former su-



pervisors and bypass the HR departments of an applicant’s former employerand of their own organization. Some of the same sources will pointedly ad-vise them to avoid their organization’s HR department. A common ration-ale for these recommendations is that HR is usually too frightened of legalrepercussions to request any usable information. Following this advice caneasily place them at the center of a legal action. As long as an organizationhas an HR department, HR should be making the reference checks.

■ RÉSUMÉ FRAUD: LIES AND EMBELLISHMENTSAt times it seems that writing an employment résumé involves puttingnearly as much fiction as fact on paper. Experts have estimated that up to40% of résumés include exaggerations or outright untruths. As many as75% include some degree of fluff designed to make facts appear more sig-nificant than they actually are. This is accomplished by putting a favor-able spin on information.

Deception on employment résumés can take a number of different forms.These involve positive spin, embellishment, exaggeration, lying or a com-bination of these devices. Many variations exist.

A résumé may be deliberately ambiguous. One of the most frequentlyencountered examples of ambiguity has to do with education. An indi-vidual will claim to have “attended Prestige University in the BS Programin Chemistry.” The hope is that readers of this résumé will assume that theapplicant received a BS degree in Chemistry. In truth, the length of atten-dance is not known, no major was completed, and the person was notawarded a degree.

Another deception is to shift dates of education or experience deliber-ately to conceal periods of unemployment or, occasionally, a period of im-prisonment. An honest résumé may well include one or more gaps.Applicants know that they are likely to be questioned about these gaps.

A variation on date shifting is using years to create the impression ofhaving worked longer in a place than was actually the case. For example,a résumé may report working for “Ajax Hospital, 2000–2001.” The hopeis that readers of this résumé will assume that employment extended fromJanuary 1, 2000 to December 31, 2001. In truth, the length of employmentmay have been from November 2000 through January 2001. The same ap-proach is used to conceal gaps in employment.

Another common strategy is to exaggerate job responsibilities, reportinflated job titles, and provide inflated salaries. In truth, this is a danger-ous practice because basic employment information such as titles and po-sition responsibilities are easily verifiable through reference checks. Salarydata is relatively easy to verify. These actions are intended to make appli-cants seem more appealing than might otherwise be the case.

Résumé Fraud: Lies and Embellishments 181


Interviewers occasionally encounter claims of a more prestigious in-stitution awarding an individual’s degree. For example, an applicant maylist “Stanford MBA” on a résumé. In truth, the person has been awardeda master of business administration (MBA) degree from ObscureUniversity. This practice is openly fraudulent. Official copies of educa-tional transcripts are often required as a condition of employment.Presenting fraudulent documentation is usually a reason for immediatedischarge from a position.

Candidates may claim to have degrees and other credentials they donot possess. Honors and awards may be invented. Numbers of publica-tions and conference presentations may be inflated or openly invented.Such claims are easily verified.

Résumé fraud increases during periods of job scarcity. However, it is pres-ent to some extent on a continuing basis, so employment recruiters andother interviewers should be alert to the possibility of fraud in every ré-sumé that they review.

Spotting Embellishments and InconsistenciesThere is no reliable way to uncover every instance of fraud, exaggeration,or untruth that may appear in the résumés an organization receives. Thetask of verifying every fact on every line would be very time-consumingand costly. However, interviewers who remain alert to subtle signs andsignals are likely to know when closer examination is warranted.

Look for gaps in a person’s record. It is common for someone whowants to cover something up simply to omit it. Be alert for overlapping datesand inconsistent details. An occasional untruth can upset the chronologyof one’s experience and the person manipulating the facts often fails to ad-just other information as necessary. Ask questions about the prestigiousschool an applicant claims to have attended or the city in which the ap-plicant claims to have worked. Many people who have put themselves inthe position of making things up as they go along will fumble, stumble, orhesitate in coming up with responses.

Always consider an applicant’s reason for leaving a particular positionand ask for clarification, especially if the job being sought represents adownward or lateral career move. The majority of people that have beenterminated from a job for cause, not laid off, will use wording that char-acterizes their departures as voluntary.

During an interview, question the applicant about specific details thatappear in the résumé. A person who has lied or exaggerated will often findit more difficult to remember everything that he or she has written. Try todecide whether a job candidate’s answers seem memorized or rehearsed.Someone with nothing to conceal does not need to have pat answers pre-pared in advance.



Always be conscious of non-verbal clues. Excessive nervousness, failureto look an interviewer in the eyes, or physical fidgeting in a chair can be in-dicators of fraud. However, be careful not to confuse simple nervousness withfraud. Ask an applicant for permission to have specific information verified.This will usually be done by HR. An applicant who has faked something sig-nificant will often withdraw from the process right after the interview.

Upon request, HR will frequently become involved in verifying résuméinformation. This is done when work references are checked. However, ver-ification must sometimes go beyond ordinary reference checks. When con-firming information by telephone, an HR representative will go througha company’s operator or HR department rather than using a telephonenumber that the applicant may have provided. Some people who fake theirexperience have friends or relatives pose as former employers. If there isany doubt about as to whether a reference’s address is genuine, HR willtest the address by mailing something there.

■ AN ACQUIRED SKILLMany who are new to recruiting responsibilities are initially uneasy aboutinterviewing prospective employees. Because of this uneasiness, and becauseof being too careful and worrying excessively about the process, inter-viewing becomes more difficult for them than it has to be. Individuals whotake interviewing seriously and conscientiously, try to do it effectively, andendeavor to learn from each interview experience will find that their skillsimprove with practice. Being too casual or disorganized when interview-ing can result in the loss of a potentially good employee and can leave thatperson with a poor impression of an organization. On the other hand, be-ing overly careful, dragging out the recruitment process by interviewingtoo many candidates and delaying a decision also can lead to the loss of apotentially good employee.

It is useful to remember that when selecting employees, there is no guar-anteed perfect choice. Some risk of error is always present. Experts re-mark that while a personal interview is a problematic and marginallyreliable means of filling a job vacancy, no better means are available.

■ CONCLUSIONThe parameters of a recruitment interview are proscribed by legal statutes.Preparation for an interview begins before an applicant arrives. Interviewersshould review the relevant position description, review the applicationsand résumés of all candidates, arrange for a room or area suitable for in-terviewing, and prepare opening questions.

Conclusion 183


Interviews should begin on time, with initial questions designed to helpcandidates to relax. The language used should be appropriate for the can-didate. Leading questions and inquiries that result in excessively long orvery short responses should be avoided. Writing during an interview shouldbe kept to an absolute minimum if not completely avoided. Closure andfollow-up should be promised and promptly delivered.

Guidelines concerning legal and forbidden topics must be closely fol-lowed. Interviewers must be alert for irregularities in documents or the in-tent of applicants. Interviewers must remember that others have theresponsibility to extend job offers and check references. Guidelines for ap-propriate behavior at all points in the interviewing process must be followed.Interviewing is an acquired skill that usually improves with practice.

Returning to the initial case study involving interviewer Carrie Taylorand applicant Lynn Taylor, Carrie has placed the organization at risk by themanner in which she allowed herself to be influenced by Lynn’s “frail build,small stature, and apparent age.” Lynn revealed enough personal infor-mation for Carrie to conclude that Lynn had received surgery for breastcancer. Carrie allowed this personal information to influence her thinkingabout Lynn’s capabilities. Carrie’s motives may have been honest and herconcern for Lynn genuine, but her actions were illegal. Carrie did not havethe right to conclude that Lynn was “bound to fail.” She was not legallyentitled to base an employment decision on that subjective conclusion. Aslong as the specifications of the nursing position in the transitional careunit did not delineate specific physical requirements that Lynn could notmeet, Carrie had no basis for rejecting Lynn as a viable candidate.

Lynn could be legitimately rejected for the position on physical grounds,but doing so is not within Carrie’s scope of authority. Such rejection mustcome from the organization’s employee health physician and would ordi-narily occur when an applicant who has a tentative offer of employmentdoes not pass a pre-employment physical examination.

In response to the Human Rights complaint, the organization shouldattempt to negotiate a settlement that includes an examination of Lynn byemployee health to determine whether she is physically capable of handlingthe transitional care position. Using an occupational physician from anoutside agency would minimize bias. When an individual is turned downfor employment on the basis of a personal observation or forbidden in-formation, the final determination appropriately involves an assessmentof the individual’s ability to perform the job.

Discussion Points

1. In interviewing a prospective employee, why should you consider itimportant to inquire about the presence of information gaps or timeperiods that are not accounted for in an applicant’s work record?



2. Why should an interviewing manager review all available informa-tion about an applicant before beginning an interview? Managers arebusy people. Is arriving for an interview with an application in handand then beginning an interview on time not sufficient?

3. If an interviewer wants the applicant to do most of the talking, whatis wrong with opening an employment interview with the question, “Tellme all about yourself?”

4. Provide three examples of interview questions that are legal but whichprovide an interviewing manager with little or no useful information.

5. Why do you believe it is no longer appropriate to ask whether a jobapplicant has ever been arrested? Is it not in an employer’s best inter-ests to avoid taking on workers who have criminal records?

6. Can you make use of personal information in rendering an employ-ment decision if the information was voluntarily provided to you?Why or why not?

7. An interviewing manager should be prepared to respond in consider-able detail to any unsuccessful job candidate who calls asking why heor she was not offered employment. Do you agree or disagree with thisstatement? Why?

8. Why do experts recommend that the proper role of an interviewer in-volves more silence than speech?

9. Develop a brief procedure or protocol (a simple list of points to becovered) for reviewing an employment application or résumé for pos-sible inaccuracies or embellishments.

10. Write (or quote from the chapter) a concise statement which, if con-scientiously applied in interviewing, will ensure that only legal ques-tions will be asked.

11. Why should an interviewing manager attempt to assess an applicant’sintangible factors that are not directly reflected in the record of edu-cation or experience?

12. Why is it advisable to keep writing to a minimum while interviewingan applicant? Is it not helpful to capture as much information as pos-sible about the person?

Resources

BBooookkssBunting, S. (2005). Interviewer’s Handbook: Successful Techniques for Every Work

Situation. London: Kogan Page.Cook, M. (2004). Personnel Selection: Adding Value through People (4th ed.).

New York: John Wiley.Phillips, J. J. (2005). (Human) Capital. Chicago, IL: American Management Association.

Conclusion 185


Schell, M. (2004). Human Resource Approved Job Interviews and Résumés.Vancouver, BC: Approved Publications, Inc.

Taylor, P., & O’Driscoll, M. P. (2005). Structured Employment Interviewing.London: Ashgate Publishing.

PPeerriiooddiiccaallssBlackman, M. C. (2002). Personality judgment and the utility of the unstructured

employment interview. Basic and Applied Social Psychology, 24, 241–250.Borman, W. C., Hanson, M. A., & Hedge, J. W. (1997). Personnel selection. Annual

Review of Psychology, 48, 299–337.Cook, K. W., Vance, C. A., & Spector, P. E. (2000). The relation of candidate per-

sonality with selection-interview outcomes. Journal of Applied Social Psychology,30, 867–885.

Goffin, R. D., Rothstein, M. G., & Johnston, N. G. (1996). Personality testingand the assessment center: Incremental validity in managerial selection. Journalof Applied Psychology, 81, 746–756.

Landy, F. J., Shankster, L. J., & Kohler, S. S. (1994). Personnel selection and place-ment. Annual Review of Psychology, 45, 261–296.

Ones, D. S., & Viswesvaran, C. (1996). Bandwidth-fidelity dilemma in personal-ity measurement for personnel selection. Journal of Organizational Behavior,17, 609–626.

Paunonen, S. V., Rothstein, M. G., & Jackson, D. N. (1999). Narrow reasoningabout the use of broad personality measures for personnel selection. Journal ofOrganizational Behavior, 20, 389–405.

Ryan, A. M., & Ployhart, R. E. (2000). Applicants’ perceptions of selection pro-cedures and decisions: A critical review and agenda for the future. Journal ofManagement, 26, 565–606.

Schmit, M. J., & Ryan, A. M. (1993). The big five in personnel selection: Factorstructure in applicant and nonapplicant populations. Journal of AppliedPsychology, 78, 966–974.

Smith, D. B., Hanges, P. J., & Dickson, M. W. (2001). Personnel selection and thefive-factor model: Reexamining the effects of applicant’s frame of reference.Journal of Applied Psychology, 86, 304–315.

Smither, J. W., Reilly, R. R., Millsap, R. E., Pearlman, K., & Stoffey, R. W. (1993).Applicant reactions to selection procedures. Personnel Psychology, 46, 49–76.

Steiner, D. D., & Gilliland, S. W. (1996). Fairness reactions to personnel selectiontechniques in France and the United States. Journal of Applied Psychology, 81,134–141.



Employee TrainingChapter Overview


• Appreciate the importance of training and development ascontinuing activities

• Be able to outline the essential role of department managers as teachers• Appreciate the importance of new-employee orientation• Understand applicable principles in addressing staff training and

development needs• View cross-training as a means for improving employee capability

and departmental effectiveness• Know how to approach on-the-job training• Understand employee mentoring• Appreciate the importance of developing potential managers• See how human resources can help managers meet departmental

training needs

■ CHAPTER SUMMARYTraining ensures the future of any organization. It helps to ease the tran-sition into an organization and facilitates movement within an organiza-tion. Training takes many forms. New-employee orientation, mentoring,on-the-job and off-site training are common examples. Managers oftenprovide training in formal or informal settings. Cross-training of employ-ees with similar types of jobs provides organizational flexibility. Giving de-velopmental opportunities to potential leaders facilitates succession planning.

Case Study: A Blue Monday

“Monday mornings should not be so complicated.” At least that is whatSam, the health commissioner thought. The new epidemiologist wasscheduled to report for work at 10:00 AM. A second new employee was

C H A P T E R

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scheduled to begin on Friday. “Two new people on two different days inthe same week,” thought Sam with an air of defeat.

Sam had been reading about the importance of developing potentialnew managers. The usual departmental duties would not diminish. Becausethe previous Friday was a state holiday, the morning volume of e-mail wasextra heavy. This had become more of a problem since a prankster had spreadSam’s e-mail address to web sites that specialized in body reshaping sur-gery or drugs to enhance performance. “Why couldn’t both new employ-ees start tomorrow?” mused Sam. What advice would you give to Sam?

■ INTRODUCTION: THE ROLE OF TRAINING AND DEVELOPMENTSenior managers in most healthcare departments can be counted on to sup-port and praise the value of continuing education. Unfortunately, many man-agers drop training and development when budgets get tight and expenses mustbe reduced. This is partly because of the difficulty of pinpointing cost savingsthat can be attributed to continuing education. Most individuals in manage-ment believe or know intuitively that education ultimately saves money. Theproblem is that it is more difficult to measure the results of education in termsof costs versus benefits than it is to measure cost savings in most other areasof organizational activity. As a result, money spent on education is oftenviewed as resources that are expended with few tangible results.

As important as training and development are to every health care or-ganization, in many instances they receive minimal attention from uppermanagers. Simply reminding department managers that they have a re-sponsibility for employee development is insufficient. Managers shouldbe encouraged to view training and development as important because itkeeps valuable employees interested and challenged.

Factors that motivate employees are found primarily in the nature ofwork. Among the strongest motivating factors are the opportunity to dointeresting and challenging work and the opportunity to learn and grow.Better performing employees usually are so motivated. They are also theindividuals who are most likely to leave in search of more interesting andchallenging work and greater overall opportunities. One way for depart-ment managers to increase the chances of retaining their better employeesis through visible support for training and development.

A department that places no emphasis on training and developmentmay seem to be standing still. In reality, it is actually going backward be-cause the world continues to move ahead. With technologic, economic, leg-islative, financial and social change constantly occurring, no departmentor organization can afford to stand still. A certain amount of forwardprogress is necessary simply to remain abreast of change. As contrary asit may sound, one must move ahead to stay even. Therefore, maintaining

188 CHAPTER 10 EMPLOYEE TRAINING


or improving the abilities of staff must be an ongoing effort. Continuingeducation is essential.

■ THE MANAGER’S ROLE IN EMPLOYEE TRAININGUnder the blanket heading of training are an entire range of employee de-velopment activities, from providing new-employee orientation to assist-ing employees in moving up into management. Employee developmentshould be one of the most important aspects of a manager’s job.

Managers are likely to have a greater depth and breadth of technicalknowledge and expertise in the areas or activities they manage than is foundanywhere else in an organization. Managers tend to be educated in thefields in which they work. In addition, they have the advantage of practi-cal education acquired through experience. Therefore, managers are primaryresources for information about their departments and the work they per-form. Department managers are uniquely positioned to pass on their knowl-edge and expertise to others. Department managers have the responsibilityfor maintaining and improving the capability and competence of their staff.

The Manager as a TeacherBecause the department manager is usually well-versed in the department’stasks and activities, the manager is best suited to do some, although prob-ably not all of the teaching in the department’s continuing education pro-gram. For some of the topics the manager will clearly be the most qualifiedindividual and the most readily available instructor, but chances are therewill be a few topics that other individuals can better address. For exam-ple, if you supervise in health information management (formerly medicalrecords) and you are interested in cross-training several assistants in chartcompletion review, it might be best to use the person regularly assigned tothis task as the instructor. With proper encouragement and assistance, theperson who knows best how to perform a given task can be the best re-source for teaching that task to others. Regardless, however, even if the de-partment manager does not do all of the teaching, this manager neverthelessremains responsible for the department’s continuing education program.

Teaching a class can loom as a formidable task to the manager who hasnot previously done so. But the manager who is hesitant to adopt the roleof instructor can rest assured that just about everyone involved in teach-ing or any other form of public speaking has experienced similar qualms.It helps to regard one’s early experiences in teaching as learning experiencesin themselves, remembering that one is not a professional teacher but thatthe department’s employees are familiar faces, not a group of unknown “stu-dents.” The keys to building one’s effectiveness as an instructor are prepa-ration and practice. The more one teaches a given subject, the better it can

The Manager’s Role in Employee Training 189


be taught in the future. And the more often one faces a group of learners,the less troublesome the feeling of uneasiness about teaching will become.

The manager who will serve as a teacher is advised to acquire knowl-edge of adult learning principles. Pertinent information is available froma number of sources including some of the resources listed at the end ofthis chapter. Also, in most healthcare organizations of any appreciable sizethere are internal resources to tap. Depending on organization size, humanresources (HR) may have a training function that can assist managers orthere may be a separate education department available. At the very leastit is usually possible to obtain information about adult instructional meth-ods from Nursing Inservice Education.

From a manager’s perspective, teaching should be an integral part of man-agement’s role. Teaching is also an essential part of managerial delegation.Unfortunately, in the pursuit of everyday business employee instruction isoften overlooked.

External RequirementsThe importance of continuing education and training is underscored bythe extent to which different accreditation and regulatory agencies assesstraining activities during their periodic surveys. For example, the JointCommission on Accreditation of Healthcare Organizations (JCAHO) pub-lishes specific requirements for the continuing education of nurses and cer-tain other personnel, and regularly checks during surveys for documentedevidence of its performance. And in most states there are state require-ments for all-employee orientation to address certain specific topics andannual refresher education on a number of topics.

Another indicator of the importance placed on continuing education ex-ternally is the fact that many health care practitioners are required to pro-vide evidence of a certain number of continuing education units each yearto maintain their professional licensure.

■ NEW-EMPLOYEE ORIENTATIONEach health care department manager should have a new-employee ori-entation plan for his or her own department, and there should also be anorientation plan for the organization overall. Orientation plans are re-quired by accreditation and regulatory agencies.

An organization usually provides a general new-employee orientationthat addresses common matters. Ordinarily provided by HR, a generalorientation addresses such matters as the organization’s structure and lead-ership, employee benefits, the performance appraisal process, the organi-zation’s dress code, employee parking, facility security, infection control,and universal precautions. Employee health and other benefits, the em-



ployee assistance program, employee work rules, and generally applica-ble policies are also typically included.

A department orientation should provide an introduction to the peo-ple in the department and program areas and to the physical space, equip-ment, processes, and special department policies, as well as on-the-jobguidance in getting started doing the work for which the new person washired. One of the most inappropriate ways of treating new employees issimply to allow them to begin working without the benefit of orientation.Even experienced and well-educated new employees require some guidanceconcerning variations specific to a particular department or program area,as well as some time to ask questions about the new job.

As part of a new employee’s orientation, it may help to appoint a mentor.A mentor is an experienced person who can provide guidance through thenew person’s first few days or weeks on the job. Mentoring offers valuablebenefits; it provides a personally guided orientation for a newcomer and itaffords an opportunity for further development to an experienced employee.

■ TRAINING TO CORRECT PERFORMANCE PROBLEMSTraining must be a high priority for every manager. Running a programarea and getting out the expected work is a supervisor’s number one pri-ority; nevertheless, training is important, especially regarding new or re-vised work procedures and the correction of performance problems.

When assessing employee performance, supervisors continually com-pare observed performance with expectations. Managers may have to beteachers when helping employees correct performance problems. Whenan employee displays performance problems that command a manager’sattention, it is always appropriate to consider whether reasonable effortsare being made to help the employee succeed. Many employees fail at theirjobs because they were inappropriately trained, insufficiently oriented, orinadequately supported.

It may sometimes be necessary to impose a requirement for a particu-lar kind of education or training as a condition of continued employment.For example, an individual whose telephone manners have elicited manycomplaints may be required to complete a program in telephone etiquette,or an individual whose job requires writing but who has experienced prob-lems with grammar may be required to take a remedial English languageprogram.

■ DETERMINING DEPARTMENTAL LEARNING NEEDSIf a variety of learning needs seem to be present throughout a department,then it is helpful to conduct a needs analysis for basic remediation. One

Determining Departmental Learning Needs 191


approach consists of making a simple chart for each job description in adepartment with columns indicating the principal required skills and rowslisting the employees whose work includes those activities. It becomes amatter of assessing all employees in terms of whether their skills are ade-quate to meet normal job expectations. Each assessment that falls shortof normal expectations indicates a learning need. This approach helpsmanagers focus training activities on areas of greatest need. In addition tomanagers’ assessments, noticeable performance problems also indicateareas of need, as do tendencies toward repetitive errors or actions thatgenerate chronic complaints by customers, coworkers, and others.

A manager’s initial assessment of training needs is translated into train-ing objectives. Learners must initially know where they are headed. Oncethis is determined, learners and managers can consider how to get there.

A learner’s motivation is a key to the eventual success of training.Managers must be prepared to help employees answer one particular ques-tion about what they are being asked to learn: “What’s in it for me?” Incorrecting a severe performance problem, the answer may be as basic as,“You get to remain employed.” There are numerous other possible re-sponses such as, “You get to learn something that may eventually help youto be promoted,” or, “You get more variety in your work,” or, “You getto do something more challenging than what you’ve been doing.”

■ EMPLOYEE TRAINING WITHIN A DEPARTMENTThe following principles may assist a manager when addressing staff train-ing and development needs. All employees who are expected to learn some-thing deserve to know why they are learning, and all employees should beadvised of specific goals and objectives. Employees learn better when theyactually become involved in the process. The more hands-on or learn-while-doing components that can be incorporated, the more likely a train-ing program is to be successful. Employees will more quickly and moreaccurately absorb material that applies to their daily work rather thanhaving to learn material that they see as irrelevant. Thus, in-departmentemployee training should be practical and immediately applicable ratherthan theoretical.

Most employees will accept new ideas more readily if these ideas sup-port their previous beliefs. New material, techniques and processes arebest presented within the context of a department’s mission. For example,“We’re still here to serve members of the community, but now it can bedone more quickly and at lower cost.” Some employees learn best whenallowed to pursue their own areas of interest or needs at their own rate.For these employees, managers must provide clear expectations, necessaryinformation and materials, and general guidance. Many employees mustbe encouraged to find learning pleasant. For some employees, the possi-



bility of education of any kind essentially means going back to school,which renders them resistant to training. These people must be shownwhat is in it for them.

■ CROSS-TRAINING FOR EFFICIENCYDepartment managers who supervise employees working in comparablepositions in terms of job grade or pay scale have the opportunity to im-plement cross-training. For example, an office manager may have three clerical-level employees who are assigned in different capacities: a file clerk,a program secretary, and a data entry specialist. These three jobs reside inthe same pay grade. As long as the three people simply do their own jobs,the department has limited flexibility. If one person is on vacation or is ill,no one is trained to assume the missing person’s duties. If all three peopleare capable of doing all three jobs, the employees can be moved aroundas needed. Resources can be shifted as workloads or backlogs demand,and any of the three people can cover for any of the others as necessary.

This type of flexibility can be obtained by training the three employeesin each other’s jobs. This requires time and effort. Each of the people cantrain the other two in job particulars, with the supervisor providing gen-eral guidance. This training will ultimately repay the time and effort in-volved. A department gains considerable flexibility in addressing backlogsand covering for vacations and illnesses. The individuals gain greater interestsand challenges associated with their work through increased task variety.

■ ON-THE-JOB TRAININGOn-the-job training is appropriate under many circumstances. For somelearning needs, it may be the best available approach. Much on-the-job train-ing is best accomplished under the direct supervision of a manager or un-der the direct guidance of an experienced employee. Employees receivingon-the-job training receive step-by-step instructions on how to accomplisha task while actually performing it. After employees perform the task a suf-ficient number of times under this direct guidance, the instructor may thenreduce or eliminate the verbal guidance and simply watch the employeeuntil assured that the activity is being performed in a satisfactory manner.Thus assured, the instructor may further withdraw to a position of beingreadily available to answer questions.

On-the-job training is not simply allowing employees to learn by trialand error with only a rough idea of expected results. However, this is pre-cisely what it becomes when managers decide that they are too busy toaddress training in a proper manner and simply turn new employees looseon the job.

On-the-Job Training 193


Improper or inadequate on-the-job training can be dangerous or de-structive. Employees may learn to perform their tasks in a highly ineffi-cient manner, creating inappropriate work habits that will become deeplyingrained and difficult to correct. It is far better for managers to ensure thatsufficient time and attention are devoted at the start of the learning processso that on-the-job training can succeed as intended.

Another common but inadequate approach to training, or at least sat-isfying annual inservice education requirements, is to give staff membersfiles or folders of information to review. Often, accreditation agencies orstate regulations require these documents to be reviewed. A reading pack-age is circulated among the staff with instructions for each recipient to re-view the documents as required, check off to indicate that they have doneso, and pass the material to the next person. This is the loosest and weak-est approach to training. Short of questioning each recipient in detail, thereis no way to ensure that the material has been read and absorbed.

Most people recall a certain portion of information they hear (perhaps10%), a somewhat greater portion of what they both see and hear (maybe20%), and almost all of what they simultaneously see, hear, and do (90%).This suggests that the most effective job-related training should include acombination of lecture, demonstration, and hands-on practice.

Using multiple channels of sensory input increases the likelihood of learn-ing. This is why personal reading alone can be the least effective way oflearning, and why lecture alone is not a great deal better. When multiplesenses are used simultaneously, the chances of learning increase. Also, re-peating the same material after a lapse of time, and presenting it in varyingforms can be highly effective in ensuring that the material will be retained.

■ EFFECTIVE MENTORINGMentoring can be most effective if it is officially sanctioned. It need not takeplace within the context of a formal program, but it should be acknowl-edged as an actively used employee development technique rather than sim-ply an ad hoc practice whereby people might happen to link up with eachother. The extent of the formality required may be minimal. A new employeeand an experienced employee or mentor are intentionally brought togetherby a department manager, and all three parties agree on the objectives of therelationship, specifying what the new employee is expected to learn. Themanager remains close enough to the process to be able to evaluate both thenew employee and the mentor during and after the relationship period.

By officially addressing mentoring as a means of employee develop-ment, an organization sends a strong message to all employees concern-ing its commitment to their development. Although mentoring is one ofthe least costly development tools available, it can be extremely effective.



Its visible use proclaims that the organization cares about the develop-ment of its people.

For a new employee, a mentor can be a valuable facilitator, soundingboard, and source of advice and guidance. The mentor benefits as well.Mentoring can provide a sense of fulfillment and satisfaction, especiallyfor a senior employee who is in need of additional challenges and who canbenefit from more interesting work experiences. The process helps men-tors further refine their skills and keep them sharp.

Employees most likely to realize significant benefits from a mentoring re-lationship are those who demonstrate a willingness to learn, are proactivein expressing this willingness, and are ambitious and enthusiastic. Effectivementors are able to assume full responsibility for their own growth and de-velopment. They are receptive to coaching and constructive feedback andhave the ability to change behaviors based on positive experiences.

Experienced employees who are considered for mentoring responsibil-ities should be persons who are willing to serve voluntarily and give theundertaking the time and energy it requires. No mentor should ever beunilaterally assigned or forced to serve. Similarly, managers should notforce new employees to work with any particular mentor. Both partiesshould have an option to change a mentoring relationship if either be-comes dissatisfied. Potential mentors should possess sufficient knowledgeand expertise in the new employee’s areas of responsibility. They shouldhave good interpersonal skills and patience, and they should be support-ive, friendly, and effective listeners. Above all else, potential mentors shoulddemonstrate interest in the development of others.

■ DEVELOPING POTENTIAL MANAGERSAn essential part of every supervisor’s responsibility is to help identify anddevelop new managers. This includes identifying and developing one ormore potential successors. Many managers fall short of properly addressingthe latter need.

The development of potential successors is closely associated with thepractice of proper delegation. This is the primary means by which suc-cession planning evolves. It is an area of concern or threat for some man-agers, especially people who are often insecure in their positions and fearthe competition provided by intelligent, up-and-coming subordinates.Many managers simply do not think beyond the present. They are ill-prepared to imagine being moved up or out or becoming incapacitatedand no longer able to function in their positions.

Development of a potential new manager may not occur within a de-partment because it requires serious and progressively more responsi-ble delegation. This takes time and planning on the part of management.

Developing Potential Managers 195


Such development requires delegation of tasks that are increasinglymore responsible. Suitable tasks are often sufficiently appealing or im-portant that managers retain them personally rather than giving themup to subordinates.

At the very least, the manager who has a potential successor in theprocess of development usually has readily available coverage for vaca-tions and illnesses as needed. No person is or should be absolutely indis-pensable, but the loss or absence of a group’s leader when there is noready back-up person can create significant inefficiency and inconven-ience to an organization.

A manager who entertains ambitions about advancing higher in the or-ganization should take seriously the need to develop a potential successor.Higher management will often look closely at a manager’s track record indelegating tasks and especially at whether that manager has one or morecapable successors in the wings. Enlightened higher management may wellconclude that a supervisor who has paid no attention to developing a po-tential successor shows little strength in delegation, a skill that becomesincreasingly important as one moves up in the organization. Executives inan organizational hierarchy may be unwilling to promote a manager if do-ing so means having to conduct an external search for a successor or pro-moting an untried insider.

No manager wants to lose good employees. However, some of themare going to be lost regardless of a supervisor’s actions. Managers whoput time and effort into developing potential successors may see many ofthem eventually lost to other departments or other organizations as theytake advantage of opportunities to advance their careers. But these em-ployees are likely to be lost to the organization anyway if they are not givenopportunities to develop. Some of them will be lost even sooner if theyremain unchallenged in their jobs. Therefore, prudent managers shouldtake full advantage of the talents that are available in their groups by del-egating tasks to the better and more willing employees and helping themto develop.

Only rarely does a manager have anything to fear from a subordinatewho is encouraged to develop and grow and learn some aspects of themanager’s job. In fact, having one or two sharp, up-and-coming employ-ees is often just what a manager needs to remain effective and to continueto grow.

■ HOW HUMAN RESOURCES CAN HELPIt is customary for an organization’s general new-employee orientation tobe presented or at least coordinated by HR. As far as this orientation isconcerned, ordinarily all a manager has to do is ensure that each new em-



ployee attends. However, some managers have to be reminded of the ne-cessity for all new employees to attend the orientation. Some of these newemployees may be filling positions that have been empty for some timeand the department may be behind in its work. Occasionally, managers maydecide that new employees cannot be spared for the few hours requiredfor orientation. There may be a tendency to regard orientation as just an-other HR thing that intrudes on a manager’s ability to run a departmentor program. In most instances, a general orientation to the organizationincludes topics that are required by accreditation or regulations. Orientationthen becomes partly a response to external requirements and partly a ser-vice performed to get new employees pointed in the proper direction.

Beyond ensuring that new employees attend general orientation, it isthe manager’s responsibility to be aware of training needs and either at-tend to them or refer them as necessary. When addressing issues of em-ployee training and development, a department manager should expectHR to work with supervisors to diagnose particular problems and de-termine the kinds of training or education that might be helpful, to pro-vide certain kinds of needed training, to secure the involvement of otherin-house training expertise, to identify external sources for specificallyrequired training, to determine how these sources are accessed, and toguide employees in using an organization’s tuition assistance programwhen appropriate.

Training needs should be addressed on a continuing basis, both to as-sess present circumstances to determine the skills and attitudes that mustbe adopted or improved to meet current needs, and to attempt to deter-mine future needs based on trends that appear to be coming during thenext one or two years. Information for evaluating training needs can begathered in a variety of ways, including questionnaires completed by man-agers and employees, focus group discussions, individual interviews withmanagers and employees, and exit interviews at which departing em-ployees are asked for their opinions concerning developmental needs.Topics that are frequently mentioned merit consideration as potentialprogram topics.

Human resources can contribute information relevant to determiningtraining and development needs from direct contact with people on the job,both managers and rank-and-file employees; from reviewing performanceappraisals, performance improvement records, and disciplinary actions; andfrom monitoring trends in public health.

When guiding training and development activities, HR may recommendinvolving both managers and employees in preparing training agendas anddetermining program content. It often starts with needs that employeesappear to be the most strongly motivated to address. Human resourcesfocuses on present jobs and needs first, then looks to the future, focusing

How Human Resources Can Help 197


primarily on behavior, in the belief that if skills are appropriately implantedor modified then proper attitudes will follow. It will use on-the-job expe-riential learning to the maximum practical extent, supplemented withtraining from other sources.

When evaluating training efforts, HR will attempt to determine whetherthe needs assessments that were conducted were accurate, whether tar-geted skills have been learned and incorporated in new behaviors, andwhether employee attitudes appear to have been modified. Human re-sources must assess what has been learned and how this audit of resultscan support the next cycle of training.

■ CONCLUSIONTraining and development should be ongoing and essentially continuousactivities. Managers are central to training efforts, identifying needs andoften serving as trainers. New employees must be properly and completelyoriented to a health care department as well as their own specific programareas. Cross-training provides flexibility, especially in times of crisis. On-the-job training is important and often conducted by a mentor. Potentialnew managers rarely emerge without assistance. They must be nurturedand developed by providing opportunities for them to actually superviseothers or guide programs. Human resources personnel may provide as-sistance in training and development.

Returning to the harried health commissioner in the opening case study,Sam should seek volunteers to serve as mentors for the new employees. Thiswill provide support for the new people and give Sam a chance to evalu-ate the leadership potential of two subordinates. Sam should decide totake the new employees to lunch on their third day of employment.

Although it would be efficient to provide one initial orientation sessionfor both new employees, Sam should avoid the temptation. This would re-quire the new epidemiologist to either start without any training or towaste four working days. Either alternative sends a negative message tothe new employee.

One year later, both new employees had become fully integrated intothe health department. One of the mentors seized the opportunity to shineand was promoted seven months later. Both mentors reported increasedjob satisfaction. Sam noticed the improvement in their job productivity.The epidemiologist volunteered to serve as a mentor in the future.

Discussion Points1. Why are training and development opportunities important to some

employees but apparently not to others? To which employees do theyappear most important?



2. Why is having training and development opportunities available toemployees important even if many do not take advantage of them?

3. Why must in-service training or on-the-job education be continuing?4. Why is education usually one of the first line items to be reduced or

eliminated when it becomes necessary to cut budgets? Is such an ac-tion organizationally prudent? Why?

5. What activities could a department manager undertake to continue in-volving employees in education with little or no direct budgetary impact?

6. How you would implement a program of cross-training among threeor four roughly comparable positions? Use actual or hypothetical po-sitions as an example.

7. How do a department manager’s skills as an instructor, teacher, ormentor relate to the ability to delegate tasks?

8. Why should a department manager who plans on remaining in placefor as long as practical develop one or two capable employees as po-tential successors?

9. It is frequently claimed that it is difficult if not impossible to quantifythe cost effectiveness of education. Do you believe this to be true? Why?

10. What are the advantages of using capable senior employees as men-tors or trainers for newer employees?

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Compensation andBenefits

Chapter Overview


• Describe the role that human resources and department managershave in matters of compensation

• Understand the roles of human resources and departmentmanagers regarding benefits

• Be able to discusses statutory benefits such as Workers’Compensation and short-term disability

• Have a better understanding of a manager’s role in theemployment process and what occurs behind the scenes in humanresources

• Understand human resources’ role in performance appraisals • Be familiar with basic guidelines for managers who become

involved in legal actions• Know about human resources’ involvement in external agency

investigations and how these involve department line managers

■ CHAPTER SUMMARYCompensation and benefits are two significant human resources (HR) ac-tivities. All employees expect their compensation to be fair and expectHR to collect information related to compensation in a regular and sys-tematic manner. Managers should be familiar with compensation scalesfor their employees. Exchanging pay scale information with professionalcolleagues in different organizations is essentially illegal.

Next after their pay, most employees are vitally interested in their ben-efits. Benefits fall into two broad categories: those that are mandated bylaw, and those that are voluntarily offered by the employer. Organizational

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policies surrounding benefits have been changing. Currently many or-ganizations are changing from defined benefit to defined contribution pen-sion plans, and organizations which for years have offered the same benefitsto all are adopting flexible or “cafeteria” plans that allow a range of em-ployee choices. Statutory benefits include Workers’ Compensation, un-employment compensation and insurance, and disability insurance.Government agencies investigating claims may involve an organization’semployees, and inquiries from external agencies should be referred to HR.

Case Study: First Impressions Can Be Wrong

Sara Hupp, the CEO of the Westside Health Consortium, summoned RobJameson, the Vice President for Human Resources and Pat Collier, theChief Financial Officer, to her office.

“Rob, I agree with your suggestion to change the structure of our ben-efits package. Pat has supplied financial data to support your suggestion.The costs for benefits continue to rise with no end in sight. I am asking bothof you to work together to develop options for a new plan to replace ourexisting approach that gives all employees the same benefits. I know thatindividual and family needs change with time. Westside must institutechanges to control costs as well as to attract and retain skilled employees.”

What steps should Rob and Pat take? What suggestions would you of-fer to them at this point in time? Why? Should Sara provide any additionalguidance? If so, what information should she give? Why?

■ INTRODUCTIONNot all of the activities of HR are visible to department managers. Manyof the activities discussed in this chapter are hidden in the sense that theyoccur within HR and elsewhere and are rarely the responsibility of a de-partment manager. Compensation and benefits are matters of concern formost employees. This chapter is intended to provide a basic understand-ing of compensation and benefits.

■ COMPENSATIONOne of HR’s primary responsibilities is to maintain an organization’s com-pensation structure. Human resources ordinarily strives to remain currentand competitive with compensation levels in the healthcare industry andthe local labor market. On a predetermined basis, usually annually, HR isexpected to make recommendations for changes in compensation. These

202 CHAPTER 11 COMPENSATION AND BENEFITS


recommendations are usually reviewed by an organization’s board of di-rectors before being implemented.

Annual compensation recommendations often include suggestions re-lated to the timing of changes and the rationale for the suggested distri-bution of increases. Recommendations usually include the basis for thechanges being proposed. These are typically related to prevailing industryor area compensation practices. Proposed wage increases may include allemployees, often referred to as cost-of-living adjustments, or they may berestricted to employees in specific professional groups.

Knowing the Compensation SystemSupervisors and department managers are usually the first persons to re-ceive questions regarding compensation and benefits from their employ-ees. To respond adequately to such inquiries, a department manager shouldbe knowledgeable about how pay increases are related to performanceand the general level of performance required for receiving merit-basedincreases. A supervisor should know the differences between merit pay in-creases and increases provided through pay-scale changes, also sometimesreferred to as cost-of-living increases. A manager should know when meritincreases or scale increases can usually be expected to occur and how andwhen other types of pay increases such as probationary increases aregranted.

A manager should be familiar with current pay scales for all positionsin the department, and should maintain current pay scale data on file forreference. When pay scales are changed, HR usually supplies up-to-datepublished pay scales to department managers. Current pay-scale infor-mation is needed when addressing particular employee questions, but thedissemination of this information should be selective, based on an individual’sneed or right to know.

Strategic planning figures prominently in compensation administration.Organizations must make decisions about the nature and extent of thecompensation and benefits that they will offer to their employees. Willthey decide to pay their employees at the regional median, similar to oth-ers in their region? Some consciously decide to pay less than the usualwage. They know that they will be saving some money but will be ac-cepting a higher than normal degree of employee turnovers as a conse-quence of their decision. Others decide to pay at a rate or level greaterthan that of other organizations. They accept the higher wage costs in ex-change for more highly skilled or reliable employees and a lower thanusual level of employee turnover.

Organizations must make similar deliberate decisions concerning ben-efits. Will their benefits package be similar to or different from those ofother organizations? A common question reflects the nature of the local

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pool of prospective employees and the extent to which they will have tocompete for employees.

Yet another strategic decision reflects the nature of benefits that will beoffered. Traditionally, organizations have offered all employees a similarpackage of benefits that typically differs only in reflection of years of ser-vice. Many contemporary organizations are making strategic decisions toallow individuals to select benefits from among a menu of options. Suchan approach is referred to as a flexible benefits plan or a cafeteria bene-fits plan under which employees are allotted a certain amount of benefitscredits to distribute as they see fit among available benefits. Employeesappreciate being able to select options that are relevant to them, and or-ganizations are able to better contain their benefit expenses.

Historically, benefits were paid to provide incentives for individuals tochoose one organization over another. After employment began, benefitsprovided incentives to continue employment. Thus, companies were ableto attract and retain desired employees. Funding for benefits reflects a fi-nancial commitment by employers. The ability to pay for benefits must beperiodically reviewed as budgets are developed, as new employees arehired, and as collective bargaining agreements are negotiated.

Organizations maintain a mix of employees at differing wage levels.The variety and extent of benefits that are offered broadly reflect the wagemix of an organization. Phrased differently, benefits are usually propor-tionate to wages. Some benefits are mandated; Workers’ Compensation andunemployment insurance are common examples. All benefits other thanthose required by law are provided at the discretion of the employer.

Individual employees have the right to know the hourly rate minimumand maximums for their pay scale as well as their own actual rates of pay.However, individual employees are not entitled to know other employees’pay scales or any other individual employee’s rate of pay. Department man-agers have the responsibility to safeguard this aspect of employee privacy.

When Compensation Challenges AriseA department manager is often the initial target when employees challengethe compensation system. Some individuals challenge the equity of theirown rates of pay; they compare their pay with that of others who have sim-ilar positions. The perceived similarity may be based on occupation, jobtitle, or another means of comparison. A typical claim is that they are un-derpaid for performing the same or comparable work. Their informationis often second-hand, inaccurate, or outdated.

A department manager should recognize several responsibilities relatedto possible pay inequities. First, a manager should know enough about thepay level for each person being supervised to recognize pay inequities withinthe group when or before they surface. In a relatively small group, substan-tial pay inequities are uncommon. A manager who has a small group of em-



ployees should be well aware of how these people stack up against eachother in terms of pay. In a larger department, the cumulative effects of sev-eral years of hiring at differing levels as well as merit and probationary andannual pay increases may mask inequity until an employee raises the issue.When this occurs, the manager should do some preliminary research con-cerning the inequity. If warranted, the problem should be referred to HR forfurther analysis and a recommendation for change or correction.

A manager’s other responsibility related to alleged pay inequities is towork with HR when the challenges involve claims of underpayment incomparison with what persons of comparable skills are supposedly re-ceiving at other local facilities. Employees will sometimes approach thedepartment manager with such challenges looking for the manager’s sup-port and advocacy. They want the manager to champion their cause andseek to have one or more pay scales increased and corresponding pay raisesgranted for individuals.

Although conscientious and caring managers are probably inclined tobe advocates for their employees, claims of pay inequity relative to otherorganizations are best referred to HR. This action should be taken beforeagreeing to take on any employee’s cause. Assessing such claims of in-equity requires detailed information about wages paid in the immediatearea. There are legal and practical restrictions on how such informationmay be obtained. It is no longer safe to simply survey wage rates aroundone’s local area to obtain information that might help in adjusting ratesfor equity and competitiveness.

In the early 1990s the United States Justice Department put a stop tothe direct sharing of wage and salary information. As part of a consent de-cree involving the settlement of a civil antitrust complaint, the JusticeDepartment laid down some rules for surveying rates of pay, specifically:

• Surveys must be designed, conducted, and published without the in-volvement of participating organizations (accomplished, for example,by a hospital association or neutral third party).

• Surveys can include only historical or current pay information (thatis, they cannot ask for intended increases).

• Surveys cannot request actual pay rates, only ranges and averages forspecific job titles.

• Surveys must disseminate data of 10 or more organizations if cur-rent information is involved, or 5 or more if the data is more than 3 months old.

• No one organization’s data may represent more than 25% of theweighted value of any statistic (in other words, the data from onelarge facility cannot dominate the results).

• Data must be presented in such a manner that no individual partici-pating organization can be identified.

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Managers should never give in to the temptation to conduct a personalwage survey by calling on contacts or colleagues throughout the commu-nity to determine what other organizations are paying for the specific kindsof skills in question. Since the early 1990s, the free exchange of wage in-formation has been legally regarded as price-fixing under antitrust regu-lations. The Justice Department eventually decided that not-for-profithealthcare organizations should be held to the same standards as other in-dustries. Therefore, department managers who solicit or exchange wageinformation with colleagues at other institutions are technically engagingin an illegal activity. Rather than attempting to verify the validity of em-ployees’ claims of wage inequity relative to other organizations, a depart-ment manager should take the issue to HR and rely on HR to conduct theappropriate investigation.

Wage surveys are permitted, but only when conducted according to es-tablished guidelines. They must be done by a third-party organization,such as a membership association of hospitals or other providers. Further,they must include a sufficient number of organizations surveyed and havetheir data arranged in such a way that no participating institutions can bereadily identified. Generally, five or six organizations are enough for anappropriate survey, provided that none can be readily identified. For ex-ample, a survey cannot have separate categories for “university medicalcenters” or “hospitals of 100 to 200 beds” if only one of each is includedin the survey’s sample or area of coverage.

Interviewing Prospective EmployeesThe department manager is expected to be conversant with all pay scalesused in the department. Thus, in most organizations a manager may citethe appropriate pay range for a job during an interview. However, a man-ager should not make a specific financial offer during an interview. Havingmade a decision to offer a position to a particular applicant, the managershould collaborate with the HR recruiter to determine the starting paythat will be offered. The official offer will flow from HR to the applicant.

There are several reasons for making formal offers only through HR.First, all offers of employment are conditional pending successful referencechecks and passing a pre-employment physical examination. Second, it isthe responsibility of the HR department to protect an organization’s com-pensation system against inequities. This can best be accomplished if alloffers emanate from a single office. Third, some organizational policies fordetermining starting pay offers may state, for example, that people witha given amount of experience may be offered a starting pay at a specifiedpercentage of the pay grade. This is also most easily controlled if all offersemanate from a single point.



A department manager should have a voice in recommending startingpay if there is any flexibility in so doing. This input should be made inconjunction with HR, remembering that HR always extends the formaloffer of employment.

■ BENEFITSA department manager should have basic benefit information availablefor employees. At a minimum, this should include information in the per-sonnel policy and procedure manual and the employee handbook. Nomatter how strongly employees are urged to become familiar with their ben-efits, many of them show no interest in doing so until a specific need arises.When a specific need does arise, they do not read about the benefit. Rather,they choose to ask a person, usually their department manager or some-one in HR. This is especially true concerning health and dental insurancebenefits, about which many employees remain nearly completely ignorantuntil a specific need emerges.

Department managers are not expected to be experts in the interpreta-tion of employee benefits. However, managers should be sufficiently con-versant with the benefits structure to answer simple questions and to knowthe appropriate person in HR to refer employees for inquiries about ben-efits. Some areas of employee benefits can become complex. For example,a large hospital may carry five or six different health insurance plans, eachhaving hundreds of details. Questions about them are best addressed bya person who is qualified and knowledgeable about the different plans.

Flexible Benefits PlansFlexible benefits plans proliferated through the 1980s and 1990s. Theyare commonly referred to as cafeteria plans, and their use recognizes thatthe majority of workers prefer to have some control over their benefits.The array of options available is often a consideration when determiningwhether an applicant will accept employment with a particular employer.

The three benefits most preferred by the majority of employees, in or-der of their preference, are health insurance, a pension plan, and paid va-cation. Despite the fact that these have formed the core of most organizationalbenefit plans, they are not of equal importance to everyone.

Employee benefits are available in many different forms and variations.This is useful when not all employees want or need the same benefits. Evenpension benefits, which will ultimately be a concern for everyone, are nota consistent choice for all employees at all times. Younger employees of-ten pay less attention to pension plans than do older workers. Youngeremployees prefer to have cash or additional paid vacation time. Older

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workers tend to prefer pension benefits. Choices were introduced into ben-efits programs as employers endeavored to stretch benefits budgets asmuch as possible while giving employees options for the benefits that theyperceived were most needed. Flexibility and choice will be increasinglyimportant features of benefits programs in the future.

Flexible benefits plans have proven their appeal to many employees.An increasing number of employers are offering plans that are either en-tirely flexible or partly flexible around a small number of core benefits.Programs that allow an employee to waive medical coverage after estab-lishing that coverage is provided by other means and applying the valueof that benefit elsewhere have been especially successful. Plans that per-mit buying or selling some vacation time by trading it off for other bene-fits are quite popular.

A logical progression beyond flexible benefits is the use of benefitsvouchers. These provide employees with the equivalent of a set amount ofmoney to apply outside of an organization as they choose. Stated differ-ently, such a plan allows employees to spend an organization’s contribu-tion toward their benefits on whatever is most meaningful to them. Vouchershave proven to be especially advantageous to some employees during lay-offs and downsizing. Many employer-furnished benefits end when em-ployment is terminated but benefits secured externally with vouchers arepurchased for a fixed period of time and do not necessarily end when em-ployment ceases.

Another emerging trend is voluntary benefits. This approach allowsemployees to purchase specified insurance coverage and financial productsfor savings and retirement at their place of employment. Voluntary bene-fits have been used in work organizations for many years in the form ofsupplemental insurance programs. The concept appears to be spreadingto include some products or options formerly regarded as core benefits.

Portable benefits are becoming more common in benefits administra-tion. This concept has been advanced by many as the solution to maintainingbenefits for workers in a mobile society. It recognizes that individuals maywork for several different organizations during the course of a normal ca-reer and therefore may be best served by benefit products that can movewith them. Defined benefit pension plans are being replaced by defined con-tribution plans. Because defined contribution plans limit liability expo-sure, they result in savings for employers. They also allow organizationsthat formerly offered defined benefit plans to escape the hassle of gov-ernment reporting, avoid annual funding of plans, and get out from un-der the constantly increasing premiums charged by the Pension BenefitGuarantee Corporation (PBGC). Common defined contribution productsinclude 401(k) plans for investments and savings and 403(b) plans for tax-deferred annuities. Individuals owning either product can transfer them tosubsequent employers.



Also, the Health Insurance Portability and Accountability Act (HIPAA)addresses an aspect of benefits portability by providing for continuity ofcoverage when workers change employers.

Some experts have predicted that the ultimate development in benefitsadministration is to offer no benefits at all other than those required bylaw, such as those required by the Federal Insurance Contributions Act(FICA, that is, Social Security), Workers’ Compensation coverage, and un-employment insurance. Employers will simply pay their employees thevalue of the organization’s benefits contribution as a part of their salaryand allow them to spend the money as they choose. This is in conflict withthe direction and philosophy established by the government in employ-ment legislation that encourages employers to assume greater social re-sponsibility for their employees. Many workers in the lower tiers of theeconomy presently receive no benefits other than those required by law.The government has been trying to address and improve the situation ofthese people, especially with regard to health insurance.

Statutory BenefitsStatutory benefits programs exist by virtue of legal requirements. Theseprograms are usually administered by HR. Foremost among these areWorkers’ Compensation and unemployment compensation in all states. Anumber of states have a requirement for short-term disability compensa-tion. Human resources usually coordinates these programs although thereare implications for a department manager.

Workers’ Compensation laws are in effect in all 50 states, AmericanSamoa, the District of Columbia, Guam, Puerto Rico, and the VirginIslands. Including both medical benefits and compensation for lost in-come, billions of dollars in Workers’ Compensation benefits are paid toAmerican employees every year.

The medical benefits paid under Workers’ Compensation laws gener-ally equal full actual medical expenses. The amount of benefit paid forlost wages varies considerably from state to state. Nationwide, the mostcommon benefit paid amounts to two-thirds of wages up to a specifiedmaximum. Most states place limits on both maximum and minimumweekly benefits, the total number of weeks that benefits can be received,and the total dollar amount of benefit eligibility. Most states also providelifetime payment for permanent disability. Some states pay additionalamounts for dependents, rehabilitation services, and other benefits.

Department supervisors cannot exert much influence over Workers’Compensation costs, because managers are members of a group of peoplein an organization who have separate but not well-defined roles in con-trolling Workers’ Compensation costs. The best approach to controllingsuch costs is to have an effective accident prevention program. Here, a man-ager’s role is to be constantly aware of the requirements of the program

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and ensure that all employees observe those requirements. Specifically, it isup to managers to ensure that employees are thoroughly educated in safework practices, including, in the healthcare setting, safe handling of nee-dles and other sharp objects and safe lifting techniques. Puncture woundshave always been a concern in health care, and back strain resulting fromimproper lifting remains one of the most common on-the-job injuries ex-perienced by healthcare personnel. Managers must enforce compliance withorganizational safety procedures that have been mandated by governmen-tal entities. They must also ensure that their employees are trained and ap-propriately use all required safety equipment as they perform their jobs.

When pursuing an effective accident prevention program, a manager isclearly responsible for encouraging a high level of consciousness about theneed for safety among employees. Managers must discipline their employeesfor unsafe practices. Ignoring a safety procedure is no different than violat-ing any other work rule or policy. Violators must be appropriately counseled.Continued violations must be handled through progressive discipline.

A department manager should assist HR in monitoring Workers’Compensation claims and challenging those that appear to be inappro-priate. To monitor claims properly, a manager must be thorough and timelyin providing all documentation that may have a bearing on a claim. Thisincludes all necessary incident and accident reports. These should be pro-vided as soon after the fact as possible. They must be clear and detailed.

Questions arise about whether a particular injury occurred during work-ing time or on an organization’s property. It may be necessary to determinewhether Workers’ Compensation is appropriate or whether the case shouldbe processed as a short-term disability resulting from an off-the-job oc-currence. Employees may report off-the-job accidents as occurring on thejob, especially in states and organizations that lack a short-term disabil-ity benefit or where Workers’ Compensation benefits are more generousthan short-term disability benefits. After an injured employee’s personalphysician, the employee’s supervisor is often the next most important per-son in determining whether a given occurrence legitimately falls underWorkers’ Compensation.

Unemployment CompensationThe Social Security Act of 1935 made the individual states responsible fortheir own unemployment compensation insurance programs. A federaltax was imposed on employers, but most of this tax could be offset bystate taxes. All programs were to be controlled at the state level.

Unemployment insurance programs are in effect in all 50 states, theDistrict of Columbia, and Puerto Rico. These programs are continually un-dergoing change. The majority of these changes lead to increased benefitsfor employees and increased costs for employers.



Although differences exist throughout the country, employers are gen-erally subject to experience rating. This means that they are taxed ac-cording to their past records. An employer that decreases its unemploymentclaims by employees will also decrease its unemployment tax costs. Themajority of business organizations, and virtually all profit-making busi-nesses, are taxed directly using experience-based rates established by eachstate. In a number of states, not-for-profit organizations, including mosthealthcare organizations, pay for their unemployment on a dollar-for-dollar basis rather than paying a tax based on a percentage of their pay-roll. This means that such organizations pay their actual unemploymentcosts as they are incurred.

Because unemployment compensation is intended to make up for wageslost due to periods of unemployment beyond an employee’s control, un-employment compensation is not ordinarily made available to people whovoluntarily resign their employment or who are discharged for cause.Rather, unemployment compensation is intended primarily for employeeswho are laid off through no fault of their own or who otherwise find thattheir services are no longer required. Individuals who have been dismissedbecause of their apparent inability to meet the requirements of their posi-tions generally qualify for unemployment compensation. In a few states,employees who are on strike can receive unemployment compensation af-ter a specified waiting period, usually six or more weeks from the start ofthe strike.

To the extent that it is possible for a department manager to influencesome forms of employee turnover, a manager can have an effect on an or-ganization’s unemployment compensation costs. Care and thoroughnessin hiring will help limit the likelihood of acquiring an employee who mayturn out to be unable to succeed on the job. It is not possible to refine thehiring process to the point where right choices will always be made.Nevertheless, if a manager sticks to minimum education and experiencerequirements and does not rush a decision based on insufficient informa-tion or an insufficient number of candidates, it is often possible to mini-mize or avoid performance problems before they begin. This also minimizespotential unemployment costs.

A manager should scrupulously follow all of an organization’s policiesregarding hiring, orientation, disciplinary action, and applicable legalprocesses. Disciplinary actions, especially those taken in a series that couldeventually result in termination, are especially important. All such actionsmust be thoroughly documented and should be taken strictly in accor-dance with policy and Equal Employment Opportunity guidelines. It isfrequently necessary to use records of disciplinary actions to refute non-legitimate claims for unemployment compensation. Because the primarypurpose of disciplinary action is correcting behavior, it is often necessary

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to produce documentation of a series of related actions to demonstratethat an employee had the opportunity to correct errant behavior but failedto do so.

A manager should remove a sub-standard performer during the pro-bationary period. An organization’s probationary period may be too shortto be able to make a definite decision concerning an individual’s ability,especially in the case of a marginal employee. However, the probationaryperiod is usually sufficient to give a manager a fairly clear indication of anemployee’s potential. Separations for reasons related to performance isusually easier to justify if they occur during a probationary period. Becauseunemployment costs are related to the length of time an employee hasworked for an organization, separation by the end of the probationary pe-riod reduces costs.

Working in conjunction with HR, a manager should challenge all un-employment claims that appear inappropriate. Many people automaticallyfile for unemployment regardless of why or how they left their positions.They have nothing to lose by trying to collect benefits. Many former em-ployees will state their reasons for termination clearly in their favor. Theformer employer then has the responsibility to dispute such claims toavoid unemployment costs. If a claim goes undisputed, then a former em-ployee, deserving or not, will automatically collect unemployment com-pensation. Thus, every effort should be made to dispute claims that appearinappropriate.

A manager should consider the use of temporary help when it will onlybe needed for a short period of time. Hiring a regular employee to covera given need and then laying the person off when the need has passed in-creases unemployment costs. Using temporary help for particular tasks orfor brief periods of time will avoid such costs. In most parts of the coun-try, 26 weeks of work are required for an employee to become eligible forunemployment benefits. Thus, any need that is less than six months longand can be met by using temporary help will reduce an organization’s un-employment costs.

Short-Term DisabilityUnlike Workers’ Compensation and unemployment compensation, whichare statutory requirements throughout the country, short-term disabilityis not a universal legal requirement. The reason for disability coverage isnot important. It requires conscientious attention to cost control.

The premium for disability insurance is linked to usage. Technically,this is called an experience rating. The claims actually paid in a given yearare reflected in the subsequent year’s premium rates. Therefore, most or-ganizations pay dollar-for-dollar. They eventually pay the total actual costsfor all claims plus administrative expenses.



The single action that can have the greatest impact on an organization’soverall disability costs is a corporate decision to become self-insured. Sucha policy is typically coupled with a comprehensive employee health andsafety program. At the level of an individual department, a manager canpass along information to employees concerning personal health and safetyin general and particular hazards or illnesses that are germane to an or-ganization. Supervisors should urge employees to take advantage of an-nual physical examinations or health assessments and should always beprepared to refer employees to the employee health office when questionsarise or problems become apparent. Finally, managers should scrupulouslyfulfill all departmental responsibilities related to disability procedures byensuring that all necessary forms are complete and submitted in a timelyfashion.

■ LEGAL ACTIONSFrom a department manager’s perspective, involvement in a legal actionmay take the form of brief periods of extremely intense and demandingactivity, interspersed with lengthy stretches characterized by little or novisible activity. A department manager who may become involved in a le-gal action against the organization must be patient. Attorneys’ schedules,court calendars, and official waiting times all extend the time that is re-quired to resolve legal actions. There is little point in allowing the sus-pense of a situation to impact the routines of employees when the timingof events lies well beyond their control.

Supervisors must accept the normal sequence of events. During longquiet periods, nothing may seem to occur. Many activities such as mo-tions, depositions of various individuals, and settlement conferences thatdo not involve a manager may be transpiring. Managers should simplyaccept the apparently slow pace of resolution. Managers should not beoverly concerned about being called for deposition or trial testimony.Expert preparation and support will be provided.

Individuals who are named in a suit or summoned in a case must ap-pear in court. Because there is no way to avoid such an appearance, wor-rying about doing so is a waste of time and energy. Resigning one’semployment will not remove the legal obligation. When completing anyform, offer only what is necessary and always do so objectively and with-out personal bias or name-calling. Complete all forms, being attentive todates and signatures. Managers should remain sensitive to the implica-tions of a case in their day-to-day dealings with employees. Words as wellas actions have the potential to create problems. In response to direct ques-tioning, do not discuss an open case with others in the organization ex-cept for those few who are actively managing the organization’s involvement.

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Smart managers avoid the temptation to make predictions concerning theeventual outcome.

■ EXTERNAL AGENCY INVESTIGATIONSHuman Resources staff members often spend a considerable amount of timeinteracting with representatives of different government agencies. A list ofthe agencies that are commonly encountered by an organization follows.

Equal Employment Opportunity Commission (EEOC) and the StateDivision of Human Rights (DHR)These two agencies address allegations of employment discrimination.Filing a complaint with one is essentially filing with both of them. In manystates a complaint reaching EEOC first is automatically referred to DHRfor initial processing. The initial point of contact for both agencies is usu-ally Human Resources. HR typically gathers the requested informationand formally responds to a complaint. The manager of a complaining em-ployee’s department will often be contacted for information to help in de-veloping the organization’s response. That manager is likely to be interviewedduring investigation of the complaint.

Occupational Safety and Health Administration (OSHA)Using no particular schedule or set frequency, this agency may send rep-resentatives to perform routine surveys of safety practices or to inves-tigate specific complaints or allegations of unsafe practices that have beenreceived. Human Resources is often an organization’s point of contact.The initial contact may be a particular administrator, a risk manager ora safety manager. Engineering may also be involved since many safetyissues involve the physical plant. The manager of a department wherea potential unsafe practice is observed or alleged can expect to becomeinvolved.

State Employment ServiceHuman Resources is heavily involved in every claim for unemploymentcompensation. Since an employee’s level of compensation is based on in-come, information about earnings must be provided. Human Resourcesmust supply the reason for termination and must indicate whether ornot the claim will be protested. A protested claim usually results in ahearing before an administrative law judge. A hearing usually involvesthe former employee’s immediate supervisor as well as a Human Resourcesrepresentative.



Citizenship and Immigration Services (CIS)Investigators from the CIS will periodically arrive in Human Resources toaudit personnel files for the presence and accurate completion of requiredI-9 forms. Ordinarily, a department manager will have no involvement inan I-9 audit except as the channel for an I-9 related question from HR toan employee. Occasionally, CIS investigators will come looking into theimmigration status of specific individuals. Such investigations can involvequestioning of a department manager.

Department of Labor (DOL)The Department of Labor monitors compliance with wage-and-hour laws.Since both states and the federal government have wage-and-hour laws,an organization may be visited by either state or federal DOL representa-tives. Their interest may be a routine audit of selected wage payment prac-tices. Overtime payments are often the subjects of investigation. The DOLalso investigates employment practices such as compliance with child la-bor laws. DOL investigators occasionally investigate irregularities in wagepayments. The primary points of contact in such investigations are usu-ally Human Resources and Payroll. Department managers can become in-volved in providing information to determine whether an employee isproperly classified as exempt or nonexempt or whether time worked hasbeen appropriately reported.

Few people look forward to an investigation by an external agency.However, such contacts are inevitable. Most Human Resource depart-ments regard external agency inquiries as opportunities to review selectedpractices for possible violations and determine how these practices can beimproved. Even though an external investigator may appear to be unnec-essarily forceful, nothing is accomplished when HR personnel or othersrespond by being defensive or uncooperative.

A considerable part of Human Resource’s role regarding external agen-cies is knowing the law as well as an agency’s guidelines and procedures.When internally investigating a specific complaint, HR should first de-termine whether it is valid. If it is, HR can recommend corrective actionin addition to formulating the organization’s response to an externalagency. There is no gain in resisting a complaint if an organization ap-pears to be in the wrong. However, HR professionals are usually wellaware that an external investigator who is acting on an individual’s com-plaint has heard only one side of the story. Unless the particular com-plaint to be addressed is a discrimination charge from EEOC or DHRthat cannot be disposed of at an early stage, Human Resources is usuallyable to keep a department manager’s involvement with external agencyrepresentatives to a minimum.

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■ CONCLUSIONCompensation and benefits are important aspects of employment for mostpeople. Compensation information is coordinated by HR. Benefit policiesare changing. Organizations are trying to reduce expenses associated withbenefits. Flexible benefit plans have evolved as organizations try to pro-vide meaningful and relevant benefits to employees with a wide range ofages and interests. Rather than simply paying for a standard benefits planfor all, organizations are allowing individuals to make their own decisionsregarding benefits. Benefit programs are usually administered by an HRdepartment. Workers’ Compensation, unemployment compensation, andinsurance and disability insurance are required by law. All other benefitsare offered at the discretion of an employing organization.

Returning to the initial case study, Sara either should provide a generaldollar amount to offer to each Westside employee or she should instructPat to develop such an amount. Rob and Pat should contact other organ-izations in the area that compete for employees to ascertain what compo-nents their benefits packages include. They should consider obtaining theopinions of a sample of Westside employees as to the desirability of the ben-efits under consideration. Once the fundamental questions of dollar amountand plan elements are addressed, Rob and Pat can develop a plan for Sarato consider. Based on their years of service and relative position within theorganization, the plan should define the dollar amounts Westside will pro-vide for its employees and the options from which they can choose fortheir benefits. Because they are thorough, Rob and Pat should develop arange of options for Sara to review. Ultimately, Westside’s board of direc-tors will have to approve the proposed changes in benefits.

Discussion Points

1. What is meant by the term statutory benefits? Provide several examples.2. Why should a department manager be thoroughly familiar with pay

scales appropriate to department personnel but refrain from makingspecific pay offers to potential employees?

3. How should a supervisor reply to a male employee who complains thathe is being paid less than another individual who is doing the samework? How should a supervisor reply to a female employee making thesame complaint about a male colleague? Are the responses different? Why?

4. Why should a department manager avoid comparing employee payscales with those of other organizations?

5. An employee asks, “What is the difference between a defined benefitpension plan and a defined contribution plan?” How would you re-spond to such a question?



6. Why is interest in portable benefits in health care increasing? 7. In your opinion, what should be a department manager’s primary role

in attempting to control Workers’ Compensation costs? 8. Managers disagree whether a particular instance of time lost due to in-

jury or illness should be considered under Workers’ Compensation(job-related) or short-term disability (not job-related). Knowing thatan employer ultimately pays for both, why is this distinction important?

9. What role should a department manager have in controlling the costof unemployment compensation?

10. How should managers react if representatives of an external regula-tory organization arrive at their departments to audit their activities?

Resources

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Beam, B. T. (2004). Employee Benefits. Chicago, IL: Dearborn Real Estate Education. Bowey, A. M. & Lupton, L. (2005). Managing Salary and Wage Systems (3rd ed.).

London: Ashgate Publishing. Boyett, J. H. & Boyett, J. T. (2004). Skill-Based Pay Design Manual. Lincoln, NE:

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PerformanceAppraisals

Chapter Overview


• Know the reasons for having an up-to-date performance appraisalprocess

• Understand the primary objectives of performance appraisals • Recognize traditional approaches to performance appraisals • Appreciate common obstacles to performance appraisals • Avoid the problems presented by appraisal instruments that

require evaluators to render personality judgments • Understand that sound position descriptions are the essential

starting point for an effective appraisal process • Know the kinds of standards and measurements that can be

applied in appraising performance • Be able to define the critical difference between the terms standard

and average as they are used in performance appraisals • Know the two most common approaches to appraisal timing • Be able to schedule and conduct a performance appraisal

interview • Know when and how self-appraisal can be a constructive element

of the performance appraisal process • Appreciate important legal implications of performance appraisals • Recognize the features of practical performance appraisal forms • Know the role of human resources in performance appraisal,

including the times in the process when a department managerbecomes involved

C H A P T E R

12

219


■ CHAPTER SUMMARYPerformance appraisals are important to employees and organizations.They provide structured opportunities for supervisors and employees totalk about progress and performance. Knowledgeable organizations usestructured forms for all employees and use written protocols to provideguidance for the process.

Poor or obsolete forms hinder the appraisal process. Useful forms areobjective, easy to understand and use, and relatively brief. They rate per-formance, not personal characteristics or attitudes. The best appraisalforms are related to position descriptions and ask for evaluations that canbe supported by data. Employees should be evaluated in terms of stan-dards rather than averages.

A written appraisal must be followed by a personal interview to discussthe evaluation and the opportunity for employee input. Self appraisals orteam evaluations are used as appropriate. Human resources (HR) shouldoversee employee appraisal programs.

Case Study: An Appraisal Conversation

“This is stupid and a waste of time,” lamented Stu Johnson. “I supervisethese people every day and know their working habits well. Upper man-agement pays me to get work done, not to write out appraisals every year.”

“Ah, even ignoring the fact that regular appraisals are required by pol-icy, your employees look forward to them,” replied Marcia Stannis, a col-league of Stu.

“Humph. If they want to know how they are doing, all they have to dois walk into my office and ask me. I’ll be glad to tell them.”

“How often does that happen?” asked Marcia. “Maybe once every year or so,” replied Stu.“Do you walk around the office?” asked Marcia.“Sometimes, when I have time,” was the reply. “How often is sometimes?”“Every few weeks,” said Stu. “You know that we’ve been busy this past

year.”“Did you know that Julie has completed her degree?” asked Marcia.“No.”“Or that Jeff is applying for a promotion?” Marcia continued. “Huh? When did he do that?” “Last month. Remember Jim, the problem employee?”“How could I forget him? He was so lazy,” Stu recalled. “He lost his lawsuit for wrongful dismissal.”“That seems appropriate.”

220 CHAPTER 12 PERFORMANCE APPRAISALS


How would you describe Stu’s management style? In your opinion, washe as knowledgeable about his employees as he thought? Why? Why doyou think Jim lost his lawsuit?

■ PERFORMANCE APPRAISAL DEFINEDPerformance appraisal is a structured event. It involves a periodic exami-nation of performance to ascertain how well a particular employee is per-forming relative to what is expected. Performance appraisal is based ontwo documents, a position or job description and a performance appraisalform. A permanent record is usually created and retained in an employee’spersonnel file.

Different organizations may use different names for the performanceappraisal process. The more common titles are performance evaluation,performance review and performance assessment. A newer term is per-formance management. Performance management purports to encompassnot only evaluation but also the overall development and improvement ofan employee as a producer. When completed correctly, however, per-formance appraisals include everything that performance managementclaims to include.

■ THE NEED FOR PERFORMANCE APPRAISALPerformance appraisal is used to facilitate improvement in employee per-formance, provide formal or official feedback to employees concerningtheir job performance and collect information for decisions concerningcompensation and other personnel transactions such as promotions andtransfers.

The primary purpose of an appraisal is to improve employee perform-ance in the present job. A secondary purpose is to maintain the perform-ance at an acceptable level. The process contributes to two developmentalobjectives for an employee. It delineates an employee’s progress toward ad-vancement and assuming greater responsibilities. It helps senior managersto identify employees who are capable of advancement. Performance ap-praisals periodically remind employees about what their employers expectfrom them. From the perspective of individual employees, performanceappraisals should enable them to know how they are performing. It alsohelps them to know what is needed to improve their performance.

Performance appraisal in health care is mandated by organizations andagencies that accredit and regulate healthcare facilities. In some instances,mandated evaluation has led to the development of performance appraisal

The Need for Performance Appraisal 221


systems that are little more than a formality. Such evaluation systems haveminimal value.

■ CONDUCTING A PERFORMANCE APPRAISALMany methods have been employed to assess employee performance. Themost often used ones employ rating scales. These are based on comparingan employee’s performance with a scale that represents expectations. Otherapproaches are sometimes used. Under particular circumstances each ofthe following has been effectively used.

EssayA supervisor periodically describes employee performance at whateverlength is considered necessary. After the contents are discussed with theemployee, the essay is signed by both parties. The employee is given a copyand a copy is placed in the personnel file.

Critical IncidentAny positive or negative event that occurs outside of the ordinary is writ-ten up and retained for the next formal performance discussion.

Employee ComparisonEmployees in a group are compared with each other and rank orderedfrom the best performer to the poorest performer. A different variationhas supervisors placing their employees into a three-part distribution. Apredetermined percentage is rated above average, a similar percentagemust be rated below average, and the remaining employees are rated in themiddle.

ChecklistIn this approach, an evaluating manager must describe employee per-formance by choosing from among a number of prepared statements. Avariation of this method asks supervisors to select, from a group of pre-pared statements, the one that best and another that least describes eachemployee.

Management by ObjectivesThis is a participative approach commonly used with higher-level techni-cal or professional employees and managers. The individual is evaluatedon achievement of or progress toward specific objectives developed by theindividual with the manager’s concurrence.



Although every appraisal system has shortcomings, a rating-scale ap-proach is most useful and equitable when it is correctly applied. It is nei-ther appropriate nor fair to appraise the work of employees by comparingthe performance of one to another. The most useful comparison that canbe made via appraisal is the evaluation of individual employee perform-ance over time; in other words, the only comparison experienced by an em-ployee is with his or her own past performance. Successive evaluationperiods provide the basis for meaningful long-term assessment. Evaluatorsand employees must have similar expectations of how their organization’ssystem works. This approach does not rely on the specifics of any partic-ular rating system.

■ MANAGERS AND RATINGAppraisal occurs so infrequently it is difficult to consider performance ap-praisal as a regular part of a manager’s job. Thus, managers often view theprocess as extraneous and intrusive. Appraisals become extra work. It re-quires supervisors to make difficult judgments about subordinates. As aresult, employee appraisals are often dreaded or disliked. Managers are of-ten uneasy about criticizing employees, especially on a performance ap-praisal that results in a permanent record in an employee’s file and that couldaffect the person’s pay, job future and career.

One common approach to evaluation anxiety or fear is to ignore theappraisal requirement. When that option is disallowed, supervisors oftenaccomplish the task in a hurry and avoid making any substantive evalua-tion decisions. Such an approach has no utility. In business in general aswell as in health care, appraisal is a necessity. The best way to address ap-praisal anxiety is with knowledge, preparation, and practice. Rememberthat neither employees nor managers enjoy appraisals.

■ OBSTACLES TO PERFORMANCE APPRAISALOther obstacles to performance appraisals exist in addition to managers’and employees’ dislike of the process. If evaluation is not taken seriouslyby an organization, then managers will view performance appraisal as lit-tle more than a paper-pushing activity that has little relevance. The lengthand complexity of forms can deter department managers. Appraisal re-sults may be converted to scores when used to determine pay increases. Whenthis occurs, a performance appraisal becomes a scorecard and the processbecomes competitive.

Ensuring that all managers apply appraisals in a consistent manner isa common problem. Person-to-person consistency is important, especiallywhen evaluation scores determine the amount of pay increases. Differences

Obstacles to Performance Appraisal 223


do exist. Some managers rarely give outstanding ratings. Others consis-tently give employees high ratings. Some managers cluster their ratingsand group most employees in a narrow band around the middle of thescale. Different supervisors emphasize different parts of the system. Onemay emphasize quality of output while another stresses interpersonal relationships.

After mergers occur, managers often have extremely large units withmany employees. Some supervisors feel they do not have sufficient timeto do justice to so many evaluations. Initial appraisals are thorough whilelater ones are likely to be rushed. Managers with large numbers of em-ployees may not be equally familiar with all aspects of every employee’swork. Older performance appraisal systems were often based on person-ality ratings. Even though such systems have changed, long-time managersoften continue to render personality judgments when appraising performance.

■ PERSONALITY-BASED EVALUATIONSOlder systems of performance appraisal often relied heavily on assessingpersonality characteristics. This yielded evaluations that were highly sub-jective. They did not focus on how an employee performed relative to anobjective standard. Exhibit 12-1 contains examples taken from an old rat-ing form. Supervisors checked the statement that best described the em-ployee being evaluated. Comments have been added to demonstrate theweaknesses of personality-based appraisal.

Exhibit 12-1 is typical of a performance appraisal that relied on sub-jective evaluations. Managerial uneasiness with such an appraisal is un-derstandable. A subjective assessment is merely an opinion when expressedby someone who is not qualified in the particular area of judgment. Fewmanagers are qualified to render a meaningful decision about personality.Using documents similar to Exhibit 12-1, managers were required to makejudgments they were not qualified to make and could not possibly defend.Making matters worse, they knew such judgments could affect people’s employment.

Such appraisals were as unsettling to employees as they were to man-agers. Few employees will willingly or readily endorse negative assess-ments. These performance appraisals were common in environments whereauthoritarian management prevailed. In such a situation, an evaluatorcould freely use personal opinions, unsupported judgments, and personalbiases on evaluations. Employees who wanted to keep their jobs had norecourse other than checking their anger and returning to work.



Personality-Based Evaluations 225

Exhibit 12-1 Example of a personality-based rating system

I. ATTENDANCE 1. Punctuality

__ Always on time __ Occasionally late __ Requires occasional reminding __ Often tardy; treats job as unimportant __ Always tardy

Commentary: In old evaluation systems, attendance was oftenthe only quantifiable item. Above, subjectivity has been intro-duced. Occasional and often are undefined. Treats job as unim-portant is a conclusion that cannot be verified. Always and neverare very dangerous words. Rarely are they absolutely true.

2. Dependability __ Perfect since last rating __ Rarely absent __ Frequently absent, but for cause __ Poor record, requires counseling __ Unsatisfactory; work suffers

Commentary: Each of these statements is completely subjective.Again there are words, such as rarely and frequently, that haveno absolute meanings. Evaluating whether an employee’s ab-sences are for cause cannot be done factually without violat-ing an employee’s privacy. As long as the employee has calledin according to policy, the manager must take each absence atface value.

II. PERSONAL QUALIFICATIONS 1. Appearance

__ Neat and in good taste __ Neat but occasionally not in good taste __ Sometimes careless about appearance __ Untidy __ Unsuitable for job

Commentary: All five items are highly subjective. What is goodtaste and who defines it? When does untidy become casual?This entire subsection is out of line. If used in an evaluation, ap-pearance should be brought up only in reference to an under-stood dress code or set of professional standards of conduct.

(continues)



Exhibit 12-1 Example of a personality-based rating system (cont.)

2. Personality __ Exceptionally pleasing, a decided asset __ Makes good impression, wears well __ Makes good first impression only; does not wear well __ Makes fair impression only __ Creates unfavorable impression

Commentary: Each of the five statements contains impreciseterminology. The entire subsection is completely irrelevant toan employee performance appraisal.

Ill. ATTITUDE TOWARD JOB 1. Interest

__ Shows intense enthusiasm and interest in all work __ Shows interest; enthusiasm is not sustained __ Passive acceptance; rarely shows enthusiasm __ Shows little or no interest __ Dislikes work

Commentary: Although often attempted, no one can appropri-ately evaluate or discipline attitude. These imprecise statementsare useless in appraising an employee. The final one is an un-warranted and insupportable conclusion.

2. Cooperation __ Goes all out to cooperate with management and co-workers __ Promotes cooperation and good will __ Moderately successful in cooperating with others __ Cooperates reluctantly and sometimes causes dissension __ Uncooperative; often breeds trouble

Commentary: How do the first two statements differ? The restof the statements can not be successfully defended.

IV. JOB PERFORMANCE 1. Accuracy

__ Rarely makes mistakes __ Above average __ Average __ Below average __ Highly inaccurate

Commentary: These statements are subjective without a quan-tified definition of average.


■ PERFORMANCE APPRAISALSThe appropriate way to appraise performance is to base the evaluation onwhat an employee does rather than on what an employee knows. Fordecades, managers rated employees on job knowledge. In addition to be-ing subjective, such an assessment provided little or no value. Job knowl-edge is immaterial. What really matters is how knowledge is applied or whatresults are achieved.

The correct approach to appraisal is to base an evaluation on how wellemployees are performing the jobs they are expected to do. Preparationfor appraisal begins by considering the specific tasks that make up the jobbeing performed.

Solid Position DescriptionsA sound performance appraisal begins with a solid position description.A position description is usually written by a department manager withassistance from HR. The person in the job should provide input.

Up-to-date position descriptions are necessary for several reasons, animportant one being their use in performance appraisal. To evaluate em-ployees on what they actually do requires a clear picture of what is expectedof each employee. The tasks to be performed and the results to be achieved

Performance Appraisals 227

Exhibit 12-1 Example of a personality-based rating system (cont.)

2. Neatness __ Takes pride in appearance of work; has sense of neatness __ Usually turns out neat work __ Apparently lacks sense of neatness; needs reminding __ Too often sacrifices neatness for quantity __ Majority of work must be done over

Commentary: All questions depend on a subjective definitionof neat.

3. Quantity __ Unusually high output; meets emergency demands well __ Consistently turns out more than average. __ Finishes allotted amount __ Does just enough to get by__ Amount of work done is inadequate

Commentary: Quantity is undefined, rendering it subjective.


provide a baseline against which to compare observed performance. Theseare often referred to as competencies. Criteria refer to the requirements ona job or position, while competencies refer to mastery of applied knowl-edge and skills that fulfill the requirements of a position description.

A primary shortcoming of many position descriptions is the extent ofdetail their writers attempt to capture. A long and detailed position de-scription leads to excessive length and detail in a performance appraisal.Position descriptions should be concise. For most entry-level jobs or non-professional positions five to eight items describing the most time con-suming tasks in descending order of time devoted to them is adequate.These should be able to capture 90 to 95% of the job duties and time spentin a year. Excessive detail places a manager at risk of paying as much at-tention to minor concerns as to major job requirements.

Exhibit 12-2 presents a sample position description for the position ofnursing assistant. The duties listed encompass more than 90% of the tasksan employee performs on a typical day throughout a year. Greater detailis possible but not desirable. Evaluating supervisors who know the joband employees as they should will be able to provide competent and com-plete appraisals.

A position description should be one of the first considerations whena new position is created. An existing position description should be re-viewed and updated when it becomes necessary to recruit for the position,when there are obvious changes in the job such as new methods or equip-ment or every two years, whichever occurs first. Another good time to re-view position descriptions for currency is when preparing to conductperformance appraisals.

Once a position description is current, attention should turn to meas-uring performance against the task requirements or assessing whether anemployee’s results are acceptable. Objective measures can usually be ap-plied to many elements of most jobs.

Sources of Standards and MeasuresMeasures of performance should address four key dimensions: produc-tivity, quality, timeliness, and cost. Sources of performance standards in-clude detailed time-study and analysis of methods. Accurate standards canoften be developed using this approach. However, the process is time-consuming and costly. The approach is most suitable for high-volume,highly repetitive activities that are infrequently encountered in health care.

Predetermined motion-time systems yield highly accurate standards,but these are also both costly and time-consuming. This process is mostsuitable for high-volume, repetitive activities.

Reasonably reliable standards can be established through work sampling.This is time-consuming, but not nearly as costly as the other two methods.




Exhibit 12-2 Sample Position Description

Department: Nursing Position: Nursing Assistant, General Medical/Surgical Grade: N-3 Job Code: 607 Reports to: Unit Manager (will occasionally report to designated nursein charge). Principal Duties (List in descending order of approximate percentageof time required):

1. Provides timely personal care of acceptable quality to patients inaccordance with established policies, procedures, standards, andapproved individualized care plans in a manner mindful of patientprivacy, comfort and safety.

2. Performs routine treatments and other patient care duties as as-signed, competently completing all assigned treatments duringthe scheduled shift. Also assists RN or LPN with nursing care andtreatments as needed.

3. Assists RN or LPN in gathering data for patient assessment in-cluding vital signs and height, weight, intake and output, and othermeasurements as applicable; demonstrates ability to recognizeand report abnormal vital signs; demonstrates proper ability tocollect and accurately label specimens.

4. Maintains positive interpersonal relationships with patients, visi-tors, and other staff while ensuring confidentiality of patient in-formation and protection of patient privacy.

5. Maintains conscientious work habits consistent with the standardsof the Nursing Department specifically: documenting clearly andcompletely, managing assignments with normal supervision, com-pleting duties within the assigned shift, accepting reassignmentto other units as necessary, and responding favorably to reason-able requests to remain beyond the shift when needed.

6. Operates equipment and performs work in a safe manner, demon-strating proper body mechanics in lifting, pulling, pushing andcarrying.

7. Maintains the clinical and educational standards of the department:maintains CPR certification and demonstrates effective performanceduring “code” procedures; participates in unit and department in-service education activities; remains current with all continuingeducation requirements.

8. Undertakes other assignments as directed by the unit manager orofficially designated charge nurse.


Nevertheless, work sampling requires special skills and a person who canbe dedicated to developing standards. Work sampling is most applicableto moderately repetitive activities.

Benchmarks are indicators of productivity that have been developedthrough the collective experience of several organizations or published byinterested groups such as associations of health care organizations or tech-nical and professional societies. Benchmarks are inexpensive. They are of-ten free to members of an association or available via a purchasedsubscription to a statistical reporting service. Benchmarks are readily ap-plicable but usually not as accurate as the other three sources described.Benchmarks can be misleading because users often have no clear idea aboutthe method on which a benchmark is based. Exhibit 12-3 provides exam-ples of indicators for which standards may be established or benchmarksacquired. These relate to productivity or quantity, quality, time, and cost.

RangesBenchmarks or other data provide the basis for assessing individuals or teamsof employees. Ranges are preferable to absolute standards. Attendanceprovides a simple example. Rather than setting a rigid standard of threeabsences in a 12-month period, an organization may establish an accept-able range of three to five absences in a 12-month period. This allows su-pervisors to warn employees about problems before they become serious.It provides a simple system for appraising behavior. Having three to fiveabsences in a 12-month period constitutes meeting the standard. Employeeswith six or more absences fail to meet the standard. Those with two or fewerabsences exceed the standard.

Using ObjectivesSome employees may be evaluated on how well they meet objectives thatwere based on previous evaluations. Objectives are best established jointlyby individual employees and their managers. A manager ensures that eachobjective is pertinent while an employee agrees that each objective is fairand reasonable. Some appraisal processes, especially those involving tech-nical, professional or managerial employees, rely heavily on such objec-tives. Some objectives arise from weaknesses revealed during an evaluation.Some objectives relate to personal development.

The appraisal approach based on management by objectives, which islargely applicable to managers and professionals, consists mainly of ob-jectives negotiated between employees and their immediate superiors. Anappropriate objective always includes an expression of what is to be achieved,how much will be accomplished, and a date for completion. Without all threecomponents, an objective is incomplete and lacks legitimacy.



Scale PointsA number of older appraisal systems require an evaluator to measure or judgeeach evaluation criterion using a scale comprised of gradations and check-off boxes or blanks. Exhibit 12-4 contains actual examples of scales usedfor appraisal. Many different evaluation scales have been employed. Mostof them have similar weaknesses in that they require an evaluator to ren-der a subjective judgment using an arbitrary scale that lacks definition.


Exhibit 12-3 Examples of Objective or Quantifiable Indicators

For Productivity (Quantity) • Number of patients served per unit of time • Number of items processed or produced per unit of time • Number of cases handled per unit of time • Percentage of employees participating • Percentage of employees absent or tardy

For Quality • Percentage of retakes (radiology) or test repeats (laboratory) • Error rate • Percentage of down time (equipment out of service) • Number of citations upon inspection or survey • Percentage of work rejected • Percentage of orders, bills, or other documents without error

For Time • Number or percentage of bills out within a specified number of

days • Number or percentage of deadlines missed • Number of days to complete task or project • Time elapsed, or turnaround time • Number or percentage of requests answered within a specified

number of days

For Cost • Expense compared with previous period • Percentage of variance from budget • Cost per item, per order received, per bill processed, per patient

contact • Overtime cost compared with target • Contract help cost compared with target


Experience with more modern appraisal systems has shown that a smallnumber of gradations are most desirable. Having an odd number of gra-dations places average in the middle position. Some systems use five points.Many highly effective job description-based systems use only three points.These are more than sufficient to assess performance. Each task on a jobdescription should have a corresponding scale to rate the standard or ex-pectation of behavior. An employee can then fall into only one of threepositions relative to the standard or expectation: failed to meet the stan-dard, met the standard, or exceeded the standard. Such a three-point scaleis especially appropriate when standards use ranges rather than absolutenumbers.

Average vs. StandardIn many appraisal systems, average is used to describe a desired level ofperformance. For example, a scale may have doing an average job in the


Exhibit 12-4 Examples of Poor Appraisal Scales

Unacceptable Below Competent Very Exceptionally

competent competent well

Low High

1 2 3 4 5 6 7 8

Definitely Substandard Doing an Definitely Outstanding

unsatisfactory but making average above

progress job average

Fails Average Good Exceeds Excellent

to meet expectations

standard


center position. However, organizations often use standards or standardperformance to indicate a minimally acceptable output. All too often, theseterms are incorrectly and inappropriately interchanged. Average and stan-dard are not the same.

Equating average with standard suggests that half of all employees arebelow the minimum acceptable level of performance and should proba-bly not be employed. A goal of every reasonable appraisal system shouldbe bringing all employees to a minimum or higher level of performance orrating. Standard becomes the floor beneath which performance will notbe tolerated.

Thus, standard is conventionally used as the minimum acceptable levelof performance. If that is the minimum and all other levels of output areabove it, then the true average or mean of a group is also above standard.Average may be a convenient way to compare or group scores once eval-uations have been quantified. Mean is a more precise term. In any event,average should not be used to describe the expectations of a performanceappraisal process.

Appraisal TimingAn employee’s initial performance appraisal is typically done at the endof the probationary employment period. This typically occurs at 3 or 6months of service. The probationary evaluation is completed to determinewhether the employee has learned the job adequately, after which the in-dividual enters the regular evaluation cycle. In most organizations, em-ployees are evaluated annually although in some organizations the timeinterval is 6 months.

There are two common approaches to an annual appraisal. All em-ployees may be evaluated at the same time once each year or employeesare evaluated on or near their employment anniversary dates. Each ap-proach has advantages and disadvantages.

For some supervisors, completing all evaluations during one brief pe-riod improves the consistency in applying evaluation criteria. Completingall appraisals at the same time can support a pay-for-performance com-pensation system by allowing the accurate distribution of a predeterminedamount of money because all appraisal scores are known at the same time.For some, it simply gets them finished.

Critics of simultaneous appraisals note that the task usually consumesa major amount of a manager’s time and forces other important mattersto be temporarily ignored. The quality of appraisals can diminish as theevaluator works through the group. This risk rises as the number of em-ployees increases.

Proponents of anniversary date appraisal ordinarily contend that the ap-praisal workload is distributed more or less evenly throughout the year,



thereby avoiding a rush within a brief period. These persons believe thatappraisals become fairer because they are not rushed.

Opponents of anniversary date appraisal often contend that the processrequires constant monitoring by higher management and HR rather thanoversight for only a few weeks. They note that psychologically, the ap-praisal task is never completed. An evaluator’s interpretation and appli-cation of appraisal criteria may be subject to change over time. If theappraisal process feeds a pay-for-performance system, then it is extremelydifficult to distribute a budgeted amount for increases because not allscores are known at the same time.

Performance appraisal should be completed faithfully for every em-ployee at the appointed time. Managers and their employees should haveestablished relationships. Simply meeting once each year for an appraisalinterview is not sufficient. A manager must maintain an ongoing rela-tionship with each employee and be available to discuss work performancewhenever circumstances warrant. Supervisors make a serious error whenthey accumulate issues specifically for performance appraisal.

Describing the Appraisal ProcedureAn organization’s performance appraisal process will ordinarily be de-scribed in a personnel policy and procedure manual. This document willexplain the features of the process and delineate responsibilities for differentstages. This description should be available for reference by employees atany time. Exhibit 12-5 presents a model policy and procedure for an ap-praisal process based on anniversary date approach.

■ THE APPRAISAL INTERVIEWMost performance appraisal systems stipulate that each employee receivea personal interview. An appraisal interview is a requirement; a manager’sappraisals are not considered complete until all employees have had anopportunity to discuss their appraisals in detail. Managers should be cer-tain that each appraisal interview occurs on time. Few events of a work-place can raise apprehensions and uncertainties faster than appraisalinterviews that are late.

Managers should schedule sufficient time for the meeting. Although anappraisal interview may seem routine to a manager, it is one of the mostimportant annual events for many employees, so it should never seemrushed. Privacy and freedom from interruptions are important consider-ations. Employees should have several days of advance notice so that theycan be prepared.

If the review involves objectives as well as ratings, then supervisorsshould review the objectives before the interview and be prepared to



The Appraisal Interview 235

Exhibit 12-5 Model Policy and Procedure: Performance Appraisal

It is the policy of the Hospital to provide a formal performance ap-praisal for each employee at least once each year. The purposes ofthe appraisal program are to:

• Maintain or improve performance in the job an employee presentlyholds

• Assist in employee development by providing learning and growthopportunities for those wishing to advance

• Assist the Hospital in identifying individuals with advancementpotential

Performance appraisal applies to designated employees as follows:

1. Newly hired employees:• The first appraisal will occur at the end of the initial three (3)

month probationary period.• The second appraisal will occur three (3) months following the

probationary appraisal.• The following appraisal will occur six (6) months later, or on

approximately the employee’s first anniversary of employment.

2. Employees promoted or transferred:• The initial appraisal conducted in an employee’s new position

will occur at either three (3) months or six (6) months, dependingon the learning period established for the particular position.

• Following successful completion of the learning period, theemployee will revert to the normal appraisal scheduled per 3, below.

3. All employees:• Once having successfully completed the first year of employment

or the learning period following promotion or transfer, allemployees will be subject to appraisal on approximately theanniversary of their employment.

General Provisions of the Performance Appraisal Program:• Appraisals in addition to those indicated in the foregoing may be

instituted by the department manager when either a significantdeterioration or a marked improvement in performance is evident.

• Regular communication with employees concerning performanceis essential. Continuing positive communication can assist in mo-tivating and reinforcing outstanding performance, which is the ob-jective of the appraisal process. Regular communication may alsocall attention to specific needs for improvement in performance,

(continues)



Exhibit 12-5 Model Policy and Procedure: Performance Appraisal (cont.)

and immediately addressing areas of need will help prevent themfrom emerging as major problems at formal appraisal time.

• An appropriate performance appraisal should:1. Provide an employee with guidance in growing and developing

as a performer2. Provide a manager with a means for personalizing management

guidance to individual employees3. Provide an employee with direction consistent with that

appropriate for pursuing the objectives of the department andorganization

4. Provide a manager with a means to assess an employee’sperformance and place a value on the effectiveness of thisperformance

5. Result in a more effective work force, as individuals tend toperform more appropriately when they know what is expectedof them and they are able to gauge their performance againstperiodic measurement.

The following procedure applies to the performance appraisalprocess:

1. Approximately 30 days in advance of an employee’s scheduledappraisal date, human resources will send the department man-ager an appraisal form for the employee with the heading in-formation completed.

2. The employee’s job description provides the basis for the ap-praisal. Before attempting the appraisal, a manager should as-certain that the job description is complete and accurate. Ifnecessary, the job description should be updated at this time,before the appraisal is begun.

3. In addressing the appraisal, for exempt (salaried) professional,technical, and supervisory employees the manager should as-sess performance primarily against the actual accomplishmentof duties and responsibilities as delineated in the job descrip-tion. Nonexempt (hourly) employees should be assessed pri-marily on the timely and accurate completion of assigned duties.

4. As appropriate, and provided that plans and objectives weredelineated when the previous appraisal was discussed, con-sideration should also be given to employee growth and de-velopment and improvements in performance that might haveoccurred since the previous appraisal.


The Appraisal Interview 237

Exhibit 12-5 Model Policy and Procedure: Performance Appraisal (cont.)

5. Objective, quantifiable measures of performance should beapplied wherever possible. For example, the Hospital’s standardsfor attendance and punctuality may be applied, as may theoutput standards available in some departments. For duties forwhich no objective measure of performance is available,managers should be able to reasonably describe a normalexpectation and indicate why, in their judgment the employeedid or did not meet or exceed the expectation.

6. Once completed, each appraisal must be submitted for reviewand approval by the next highest level of management.

7. When higher management approval of an appraisal has beensecured, the manager may schedule the employee for anappraisal conference. Every effort should be made to accomplishthis conference no more than five (5) working days before or afterthe employee’s anniversary date.

8. The manager is urged to follow good interviewing practices inconducting the appraisal conference by providing adequate time,privacy, reasonable comfort and freedom from interruptions.

9. As appropriate (primarily for technical, professional andsupervisory employees), the manager and employee will jointlydetermine goals, objectives, and development plans to bepursued during the period preceding the next appraisal. Asnecessary, they should achieve agreement on interim dates onwhich to examine progress between appraisals.

10. At the completion of the appraisal conference, the employeeshould be asked to sign the appraisal document to acknowledgehaving discussed it and received a copy. If necessary; the employeemay be reminded that signing the appraisal is simplyacknowledgment and does not necessarily mean agreement withall that it says. The employee may add comments of disagreementor agreement in the appropriate space on the appraisal form.

11. Should employees refuse to sign their appraisal, a manager shouldso note the fact on the form. If, in the manager’s judgment, theemployee is in strong disagreement with the appraisal and mayappeal or take other action, the manager should have anotherparty witness the refusal to sign and so indicate on the form.

12. Following the conference the completed appraisal is distributedas follows:• Original to Human Resources• Copy to employee• Copy retained by manager


discuss them. Managers should come to the interview with ideas or sug-gestions concerning objectives for the next cycle. If improvement orcorrection is needed, managers and employees should agree on appro-priate steps to achieve both.

As with any other kind of interview, from a manager’s perspective, themost important parts of an appraisal interview occur while the evaluatoris listening, not speaking. Whenever delivering praise or criticism, man-agers should be certain to address specifics. Generalizations are not use-ful and should be avoided in any element of an appraisal. Before concludingan interview, supervisors should ask their employees to sign the appraisalform to acknowledge receipt. This does not indicate agreement with thefindings or conclusions. If an employee declines to sign the form, thisshould be noted before the form is filed. Be sure to supply signed copiesof all evaluation documents to employees.

Employees occasionally report to more than one supervisor. This occurswith overlapping shift assignments or split-shift responsibilities of man-agers. When this occurs, the primary input must come from the managerwho provides the most direct supervision. This is supplemented with in-put from other involved supervisors. The manager who provides the ma-jority of direct supervision should be the one who conducts the appraisalinterview.

Neither the written performance appraisal nor the appraisal interviewshould contain surprises for an employee. Employees should have a goodidea of their standing with their manager at all times. It is a manager’s re-sponsibility to ensure that this is the case.

■ SELF-APPRAISALSelf-appraisal can be a productive component of a performance appraisalsystem. However, self-appraisal is not appropriate for everyone. Some em-ployees are intimidated by it. Others are apprehensive, fearing the possi-ble consequences of rating themselves too high or too low. Self-appraisalis most appropriate for higher-level technical employees, professionals,supervisors, and managers. While self-appraisal has the potential for suc-cess, many hourly employees are suspicious of the process and manage-ment’s intent when using it.

While some people rate themselves higher or lower than may be ap-propriate, research has repeatedly shown that the majority of employeesrate themselves no higher, and frequently lower, than their supervisors ratethem. When it is used, an employee should complete a self-appraisal whilea manager completes an evaluation. These tasks should be completed sep-arately. Neither appraisal should bias the other.



The forms should be similar and should address the same major jobdescription criteria. The forms should be exchanged for the first timeduring an appraisal interview. The items on both appraisals should becompared one at a time. Both participants should note items on whichthey appreciably differ. Areas of divergence highlight an important as-pect of self-appraisal and focus discussion where it is most likely to beneeded.

Self-appraisal is not appropriate for every situation. However, whenappraising employees who are required to exercise some degree of inde-pendent discretion and judgment, self-appraisal can be a constructive ad-junct to a performance appraisal system. Self-appraisal draws employeesmore deeply into the appraisal process and transforms it into more of aparticipative activity.

■ TEAM APPRAISALSOrganizations have been assembling and using teams during recent decades.While team building is useful for organizations, it must be periodicallyevaluated. Teams present evaluation challenges to managers. Individualevaluations rendered in a team environment can be troublesome becausethey tend to undermine teamwork and cooperation by stressing individ-ual competitiveness. They can encourage competitive individuals to cir-cumvent team requirements for individual gain and to fail to nurture anopen, problem-solving environment. Individual performance appraisalsdo not support team-building because they lack a means of identifying theeffects of individuals on the group or the group on individuals. Individualappraisals can impede effective team building.

Teams can be appraised as groups. However, a glaring weakness is theinevitable differences that exist among individuals. People always performin different ways. A properly managed team should be able to use the dif-ferent strengths of all its members. Likewise, it should be clear to groupswho function well that a team is no place for either single stars or individualslackers.

As with individual performance appraisals, team evaluations requirecriteria and standards. These must be constructed specifically in termsof team performance. In many organizations, group or team appraisalssupplement rather than replace individual performance appraisals.Thus, although the emphasis on groups and team performance con-tinues to increase, most reward and recognition systems are focused onindividuals. This reinforces the need to appraise both team and indi-vidual performances.

Team Appraisals 239


■ THE APPRAISAL FORMThe major shortcoming of many performance appraisal systems is thatthat they attempt to capture far too much detail. A lengthy, detailed ap-praisal form creates extraneous work for appraisers and rapidly fills per-sonnel files with paper. Some organizations have tried to compensate forthis by filing only a summary document. All too often, such an approachalso requires a key for interpretation. Once filed, an appraisal should bea self-contained record that can be understood on its own if it is referencedin the future.

No appraisal form is right for all situations. The most useful forms arethose that have a minimum of fill-in spaces and a maximum of open writ-ing space. Two or three pages should be sufficient for most performanceappraisal forms. Following an appraisal interview and obtaining signa-tures from both supervisor and employee, three copies should be made ofeach performance appraisal. The original should be sent to HR and addedto an employee’s personnel file. A copy is given to the employee and a copyis retained by the evaluator.

Exhibits 12-6 and 12-7 provide examples of actual performance ap-praisal forms. Exhibit 12-6 is generic, an open format that can conceiv-ably be used along with many different job descriptions. The rating scaleis simple and has three options. The numbers attached to these three lev-els of performance are simply a convenience for converting the appraisalresults into an overall score for organizational use. Exhibit 12-7 containsan outline that is completed by adding specific information from a posi-tion description. It uses a three-point scale with the standard or expectedlevel of performance in the middle. This exhibit allows individual componentsto be weighted. Exhibit 12-7 demonstrates how position descriptions andappraisal forms can be combined into a single document.

■ LEGAL IMPLICATIONS OF PERFORMANCE APPRAISALSPerformance appraisal has become a regulatory necessity in health care.The Joint Commission on Accreditation of Healthcare Organizations(JCAHO) looks for appraisals in the personnel files during its periodic sur-veys, as do many state health departments. Performance appraisals shouldbe completed as a means of employee development, but they must be doneto avoid being cited for deficiencies.

Although there are legal risks associated with completing and retain-ing performance appraisals, on balance the legal risks of not doing so aregreater. When an employee is terminated for reasons related to job per-formance or is preferentially chosen for layoff and the action is contested,performance appraisal documents in the personnel file become a central



Legal Implications of Performance Appraisals 241

Exhibit 12-6 Generic Performance Appraisal Form

Employee Name: _________________________ ID No. ______________

Department: _____________________________ Hire Date: ___________

Job Title/Grade: __________________________ Job Date: ____________

Job Description Requirement Rating

No. Task and Expectation (Standard) Not met Met Exceeded

___ ____________________________________________ _____ _____ ________ ____________________________________________ _____ _____ ________ ____________________________________________ _____ _____ ________ ____________________________________________ _____ _____ ________ ____________________________________________ _____ _____ ________ ____________________________________________ _____ _____ ________ ____________________________________________ _____ _____ ________ ____________________________________________ _____ _____ _____

Scoring: Number Not Met: ___ x 0 = _____

Number Met: ___ x 2 = _____

Number Exceeded ___ x 4 = _____

Total = _____

Average = _____

Average less than 2.0 means improvement needed

Average of 2.0 means standard performance

Average greater than 2.0 means exceptional performance

Manager’s comments:

Employee’s comments:

Date of discussion: __________________________

Employee signature: _________________________

Manager signature: __________________________



Exhibit 12-7 Position-Specific Performance Appraisal Form




Summary: (obtain from position description)

Requirements: (obtain from position description)

Weight Score

1. First task (from position description with three specific elements) ____a. Sub-element one 1 2 3b. Sub-element two 1 2 3c. Sub-element three 1 2 3Comments:

2. Second task (from position description with three specific elements) ____a. Sub-element one 1 2 3b. Sub-element two 1 2 3c. Sub-element three 1 2 3Comments:

3. Third task (from position description with three specific elements) ____a. Sub-element one 1 2 3b. Sub-element two 1 2 3c. Sub-element three 1 2 3Comments:


Legal Implications of Performance Appraisals 243

Exhibit 12-7 Position-Specific Performance Appraisal Form (cont.)

Weight Score

4. Fourth task (from position description with three specific elements) ____a. Sub-element one 1 2 3b. Sub-element two 1 2 3c. Sub-element three 1 2 3Comments:

5. Fifth task (from position description with three specific elements) ____a. Sub-element one 1 2 3b. Sub-element two 1 2 3c. Sub-element three 1 2 3Comments:

Manager’s comments:

Employee’s comments:

Date of discussion: __________________________

Employee signature: _________________________

Manager signature: __________________________


concern. Appraisals should support management’s decisions. Decisionsthat cannot be substantiated by documentation are usually assumed to bethe result of discrimination or other personal bias.

Performance appraisals frequently figure prominently in wrongful dis-charge litigation. When there is a chance that a discharge was based whollyor in part on substandard performance, a wrongful discharge claim maybe filed and information will be sought in the appraisal records in per-sonnel files. Thus, many wrongful discharge lawsuits are an outgrowth ofinadequate performance appraisal procedures.

The largest number of legal complaints centered on performance appraisalissues involves alleged violations of individual rights as specified underTitle VII of the Civil Rights Act of 1964. The second largest number of suchcomplaints reflects alleged violations of the Age Discrimination inEmployment Act. Performance appraisal records may be examined closelyif performance is used as a criterion in determining who will be includedin a large layoff or planned reduction in force. This is emphasized if thereappears to be a disparate impact on any group or class of employees, a com-mon complaint from the layoff of older workers.

Although there is no way to avoid some subjective assessments in per-formance appraisals, these are best kept to a minimum. Always avoid po-tentially defamatory comments as well as insults, name-calling andunsupported negative commentary. Whenever entering negative assess-ments, cite specifics that can be supported by data or otherwise proven.

An organization is not legally obligated to have a performance appraisalsystem. Once a system is put in place, however, an employer may be seenas having created an implied contract with employees to use the system asestablished and described. A performance appraisal system should be suf-ficiently formal to have published instructions for completing appraisals.These instructions, as well as any evidence that can be presented con-cerning the training of appraisers in the system’s use, can be helpful in de-fending the appraisal system against charges of discrimination.

■ THE ROLE OF HUMAN RESOURCESThe HR department is usually the custodian of an organization’s perform-ance appraisal system. Human resource’s role in performance appraisal in-cludes monitoring job descriptions and evaluation criteria to ensure that theseare always up-to-date and currently applicable. Human resources typicallydesigns an appraisal system. Ideally, design and modification should be ajoint effort involving HR and managers of both line and support activities.Human resources should schedule the steps in the process including estab-lishing dates for forms to be sent out, appraisals to be written and discussedwith employees, and completed documents sent back.



Human resources should provide forms, lists, and time schedules to de-partment managers as needed. In a system under which employees areevaluated on anniversary dates, someone in HR should constantly moni-tor the system and send out forms and reminders as employees’ anniver-sary dates occur. Human resources should monitor the incoming appraisalsfor completeness and consistency. Under some appraisal systems, appraisersare required to have their evaluations reviewed by the next level of man-agement before they are discussed and submitted.

Human resources has a responsibility to hold classes for evaluators,providing both original and refresher appraisal training every year. Humanresources usually responds to evaluator’s questions about appraisal. It fol-lows up to ensure that evaluations are completed within the proper timeperiod. The HR department usually files completed evaluations in individualpersonnel files, and addresses employee questions and grievances about theappraisal process.

Following up on appraisal completion is often stressful for line man-agers and HR staff. Managers may place a low priority on completing ap-praisals if they view the process as less than essential. They may complainabout pressure and insufficient time to complete evaluations. In contrast,HR must follow higher management’s mandate to keep the system mov-ing. Timely appraisals are always important. Because they provide the re-minders, many managers view appraisals as being an HR system at bestand HR paperwork at worst.

■ AN ESSENTIAL PROCESSMost employees perform at a satisfactory or better level. Individual re-sults are seldom unacceptable. Despite this, many managers neglect to ex-press appreciation of employee successes and instead focus on failures andweaknesses. Unfortunately, they take the good for granted. This tendencyto focus on the unsatisfactory simply reinforces the reputation of per-formance appraisal as a negative process.

Human resources alone cannot guarantee a successful appraisal process.Nor can a few conscientious department managers working together doso. A critical element in the success of performance appraisal is the extentto which top management supports the process. Far too often top man-agement simply assigns supervisors to complete the process while failingto participate in any substantive manner. Lack of visible executive sup-port increases the risk of appraisal becoming a meaningless routine. Manyorganizations, including those in health care, have performance appraisalsystems. However, the existence of a system does not guarantee that per-formance appraisal is carried out in an effective manner.

An Essential Process 245


■ CONCLUSIONThe importance of regular, structured employee appraisals cannot be over-stated. Supervisors must be well-trained and diligent about completingemployee evaluations on time. Forms and procedures must be current.The personal interview that follows a written appraisal is often dreadedby employees. Successful managers use the interview as a positive experi-ence to review and motivate their employees. Human resources supervisesthe appraisal process and collects and files completed appraisal forms.

Returning to the conversation that Stu and Maria were having, Stu said,“I wonder what basis the court used for its decision?”

Marcia smiled. “The two latest annual appraisals that you completed.” “No.”“Yes,” she said, heading out the door of Stu’s office.

Discussion Points

1. Explain the difference between average and standard as these termsare used in performance appraisal. Discuss how one is erroneouslyused.

2. Some management experts have recommended that performance ap-praisal be abolished. Provide three reasons why performance appraisalsshould be retained in modern healthcare organizations.

3. Consider an employee who always performs satisfactorily but has lit-tle or no opportunity to improve, and can go no higher in the organ-ization and does not aspire to do so. Why is it considered necessaryto continue periodically appraising this employee’s performance?

4. Why are employee performance appraisals often described as a man-ager’s least favorite responsibility?

5. Why should all appraisal processes avoid addressing personality char-acteristics of employees?

6. Why is it appropriate to begin addressing an employee’s performancewith a review and update of the person’s job description?

7. What are the three essential elements of an objective? Why are all threeneeded?

8. Why do experts recommend that three to five point rating scales beused for appraisals?

9. Why is it important to ensure that employee appraisals occur whenthey are scheduled to occur?

10. What is the primary shortcoming of team appraisal? How can this beavoided but still using a team appraisal?



11. Why is the HR department a reasonable place from which to coordi-nate an organization’s performance appraisal process?

12. Managers do not always provide consistent appraisals. How can thisproblem be addressed?

13. How can past appraisals of performance influence the outcomes ofemployment-related legal actions?

Resources

BBooookkssDelpo, A. (2005). Performance Appraisal Handbook: Legal and Practical Rules

for Managers. Berkeley, CA: NOLO Publishing. Falcone, P. (2005). 2600 Phrases for Effective Performance Reviews: Ready-to-Use

Words and Phrases that Really Get Results. Chicago, IL: American ManagementAssociation.

Forster, N. (2005). Maximum Performance: A Practical Guide to Leading andManaging People at Work. London: Edward Elgar Publishing.

Harris, L., Leopold, J., & Watson, T. (2005). Strategic Managing of HumanResources. London: Financial Times Management.

Packard, P. & Slater, J. (2005). Skills of Appraisal. London: Ashgate Publishing. Pauwe, J. (2004). HRM and Performance: Achieving Long Term Viability. New

York: Oxford University Press. Rothwell, W. J. (2005). Effective Succession Planning: Ensuring Leadership

Continuity and Building Talent from Within (3rd ed.). Chicago: AmericanManagement Association.

PPeerriiooddiiccaallssBecker, B. & Gerhart, D. (1996). The impact of Human Resource Management

on organizational performance: Progress and prospects. Academy of ManagementJournal, 39(4), 779-801.

Carmeli, A. & Schaubroeck, J. (2005). How leveraging human resource capital withits competitive distinctiveness enhances the performance of commercial andpublic organizations. Human Resource Management, 44(4), 391-412.

Delery, J. E. & Doty, D. H. (1996). Modes of theorizing in strategic human resourcemanagement: Tests of universalistic, contingency, and configurational per-formance predictions. Academy of Management Journal, 39, 802-835.

Dyer, L. & Reeves, T. (1995). Human resource strategies and firm performance:What do we know and where do we need to go? International Journal of HumanResource Management, 6, 656-670.

Gerhart, B., Wright, P., McMahan, G., & Snell, S. (2000). Error in research on hu-man resources and firm performance: How much error is there and how doesit influence effect size estimates? Personnel Psychology, 53, 803-834.

Givan, R. K. (2005). Seeing stars: Human resources performance indicators in theNational Health Service. Personnel Review, 34(6), 634-647.

Greenhaus, J. H., Parasuraman, S., & Wormley, W. M. (1990). Effects of race onorganizational experiences, job performance evaluations, and career outcomes.Academy of Management Journal, 33, 64-86.

Conclusion 247


Hitt, M. A., Bierman, L., Shimizu, K., & Kochhar, R. (2001). Direct and moderatingeffects of human capital on strategy and performance in professional service firms:A resource-based perspective. Academy of Management Journal, 44, 13-28.

Larson, J. & Callahan, C. (1990). Performance monitoring: How it affects workproductivity. Journal of Applied Psychology, 75, 530-538.

Propper, C. & Wilson, D. (2003). The use and usefulness of performance mea-sures in the public sector. Oxford Review of Economic Policy, 19(2), 250-267.

Robie, C., Johnson, K. M., Nilsen, D., & Hazucha, J. F. (2001). The right stuff:Understanding cultural differences in leadership performance. Journal ofManagement Development, 20(7), 639-650.

Terpstra, D. E. & Rozzell, E. J. (1993). The relationship of staffing practices to or-ganizational level measures of performance. Personnel Psychology, 46, 27-48.

Wright, R. M., McCormick, B., Sherman, W. S., & McMahon, G. C. (1999). Therole of human resource practices in petrochemical refinery performance.International Journal of Human Resource Management, 10, 551-571.

Wright, T. A. & Bonett, D. G. (1997). The contribution of burnout to work per-formance. Journal of Organizational Behavior, 18, 491-499.

Wright, T. A. & Cropanzano, R. (1998). Emotional exhaustion as a predictor of jobperformance and voluntary turnover. Journal of Applied Psychology, 83, 486-493.



Managers andEmployeeProblems

Chapter Overview


• Recognize the inevitability of people problems in any work groupand understand some common origins of such problems

• Understand the primary purpose of most processes for handlingemployee problems as correction of behavior

• Differentiate between problems of performance and problems ofbehavior and be familiar with systematic processes for addressingeach

• Be prepared to address excessive absenteeism• Understand the applicability and operation of an employee

assistance program• Be able to address different common forms of termination for

cause: discharge for behavior problems and dismissal forperformance problems

• Appreciate the necessity of emphasizing problem preventionwhenever possible

■ CHAPTER SUMMARYPeople problems are an inevitable component for anyone who managesothers or supervises their work. First-line supervisors frequently regard peo-ple problems as intrusions on their work. This is unfortunate when, infact, addressing the problems and the needs of employees is a cornerstone

C H A P T E R

13

249


of a manager’s role. All employees are individuals. Although all are differ-ent from each other in some way, some are sufficiently different that theypose behavioral problems and other difficulties for their managers. In pur-suing the ongoing goal of having people produce goods or deliver services,a manager must maintain employees as producers. Doing so requires man-agers to address people problems arising out of issues related to their work-ing and outside lives.

The primary objective of a manager’s actions in response to peopleproblems is correcting behavior. Depending on the nature of the problem,behavioral issues are addressed through individual coaching, counseling,activities to improve performance, or disciplinary actions. Problems ofperformance and behavior can both be corrected. Behavior issues oftenconstitute breaches of rules or policies.

Disciplinary action is customarily applied in a progressive manner. Theextent or severity of the corrective action is proportional to the gravity ofthe problem or infraction. Correcting behavior is the main objective ofmanagerial actions except under extreme conditions or instances when anemployee must be removed from an organization.

Case Study: Always is a Dangerous Word

“I know what I heard, period,” staff nurse Molly Stern said curtly. Her facewas a mask of anger, and she spoke in the righteous tone that head nursePenny Jerome had heard so many times.

“Dr. Benson says otherwise, Molly,” said Penny. “She told me she wascertain the instructions she left for you were just the opposite of what youactually did. And she really came on strong.”

“She’s wrong,” snapped Molly.“She seems just as certain that you were wrong.” Penny paused before

adding, “She explained the whole situation to me, and I have to admit thatI understood her instructions. At least I was able to repeat them in my ownwords so she was satisfied that I understood.”

Molly shrugged and said, “Then Dr. Benson changed her story betweenthe time we talked and the time she spoke with you.”

“Are you suggesting that she lied to me?”“I didn’t say that. I’m only saying that she told me one thing and then

apparently told you something different. Maybe she didn’t realize what shesaid. You know how she just rattles off something quickly and runs away.”

Penny said, “Did you consider the possibility that you didn’t under-stand? It isn’t hard to misinterpret a message when things happen so fastand—”

“I know what I heard,” interrupted Molly. “When I know I’m wrong,I say so. But in this case I know I’m right. I could not have misinterpretedDr. Benson.”

250 CHAPTER 13 MANAGERS AND EMPLOYEE PROBLEMS


Feeling that Molly had given her cause to bring up something that hadbeen nagging her for quite some time, Penny said, “It seems to me thatyou’re never wrong, Molly.”

Molly glared at her supervisor. “What do you mean by that?”“I’ve been head nurse of this unit for three years, and in all that time

I’ve never known you to admit being wrong about anything. This prob-lem with Dr. Benson is just one more example of how you always turnthings around so that you look innocent. Is it so necessary that you beright all the time?”

In icy tones, Molly said, “As I said, when I’m wrong I’ll admit it—butonly when I’m really wrong. And I want to know the other times you’retalking about, the times you said I ‘turned things around.’”

“I don’t have any specifics in front of me, but you ought to know whatI’m talking about. Think about it and you’ll know what I’m saying. Youseem to have an answer for everything, and it’s always an answer thatplaces you in the right.”

“You can’t think of any specific incidents because there haven’t been any,”said Molly. She rose from her chair and continued, “You may be my su-pervisor, but I don’t have to listen to this. Is there anything else you wantedto say about Dr. Benson’s problem?” She glared down at Penny.

Penny stood. “Just that the incident isn’t to be considered closed. Dr.Benson insists that it be written up as a formal warning.”

“I’ll protest, of course,” said Molly. “I won’t accept a warning that Idon’t deserve, and I won’t say I’m wrong when I know I’m right.”

When Molly left the office, Penny began to regret having spoken as shedid. She was convinced, however, that she had to try to get through toMolly about her apparent need to be right whenever a disagreement or amisunderstanding arose.

What critical error did head nurse Penny Jerome make in her one-on-one exchange with Molly Stern? Why was that particular action of Penny’swrong? How would you recommend that Molly and Dr. Benson resolvetheir misunderstanding? How would you respond to employees that arealways right?

■ PEOPLE PROBLEMS ARE INEVITABLEConsider the following typical vignette. A chronic personnel problem in-volving differences between some staff members of two adjoining depart-ments had surfaced once again. This time, it affected two departmentmanagers, several rank-and-file employees, and an employee relationsmanager. A discussion meeting had been scheduled to explore the situa-tion. After more than an hour of animated discussion during which chargesand counter-charges flew back and forth, the employees were excused and

People Problems Are Inevitable 251


the others continued for another half-hour. When the meeting finally brokeup, an hour and a half had elapsed and only the most tentative of conclu-sions had been reached. As the participants rose to leave the room, one de-partment manager’s pager sounded. The manager checked the messageand muttered, “I was expecting this. It looks like another of my pet trou-blemakers is acting up again.” As he left the room, the manager also re-marked, in a voice strained with frustration, “You know, I could probablyget some real work done around here if it weren’t for all these people prob-lems that keep popping up.”

Most managers have more than enough to do without spending timetending to the problems of the adults that they supervise. However, anymanager who feels frustration because of people problems must appreci-ate the fact that people-related problems are part of the job for a first-linesupervisor. A first-line manager supervises people who perform hands-onwork and provides an interface between rank-and-file employees and com-pany management. Employee frustrations are a component of this posi-tion. If maintaining rank-and-file employees as effective producers did notinclude the frustrations and issues that employees bring to their jobs, fewerfirst-line managers would be needed in work organizations. As long asthere are people in the work place, supervisors can expect people problems.Only when automated equipment replaces human labor will people prob-lems disappear. Although it is a less than appealing aspect of being a man-ager, coping with people problems is an inevitable and unavoidable partof the department manager’s role.

Problem SourcesProblems presented by employees can come about because of job-relateddifficulties, personal problems experienced largely outside of work, or acombination of the two. Some people are much better than others at keep-ing the working side and the personal side of their lives separate from eachother. However, it is not possible to separate the person on the job com-pletely from the person off the job. Problems flow both ways. Personalproblems accompany people to their jobs and often affect job performanceand employment relationships. Work-related problems go home and of-ten affect personal lives and relationships.

Outside observers can say that an employee’s personal problems are nobusiness of the manager. Such a position is correct but only up to a point.If an individual’s personal problems are affecting work through deterio-rating performance, reduced productivity, or disruption of a department’sability to operate normally, then a supervisor must become interested be-cause of the negative effects on operations.

When an employee who has performed satisfactorily for a prolongedperiod and has always gotten along with others reasonably well begins to



shows signs of performance and relationship problems on the job, a man-ager has every reason to suspect that there is an underlying problem be-hind the changed behavior. It may not be initially evident whether theproblem has its basis in the work place or on the outside, but the resultsof the changed behavior are a manager’s immediate concern. Performanceor relationship problems that affect a working environment are of vital in-terest to supervisors.

Supervisors who suspect that personal problems are behind declines inperformance must approach their employees in a manner that is respect-ful of their right to privacy. Although the performance resulting from anindividual’s behavior must be addressed for the sake of the departmentand the people being served, events in an individual’s private life are notthe business of a manager.

Supervisors must address the results of behavior. Managers should notattempt to infer causation. Tell an individual, through whatever channelis used, about current behaviors or actions that are problems. Point outerrors of judgment or actions and offer suggestions as to how they can becorrected. Using the resources that are available, provide whatever help isneeded to take appropriate corrective action. Do not, under any circum-stances, probe for personal information. Supervisors must be clear thatthey are there to listen if or when a person wants to talk. Managers mustnot ask individuals about problems that seem to lie outside of the work-ing situation.

If employees volunteer information concerning personal problems, thenlisten and be prepared to refer them elsewhere as necessary. Even if em-ployees reveal their problems and ask for advice, wise supervisors will notrespond to such requests. Managers may feel flattered that employees thinkenough of them to reveal a personal problem and ask for their advice. Evensupervisors who are trained professionals working in a human service areaare advised to keep their advice to themselves. Some of the most trouble-some statements a manager can make begin with, “If I were you . . .”

Refer troubled employees to an appropriate person or agency fromwhich they can be directed toward an appropriate source of knowledge-able help. This will usually mean referral to the employee health serviceor an organization’s employee assistance program (EAP).

■ PRIMARY PURPOSE: CORRECTIONThroughout this chapter, we will make references to corrective processes.Although there are instances in which the action taken in response to anemployee problem is punitive, the primary purpose of taking steps is to cor-rect employee performance or behavior. We will speak about disciplinaryaction. Although discipline involves punishment, its underlying reason is

Primary Purpose: Correction 253


to teach or correct problem behaviors. The root of discipline is the worddisciple, which is a learner, pupil, or follower.

Correction is always the primary intent of what we refer to as the cor-rective process. The primary objective of disciplinary action should alwaysbe to correct behavior. There is an unavoidable punitive aspect in mostcorrective processes. Policies that are violated or rules that are broken re-sult in warnings. Even though we acknowledge the punitive aspect of truedisciplinary action, we do not advocate treating employees with per-formance problems in a punitive manner. Therefore, it is essential to sep-arate problems of performance from true behavior problems.

■ SEPARATE ISSUES OF PERFORMANCE AND BEHAVIORDepartment managers will find it necessary to address different kinds ofproblems presented by employees on the job. Some will involve behaviorswhile others will involve performance. These problems must be addressedusing different approaches.

Performance problems relate to meeting the expectations or require-ments of a job and difficulty doing the work and producing the minimumlevel of quality or output required. Behavior problems involve violationsof policies or work rules. These are conduct issues. Usually they are unre-lated to performance and may have no bearing on how an employee isperforming on the job.

It is sometimes necessary to determine whether a particular employee can-not perform as expected or will not perform as expected. The former re-quires a call to an employee’s immediate supervisor to address a performanceproblem. The latter may require disciplinary action. These areas occasion-ally overlap when an individual’s deliberate acts of recklessness, negligence,or carelessness causes performance to deteriorate below accepted standards.In other words, when an employee cannot perform, then the issue involvesa performance problem. When an individual will not perform, then the is-sue involves a behavior problem.

A thorough orientation and education about an organization is a re-quirement for all employees. Workers are always entitled to know whatis expected of them, whether related to performance or behavior. Concerningbehavior, it is essential that employees are informed of all applicable poli-cies and work rules. Concerning performance, it is equally essential thatall employees be thoroughly trained and given every opportunity to learntheir jobs. Such opportunities must be consistent among all employees.Whether behavior or performance is involved, the first area for a depart-ment manager to examine should be the expectations of an employee. Wasthis person fully knowledgeable about the behaviors or performances thatwere expected?



■ ADDRESSING PERFORMANCE PROBLEMSEmployees who do not meet their expected performance levels commonlyfall behind in output, produce poor quality work, or simply do not followestablished procedures. The first step a department manager should takeis to look for the source of the problem. The initial critical issue to addressis whether or not the immediate supervisor and predecessor did everythingreasonably possible to help this employee to succeed.

Performance problems, especially those occurring early in a person’semployment, are often the result of weak or sketchy orientation. To ad-dress a performance problem, a department manager must positively iden-tify the problem and proceed to work out, preferably with the participationof the employee, what must be done to correct the difficulty and a timeframe for action.

The performance improvement process should proceed in the follow-ing manner. A manager observes a problem situation involving substan-dard performance in some form. Common issues include unacceptablequality of work or services delivered, insufficient productivity, complaintsby customers or others receiving services, or complaints by visitors. Thislist is not exhaustive. A manager next conducts an investigation to verifythe existence and nature of the problem. Prudent managers ensure thattheir facts are correct before addressing the situation with an employee.A supervisor next meets privately with the problem employee. The pur-pose of the meeting is to define and discuss the perceived difficulty withthe employee and to elicit the employee’s views and perspective.

A manager should next make every reasonable effort to secure an em-ployee’s agreement concerning the nature of the problem and what shouldbe done to correct the unacceptable performance. Ideally, the two shouldagree on a brief written description of what is wrong and what is neededfor correction. The agreement should include a timetable for correction,with both parties agreeing on when corrective action must be accom-plished. Part of this agreement should specify if interim checkpoints willbe needed to review progress. Some corrective processes may require abrief period while others may require more time. When the evaluationpoints are reached, the supervisor must follow-up in good faith, com-pletely, and on time. One of the greatest shortcomings encountered withthe process of progressive discipline is a manager’s failure to provide timelyfollow-up.

At the end of the evaluation period, the manager must decide whetherthe employee’s performance improved as required, improved partly, didnot improve, or deteriorated further. The desired result of an evaluationperiod is returning an employee to an acceptable level of performance.Depending on the actual outcome, however, other subsequent steps canbe taken. These include extending the improvement period in the case of

Addressing Performance Problems 255


partial improvement or dismissal for failure to meet expected evaluationstandards.

How should managers treat employees who modify their performancewell enough to get by the correction period and then go back to substan-dard performance some weeks or months later? Some department man-agers may elect to go through the performance improvement process withsuch an employee again but most will not look forward to doing so a thirdtime. The documentation that is created the second time through the processshould include wording to the effect that subsequent performance must re-main at or above standard or the person will be at risk for discharge.

Exhibit 13-1 presents a model procedure for addressing the need for im-provement in performance.

■ ADDRESSING BEHAVIOR PROBLEMS

Disciplinary ActionA chief reason why many supervisors do not confront problem employeebehavior is their discomfort with the traditional punitive discipline sys-tems many have to use.1 This comment says a great deal about why su-pervisors frequently shy away from disciplinary action even when it maybe deserved. Regardless of how a system is designed, most employees, su-pervisors, and managers perceive their disciplinary systems as punitive.Repeating, the goal of disciplinary action is to correct behavior. Few man-agers ever look forward to delivering disciplinary action.

The mere thought of having to take disciplinary action is upsetting andunsettling to many managers. Impending disciplinary action can makemanagers apprehensive. Some managers simply ignore situations, post-poning action until events resolve themselves or the problems can be en-tirely forgotten. Others approach disciplinary action with hesitation,watering it down so much that it becomes ineffective.

Disciplinary action is similar to any other difficult task. Conscientiousattention to the process and practice eventually leads to a degree of fa-miliarity. At that stage, a manager can apply disciplinary action honestlyand confidently when needed. Most managers never become entirely com-fortable with the process. Given that disciplinary action has the potentialto affect employment or ruin a career, such unfamiliarity is healthy.

The Process of Progressive DisciplineThe complete progressive disciplinary process consists of counseling, oneor more oral warnings, one or more written warnings, suspension with orwithout pay, and termination. A considerable range of possible violationsis subject to progressive discipline. Not all infractions are subject to the



Addressing Behavior Problems 257

Exhibit 13-1 Model Policy and Procedure: Performance Improvement

Process

The following procedure is provided to establish clear direction forthe resolution of problems concerning an employee’s substandardjob performance.

Substandard performance is defined as: A demonstrated lack ofacceptable work performance, or chronically unsatisfactory resultsthat prevent an employee from attaining or maintaining job standard.

Job standard is defined as: The average or acceptable level of out-put provided by employees in the same or similar position or classi-fication, or the standard level of results defined in advance by thedepartment manager clearly identifying the quality or quantity of out-put expected.

In the event that nonprobationary employees exhibit substandardperformance of job duties or fail to fulfill all the responsibilities oftheir positions, a department manager should make a sincere andadequate effort to guide them in returning to an acceptable level ofperformance. The first steps in this process include:

• Verify the job standard for accuracy and applicability and make anynecessary adjustments

• Advise and guide employees to create a plan for their return tostandard performance and a time frame for doing so, documentingthis effort using a Counseling Form (Attachment A)

• Guide and monitor employee efforts to attain standard performance• Remove obstacles to employee progress where possible

In the event an employee does not attain job standard within theagreed-upon time, department managers should next:

• Complete a Work Improvement Evaluation (Attachment B)• Repeat the creation of a mutually agreed upon plan of action, this

time including referral to Employee Relations or Employee Healthif applicable (should there be some documentation of an under-lying difficulty or problem to warrant such a referral)

If the second effort is unsuccessful in returning an employee tostandard performance within the agreed-upon time:

• Complete a Performance Expectations Form (Attachment C) plac-ing the employee on notice of probationary status and calling fordismissal on the grounds of substandard performance no laterthan 30 days following this final notice unless standard perform-ance is attained during that period

(continues)




Process (cont.)

Note: Once an employee has been through the PerformanceExpectations stage and has again achieved standard performance,that person’s performance is expected to remain at standard orbetter. Without extenuating circumstances (for example, under-going a corrective or rehabilitative process under the EmployeeAssistance Program or the auspices of Employee Health), reversionto substandard performance will result in dismissal.

Exhibit 13-1 Attachment A Counseling Form

__ Performance Counseling

__ Probationary Counseling

__ Other _____________




Summary of Discussion:

Action to be taken by Manager:

Action to be taken by Employee:

Date of Follow-Up Meeting: ______________________________________

Employee Signature: ________________________ Date: _____________

Manager Signature: ________________________ Date: _____________

Exhibit 13-1 Attachment B Work Improvement Evaluation

This document summarizes a work improvement discussion betweenmanager and employee. An initial effort to correct a documented per-formance problem was unsuccessful, indicating the need for additionalcorrective action represented by the numbered objectives below that mustbe met to return the employee to an acceptable level of performance.




Process (cont.)

No. Description of objective and the agreed-upon criteria for achievement

1.

2.

3.

Referral to Employee Relations or Employee Health as appropriate:

_________________ Date of next review: _________



Exhibit 13-1 Attachment C Performance Expectations




Summary of Performance-Problem Discussion:

Follow-up was performed on the following dates:

_____________ _____________

_____________ _____________

Continued substandard performance makes it necessary to place thisemployee in probationary status subject to dismissal during or after30 days from the date of signing unless fully satisfactory and lastingimprovement is demonstrated by the employee.




entire range of progressive discipline. Lesser violations, for example ab-senteeism or chronic tardiness, may go through all of the steps. With mi-nor infractions, it may be advisable to repeat a step if a significant timelapse has occurred between infractions. Some infractions may involve onlytwo steps. For example, sleeping on the job might call for a written warn-ing for the initial offense and termination for a second offense.

The initial step in many instances is informal counseling. Counseling isbest undertaken when a manager observes an employee headed for diffi-culty but not yet at the point of requiring disciplinary action. An oral warn-ing is the first formal step in the progressive disciplinary process. Althoughit is delivered orally to an employee, a supervisor should create a writtenrecord and ask the affected employee to review and sign it. Many organi-zations have forms specifically designated for documenting oral warnings.

This can be confusing. Although a record is created, in many instancesthis record never goes into an employee’s personnel file unless the prob-lem is repeated and a written record is required. Documentation is essen-tial to prove that an organization’s processes were followed. If a disciplinarypolicy states that an oral warning is the first level of response for a giveninfraction, it may later be necessary to prove that the oral warning was ac-tually given.

At all steps of the disciplinary process, an affected employee is askedto review and sign the documentation created. The manager may have tostress that signing does not necessarily indicate agreement with the action.Rather, it simply acknowledges that the employee has seen the document,has discussed the problem with the manager and has been provided witha copy. It is not unusual for an employee to refuse to sign a warning oreven to acknowledge its receipt. When an employee refuses to sign a warn-ing, a supervisor simply notes in the signature area, “Employee refusedto sign” and ensures that the document is dated. In difficult circumstanceswhen a manager has reason to believe that disagreement may escalateand involve others, another manager should witness an employee’s re-fusal to sign and so note on the document. The second supervisor shouldalso sign the document.

When Discipline Is Not ProgressiveDisciplinary action cannot always be progressive. Some infractions, usu-ally clearly defined in policy manuals and employee handbooks, call forimmediate termination. These may move to immediate suspension pend-ing investigation as necessary. Such transgressions ordinarily include fight-ing or physical assault, using illegal drugs or alcohol on the job, carryinga weapon on the premises, theft, or threatening other employees or man-agers. Immediate termination with no chance to change an individual’sbehavior is hardly corrective. However, experts note that when an em-



ployee is released for a serious infraction, the problem has been correctedby removing its cause.

Exhibit 13-2 presents a sample progressive discipline policy and pro-cedure for a healthcare organization, including the recommended treatmentfor different infractions.


Exhibit 13-2 Model Policy and Procedure: Progressive Discipline

This organization is committed to providing the best possible work-ing conditions for all employees. Rules of conduct have been estab-lished to assist the organization and its employees in achievingorganizational goals as well as providing a safe and productive workenvironment. All employees are expected to observe all rules of con-duct and to follow the instructions provided by their immediate su-pervisor. Supervisors and managers are responsible for applying therules to all employees in a fair and consistent manner.

When an employee appears to have violated a rule, the immediatesupervisor should address the specific problem through the pro-gressive discipline process.

A. Steps in Progressive Discipline1. Counseling

Before informal or formal disciplinary action is taken, the em-ployee’s supervisor has the responsibility to counsel the em-ployee to correct the undesirable behavior. Use the CounselingForm (Exhibit 13-1, Attachment A), which is retained in de-partmental files until the employee terminates employmentat which time the form is forwarded to human resources.

2. Oral Warninga. An informal disciplinary conference may be scheduled when

an employee repeatedly displays undesirable behavior anddoes not respond to counseling. The conference should besummarized on the Record of Oral Warning (AttachmentA), which is retained in the department manager’s files.

b. If further disciplinary action is necessary for the same of-fense, then the Record of Oral Warning should be for-warded to human resources for inclusion in the employee’spersonnel file.

3. Written Warninga. If counseling and oral warnings fail to correct employee

behaviors, then a written warning should be generated.

(continues)



Exhibit 13-2 Model Policy and Procedure: Progressive Discipline (cont.)

The employees will be informed that the Record of OralWarning and the Written Warning will be included in theirpersonnel file and they will be ineligible for transfer for six(6) months. Repetition of the offense will lead to seriousdisciplinary action such as suspension without pay or ter-mination of employment.

b. An employee whose inappropriate behavior has not beencorrected by counseling, oral warning or written warning willbe referred to Employee Relations for further counseling orto Employee Health or Employee Assistance for evalua-tion and referrals if appropriate.

4. Suspension without Paya. A temporary termination of work at the will of the em-

ployer may be initiated if an employee fails to respond tothe foregoing steps. Time off may be waived at the dis-cretion of the manager if staffing needs require the em-ployee’s presence. Waiver of time off does not lessen theseverity of the disciplinary action.

b. At the discretion of the manager, indefinite suspensionpending investigation may be utilized to provide time anda thorough opportunity to investigate an alleged viola-tion that has the potential to result in termination.

5. DischargeTermination of employment for violation of organizationalrules may apply after repeated counseling, warnings, refer-rals and suspensions or after initial commission of specificsevere violations.

6. GeneralThe organization reserves the right to amend these rules asnecessary. Each manager has the right to initiate the pro-gressive disciplinary process at any step, depending on theseverity of the offense. All violations leading to potential sus-pension without pay or discharge must be reviewed with hu-man resources.

B. Violations and Severity1. Carelessness: Careless acts that could result in personal in-

jury to patients, employees or visitors, or damage to property. a. First violation: Written warningb. Second violation: Up to 5-day suspension without pay c. Third violation: Discharge




2. Insubordination: An employee’s refusal to comply with a rea-sonable and safe work instruction as required by an imme-diate supervisor. a. First violation: Up to 5-day suspension without pay, and

referral to Employee Relationsb. Second violation: Discharge

3. Absenteeism: Excessive absenteeism is the frequent use ofsick time that in the judgment of the department manager ad-versely affects the operation of the department, regularly oc-curs before or after scheduled days off, weekends, holidays or scheduled vacations, or that result in sick time being usedas it accrues. Unexcused absenteeism is absence withouttimely notice to a manager or designee prior to the start ofa scheduled shift, per departmental policy. a. First violation: Oral warning b. Second violation: Written warning and referral to Employee

Health for counseling c. Third violation: Up to three-day suspension without payd. Fourth violation: DischargeNote: Failure to appear at work or call in per policy for three con-secutive work days will result in discharge for job abandonment.

4. Tardiness: Consistent tardiness is the patterned failure to re-port for work at the designated starting time. a. First violation: Oral warning b. Second violation: Written warning and referral to Employee

Relations for counselingc. Third violation: Up to three-day suspension without pay d. Fourth violation: Discharge

5. Misconduct: Actions detrimental to the interests of the or-ganization or that cause harm or disruption to any person ororganizational activity. Some examples include: threateningor discourteous behavior toward patients or visitors; sexual ha-rassment; misuse of confidential information; leaving the workarea without permission; gambling; possession of explosives,firearms or other weapons on organization property; and vi-olation of safe practices in the performance of work. a. First violation: Written warning and up to five-day sus-

pension without pay, plus referral to Employee Relationsfor counseling.

b. Second violation: Discharge(continues)




6. Sleeping: Sleeping on the job is prohibited unless it is rec-ognized as a legitimate part of an employee’s extended shift. a. First violation: Written warning and up to five-day sus-

pension without pay, plus referral to Employee Relationsor Employee Health for counseling.

b. Second violation: Discharge 7. Solicitation: Employees may not engage in unauthorized so-

licitation, distribution or posting of materials on organiza-tion premises. a. First violation: Written warning b. Second violation: Written warning and up to three-day

suspension without pay c. Third violation: Discharge

8. Falsification of Information: Falsification of information on em-ployment applications or in other work situations is prohib-ited. This prohibition includes the making of false entries ontime records or punching another employee’s time card. a. First violation: Indefinite suspension pending investigation

prior to possible discharge 9. Alcohol and Illegal Drugs: Possession, use or being under

the influence of alcohol or illegal drugs on organization prem-ises is prohibited. Employees using prescription medicationswhile at work are requested to report such use to the ap-propriate manager.

Because of the considerable responsibility that all employees have for the organization’s patients, a manager whohas probable cause to believe an employee to be under the in-fluence of alcohol or drugs may ask the employee to submit vol-untarily to an appropriate test arranged by either EmployeeHealth or the Emergency Department. Refusal to submit tosuch reasonable request may result in disciplinary action.a. First violation: Indefinite suspension pending test results

and, if necessary, the employee’s willingness to enter anapproved rehabilitation program as determined by theemployee’s personal physician and Employee Health

b. Second violation: Discharge10. Unauthorized Possession of Property: The unauthorized use,

possession or removal of organization property or the prop-erty of patients, visitors, employees, or others. a. First violation: Indefinite suspension pending investigation

prior to possible discharge



Exhibit 13-2 Attachment A Record of Oral Warning




Specific problem or incident, and rule or policy reviewed and discussed:

Dates of previous discussions or counseling relating to the foregoing:

Action required of Employee:



This record will be maintained in departmental files. If further actionis required for the same offense, it will be forwarded to the HumanResources department for inclusion in the personnel file.

Exhibit 13-2 Attachment B Written Warning





Dates of previous discussions, counseling or warnings relating to theforegoing:

(continues)



Exhibit 13-2 Attachment B Written Warning (cont.)

Action required of Employee:



This record puts the employee on notice that additional violationswill result in more serious disciplinary actions such as suspensionwithout pay or discharge.

Exhibit 13-2 Attachment C Suspension without Pay





Previous actions taken:Date Action Taken

Suspended for _____ days from above date. Report back on ___________.

Time off waived by manager for the following reason (waiver doesnot lessen the severity of the action):



This is a final warning. Failure to respond appropriately may resultin discharge.


■ EMPLOYEE ABSENTEEISMSome degree of absenteeism is accepted as a fact of organizational life.People become legitimately ill or experience family emergencies and otherurgent matters that sometimes keep them away from work. However, asmany department managers have discovered, the line between acceptableand unacceptable levels of absenteeism is extremely fine and difficult torecognize.

Some department managers appear to pay little or no attention to em-ployee absenteeism. Such attitudes set the standard for a department.Managers that seem to ignore absenteeism usually wonder why their ab-senteeism rates are higher than normal for their organization.

Absenteeism costs money. While someone may be receiving paid timeoff for being away from work, a job that must be covered incurs the di-rect cost of a temporary replacement or staff overtime. For nonessentialpositions, a replacement may not be needed for an absence of one or two

Employee Absenteeism 267

Exhibit 13-2 Attachment D Notice of Discharge or Dismissal (cont.)




You are being terminated from employment for the following reasons:

Previous actions taken:Date Action Taken

___ Check here to indicate that the employee desires an exit interviewto discuss benefits. If the employee declines this opportunity, thencontinuation of benefits information will be mailed to the employee’shome address.




days. However, a department will experience lost productivity as a resultof the absence.

Experience with traditional sick-time benefit programs has suggestedthat an organization’s sick-time benefit often generates its own usage.Consider the experience of two health care organizations in the same com-munity. One provided a benefit of twelve sick days per year and the otherprovided five days per year. In the facility where employees received twelvesick days per year, the average usage per employee was approximatelyseven days per year. In the facility where employees received five sick daysper year, the average usage per employee was slightly more than three daysper year. The organization with the higher rate of sick-time consumptiondid not necessarily have less healthy employees than did the other facility.

Such experiences with sick time have encouraged an increasing num-ber of organizations to reduce their absolute sick time benefit and com-bine it with vacation and other personal time in a paid-time-off bank.Under these plans, a person who uses little or no time off for illness hasthe time left for other uses. Critics point out that such a policy rewards illpeople to come to work and potentially infect other workers. Both sidesin this argument have merit.

A department manager’s conscientious attention to absenteeism is a sig-nificant component in controlling employee absences. Some employeeswill be inclined to abuse sick time if they see that their manager pays noattention to their absences. They interpret the lack of attention as ap-proving their conduct. In truth, this interpretation has merit.

For controlling absenteeism in a department, a supervisor cannot clearlyremember everyone’s attendance, so accurate attendance records are re-quired. Effective managers do not rely on other departments to maintaintheir attendance records. By personally monitoring attendance, they stayin closer touch with their employees. They check in with employees afterthey return from any absence, even a single day. A simple question or state-ment such as “Feel better today?” or “Good to have you back” tells em-ployees that their supervisors are aware of their attendance.

Attentive supervisors watch for patterns of absences. Patterns are amongthe more reliable signs of sick-time abuse. Common examples of sick-timeabuse include holiday stretching or being absent the day before or the dayafter a scheduled holiday. Weekend stretching involves being absent on aFriday or Monday. Employees tend to be “sick” on Monday more thanon any other day of the week.

Counsel any employee who appears to be getting close to a level of ab-sences that can trigger disciplinary action. For example, if the policy saysthat five instances of unexcused absence in a 12-month period call forthe start of disciplinary action, meet with an individual who has been ab-sent four times in eight months, explain the policy and point out the con-sequences of the next unexcused absence. Effective supervisors do not



wait until disciplinary action is required before speaking up. They do notavoid taking disciplinary action for absenteeism when it is deserved.Finally, they are not punitive. A progressive system allows lots of roomfor improvement. A supervisor’s intent should be to help employees im-prove and succeed.

■ EMPLOYEE ASSISTANCE PROGRAMSAn employee assistance program (EAP) sends a message to employeesthat their employer cares about them beyond the usual demands of theirorganization. An EAP provides information, assessments, advice, and re-ferrals for employees who are experiencing personal problems that canaffect them as individuals and as producers of goods or services. Employeeswho take advantage of an EAP will receive a confidential assessment thatis ordinarily followed by a referral to an appropriate source for profes-sional help.

It is common practice to use an external assessment and referral agencyrather than have organizational employees, for example, someone in HR,perform this task. This helps to preserve employee confidentiality and al-lows employees to build a level of confidence in the EAP. For obvious rea-sons, many employees are more likely to share personal issues with someoneoutside of their organization than with another employee.

Improvements realized through intervention by an EAP ordinarily re-quire some time. There is often a temptation to look for short-term im-provement, rather than long-term benefits for both an employee and theorganization. Quick fixes for the following kinds of problems addressedthrough an EAP are unlikely. The EAP frequently addresses difficult is-sues such as substance abuse (drugs or alcohol), marital or family prob-lems, financial troubles, compulsive gambling, and other addictions. MostEAPs ordinarily provide two or three counseling sessions to determine anappropriate referral path. After these initial visits, an individual’s healthinsurance or other applicable program takes over.

Employees can enter an EAP through self-referral, meaning that theyvoluntarily approach the EAP themselves. Alternatively, employees can bereferred by a supervisor, a manager, or by an employee health office. If anindividual’s problem has the potential to negatively affect performance orpresents a danger or risk to people or property, then the organization canmandate referral to the EAP and require completion of a subsequent pro-gram as a condition of continued employment. An example of a potentiallydangerous problem is alcohol abuse that requires rehabilitation. Managersand supervisors do not need to know details of a problem. However, whena problem affects the performance or safety of other patients, visitors, oremployees, it becomes a manager’s business.

Employee Assistance Programs 269


An EAP usually costs an organization a set, nominal amount of moneyper employee or per full time equivalent. Often the cost of an EAP for anentire year is less than the costs associated with replacing one or two em-ployees. Most HR experts agree that an EAP is cost effective. To serve itsintended purpose completely, an EAP requires support from senior andexecutive managers, adequate funding, an efficient and confidential as-sessment and referral process, record keeping that ensures confidentiality,and educating employees and managers about the EAP program and howto access it.

An EAP can relieve department managers of difficult problems involv-ing ordinarily good employees who encounter personal difficulties. AnEAP can effectively assist a person for whom termination would be the al-ternative. Department managers usually agree that there is far more sat-isfaction in helping to salvage one employee who might otherwise fail thanthere is in firing him or her.

■ WHEN TERMINATION IS NECESSARY

Discharge versus DismissalIt is helpful to distinguish between the two most common kinds of invol-untary separation. These are discharge and dismissal. Dismissal is relatedto performance while discharge is related to conduct and behavior.

Dismissal is the appropriate path for an employee who must be releasedbecause of performance problems. This will apply to newer employeeswho are unable to gain sufficient control of their jobs to pass the proba-tionary period. Dismissal may be appropriate for employees who experi-ence performance problems and do not respond to corrective processes.Dismissal should be the final resort following all reasonable efforts to im-prove performance.

A dismissal is the equivalent of a layoff. It is a separation that does notinvolve fault. Human resource experts often refer to this as no-fault sep-aration. A no-fault separation concedes only that a person did not fit aparticular kind of work and makes no judgments about a person’s abilityto succeed elsewhere. Similar to the situation of a layoff, a dismissed em-ployee is eligible for unemployment compensation.

Discharge is related to conduct and behavior. Discharge is terminationfor cause, more commonly referred to as being fired. Discharge should oc-cur only after all elements of an organization’s progressive disciplinaryprocess have been applied and failed to correct the offending behavior.Employees who are discharged for cause are usually ineligible for unem-ployment compensation. However, an outside agency ultimately deter-mines eligibility for unemployment compensation.



An Important CaveatNo employee should ever be summarily discharged, fired on the spot, orfired in anger. The nature of the infraction does not affect this rule. An ap-propriate reaction to the most blatant of offenses that are punishable byimmediate discharge is to place the offender on indefinite suspension pend-ing investigation and discharge. This provides a cooling off period for allconcerned, and it provides time for a fair and thorough investigation asneeded.

■ PARTNERSHIP WITH HUMAN RESOURCESDisciplinary action is one area in which department managers and HRpersonnel frequently collide. Such controversy, however, can be minimizedby having clearly stated policies governing who is responsible for each partof the process. A significant number of organizations require managers tocoordinate all disciplinary actions with HR. This is a reasonable require-ment. Human resources can help to ensure that the elements of a pro-gressive discipline program are consistently applied and to confirm thatall legal requirements are observed.

Human resources should be allowed to serve as a central monitor fordisciplinary actions, initially rendering an opinion as to whether a pro-posed action is appropriate to the situation. Another important aspect ofthe HR role in discharge is to ensure that all of the proper steps called forin the policy have been applied.

■ PREVENTION WHEN POSSIBLEActive prevention is important in reducing the need for disciplinary ac-tions and keeping them to a minimum. Two important keys to preventionare information and education.

Be certain that all new employees are familiar with the work rules andapplicable policies, all of which should be mentioned in the employee hand-book. These may have been covered during the organization’s general new-employee orientation, but do not assume so. It certainly will not hurt togo over them a second time.

Make sure each new employee goes through the employee handbookand signs and turns in the handbook receipt as required. Employees willrarely read an employee handbook if they are determined not to do so.However, a signed receipt shifts the responsibility for knowing the contentsto employees.

Managers should periodically review rules and policies with the entirestaff. This can be conveniently accomplished by covering one or two itemsat every regular staff meeting. Personnel policies are periodically revised

Prevention When Possible 271


and updated. Publication of a revision presents a good opportunity for areview. If the rules and policies are kept fresh in employees’ minds, thenthey will be less likely to ignore them.

Preventive employee relations has the potential to avoid disciplinaryactions. Successful supervisors remain alert to signs or signals that indi-cate the possibility of employee problems. They talk to their employees whenthey sense problems. Talking is preferable to allowing problems to fester.Actual problems are far more difficult to manage than are avoided issues.

Remaining visible and available to employees can help to prevent theneed for disciplinary actions. When a department manager is present,many issues that might otherwise escalate into behavioral problems canbe identified and addressed. The presence of a manager tends to have astabilizing effect on a work group. Staying in touch with employees andmaintaining solid one-to-one relationships with them helps to preventdisciplinary problems.

■ ELEMENTS OF EFFECTIVE CORRECTIVE ACTION

KnowledgeSupervisors must be thoroughly familiar with their organization’s policiesand work rules. Thorough familiarity means that they do not have to lookin a book whenever questions or problems arise. Likewise, they must becompletely familiar with the progressive disciplinary process and knowthe contacts in HR with whom to coordinate disciplinary actions. To keeptheir knowledge current, they take advantage of training in these processeswhenever it is offered within their organization.

TimingEffective supervisors do not delay deserved criticism or disciplinary actionany longer than is necessary. Delay only weakens the impact of actionstaken and lessens their importance. When actions are immediate, they aremore likely to be effective.

ConsistencyManagers must strive for consistent treatment of their employees. Workrules and policies must be applied consistently regardless of who is in-volved in a particular problem or infraction. This can be difficult to ac-complish in situations involving people with other personal issues orinvolving friends. Consider the situation of two employees. One has long-standing health problems; the other routinely abuses sick time. Both mustbe treated equally if they are chronically absent.



IntimidationEffective supervisors do not allow themselves to be influenced by em-ployees who try to outsmart or intimidate them. Markets and scarcity ofemployees can cause intimidation. Supervisors must react to problems asthey arise without being influenced by other issues such as scarcity of em-ployees with particular skills. No matter how specialized or valuable theymay think they are, no employees are indispensable. What applies to onemust apply to all. A department or organization cannot maintain a dou-ble standard of employee conduct. This again raises the issue of consistency,which is arguably the most important single factor in a department man-ager’s handling of corrective processes.

■ DOCUMENT, DOCUMENTMost HR practitioners can relate to the following situation. A departmentmanager came to HR prepared to discharge a particular employee. The HRrepresentative heard a ringing indictment of the employee. The individualis never cooperative, is the department’s worst performer, has the worstattendance record of anyone in the department, is frequently mouthy andinsubordinate and is constantly making trouble with other employees. Theemployee has once again caused a problem. The angry manager demands,“I want this person discharged, now.” The HR person begins to considerthe manager’s request by pulling the employee’s personnel file and goingthrough it item by item. The HR representative finds no warnings, no dis-cussions about performance or behavior issues, and no record of discipli-nary actions. The file contains middle-of-the pack satisfactory performanceappraisals covering several years of work. The discussion of discipline forbehavioral issues is over at this point. Without supporting documentationof similar past difficulties, those past problems simply do not exist.

There are lessons in the foregoing story. Instances in which an employeedeserves some form of reprimand or formal disciplinary action must notbe ignored. Every instance of reprimand or disciplinary action must beproperly documented and submitted for inclusion in an employee’s per-sonnel file. If an employee’s file contains nothing about a particular prob-lem, then for all practical purposes it never happened. Finally,less-than-honest performance appraisals are never appropriate. In this in-stance, the record supports the employee and can be used to challenge al-most any disciplinary action. Documentation is critical for any disciplinaryaction.

Supervisors should never attempt or proceed with a personnel actionwithout generating the appropriate documentation. Managers must al-ways remain aware that any employee-related document that is generated

Document, Document 273


can be made public should an employee become involved in a legal pro-ceeding against an organization.

■ CONCLUSIONProblems related to employees are inevitable in any organization. No em-ployee is immune to experiencing personal issues. Supervisors must re-spond to behavior, and personal opinions or predispositions must be setaside. The rules, procedures and penalties for noncompliance must beclearly explained to all employees.

The primary objective of disciplinary actions is correction. Performanceproblems relate to meeting the expectations or requirements of a job anddifficulty doing the work and producing the minimum level of quality oroutput required. Behavior problems involve violations of policies or workrules. In other words, when an employee is unable to perform, the issueinvolves a performance problem. When an individual will not perform,the issue involves a behavior problem.

Performance and behavior problems should both be addressed in a pro-gressive manner using a protocol that has been approved in advance. Thesteps for each type of issue differ. Discipline should be progressive. All ac-tions taken by any supervisor or manager must be documented. Employeeassistance programs provide confidentiality for workers.

Separating employees is occasionally required in most organizations.Dismissal is a no-fault separation. Dismissed employees are usually eligi-ble for unemployment benefits. Discharge is separation for cause, and dis-charged employees are usually not eligible for unemployment compensation.Eligibility for unemployment compensation is ultimately determined by anexternal agency. All separations require documentation. Discharges mustnever occur immediately, and no one, regardless of circumstances, shouldever be discharged in anger. Suspensions can be immediate for actions inunusual and well-defined situations. Discharges should only occur afterallowing time for anger to dissipate and thorough investigations to bemade.

Preventive measures can help to avoid some disciplinary actions.Thorough and ongoing education is important for prevention to occur.Supervisor availability has the potential to open lines of communication.Documentation is an absolute requirement for any employee action in-volving human resources. The importance of documentation cannot beoverstated.

Returning to the opening case study, Penny Jerome’s damaging error re-lates to generalizing. When delivering criticism, do not generalize. “Always”is a dangerous assertion to make; in the sense of being absolute, two of themost dangerous words in the language are “always” and “never,” because



rarely is either state provable. Penny was doing fine while talking aboutthe specific problem Molly had with Dr. Benson. When she generalized,she greatly reduced the chances of having meaningful communication.

When criticizing an employee or delivering disciplinary action, a su-pervisor must be specific. Valid criticism must include a constructive ele-ment. It must indicate or suggest a direction for correction.

If Penny pursues the matter, she must try to have a joint meeting withMolly and Dr. Benson. Having all concerned parties together is the onlyrealistic way to resolve this kind of issue. If Penny shuttles between theparties, she is likely to accomplish little or nothing.

Penny should have already learned that, when interacting with Molly,she must be clear, specific, and detailed at all times. Furthermore, Pennymust always be prepared to explain the reasoning or logic of any criticismdirected at Molly. Finally, Penny must be absolutely certain that her doc-umentation concerning Molly is correct and complete.

Reference

1. Segal, J. A. (1990). Did the Marquis de Sade design your discipline program?HR Magazine, 35(9), 90-95.

Discussion Points

1. Comment on the claim that “like it or not, people problems are thelegitimate terrain of a first-line manager.” Why is this often true?

2. Why do experts strongly recommend that regardless of the apparentseverity of an infraction, no employee should be summarily dischargedbut rather be placed on indefinite suspension pending an investigation?

3. Why do we stress that an employee’s personal problems are no busi-ness of the manager? Under what conditions and to what extent cana department manager be concerned with any facet of an employee’spersonal problems?

4. We repeatedly stress that the primary purpose of disciplinary actionis correction of behavior. If this is so, why have we delineated spe-cific behavioral problems that call for loss of employment upon a sin-gle occurrence?

5. Explain why corrective action should be taken as soon as possible andpractical following an infraction.

6. Why do experts strongly recommend that performance problems beconsidered separately from conduct or behavior problems?

7. Why is it necessary to have a completely documented history leadingup to an employee’s involuntary termination? With what must thisdocumented history agree?

Conclusion 275


8. Why is a department manager’s timely follow-up so important in theperformance improvement process?

9. Why do senior executives require that no significant disciplinary ac-tion be implemented without the involvement of the HR department?

10. Describe the approach you would take with employees who you feelare repeatedly coming close to termination because of tardiness or ab-sences but correcting just enough to avoid discharge?

11. Why is it inadvisable to skip steps in the disciplinary process leadingup to an employee’s involuntary termination?

12. Why is it necessary to create and retain a written record of an oralwarning?

13. How would you address the problem of a pleasant, likeable employeewhose normally marginal performance repeatedly becomes substan-dard a few weeks after corrective action is applied?

14. Describe two hypothetical situations in which it is appropriate for adepartment manager to direct an employee into the employee assis-tance program as a condition of continued employment.

15. Where should a department manager first look for clues to correctiveaction when an employee exhibits problems in meeting the job’s min-imum standards of performance?

Resources

BBooookkssDelpo, A. & Guerin, L. (2005). Dealing with Problem Employees: A Legal Guide.

Berkeley, CA: NOLO Publishing. Hoover, J. & DiSilvestro, P. (2005). The Art of Constructive Confrontation: How

to Achieve More Accountability with Less Conflict. New York: Wiley. Maiden, R. P. (2005). Accreditation of Employee Assistance Programs. Binghamton,

NY: Haworth Press.Shepard, G. (2005). How to Manage Problem Employees: A Step-by-Step Guide

for Turning Difficult Employees into High Performers. New York: John Wiley. Tate, R. & White, J. (2005). People Leave Managers . . . Not Organizations: Action

Based Leadership. Lincoln, NE: iUniverse.

PPeerriiooddiiccaallssBatt, R. (2002). Managing customer services: Human resource practices, quit rates,

and sales growth. Academy of Management Journal, 45, 587-597.Brooke, L. (2003). Human resource costs and benefits of maintaining a mature-

age workforce. International Journal of Manpower, 24(3), 260-283.Brotheridge, C. M. & Grandey, A. A. (2002). Emotional labor and burn-out:

Comparing two perspectives on “people work.” Journal of Vocational Behavior,60, 17-39.

Cordes, C. & Dougherty, T. (1993). A review and integration of research on jobburnout. Academy of Management Review, 18, 621-656.



Dodani, S. & LaPorte, R. E. (2005). Brain drain from developing countries: Howcan brain drain be converted into wisdom gain? Journal of the Royal Societyof Medicine, 98(11), 487-491.

Ellens, J. H. (2005). Emotional reason, deliberation, motivation, and the natureof value. Journal of Psychology and Christianity, 24(2), 179-180.

Ito, J. & Brotheridge, C. (2003). Resources, coping strategies, and emotional ex-haustion: A conservation of resources perspective. Journal of Vocational Behavior,63, 490-509.

King, S. C. (1998). Creativity and problem solving: The challenge for HRD pro-fessionals. Human Resource Development Quarterly, 9, 187-191.

Madiar, N. (2005). The contributions of different groups of individuals to em-ployees’ creativity. Advances in Developing Human Resources, 7(2), 182-206.

Thomas, D. (2005). Manpower problems. British Dental Journal, 199(9), 545-548.

Conclusion 277


AddressingProblems beforeTaking Critical

ActionChapter Overview


• Appreciate the value and importance of preventing employeeproblems whenever possible

• Understand that a manager’s visible attention to chronicabsenteeism and tardiness can usually minimize or prevent both

• Recognize issues concerning employee privacy and confidentialitythat often lead to conflict between individuals and organizations

• Know the legal steps that have been taken to protect the privacy ofindividual employees

• Know how to respond to legal orders such as subpoenas,summonses, and warrants

• Understand an organization’s policies and legal postureconcerning searches of employees’ desks and lockers

• Know the parameters governing access to employee personnelrecords, including the special status of employee health records

• Understand the actual and perceived hazards of personalrelationships in the workplace

• Know the causes and possible means to prevent violence in theworkplace

• Appreciate the power of employee participation and involvementin avoiding potential problems

C H A P T E R

14

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• Understand the uses of counseling as an essential management skillfor preventing selected circumstances from becoming genuineproblems and for resolving smaller problems before they becomelarger

■ CHAPTER SUMMARYThe best time to address a problem is before it occurs. In terms of time,cost, and aggravation, problem prevention—finding solutions for problemsin their earliest stages or avoiding them altogether—is most effective. A sig-nificant number of contemporary workplace problems involve issues of pri-vacy and confidentiality that have been extensively addressed in legislation.Sexual harassment, workplace violence, and personal relationships createproblems for supervisors and managers. Many difficulties can be avoidedthrough employee participation and involvement in programs intended toraise awareness about these issues. Astute managers offer some counsel-ing to their supervisees or refer them for other assistance when indicationsof problems begin to emerge.

Case Study: A Good Employee, Except for—

Supervisor Alice Ross faced a situation that left her feeling uneasy aboutthe action she might have to take. In discussing the matter with fellow su-pervisor Ed Wilson she began by saying, “I have no idea what to do aboutJane Lawson. I just don’t recall ever facing one like this before.”

Ed asked, “What’s the problem?”“Excessive absenteeism. Jane has rapidly used up all of her sick time,

and most of her sick days have been taken immediately before or afterscheduled days off.”

“What’s unusual about that? Unfortunately, we have any number ofpeople who use their sick time as fast as it accrues. And most get sick onvery convenient days. I should say convenient for them, not us.”

“What’s unusual is the fact that it’s Jane Lawson. She’s been here forseven years, but the apparent sick time abuse has all been within the re-cent few months. She’s used up her whole sick time bank in six months,and most recently she was out for three days without even calling in.”

Ed said, “You can terminate her for that.”“I know,” said Alice.“Especially when you take her other absences into account. Have you

warned her about them?”After a brief hesitation Alice said, “No, not in writing. Just once, face-

to-face.”“Is there any record of it? Any form she had to sign?”

280 CHAPTER 14 ADDRESSING PROBLEMS BEFORE TAKING CRITICAL ACTION


“No,” said Alice. “I really hated to make her sign a form. I know Ishould have taken some kind of action by now, but I can’t seem to makemyself do it.”

“Why not?”“Because she’s always been such a good employee. She’s always been

pleasant, always done what she’s told, and always done quality work. She’sstill that way, when she’s here. She’s also a friend. I guess what I’m hungup on is, um, how do I discipline someone who’s usually a good employeeand do it in a way that doesn’t destroy any of what’s good about her?”

Ed said, “Good performer or not, you should be going by the policy book.That’s all I can suggest.”

How has Alice’s failure to take action as troubles emerge or do any-thing about the signs of impending problems hampered her ability to takeeffective action now? What has Alice actually done by allowing mattersto proceed as far along as they have? What impact will their friendship haveon the situation?

■ PREVENTION WHEN POSSIBLEThe best time to address a problem is before it becomes a problem. Managerscannot accurately anticipate difficulties in specific forms or at particulartimes. By developing an awareness of basic behavioral patterns and learn-ing how to spot signs of trouble, a manager can catch many actual orwould-be problems in their early stages.

It is not necessary to repeat what has already been said about discipline.However, an example clearly illustrates the value of prevention in a proac-tive approach to absenteeism. Consider an organizational policy con-cerning absences that specifies five instances of unexcused absence in a12-month period or less calls for the start of disciplinary action. A super-visor learns that a particular employee has just been absent for the fourthtime in eight months. The supervisor has two options. The first is to ig-nore the problem but prepare to begin disciplinary action as soon as ab-sence number five occurs. The other is to have a conference to warn theemployee about the requirement of disciplinary action.

Why simply ignore the issue now? Why let it go further if there is acourse of action that can be taken to prevent more serious consequencesin the future? The supervisor should take the employee aside and addressthe recent absences before it is necessary to take formal action. Preventionshould be practiced whenever possible. In addition to being less stressfulfor both supervisor and employee, it improves morale by showing that themanager cares enough to pay attention to employees and their circum-stances and behavior.

Prevention When Possible 281


Employee tardiness and absenteeism deserve a department manager’svisible attention. If employees see their manager visibly attending to theseproblem areas, some will be deterred from abusing these issues.Conscientious and common-sense management can help to minimize oravoid many problems.

■ EMPLOYEE PRIVACY AND CONFIDENTIALITYIssues of employee privacy and confidentiality are pervasive in contem-porary organizations. This is especially true in health care. Human re-source professionals are familiar with the debate between employee privacyon one hand and the right to know on the other hand. Putting the controversyinto other terms, the conflict usually amounts to individual rights versusbusiness needs. The rights of individuals to privacy and confidentialityhave been a growing concern in contemporary American society.

Privacy and the Changing TimesThere is an increasingly strong belief in society concerning the right of anindividual to privacy. There is also increasing apprehension about how thegovernment might use information that it gathers about individuals. Thisstems from a number of concerns. Many observers feel that agencies are in-truding more deeply into peoples’ lives as the government enacts new leg-islation and increases demands for information. Businesses are widelyperceived as exercising their legal right to review computers and electronicdocuments and to monitor telephone conversations as they attempt to knowmore about the people they employ. Advancing and expanding computertechnology is simplifying the collection, storage and retrieval of personalinformation. Since September 11, 2001, the government has been respondingto a perceived need to monitor individuals and their movements.

Because they are becoming increasingly aware of their rights, employ-ees are coming to expect that their privacy will be protected. At the sametime, organizations are requesting an increasing amount of information frompeople when making decisions about hiring, promotions, benefits and se-curity. When individuals seek employment, work organizations want in-formation about past and present employers and other references. Dependingon the details of a particular job, the application process may involve de-tailed security screening. Employees continue to grow more sensitive to theissue of privacy rights, but at the same time they perceive that organiza-tions are delving continually deeper into their personal lives.

Many individuals believe that organizations collecting data about themask for more personal information than is legitimately needed. Petrocellioffers a classic definition of the right to privacy:1



“It is the right to be free from the unwarranted appropriation ofone’s personality, the publicizing of one’s private affairs with whichthe public has no legitimate concern, or the wrongful intrusion intoone’s private activities, in such a manner as to outrage or cause suf-fering, shame or humiliation to a person of ordinary sensibilities.”

Examples are useful. Consider the rights of privacy and drug testing.Individual rights are continually giving way to perceived needs for drugtesting, especially concerning people in occupations having responsibil-ity for public health and safety. Consider AIDS and testing for the pres-ence of HIV. This represents a constant collision of individual rights withthe need to know information about people seeking treatment and cowork-ers. This controversy was largely responsible for adopting universal pre-cautions under which all bodily fluids are regarded as potentiallyhazardous.

Many organizations once routinely used polygraph (lie detector) teststo screen potential employees and to make random checks of existing em-ployees. Adverse reactions to that practice led to passage of the EmployeePolygraph Protection Act of 1988. Most controversies over employee in-formation and management involve business needs compared to employeeexpectations of privacy.

Legislation Affecting PrivacySince 1975, employees have developed stronger voices in the workplace.Government has responded to those voices. Large amounts of personalinformation were formerly requested on job applications and in employ-ment interviews. Such practices were curtailed when antidiscriminationlaws restricted the information employers could request.

Title VII of the Civil Rights Act of 1964 was the first major law to havea significant bearing on individual privacy. The next major attack on thisissue resulted in passage of the Privacy Act of 1974. Officially applying onlyto agencies of the federal government (but often regarded as a standardfor other employers), this legislation stated that an agency may obtain andretain only information that is relevant and necessary to accomplish itsofficial purposes. Furthermore, it requires that as much essential infor-mation as possible is obtained directly from individual rather than fromsecondary sources. The law ensures record confidentiality, guarantees em-ployees the right to examine their personnel files, and requires that no in-formation be disclosed without the consent of affected employees.

In addition to providing a useful model for most all employers, thePrivacy Act has served as a model for privacy laws in many states. In themajority of states, privacy laws allow employees to know that a person-nel file is maintained and to examine it when desired. Most state statutes

Employee Privacy and Confidentiality 283


permit employees to enter information in their files to clarify whateverthey may consider to be inaccurate.

The Polygraph Protection Act of 1988 proclaimed the practice of rou-tinely administering lie detector tests to be an invasion of privacy. The Actprohibited the use of lie detectors in most screening situations, stated thatemployees cannot be randomly tested during their terms of employment,permitted polygraph use if there is a reasonable suspicion of involvementin workplace incidents resulting in economic loss or injury to an organ-ization, and exempted government employers from the provisions of thelaw. The Polygraph Protection Act does allow testing of selected em-ployees in positions of responsibility for significant dollar value, in-cluding armored car employees, employees of alarm and security-guardfirms, and current and prospective employees of firms handling con-trolled substances.

The Fair Credit Reporting Act limited the extent to which an organi-zation can delve into the personal finances of an individual. This legisla-tion regulates the conduct of consumer reporting agencies and users ofconsumer credit reports, prevents unjust damage from inaccurate or ar-bitrary information in credit reports and keeps employers from receivingreports about employees with the exception of specifically defined pur-poses related to work.

Legal OrdersIt is a relatively common practice for agencies to serve subpoenas, sum-monses, and warrants to employees in the workplace. While many suchorders are served at employees’ homes, officers frequently attempt to servethem at job sites because no one can be found at an employee’s last knownaddress. If they enter via administration, they will probably be referred toHR. In either administration or HR, they will frequently ask directions toemployee’s department. Although the practice may vary, many organiza-tions prefer to have HR arrange for such an order to be served in privateand avoid unnecessary embarrassment to an employee.

Managers who become aware of an attempt to serve a legal order on anemployee in their department should send the serving officer to HR. Humanresources will arrange for the order to be served in private or may be ableto accept it on behalf of the individual. The latter possibility is usually re-stricted to an employee being summoned as a witness in a legal proceeding.

Any external request for information about an employee should be re-ferred to HR. Occasionally human resources will receive a legal order call-ing for employee information required in legal proceedings. With theexception of responding to legal orders, HR should not release any infor-mation to outside persons or parties without first securing a signed releasefrom the affected employee.



Employee SearchesIt is sometimes necessary to conduct searches of areas within a facility suchas desks and lockers that legitimately contain the personal property of em-ployees. Organizations should have a published policy governing suchsearches. An organization should publicize the policy so that employeesknow that searches can occur and the basis for the surveys, specificallywhether they are to occur at random or for reasonable cause or both. Stepsshould be taken to ensure that the search policy is justified and that thereare good reasons for random searches. Any search policy must be appliedevenly and consistently to eliminate any perception of discrimination. Noemployees should be exempt from a search. Employee consent should berequested before a search. While it may not be legally required, consent canoften avoid charges that might arise after the fact. Every search should beconducted discretely and with respect for individual persons and property.

Access to Employee InformationEmployee confidentiality always involves questions of access to informa-tion. Once information is collected, who is entitled to see it? Although ar-guments can be made about the need to know, legitimate needs can usuallybe determined by answering the question: What will be the result if thisinformation is not made available?

Employees have a legally protected right to examine their personnelfiles and add clarifications they believe are necessary. Organizations ordi-narily have policies governing employee access to records, usually includ-ing a requirement that files may not leave the HR department. Most suchpolicies require that files must be reviewed in the presence of an HR em-ployee to ensure that no material is removed.

Employee personnel files may be made available to managers who areconsidering particular persons for transfers. The need to know in such aninstance is a legitimate requirement to review the employment history ofpersons being considered for a position in a manager’s own department.

All organizations should have a written policy governing the release ofinformation concerning both employees and others, such as patients forwhom they provide services. Although department managers often main-tain files concerning their own employees, this practice should be publi-cized. Similar information should be kept for all employees with noexceptions. Supervisors are not advised to maintain secret files on selectedindividuals.

Employee Health RecordsMany organizations formerly kept records related to Workers’Compensation, disability, and the like in employees’ personnel files. Becausethey relate to employee health or physical condition, these documents and

Employee Privacy and Confidentiality 285


records are now considered to be medical records and are subject to stricterrules of accessibility. Employee health records are now customarily filedseparately from personnel information, often in a separate office such asthe employee health service. They are commonly retained by the employeehealth office and are subject to the same rules of access that govern patientrecords in a physician’s office.

■ PERSONAL RELATIONSHIPSSome organizations have rules governing personal relationships, particu-larly those of a romantic nature. The likelihood of such rules increases asthe size of an organization increases. It is not uncommon to have a pro-hibition against employees being involved with each other or being in-volved with employees of direct competitors. Generally, employers can donothing regarding the conduct of employees off of the job. They typicallydo nothing as long as there is no adverse effect on job performance or onthe organization’s reputation. Employees should be encouraged to disclosethe existence of romantic relationships involving co-workers voluntarilyto their supervisors. Organizations often require employees to disclose theexistence of personal or romantic relationships with individuals employedby direct competitors.

There are legitimate concerns about the appearance of favoritism andan increased likelihood of sexual harassment claims and employee unrestwhen romantic relationships exist between management and nonman-agement employees. Such relationships may create conflicts between an em-ployee’s right to privacy and the organization’s legal responsibility toprevent sexual harassment. An organization is particularly vulnerablewhen a member of management is involved. Courts have held organiza-tions liable for sexual harassment by a manager even if senior managersdid not know about a relationship. As many organizations have discov-ered, relationships that begin as consensual can go sour and lead to chargesof sexual harassment.

Many organizations have policies that prohibit having one spouse un-der the supervision of the other, or even to place both spouses in the samedepartment or group. Experience has shown that harmful perceptions of-ten arise in the group when these prohibitions are ignored. Little or no in-appropriate behavior may occur. However, because the possibility ofdiscriminatory behavior is present, perceptions arise. To a perceiver, per-ception is reality.

A rule against having spouses in a superior-subordinate relationshipwill ordinarily hold up under scrutiny, but prohibiting spouses in the samedepartment may be challenged. Generally, a no-spouse rule will prevail ifit can be shown that the rule is designed to avoid aggregation of family mem-



bers, is applied evenly and consistently, and results in no adverse impacton either gender. However, inconsistent or uneven enforcement of this andsimilar rules can result in discrimination charges. Overall, all rules concernedwith personal relationships are especially vulnerable to challenge underprivacy and antidiscrimination laws.

■ SEXUAL HARASSMENTThe risk of sexual harassment charges was mentioned in association withpersonal relationships on the job. In reality, this risk extends far beyondthe boundaries of failed consensual personal relationships.

Under the Civil Rights Act, sexual harassment is a form of sex dis-crimination. Many kinds of acts or actions can result in charges of dis-crimination against employers. Sexual harassment relates to just oneparticular area of troublesome behavior. However, sexual harassment hasbecome one of the two most frequently charged forms of discriminationfor employers in the United States. The other most frequently chargedform of discrimination is discrimination based on age.

The increasing number of cases and increasingly large monetary settle-ments involved make sexual harassment a concern of every employer. Thus,it becomes important for every department manager and supervisor. Withoutexception, all employees of any organization must understand sexual ha-rassment and know about organizational policies relative to it.

Sexual Harassment DefinedSexual harassment consists of unwelcome sexual advances, demands or re-quests for sexual favors, or other conduct of a sexual nature. It is harass-ment if acceptance of or submission to such conduct is either explicitly orimplicitly a term or condition of employment, if acceptance or rejectionof such conduct is used as a basis for making employment-related decisions,or if the conduct can be viewed as unreasonably interfering with work per-formance or creating an offensive or intimidating work environment. Thelatter condition is often referred to as a hostile environment.

Sexual harassment can be as direct and blatant as offensive touchingor making direct sexual propositions. Alternatively, it can be as indirectas exhibiting sexually suggestive posters or calendars, or allowing sexu-ally related humor to be overheard by parties who find it offensive. Bothextremes and any behaviors in between constitute sexual harassment. Alist of concrete examples, specific instances of behavior that could be in-terpreted as sexual harassment, could easily fill several pages withoutcovering all of the possibilities. A particular mode of behavior might con-stitute sexual harassment at one time but not at another time. For exam-ple, it is ordinarily not considered sexual harassment for an individual to

Sexual Harassment 287


ask a co-worker for a date. If the person who is asked declines and theother party repeatedly asks for a date, this may then be construed as sex-ual harassment. Often determining whether some mode of conduct is oris not considered sexual harassment rests with how the conduct is per-ceived. Much behavior that is judged to be sexual harassment is gener-ally unwelcome, unwanted, and repeated.

All organizations should have policies that prohibit sexual harassmentand also specifically prohibit retaliation against anyone complaining ofsuch harassment. Department managers have the responsibility to knowthe sexual harassment and anti-retaliation policy in sufficient detail. Theymust be able to train employees about the contents of the policy and theprocedures for reporting sexual harassment. Human resources should in-clude a briefing on sexual harassment in the new-employee orientation.Organizations should also have printed guidelines in their employee hand-books and their personnel policy manuals. These documents are oftenavailable on an organizational web-site on the Internet. All employeesshould be offered copies of the sexual harassment policy or otherwise havedirect access to this information. It is essential that all employees know theprocess for reporting sexual harassment and be aware of the processes bywhich any charges of such behavior are investigated. Most organizationsrequire a complaining employee to report any issues relating to sexual ha-rassment to the immediate supervisor or manager. Alternative proceduresusually allow employees to make harassment complaints directly to HRor to another point in the organization should an employee’s immediatemanager or supervisor be the subject of the complaint.

It is difficult to say whether sexual harassment is declining overall orcontinuing at its previous levels. Since the passage of antidiscriminationlegislation, sexual harassment has become more visible because people whoonce had no recourse to such behavior now have legal channels through whichthey are lodging complaints. Sexual harassment has long been prevalent inbusiness and industry, but before 1964 there was little its victims could doabout it. In other words, before the emergence of legal channels throughwhich to complain, sexual harassment was entirely “underground,” and forthe most part it was shrugged off or deliberately ignored. Surely anyone whohas been in our mixed-gender work force for a few years can attest to thecontinuing presence of significant sexual harassment.

Sexual harassment remains a major concern throughout business andindustry. It must remain a key concern of every department manager orsupervisor in every organization. Sexual harassment cannot be condonedor tolerated. Every manager in every organization should maintain a zero-tolerance policy towards sexual harassment; to do otherwise is to leave em-ployers open to the possibility of huge financial penalties and some of themost negative publicity an organization can experience.



■ VIOLENCEViolence in the workplace is often the result of stress. It frequently occurswhen individuals become stressed to an unbearable level. When stress be-comes unbearable some people become ill, some break down, and somewalk away from the situation. Some become violent. Violence is similarto other forms of human behavior in that it is action in response to a con-dition, need, or demand.

Every organizational change that alters expectations held by employeesbecomes fertile territory for anger. Over time, chronic anger can lead to di-minished productivity, reduced quality, increased fatigue, burnout, de-pression, and violence. The Federal Bureau of Investigation (2002) reportedthat on average 12.5 of every 1000 employees are the victims of violencein the workplace.2 Additional information is provided in Exhibit 14-1.

A department manager’s best approach to workplace violence involvesawareness and prevention, but this advice introduces the manager to an-other potential source of trouble: there is no consistent profile to describepersons who commit violent acts in the workplace. Individuals who haveperpetrated workplace violence may be experiencing family problems;have a history of abuse; have problems stemming from substance abuseinvolving alcohol or drugs; have a history of violence; have an aggressivepersonality; experience mental conditions such as depression, paranoia orschizophrenia; or have a poor self-image or low self-esteem.

There are no all-inclusive reasons why people commit violent acts. Reasonsbehind workplace violence include an inability to cope with unbearable lev-els of stress; drug reactions; problems involving job, money, or family; re-action to the loss of employment; reaction to the loss of a relationship;frustration with long waits or with what may be perceived as rude or indif-ferent treatment; confusion or fear; and perceived violations of privacy.

Violence 289

Exhibit 14-1 Workplace Violent Crimes 1993–1999

Average Rate per Percent ofCrime victims per 1000 workplacecategory per year workers victimization

All 1,744,300 12.5 100.0Homicide 900 0.01 0.1Rape/sexual assault 36,500 0.3 2.1Robbery 70,100 0.5 4.0Aggravated assault 325,000 2.3 18.6Simple assault 1,311,700 9.4 75.2

Source: Federal Bureau of Investigation, 2002.


Managers, psychologists, or criminal justice professionals cannot reli-ably identify persons who may resort to violence. However, there are stepsthat can be taken to prevent violence. Treat everyone, including employ-ees, patients, visitors and customers, with respect and consideration.Managers should keep all objects that could be used as weapons stored outof easy access. Employees should remain beyond the reach of patients andvisitors in tense situations and should take threats seriously and reportthem immediately through proper channels. All supervisors should knowtheir security procedures, alarms, and warning codes.

Employees and supervisors should be extra alert to the possibility of vi-olence if a person appears to be under the influence of alcohol or drugs,appears to have been in a fight, is brought into a healthcare facility by thepolice or is already being restrained. Visible indicators of potential vio-lence include obvious possession of a weapon; nervousness; abrupt move-ments; extreme restlessness, pacing or obvious agitation; hitting walls orobjects; or breaking things.

When observing an individual who appears to be on the edge of losingcontrol, supervisors should notify other staff and call the security depart-ment. They should stay alert but remain calm. All employees should main-tain a safe distance and give an agitated person plenty of space. Peoplenearby should not turn their backs. Under no circumstances should an un-trained employee touch an agitated or upset person. Obstacles between anupset person and others provide some protection. Untrained employees inthe vicinity of an agitated person should be certain to have a clear way out.Dead-ends or corners are especially dangerous. Untrained personnel shouldlisten and never display anger or defensiveness. They should not argue.Rather, they should speak using voices that are calm, slow, and quiet.

Some departments, such as an emergency room, are more relativelylikely to experience violence. However, violence is possible anywhere inany facility or organization. Therefore, all employees should be orientatedin how to react to violent behavior. If violence does occur, employees shouldprotect themselves to the extent necessary. They should sound an alarmor call the appropriate code or call security. Employees should help re-move others from the vicinity, if necessary. Employees who lack specifictraining should not try to disarm or restrain an agitated person. If possi-ble, they should give potentially violent persons what they are demanding,if the demands are within reason.

■ EMPLOYEE PARTICIPATION AND INVOLVEMENTTrue employee participation has the potential to positively influence be-havior and avoid some potential problems. Participative management isnot a program with a beginning and an end. It requires management com-



mitment. Individual managers and supervisors must be willing to allow em-ployees to participate in decisions. Employees must know that supervisorsand managers genuinely want their input and that it is valued. Involvingemployees requires that management listen to them. Managers should beboth visible and available. Walking around and visiting with employees attheir work stations is valuable. The more employees feel that managers areinterested in what they do and in their thoughts, the more they will feelrespected, challenged, and constructively utilized.

A few employees prefer to just do as they are told, put in their hours, andgo home. The majority of employees, however, usually prefer to be chal-lenged. They have the potential to become engaged in their jobs. Many peo-ple are capable of managing their own work if they are provided with asupportive environment and given the opportunity to perform. Effectivemanagers remember that nobody knows the inner detailed workings of ajob better than the person who does it every day. This is the source of knowl-edge that a manager should try to access through honest participation.

The primary factor in the eventual success of employee involvement issupportive managerial behavior. Managers must be able to empower theiremployees. They will not necessarily always get to make the decisions ordevelop the solutions but employees must understand how they can in-fluence processes and who they will help decide. Decisions that relate toindividual jobs are usually best made by the people who perform the jobs.The more levels of supervision that separate a decision maker and the per-son affected by it, the worse will be the outcome.

Effective employee involvement requires a gradual transition as mutualtrust develops between managers and employees and each becomes morewilling to help the other succeed. An organization or department that canachieve effective employee participation will usually experience signifi-cant increases in productivity and noticeable decreases in employee prob-lems. Interested, stimulated and challenged employees constitute the bestpossible means of preventing problems.

■ COUNSELINGCounseling is appropriate for addressing problems and potential prob-lems at their early stages to keep them from becoming larger problems.Sometimes counseling is informal guidance and work-related advice thatis provided by a supervisor. Overall, counseling may be employed to iden-tify problems in their early stages and attempt to resolve them before theybecome overwhelming. Counseling can be used to strengthen weaknessesin employee performance and provide ongoing guidance. Counseling mayenable a manager to recommend developmental activities for an employeeor improve communication between supervisor and employee.

Counseling 291


Supervisors should try to counsel employees when problems appear tobe developing rather than letting them continue to grow until disciplinaryaction or other corrective action is required. A need for counseling maybe signaled by a noticeable decline in an individual’s performance or a per-son’s failure to continue meeting job standards. A decline in performance,especially in an employee who has performed well for an extended period,often indicates the presence of a personal problem. A counseling sessioncan afford employees the opportunity to talk. This provides a managerthe opportunity to make an appropriate referral. Employees should not beallowed to continue on a path toward disciplinary action when a friendlyone-to-one counseling session may be able to head off further trouble.Changes in individuals relative to their jobs are indicators to make a coun-seling referral. Changes in interpersonal relationships are another indica-tor of trouble. Complaints about an employee from other people, especiallythose that reflect rude or inappropriate behavior often reflect personalproblems.

Discussing a need for counseling with a subordinate is not easy for allmanagers. Managers should remember that they are primarily conduitsto trained professionals. Effective counseling requires training. However,managers can provide basic advice and guidance to their employees. Afirst rule is to understand the boundaries. Supervisory counseling encom-passes coaching on job-related topics or on behavior relative to policies orwork rules. Counseling must never become personal, that is, involve in-trusions into private lives.

Many common obstacles to counseling success may be overcome. Practiceand experience should overcome uneasiness and a lack of experience. Lackof time can be addressed by making an appointment and clearing a cal-endar for 30 to 60 minutes. Friendships are more difficult. Counselingfriends is not much easier than disciplining friends, so many managersavoid both activities. Counseling a person with more seniority than the coun-selor is often awkward. If this is not overcome with practice, it will likelynot disappear with the passage of time. A reasonable fear of making mis-takes is healthy and helps managers respect appropriate boundaries andguidelines. Fear of a lawsuit should reinforce the directive to refer peoplewith problems to qualified professionals.

To provide effective advice in appropriate settings, managers must beknowledgeable and credible. Managers must know what they are talkingabout and avoid trying to bluff their way through unfamiliar situations.Managers should keep their advice consistent from person to person.Effective counselors stick to known facts and avoid generalizations.Timeliness is appreciated by all concerned. As with delaying disciplinaryaction, delaying counseling until a later time dilutes the message and di-minishes its impact.



Effective managers are alert for employee defensiveness and do not ar-gue. Some employees will interpret any effort at counseling as direct crit-icism and will immediately become defensive. Should this occur, hear anemployee out and avoid contradicting the person. Successful counselorsare as positive as possible. Counseling may indeed contain elements ofcriticism, but a positive direction to a discussion is always helpful. Effectivecounselors listen, really listen. When an employee is speaking, they pro-vide their undivided attention and focus on what is really being said.

At all times, department managers must remember that their primarygoal should be focusing on the results of behavior, not the causes. In talk-ing with subordinates, managers should not attempt to infer the cause ofbehavior and should not attempt to look for it. Focusing on the results ofbehavior and correcting inappropriate behavior helps managers to avoidentering an employee’s personal life.

Wise managers should document each counseling session briefly and in-formally, making note of employee name, date, and the nature of the dis-cussion. The aim of such informal and personal notes is to capture theessence of the discussion objectively and using anecdotes. These notes arenot considered to be permanent records but should be for one to two yearsin the event that the problem recurs. These personal notes should be de-stroyed if the problem has not recurred in two years.

■ CONCLUSIONMany employee-related problems can be prevented by timely and appro-priate interventions by supervisors and managers. Employee confiden-tiality and privacy must be respected and protected. Recent legislation hasreinforced this need.

Personal relationships involving colleagues or supervisors present sig-nificant problems. Most organizations have established policies to addresssuch situations in an attempt to protect all concerned. Sexual harassmentis one of the most serious problems facing workers in contemporary or-ganizations. All employees must understand and follow organizationalpolicies and procedures that relate to sexual harassment. Zero tolerancefor such activities is the only defensible position that an organization canadopt.

Violence has become more common in the workplace. All employeesmust be instructed about how to respond to threats of violence becauseviolence is possible anywhere in a facility or organization. Employee in-volvement can facilitate and improve organizational operations. Supervisorsshould be able to provide advice or limited counseling to their employees.

Returning to the initial case study, Alice Ross has made additionalwork for herself by allowing the situation with Jane to continue without

Conclusion 293


intervention. Alice faces a sticky problem because she did not use earlyopportunities to head off the worst before it could develop. She has madea classic error by avoiding a confrontation. Alice does not wish to an-tagonize an employee who is otherwise doing a decent job. Maintaininga personal friendship with a subordinate complicates the situation.

It is likely that there is a reason behind Jane’s behavior. She may be ex-periencing a personal problem. If so, privacy issues must be considered.An element in Jane’s personal life could be causing her frequent absences,but as a supervisor Alice cannot ask about personal issues; she could per-haps ask about personal issues as a friend, but her supervisory responsi-bilities take precedence. Alternatively, the pattern of Jane’s absences mightsuggest that she is simply playing the system for time off, possibly havinglost interest in her job. Alice should offer to listen to anything Jane wishesto talk about and then refer Jane to sources of help such as an employeeassistance program.

Because she has not taken any formal action on the apparent problem,Alice has little choice but to start over with Jane and to apply the organi-zation’s disciplinary policy. However, Alice should first tell Jane exactly whereshe stands and explain the consequences of continued absenteeism.

Alice’s colleague Ed pointed out that the practical response to threedays of unexplained absences is grounds for discharge. Alice must watchthe breaks she gives to any individual. Policies must be applied consis-tently, and Alice cannot be allowing someone to slide by without conse-quences for doing something that for which others are discharged. Thefact that their friendship interferes with operations is the basis for orga-nizational policies restricting personal involvement with co-workers.

Alice should have recognized signs of a developing problem before Janehit the threshold for an initial warning under the progressive disciplinepolicy. An ideal course of action would have been counseling at this earlystage in an effort to avoid a more serious problem.

Some managers will allow an employee to wander deeply enough intotrouble for disciplinary action to apply before starting to deliver warn-ings. However, thoughtful managers will take reasonable steps at the ear-liest signs of trouble to prevent small concerns from becoming full-scaleproblems.

References

1. Petrocelli, William. (1981). How to avoid the privacy invaders. New York: McGraw-Hill, 112.

2. Federal Bureau of Investigation. (2002). Workplace violence. Available at http://www.fbi.gov/publications/violence.pdf. Accessed March 21, 2006.



Discussion Points

1. Why should supervisors and managers be most interested in the resultsof employee behavior? Why should they not try to eliminate the causesof such behavior?

2. How do the needs of an organization and the privacy rights of an in-dividual differ? When do these needs conflict?

3. How could a department manager prevent excessive absenteeismamong employees?

4. Under what circumstances is polygraph testing of employees legal? 5. Why is it advisable to maintain documentation having a bearing on

employee health issues separately from regular personnel files?6. When may a department manager be granted access to the personnel

files of employees of other departments? 7. Why is employee involvement frequently recommended as a strategy

for preventing problems?8. Why should supervisors take time to counsel employees when a dis-

ciplinary problem appears to be developing? Why should they notwait until definitive disciplinary action is permissible under an orga-nization’s policies?

9. How should managers prepare their employees to react to violence inthe workplace? Why is the preparation necessary?

10. Why must an organization obtain an employee’s written permissionbefore releasing any information concerning that employee? Whenmay such information be released without employee permission?

Resources

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New York: Routledge.Ghodse, H. (2005). Addiction at Work: Tackling Drug Use and Misuse in the Work

Place. London: Ashgate Publishing.Goldsmith, J. (2005). Resolving Conflicts at Work: Eight Strategies for Everyone

on the Job. New York: John Wiley. Joy-Matthews, J. & Surtees, M. (2004). Human Resource Development. London:

Kogan Page. Kaye, B. & Jordan-Evans, S. (2005). Love ’Em or Lose ’Em: Getting Good People

to Stay (3rd ed.). San Francisco, CA: Berrett-Koehler Publishers. MacLennon, W. (2005). Counselling for Managers. London: Ashgate Publishing.

Conclusion 295


PPeerriiooddiiccaallssBrotheridge, C. M. & Lee, R. T. (2002). Testing a conservation of resources model

of the dynamics of emotional labor. Journal of Occupational Health Psychology,77(1), 57-67.

Hogan, R., Hogan, J., & Roberts, B. W. (1996). Personality measurement and em-ployment decisions. American Psychologist, 51, 469-477.

Huffcutt, A. I., Conway, J. M., Roth, P. L., & Stone, N. J. (2001). Identificationand meta-analytic assessment of psychological constructs measured in em-ployment interviews. Journal of Applied Psychology, 86, 897-913.

Huffcutt, A. L., Weekley, J., Wiesner, W. H., DeGroot, T., & Jones, C. (2001).Comparison of situational and behavior description interview questions forhigher-level positions. Personnel Psychology, 54, 619-644.

Munn-Giddings, C., Hart, C., & Ramon, S. (2005). A participatory approach tothe promotion of well-being in the workplace: Lessons from empirical research.International Review of Psychiatry, 17(5), 409-417.

Riolli, L. (2003). Optimism and coping as moderators of the relation betweenwork resources and burnout in information service workers. InternationalJournal of Stress Management, 10, 235-252.

Stevens, C. K. & Kristof, A. L. (1995). Making the right impression: A field studyof applicant impression management during job interviews. Journal of AppliedPsychology, 80, 587-606.

Talbot, T. (2005). “Working interviews”: The human resources perspective. Journalof the Michigan Dental Association, 87(5), 17-20.

Ulrich, D., Brockbank, W., Yeung, A. K., & Lake, D. G. (1995). Human resourcecompetencies: An empirical assessment. Human Resource Management, 34,473-496.

Van Wezel Stone, K. (2001). Dispute resolution in the boundaryless workplace. OhioState Journal on Dispute Resolution, 16, 467-490.

Wiersema, M. F. & Bartel, K. A. (1992). Top management team turnover as an adap-tation mechanism: The role of the environment. Strategic Management Journal,14, 485-504.



DocumentationChapter Overview


• Be able to differentiate between the formal documentation that isrequired and the informal documentation that is optional buthelpful

• Appreciate the legal implications of employment documentation• Understand the role of human resources in maintaining and

safeguarding personnel files• Appreciate an individual manager’s responsibilities relating to

employment documentation• Know how and when to create, maintain, and purge anecdotal

note files concerning employees• Appreciate the importance of complete, properly executed, and

appropriately retained documentation

■ CHAPTER SUMMARYPaper records are essential. The human resources (HR) department hasan important role concerning employee personnel files. Department man-agers and supervisors share in documentation responsibilities. Relevantdocuments include personnel files, job descriptions, employee handbooks,and policy and procedure manuals. Departmental files are important buttemporary. Human resources has the job of maintaining long-term files.Paperwork is necessary and should be completed in a timely fashion.Without proper and complete records, an important matter, issue, orevent is considered never to have occurred.

While this chapter emphasizes several forms of documentation, medicalrecords are excluded. Two general classes of employment documents areincluded. The first of these encompasses formal documentation that re-sults primarily from adhering to laws or regulatory requirements. This in-cludes the majority of items found in an employee’s personnel file. The

C H A P T E R

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second class is informal documentation. These papers are not required bylaw or regulations but are deemed to be helpful when running an organiza-tion. Examples include internal reports, statistics, meeting minutes, anec-dotal notes, and personal reminders.

Case Study: “Relax, It’s Only a Little Paperwork”

Middle manager Kathy Mason was talking to a colleague. “I have a greatsupervisor in charge of the evening shift housekeeping crew, Julius Newton.He’s probably better at keeping a diverse crew happy and productive thanany other first-line manager we’ve got. But he drives me absolutely nutswith his casual attitude toward documentation.” Kathy slapped the file infront of her and added, “Honestly, Julius is a good person and a strict butfair supervisor. Still, a lot of my time and attention are needed to keep himout of trouble.”

Employee relations manager Dan Howland asked, “How can he be sogood if he causes you so much aggravation?”

“Because everything else is great. He has a tough group to run. They’reall entry-level personnel, and he has plenty of employee changes. Despitethese challenges, he’s successful. The problem is that I’m always getting stungby a lack of critical documentation when it’s needed.”

“Can you give me an example?”“Sure,” Kathy said, slapping a file folder on Dan’s desk. “He submit-

ted a discharge notice for an employee. The reason was excessive absen-teeism. For months, he worked with the guy, counseling, offering assistance,you name it. Eventually he gave up, decided he’d spent enough time anddischarged the employee.”

Kathy tapped the folder and continued, “Now I’ve got a legal com-plaint claiming unjust discharge. The guy says he never knew his absenceswere a problem until he got fired.”

Dan said, “But he did know? And where is the proof?”“Right. Where we should have Julius’s counseling notes and a record

of three or four warnings under the progressive discipline policy, all we haveis the dismissal-discharge notice. Julius had to provide the discharge no-tice to let the guy receive his final check and get him out the door.”

Kathy went on. “This isn’t the first time this sort of thing has occurred.And don’t even mention performance evaluations. If Julius gets them doneat all, they’re months late and consist of a few generalizations dashed offin a hurry.”

Dan asked, “Have you talked about this with Julius?”“Yes. Multiple times.”“Then why not replace him?”“I’d rather salvage him. When it comes to guiding people one-on-one,

he’s a natural manager. But he worries me. Whenever I bring up the sub-

298 CHAPTER 15 DOCUMENTATION


ject of documentation, he brushes me off. Just yesterday I tried, and hisreaction was, ‘Relax, it’s only a little paperwork.’ I’m afraid we will be really stuck if anything involving him goes to court and we find the per-sonnel files practically empty.”

Dan nodded. “Agreed. You know the attitude of the courts and the ad-vocacy agencies. Their approach is that if it’s not on paper, it never happened.”

What advice would you offer to Kathy Mason? If you were in her po-sition, what actions would you undertake or recommend for supervisorJulius? What options does Kathy Mason have regarding required employeedocumentation?

■ PAPER REMAINS IMPORTANTAlthough computers and electronic records have become increasingly im-portant in recent decades, paper has not been totally replaced. More to thepoint, paper still dominates in many respects. It is required in many legalsettings. Computer output is often converted to printed form.

Many documents are intended for simple record-keeping. Indexes andother records ensure that particular documents are available for referenceof other ordinary business purposes if needed. However, in recent decades,an increasing amount of documentation has been created and maintainedlargely as protection against legal challenges.

Documentation can be troublesome for a department manager in twoways. The first is when it is not available and appears never to have ex-isted. The other is when documents do exist but are weak, inaccurate, orincomplete.

■ LEGAL IMPLICATIONS OF EMPLOYMENT DOCUMENTATION

The Legal Importance of PaperEvery piece of paper ever generated concerning an employee is a potentialkey in resolving a legal complaint involving an organization or manager.Evidence of discrimination or its absence is often inferred from the con-tent of documentation relating to employees. The most common kind ofdiscrimination charge involves disparate treatment. These are allegationsregarding violations of the Civil Rights Act. This legislation requires all in-dividuals to be treated equally concerning terms and conditions of em-ployment. Another common basis for a charge of discrimination involvesallegations of disparate impact. These result from job requirements or ac-tions taken by an employer that have a discriminatory effect on membersof a protected group. When either type of charge is reviewed, documen-tation concerning all affected employees may be requested.

Legal Implications of Employment Documentation 299


Employment documentation is always important when responding tocharges of discrimination. If requested documentation cannot be produced,the worst is often assumed.

Documents related to employment in any way can be requested in a le-gal action. Under a legal order known as a notice to produce, an organi-zation can be required to produce, for copying and inspection, any documentsthat may be possibly or remotely related to the charge. A notice to pro-duce can ask for a considerable variety of material, including the person-nel files of persons involved in an action. This can be extensive and canencompass many personnel files. For example, in an action involving threeemployees alleging a history of discriminatory behavior that followed themfrom their former departments to their present situation, the personnelfiles of all employees in all affected departments were requested. Whencompleted, the files of more than 100 people were involved.

An organization’s personnel policy and procedure manual including allpolicies applicable to the complaining employees’ employment may be re-quested. While this may seem straightforward, changes and revisions tothe document complicate the request. Two comments are in order. First,every page of every document should have a unique page number and anidentifying title. All documents should be dated with a time that they be-come effective or a time that they will expire. Second, HR should retaincomplete copies of all versions or revisions of all organizational documentsthat affect employees. These provide a document trail for future use.Prudent organizations retain copies of additional documents, includingwork rules, job postings, and employment advertisements. Any informa-tion that cannot legally be used as the basis for a personnel decision shouldnever enter an employee’s personnel file and should never be retained in amanager’s anecdotal or personal files.

Record RetentionSome records are retained on the basis of common sense. There may belegitimate needs to retrieve the information they contain at some time inthe future. Other records are retained because of external or legal re-quirements. All federal laws that address aspects of employment includerequirements for record retention. In most organizations, retaining recordsis a continuing responsibility of HR.

Regulatory agencies that administer employment legislation specify theminimum length of time that pertinent records must be retained. Thelengths of retention time differ. For example, under the Fair Labor StandardsAct, payroll records and supporting information such as time cards andtime sheets must be retained for three years. Other related informationsuch as job evaluations, merit system descriptions and records, and pay-roll deduction records, must only be kept for two years.



Under the Age Discrimination in Employment Act, all employment re-lated records must be retained for a single year. This is consistent with theprovision that a charge of age discrimination must be filed within one yearafter the alleged act occurred. The Occupational Safety and Health Act re-quires that all records related to employee injuries or illnesses be retainedfor five years. The Civil Rights Act requires that all records of personneltransactions must be retained for at least six months unless charges are filed.In that case, the records must be retained until the final disposition of allcharges.

The Joint Commission on the Accreditation of Healthcare Organizations(JCAHO) requires that a number of types of documents be retained sothey can be reviewed during periodic accreditation surveys. The affectedpapers include all documents that demonstrate compliance with federal laws,all licenses held by the organization and its individual employees, recordsrelated to employee training, detailed records of safety practices, copies oforganizational policies and procedures, job descriptions, and employeeperformance appraisals. The Joint Commission is a voluntary member-ship organization, not a government agency.

In its periodic surveys, the health department of the state in which anorganization is located may elect to review much of the same documen-tation. States having right-to-know laws concerning toxic substances areinterested in related records.

Hazardous materials and toxic substances present some of the mostrigid record retention requirements. Under the rules of the OccupationalSafety and Health Administration (OSHA), records of any personal or en-vironmental monitoring of exposure to hazardous materials must be re-tained for 30 years. The same requirements apply to records retained whencomplying with the Toxic Substances Control Act. In New York State,records of exposure associated with the New York State Right-to-KnowLaw must be kept for 40 years.

The threshold for retaining most employment documentation is sixyears. This is the statutory limit for filing most employment related chargesarising from violations of the Civil Rights Act.

Many organizations simply assume that all personnel files must be per-manently retained. Employees come and go, in the process generating filesthat become inactive. Employees that remain for many years often gener-ate thick files over the course of their employment. The net result is thatHR has a considerable records retention challenge.

Personnel files of former employees must be accessed when respondingto reference requests and other legitimate external requests for informa-tion. Occasionally, former employees return, requiring the retrieval ofstored records. For these reasons, files of recent former employees mustbe accessible. Because it is generally true that older files are less likely tobe needed, many HR departments develop systems for document storage

Legal Implications of Employment Documentation 301


and retrieval. Old files are often stored on microfilm. Newer systems savedocuments in electronic form; paper files are scanned and then stored aselectronic images. While this approach saves space, it requires that recordsbe periodically re-saved on different media to maintain accessibility.

■ HUMAN RESOURCES AND PERSONNEL FILESThe responsibility for employee documentation resides primarily in theHR department. This department must ensure that all required documentsin each personnel file are in fact there and complete. A department man-ager’s role in supporting personnel files consists primarily of ensuring thatdepartmental inputs to each personnel file get to HR properly completedand in timely fashion. Foremost among the documents coming from a de-partment manager are performance appraisals and disciplinary actions.Other information that is provided includes routine employee informa-tion such as changes of address for employees.

A department manager may expect to hear from HR when documen-tation is not forthcoming. Performance appraisals and disciplinary actionsare most likely to require additional input or actions. Depending on or-ganizational policy, licensure information may be an HR responsibility.Department managers may have the responsibility to ensure that care-givers renew their licenses in a timely fashion and submit copies for theirpersonnel files. Organizations occasionally maintain a separate central li-cense repository.

Regarding disciplinary actions, organizational personnel policies mayinclude guidelines governing disciplinary actions. Written warnings in em-ployee files are often considered to expire after a period of time if subse-quent related infractions do not occur. To comply with such a policy, HRmust monitor written warnings and invalidate them as needed. Humanresources staff may not purposively review all personnel files to removeexpired warnings. However, when expired warnings are encountered, theyshould be removed and placed in a separate file. The objective of a warn-ing is to correct behavior. The point of invalidating and removing olderwarnings is to prevent an infraction from permanently harming an em-ployee. Documents that are removed should not be destroyed in case theyare needed in a future legal action. Documents removed from employeefiles should be re-filed in a separate, central location.

The HR department must control access to personnel files. Internal ac-cess to personnel files is ordinarily limited to designated HR staff whomust have access to files to complete their work. An employee’s immedi-ate supervisor and department manager often have limited access to em-ployee files. An organization’s legal counsel has access to pertinent files asrequired when addressing legal matters. Potential managers may have lim-



ited access to specific qualified employees’ files when considering them forpromotion or transfer. All employees have the right to review their ownpersonnel files, although this is permitted only under HR supervision anda prohibition against removing any documents.

Access to personnel files by interests external to an organization isstrictly limited. Such requests are typically limited to having copies of doc-uments furnished only upon receipt of a written release signed by the af-fected employee giving permission to release specific information. Documentsspecifically requested via subpoena or other court order must be furnishedas requested, without employee permission. Exhibit 15-1 contains guide-lines related to the confidentiality of employee records. These guidelinesare based on principles developed by a governmental task force.

■ THE DEPARTMENT MANAGER’S RESPONSIBILITIES

Job DescriptionsJob descriptions have several uses in an organization. They provide day-to-day guidance for workers. Supervisors use them when evaluating theirsubordinates. Human resources uses them when recruiting. They are oc-casionally non-existent and are more commonly ignored until needed.Thus organizations have a vested interest in creating accurate job de-scriptions and maintaining their currency.

Department managers and HR staff are often required to work togetheron job descriptions. Ordinarily, the content comes from managers while

The Department Manager’s Responsibilities 303

Exhibit 15-1 Guidelines for Confidentiality of Employee Information

• Employees must know of the existence of all systems that retainpersonal information; no such systems should be kept secret fromemployees.

• A procedure must be established for individuals to determine whatinformation exists about them and how it is to be used.

• Personal information obtained for one purpose cannot be used foranother purpose without the consent of the individual to whomthe information pertains.

• A process must allow individuals to correct or amend records ofpersonal information pertaining to them.

• Any organization that creates, maintains, and uses or disseminatesidentifiable personal information must ensure that the informationis reliable for the intended use and must take steps to preventmisuse of the information.


HR provides the format, arrangement, and items that are contained inevery position description in an organization. Employees should partici-pate in revisions of existing job descriptions. Workers should be involvedin an annual review and update of their own job descriptions.

Different versions of job descriptions contain different information.This can create confusion. An easy way to avoid problems is to date eachjob description when it is modified in any way. A message to destroy allprevious versions should accompany the distribution of any revised job de-scription. Human resources must issue all revisions and retain a copy ofevery description in a master job description file. This reduces confusionand provides a resource to determine that the most current document isbeing used.

Employee HandbookEvery organization should have an employee handbook, and all depart-ment managers and supervisors should be familiar with its contents. Tworeasons support this suggestion. The first is for personal knowledge anduse, because managers are employees as well as supervisors. The secondis to answer employee questions. Managers must be able to handle gen-eral questions about the handbook’s contents and must know how andwhere to secure clarification of any of the book’s contents.

Supervisors must ensure that all employees in their departments havecopies of the handbook or have ready access to the current handbook.Employee handbooks are not revised as often as policy and proceduremanuals, but new editions are periodically issued. When the handbook isre-issued and circulated or made available to all employees, supervisors mustensure that all employees not only receive one but also that they sign andsubmit the receipt acknowledging that they have received and read thehandbook. Handbooks include work rules as well as general informationabout an organization. They often include information concerning keypersonnel policies.

A signed handbook receipt is retained as evidence that the employeehas received and reviewed the handbook. The receipt is kept in an em-ployee’s personnel file. This can be extremely important to an organiza-tion should an employee attempt to deny knowledge of a particular ruleor policy as an excuse for a rule violation or similar problem. Also, manyhandbooks carry a prominently displayed disclaimer to the effect that theemployee handbook is not a contract of employment. However, on nu-merous occasions, at times even when a disclaimer has been present, courtshave ruled a handbook to be a contract of employment. Therefore, em-ployee handbooks must be carefully written to avoid conveying the im-pression of promises or guarantees. For example, it is best to refer to onewho has passed a probationary period as a “regular” employee, because



past references to one who has passed probation as a “permanent” em-ployee have been interpreted as rendering the employee immune fromtermination.

Policy and Procedure ManualsAn organization’s personnel policy and procedure manual is ordinarily is-sued by HR. Most policies are prepared by HR directly or by using inputfrom other organizational units and distributed by HR. In most organi-zations, every department has a copy of the manual. Larger departmentsmay have multiple copies.

Department managers or the person delegated to maintain a policy andprocedure manual should file updates as soon as they are received with-out allowing them to accumulate. Rapid references to specific policy in-formation are often required. If a manual has not been kept up to date,then it is not possible to know whether or not a given policy is current. Amanual that has been allowed to go out of date has the potential to bedamaging if a wrong reference is taken as applicable.

A departmental policy and procedure manual is not the exclusive prop-erty of a manager and it should not be kept in a manager’s office. A pol-icy and procedure manual should be stored where employees can accessit and make reference to it as needed, without having to ask for it. Whenthe manual is retained in an office and cannot be readily accessed, em-ployees are left feeling that it is being kept from them and that it containssecrets. Because personnel policies exist for every worker, all employees de-serve equal access to the manual.

Releasing Employee InformationSometimes department managers directly receive requests for informationabout particular employees, requests from outsiders who have—usuallydeliberately—bypassed human resources or other channels such as ad-ministration. Requests for employee information from outside of the or-ganization should not be honored. The people requesting the informationshould be referred to the appropriate person or department, usually HR.The HR policy governing external release of employee information shouldbe the entire organization’s policy on this matter. No information shouldbe released to an outside party without a signed consent from the affectedemployee or a subpoena or other court order.

Requests from within an organization should be honored on a need-to-know basis. When responding, opinions and subjective assessments shouldnever be offered. Organizations should provide only objective informa-tion that can be supported or verified by an official record such as a per-formance appraisal, attendance record, or other documentation.

The Department Manager’s Responsibilities 305


■ DEPARTMENT MANAGER’S EMPLOYEE FILESA department manager will have occasion to keep particular records, bothformal and informal, concerning each employee. Employee records main-tained in a department are not considered to be permanent. Only one per-manent record of employment exists—the personnel file maintained byHR. The files maintained by a manager should not be approached or main-tained in a careless or casual manner. Employee files that are maintainedby managers are not the managers’ personal property. Like all other files,employee information must be appropriately maintained. In some cir-cumstances, they can be made public.

Regardless of the amount of information contained, supervisors shouldalways maintain a separate file folder for each employee. This avoids anycharge of favoritism or discrimination by denying any employees the op-portunity to claim that files were kept selectively or that some employeeswere watched while others were allowed to go their own way. A few itemscan be retained for every employee.

Supervisors’ files for each employee ordinarily include copies of themost recent one or two performance appraisals. Permanent records ofolder performance appraisals are available in HR files. Notes regarding bothpositive and negative items to include in the next performance appraisalare useful. Copies of warnings, reprimands or other disciplinary infor-mation concerning an employee should be retained. Depending on the dis-ciplinary system guidelines, records of oral warnings may remain with amanager instead of going to HR. These should be forwarded to HR alongwith any subsequent written warnings for similar offenses if they occur.

First-line managers are busy people, and they often tend to skimp oninformal documentation. Negative comments seem to get written upmore often than positive comments; these are supposedly “important”in that they may lead eventually to larger problems or necessary coun-seling or disciplinary action. Positive comments often do not get enteredfor employees who do something commendable. However, positives canbe just as important as negatives—even more important to the employ-ees themselves—to capture in a manager’s anecdotal note file.

Accurate records of any performance improvement activities that areundertaken, including all remainders for follow-up and notes indicatingthat problems are being resolved, should be retained. Copies of complaintsor compliments received concerning an employee should be discussed withthe employee at the time they are received and retained. Notes of coun-seling sessions held with an employee should be kept. Any other infor-mation relevant to an individual’s employment or performance in thedepartment that is not customarily included in the formal documentationrequired of a personnel file should be retained. Everything that managerswrite for employee files must be expressed in accurate, objective language



without name-calling or insupportable opinions. Avoid writing anythingthat can be personally or organizationally embarrassing.

Employee files should be periodically reviewed and cleaned. Notes thathave been incorporated into formal appraisals are no longer needed. Oldcounseling notes can be discarded if the problems prompting the inter-vention have not recurred. With a single exception, personal files relatedto employees can be purged at any time. Once a legal action is started andnotice served upon an organization, files pertaining to the legal issue can-not be destroyed; to do so is a violation of federal law. Restating this in adifferent way, routinely discarding files is permissible as long as no legalaction is being threatened or underway. Should a discarded document berequested at some time in the future, it cannot be produced if it does notexist.

■ DO THE PAPERWORKAttending to necessary documentation is a task that is frequently put asideuntil spare time becomes available. Typically, documentation that is leftuntil time becomes available is not completed thoroughly if it is completedat all. Documentation should be completed on a timely basis. Even in theimmediate presence of pressures on a manager, it is best to address docu-mentation right away. This is the time that facts and data are freshest andwhen the most accurate recording of information is made.

Many problems occur after the fact because of documentation that ismissing or incomplete. Instances of incomplete documentation are com-mon in every organization. These include forms that are not completelyfilled out, papers that are not signed, and information that is illegible orincomplete. An ongoing and recurring problem is documents that lackdates. Enter a date on any paper before adding any words. This simple actcan prevent many problems associated with documentation.

■ CONCLUSIONThe importance of complete and accurate documentation cannot be ex-aggerated or overstated. Records should be completed in a timely manner.They must be retained in compliance with applicable rules. Electronic stor-age formats have eased the burden of retaining large volumes of paper.Although not the most popular task of a manager, record-keeping is an ab-solute organizational necessity.

Returning to the initial case situation, a reasonable question is JuliusNewton’s overall use to his employer. Is he an asset to his employer whenhe neglects a significant part of the job? By ignoring a component of hisjob description, he is guilty of insubordination and of potentially placing

Conclusion 307


the entire organization in legal jeopardy. Julius must be made to appreci-ate the importance of employee documentation. While he deserves praisefor his successful one-on-one supervisory style, he must be reprimandedfor neglecting to complete and file documents. Any lawsuit has the po-tential to harm his employer. His reprimand should be written rather thanverbal, and it should specify what he is to do and when his expected com-pliance will be reviewed. In any event, the warning or reprimand must benoted in writing and included in his personnel file. There is no such thingas “only a little paperwork.”

Discussion Points

1. Describe several implications of the statement, “If it isn’t in the per-sonnel file, it never happened or does not exist.”

2. Why have many organizations adopted the practice of permanentlyretaining the personnel files of past employees? What events have ledto the creation of such a policy?

3. Why should an organization retain all documentation that is requiredby law but periodically clean out and dispose of unneeded records?

4. Under what circumstances are employees permitted to add items to theirpersonnel files? Under what circumstances are employees permittedto remove items?

5. What problems most frequently occur when organizations create andretain working documents? How can these be addressed?

6. Why should a department manager make an organizational person-nel policy and procedure manual readily available to employees?

7. How do you handle a written request for reference information con-cerning a past employee addressed to you personally, and includes theformer employee’s written permission to release information? Why?

8. Why should a manager always remain objective, factual, and non-judgmental in private anecdotal notes concerning employees when noother persons are intended to see them?

9. Why should a manager’s anecdotal note files be periodically purgedof all but currently essential information?

10. How and why can some documentation be more damaging to an or-ganization in a legal matter by being missing and unattainable ratherthan readily available?



Resources

BBooookkssAtkinson, F. & Fathers, D. (2005). Training Workshop for Supervisors: Building

the Essential Skills. London: Ashgate Publishing. Bruce, A. (2005). Perfect Phrases for Documenting Employee Performance Problems:

Hundreds of Ready-to-Use Phrases for Addressing All Performance Issues.New York: McGraw Hill.

Bucknall, H. (2005). Magic Numbers for Human Resource Management. NewYork: John Wiley.

McConnel, J. H. (2004). How to Develop Essential HR Policies and Procedures.Chicago: American Management Association.

Scholes, E. (2005). Gower Handbook of Internal Communications. London:Ashgate Publishing.

PPeerriiooddiiccaallssCarmeli, A. (2002). A conceptual and practical framework of measuring per-

formance of local authorities in financial terms: Analyzing the case of Israel.Local Government Studies, 28, 21-36.

Grandey, A. A. (2003). When “the show must go on”: Surface acting and deep act-ing as determinants of emotional exhaustion and peer-rated service delivery.Academy of Management Journal, 46, 86-96.

Huselid, M. & Becker, B. (1996). Methodological issues in cross-sectional andpanel estimates of the human resource-firm performance links. IndustrialRelations, 35(3), 400-422.

Lind, A. E., Kulik, C. T., Ambrose, M., & de Vera Park, M. (1993). Individual andcorporate dispute resolution: Using procedural fairness as a decision heuristic.Administrative Science Quarterly, 38, 224-256.

Nakhinikian, E. (2005). Breaking the turnover cycle. Health Progress, 86(6), 21-24.Robie, C., Zickar, M. J., & Schmit, M. J. (2001). Measurement equivalence be-

tween applicant and incumbent groups: An IRT analysis of personality scales.Human Performance, 14, 187-207.

Saks, A. M., Leck, J. D., & Saunders, D. M. (1995). Effects of application blanksand employment equity on applicant reactions and job pursuit intentions.Journal of Organizational Behavior, 16, 415-430.

Taylor, P. & Walker, A. (1994). The ageing workforce: Employers’ attitudes towardsolder workers. Work, Employment and Society, 8(4), 569-591.

Taylor, P. & Walker, A. (1998). Policies and practices towards older workers: Aframework for comparative research. Human Resource Management Journal,8(3), 61-76.

Taylor, P., Encel, S., & Oka, M. (2002). Older workers: Trends and prospects.Geneva Papers on Risk and Insurance, 27(4), 512-531.

Conclusion 309


TerminatingEmployees

Chapter Overview


• Understand the roles of human resources and departmentmanagers in terminating employees whether discharged for cause,dismissed for performance reasons, or laid off as a result ofreductions in force

• Be able to explain the concept of constructive discharge• Be prepared to discuss conditions that contribute to mass

terminations or layoffs• Know the sequence of steps to consider before deciding to

lay off personnel• Be familiar with a means for determining who is discharged and

who remains in a layoff• Understand related dimensions of termination, including

unemployment compensation and employee privacy• Be able to discuss the potential effects of a reduction on the

survivors and suggest how management can address these issues

■ CHAPTER SUMMARYTerminations of employment are inevitable. These include positive termi-nations such as retirements and resignations as well as negative experiencessuch as firings and layoffs. Involuntary termination involves the end ofemployment at the request of management. There are two types of such ter-minations. Dismissals occur either when individuals fail to meet the stan-dards of their job or as part of a layoff. Discharges occur when employeesare released for reasons of conduct or behavior usually involving violationsof policies or work rules. Discharges are an ongoing concern because they

C H A P T E R

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may be necessary at any time. Most dismissals, other than a relative fewrelated to job performance, are layoffs for reasons such as reengineering ordownsizing, mergers, other affiliations or economic forces. Layoffs are trau-matic occurrences that sever some personnel from their employment andadversely affect the morale and motivation of survivors. Properly handled,layoffs require the guidance of human resources (HR) and the active partic-ipation of supervisors at all levels of management.

Case Study: The Case of Joan von Willebrand

Joan von Willebrand was a phlebotomist at City Hospital. Her supervisor,George Parker, worked as a member of the phlebotomy team. Georgereported to Gloria Garcia, a unit manager of the laboratory.

Joan had been employed at City Hospital for five months when she wasdischarged for chronic tardiness. Gloria initiated the discharge with the con-currence of George. When the matter was turned over to HR, Gloria toldHR that Joan had been given written warnings for clocking in more than30 minutes late on three prior occasions. Gloria also said, “There werenumerous other occurrences that had been overlooked or that had resultedin undocumented oral warnings.”

Joan complained that the 6:30 A.M. starting time for the morning blood-collecting rounds was too early for her. She stated that as a single mother,she had the responsibility of looking after one child. Even though she livedwith relatives, she had difficulty getting to the hospital on time. She alsostated that when she was hired, George had led her to believe that theblood-collecting job was temporary and that a regular opening in the lab,starting at 8:00 A.M. would be available in two or three months.

Gloria had criticized George for being too lenient and for not followingorganizational policies. He had delivered an initial oral warning as required.However, on subsequent occasions, he repeated the oral warning and neverissued written warnings. She said that George was inconsistent in hisbehavior, often not reprimanding her for behavior that did not complywith organization policy. George started delivering written warnings afterGloria prompted him to do so. According to hospital policy, four writtenwarnings for tardiness constituted grounds for discharge. George gave thisinformation to Joan each time she received a written warning. After receivingthe fourth written warning, Joan was fired.

Although George and Gloria both admitted to the possibility of men-tioning a regular technician job in the future, they were both convincedthat there had been no promises. The HR recruiter supported these factsand said that he had also mentioned to Joan the possibility of moving intoa different job should one become available but had made no promises.

Joan took her complaint to the State, claiming that her firing was unwar-ranted and unfair. Although she had been late a few times, she said, she

312 CHAPTER 16 TERMINATING EMPLOYEES


never failed to stay and make up the time and that she had always performedher assigned duties. However, George cast some doubt on this claim. Hesaid that on days when Joan was late, he and another technician had tocover extra territory to make up for the missing employee.

Joan charged that the written policy meant very little because early inher employment she had been late several times, but on these occasions shehad not received warnings. She charged management in general, and Gloriain particular, with using the tardiness policy as an excuse to get rid of her.

What procedural errors were made in the handling of Joan vonWillebrand’s case? How would you rule on Joan’s claim? On what basiswould you base your decision?

■ INVOLUNTARY TERMINATIONThis chapter addresses involuntary terminations. These include dischargesfor cause, such as violations of policies or work rules and dismissal forreasons of performance. These latter terminations include layoffs andreductions in the work force. Questions occasionally arise in relation tosupposedly voluntary terminations, such as resignations and retirements.With these exceptions, voluntary terminations are not included.

■ INDIVIDUAL TERMINATIONS

Discharge: Termination for CauseDischarge and dismissal are different. Discharge is commonly referred toas being fired. Discharge usually occurs after employees break organiza-tional rules or violate organizational policies. Dismissal typically occursfor reasons related to performance such as failure to pass the probationaryperiod or failure to meet the minimum standards of a job.

Most managers dread having to fire someone, even if the employee com-pletely deserves the termination. Dismissal is also a managerial task thatis not easy, and it rarely becomes easier. Before a termination is under-taken, the manager must work with HR and must be in agreement withHR concerning the details of the termination and agree that all requiredinformation is available.

From an employer’s perspective, terminations that involve the least riskto an organization are those for which good cause is evident. Managersmust ensure that their organization closely followed its own policies, andthat the organization can demonstrate that the discharged employee wasgiven every reasonable opportunity to correct the offending behavior. Thisquestion is often pertinent.

Individual Terminations 313


The supervisor or HR must ensure that organizational policies havebeen followed. Adherence to the progressive disciplinary policy is critical.It is essential to ensure that all required documentation is complete and inplace. The most critical dimension of termination for cause is ensuringthat management and HR observe all necessary policies and processes.Despite the best efforts of department managers and HR, unexpected cir-cumstances can surprise an organization. For example, a written passagein an employee handbook stating that an employee who passes probationbecomes permanent has been interpreted as constituting an employmentcontract. Such an interpretation has been used to protest discharge. Whensuch problems are encountered, they are corrected. Using this example, aformerly permanent employee is given “regular” status.

A department manager must prepare for the possibility that a memberof a protected class may claim discrimination when being discharged. Awrongful termination lawsuit is usually frustrating, costly, and time-con-suming. An organization’s best protection against wrongful terminationpolicies are fair personnel policies that are consistently applied. Performanceappraisal systems must be fair. All documentation must be complete andavailable. Above all, organizations must have clear evidence of employeewrongdoing.

Dismissal: Inability to Meet Job StandardsAn individual is not at fault in a dismissal. This is an essential differencebetween dismissal and discharge. Dismissal relates to performance. Becauseno rule is broken or policy is violated, dismissal for inability to meet thestandards of the job or for failure to pass the probationary period is treatedas a layoff. The distinction becomes important when dismissed employeesapply for unemployment compensation. A discharged employee is ineli-gible for unemployment compensation. A dismissed employee is eligiblefor unemployment compensation.

The majority of employees who are involuntarily separated apply forunemployment benefits regardless of the circumstances under which theywere let go. They do so because they feel they have nothing to lose.Discharged employees are frequently granted unemployment compensa-tion contrary to the fact that they were discharged for cause. States havethe legal responsibility to determine when individuals should receive unem-ployment compensation.

Constructive DischargeOccasionally some managers will behave as though they believe that themost effective way of getting rid of an under-producing or uncooperativeemployee is simply to keep piling on work, or otherwise making life mis-erable, until the person finally quits. Such managers reason that persons



who voluntarily resign are not eligible for unemployment compensation.They incorrectly conclude that they have solved a problem without costto their employer. To the contrary, there is a significant risk in using thisapproach to getting rid of an employee.

The concept of constructive discharge becomes an issue when a formeremployee registers a legal complaint alleging that the organization, as rep-resented by one of its managers, made life so difficult and unbearable thatthe individual had to resign. The alternative of remaining usually involvesexperiencing physical illness or emotional damage. A resignation that isforced by extreme or intolerable conditions or treatment may be consid-ered a constructive discharge. A resignation tendered under such condi-tions is not considered strictly voluntary.

Another potential constructive discharge situation occurs when an indi-vidual who is approaching termination for cause is allowed to resign in lieuof discharge. Well-intended managers may suggest that an individual resignfor the record in lieu of discharge. They think that it is better for individ-uals to avoid having an involuntary termination in their personnel records.Such behavior exposes an organization to a claim of constructive discharge.It is far more prudent for an organization to conduct a well-documenteddischarge in accordance with organizational policy.

■ REDUCTIONS IN FORCEThere are several reasons that compel organizations to alter the numbersof their employees. Growth supports increases in employee counts. Otherforces cause organizations to reduce the numbers of their employees. Theseinclude downsizing, reengineering, mergers, acquisitions and other com-binations. Organizations use several methods to reduce the number ofemployees, including layoffs and terminations.

ReengineeringHealthcare organizations entered into reengineering a few years after itpeaked in manufacturing. Reengineering is the systematic redesign of abusiness’s core processes, starting with desired outcomes and establishingthe most efficient possible processes to achieve those outcomes. Reengineeringis often referred to by other names including downsizing, rightsizing, reor-ganizing, repositioning, revitalizing, and modernizing, although reengi-neering is in fact a considerably more complex undertaking than these othernamed processes. Nevertheless, to most employees, reengineering has asingle significant result: job loss. Mentioning the term alerts employees tothe likelihood of layoffs. In hospitals, 81% have reduced their employee staffsthrough layoffs or attrition, and nearly half have laid off managers.1

Reductions in Force 315


Employee morale is likely the most severe HR problem in the health-care sector, and layoffs are the main cause of morale problems. There isapparently no way to avoid the conclusion that reengineering is synony-mous with eliminating jobs.

Mergers, Acquisitions, and Other AffiliationsMergers, acquisitions, and other forms of affiliation have become commonin contemporary health care. Because these recombinations usually aremade in response to financial pressures, they usually mean the loss of jobs.

Systems often promote diversification and breadth of services. Not-for-profit systems usually are more diversified than for-profit systems. For-profit systems are more likely to be specialized. They are far less likely tomaintain a service that is not profitable. Not-for-profit systems are morelikely to carry unprofitable services for the sake of remaining full-serviceto the communities they serve. Little evidence exists to suggest that hos-pitals belonging to multi-organizational systems are any more efficientthan are freestanding hospitals. In some parts of the country, systems andother alliances have been the salvation of endangered rural hospitals butusually at the cost of job loss in the rural communities.

Mergers frequently lead to the reduction of management jobs as wellas staff positions. Consider the merger of two small-town hospitals locatednot far from each other. The merger involved combining parallel depart-ments from both institutions under a single management structure. Forexample, where two clinical laboratories with two managers once existed,they were combined into a two-location laboratory department with asingle manager. Because of this merger, twelve managers were eliminated,and each of the managers who remained was left with a greatly enlargedspan of control.

The process of consummating a merger is usually considerably more dif-ficult and more expensive than what was originally anticipated. Employeesof one organization usually fear absorption by the other organization andthe loss of their identity. This happens even in a merger of so-called equals;one organization absorbs the other.

Consolidation expenses can be high. Organizations can require anextremely long time to recover their merger expenses through lower oper-ating costs and improved efficiency. Organizational recombinations canbe highly disruptive to staff in a number of ways as conflicting organiza-tional cultures are forced to mix. The human side of merger or acquisitionis rarely given sufficient attention. Emotional issues that can make or breaka merger usually take a distant second place to the financial issues.

When organizations explore the possibility of merger or affiliation, littleinformation is likely to be available. However, once the possibility of amerger becomes known, employees will become uneasy. Successful super-



visors maintain a dialogue with their employees. They listen to their con-cerns and keep them informed. They keep lines of communication openand provide the best information that is available. Honesty is an absoluterequirement for maintaining personal credibility.

■ LAYOFFS

Other Considerations FirstDepartment managers and HR staff experience considerable stress when theyare ordered to implement mass layoffs. When a layoff is impending, an organ-ization should plan to take other steps that frequently precede a layoff. Allrealistic steps that do not involve layoffs should be taken. An early step shouldbe eliminating the use of all temporary employees. Another early step isimposing a hiring freeze. By stopping the influx of all but essential staff, suchan action provides time to consider internal reallocation of personnel.

Following a hiring freeze, closing open positions can reduce the totalnumber of employees without releasing people. If the reduction in staff isto be extensive and likely to be permanent, executive management shouldconsider offering a voluntary termination incentive. Organizations mightalso consider offering an early retirement incentive. Early retirement incen-tive plans are helpful but can be risky. Specific individuals or groups cannotbe targeted. To do so is discriminatory. An additional risk is that keyemployees may actually leave.

Who Goes and Who Stays?A department manager is usually involved in determining which employeesleave and which ones stay. Personal preferences must be subordinate to estab-lished organizational guidelines. All organizational guidelines are estab-lished with the guidance of legal counsel. Selection for layoff is most oftenaccomplished by seniority, although this is not an absolute requirement unlessa contract governs selection for layoff. Seniority may not be the sole factor.For example, assessment mechanisms may consider a combination of fac-tors that may include performance as reflected by appraisals, attendance,conduct as reflected by disciplinary actions, and seniority.

Many organizations have determined that seniority is the fairest and safestmeans of determining who leaves and who remains. Using seniority alone,questions remain about how it is determined. Seniority can be determinedby time in the organization, time in a specific department, time within aparticular task or job class, or time within a department.

Related to the degree of seniority is the process of bumping or dis-placement. Bumping occurs when the job of an individual is eliminated.Persons of greater seniority are allowed to displace or bump persons having

Layoffs 317


lesser seniority from their positions. This process continues until the personhaving the least seniority is laid off. Bumping can be simple or extremelycomplex, depending on the rules that are in place.

In addition to utilizing temporary employees, healthcare organizationsactively use many part-time employees. An official approach taken toselecting employees for layoff may include guidelines governing the orderof reduction based on work status. For example, temporary employeesare discharged first, followed by regular part-time employees. Their statustypically puts them ahead of regular full-time employees when determiningwho will be released.

Whatever combination of factors is used by an organization, consistencyin how the guidelines are applied is critically important. Ideally, an organ-ization should have a personnel policy to govern staff reductions. Such apolicy should be in place well before reductions ever become necessary.However, in many organizations, no policy is created until the need forreductions becomes apparent. Exhibit 16-1 contains a sample reduction-in-force policy illustrating how one organization has addressed most of theforegoing concerns. If employees are represented by a union, a collectivelybargained agreement between employer and union will delineate howemployees are chosen for layoff.

Once a layoff plan has been created, personnel from administrationand HR and legal counsel must assess the proposal to ensure that it is notbiased. Charges of discrimination are likely if patterns based on age, gender,or race emerge among those slated for layoff. For example, organizationswanting to reduce personnel costs have laid off higher paid employees. Asthese people tend to be older, the resulting process can be considered dis-criminatory. All scenarios must be examined before a layoff plan can beconsidered to be workable and non-discriminatory.

The goal of an ideal layoff will be an organization that has reduced itspersonnel costs but retained its best employees. Rarely is such an idealoutcome achieved. Compromises must be accepted as a consequence of beingfair to all employees. Older employees tend to earn higher salaries, and theyare often protected by seniority. Younger employees may earn lower salariesand possess critical skills. While these traits are desirable to an organiza-tion, younger employees lack seniority. Layoffs should not be undertakenwithout considerable deliberation.

The Timing of LayoffsThe timing of reductions is an issue for which there are no easy or unam-biguous solutions. From the perspective of employees, timing is irrelevantbecause layoffs contain no positive benefits. Consultants and HR profes-sionals who develop reduction plans and policies disagree on whether itis best to phase in reductions over a period of time or accomplish all lay-offs at once. Both approaches have shortcomings.



Layoffs 319

Exhibit 16-1 Model Policy and Procedure: Reduction in Force:

Policy and Practice

Policy:

The relative security of the organization’s employees is best servedby continuous employment. However, occasions may arise whenreducing staffing levels is necessary because of changing financial oroperational circumstances. The objective of this policy is to providea rational basis for reducing staffing levels in the event such adjust-ments are necessary.

Definitions:

Department A cost center or a set of cost centers havingcommon positions, tasks, functions orduties that report to the same manager.

Organizational seniority An individual’s uninterrupted servicetime as a full-time or part-time employee,adjusted for approved leaves of absence.

Department seniority An individual’s uninterrupted servicetime as a full-time or part-time employeeof the present department or unit,adjusted for approved leaves of absence.

Incumbent employee An employee currently occupying anapproved full-time or part-time position.

Qualified employee An individual who possesses the statedqualifications for a specific position byvirtue of education, experience, orboth, and can either presently performin that position or achieve standardperformance within the normal intro-ductory period.

Determining Staff Reductions:

A. Work Force Composition

1. Establishing the size, composition, and distribution of the workforce remains a prerogative of management.

2. Before deciding that staff reductions are necessary, manage-ment will investigate alternative processes that can avoid areduction or lessen its impact. Staff reductions will proceed onlyafter all reasonable alternatives have been either implementedor eliminated from consideration.

3. When circumstances necessitate staff reductions, manage-ment shall determine the numbers and kinds of positions tobe eliminated. (continues)




Policy and Practice (cont.)

B. Guidelines Affecting Incumbent Employees1. Nonexempt employees, excluding those in designated essen-

tial positions that may be designated by management, shall besubject to layoff generally by job assignment and by depart-ment according to staffing needs.

2. Employees working within a specific job assignment and depart-ment will be ranked using the following criteria:• Appropriateness of individual qualifications and experience

in meeting the hospital’s needs• Past personal performance (average of the three most recent

performance appraisals)• Disciplinary counseling or warnings within the past twelve months

C. Organizational Seniority1. Each of the foregoing criteria may account for up to 25% of the

ranking decision for an employee. From time to time, dependingon circumstances and need, management may devise ratingscales to facilitate employee ranking.

2. After all employees within a department or job assignment areplaced in rank order, selection for layoff will proceed in reverseorder of the list.

3. Employees remaining in a department following a staff reduc-tion may be subject to changes in hours and shift schedulesand work assignments as necessary.

4. Management may exercise the right to displace less seniornonexempt employees in one department with qualified nonex-empt employees from another department who have greaterorganizational seniority, providing that this is accomplishedwithin similar job assignments and without significant disrup-tion of departmental operations.

5. Management, physicians, and other exempt positions, and par-ticular technical and professional nonexempt positions that maybe designated, are subject to position-specific reductions withoutregard to seniority or other factors. The principal criterion fordetermining the status of such positions will be their appropri-ateness in meeting the needs of the organization.

6. Any employee identified for layoff will be considered for otherpossibilities such as transfer or demotion to a position in anarea of need. Whenever possible, employees will be allowedto choose from available alternatives. Employee requests forreassignment to alternative positions shall be honored solely


Layoffs 321


Policy and Practice (cont.)

at management’s discretion. Displaced employees who decline analternative position will be dismissed.

D. Administration of Reduction1. Department managers will identify the positions to be elimi-

nated and will furnish administration with a list of those posi-tions and incumbent employees.

2. Administration and HR will review potentially affected employeesproposed for possible transfer or reassignment to areas of need,if any, and will make recommendations as appropriate.

3. Human resources will submit departmental lists of employeesrecommended for layoff to the appropriate Vice President andthe President.

4. Following executive approval of layoff, HR will coordinate withdepartment managers to arrange for providing employees withproper notification of termination date and information con-cerning terminal benefits.

5. Each affected employee will be offered an exit interview intendedto cover:• Method and timing of payment for accrued vacation time• Status and conversion of insurance coverage• Pension plan vesting, if appropriate• Unemployment compensation procedures• Reinstatement rights, if any• Recommendations or referrals for external placement, if any

E. Other Considerations1. Every effort should be made to eliminate the use of all temporary

employees before regular employees are considered for layoff.2. An employee who is still in the introductory period (the first six

months of employment) does not need to be re-ranked withothers according to B.2. If such an employee’s job is eliminatedthe individual is to be considered dismissed due to lack of work.

3. In the displacement of an employee as described in B.4, a full-time employee may displace another full-time employee or apart-time employee, but a part-time employee may only dis-place another part-time employee with equal or lesser hours.

4. For employees about whom a recommendation for layoffdepends in part on performance or disciplinary issues, appro-priate supporting documentation must be in the personnel files.

Attachment: Employee Ranking Scale (continues)


When layoffs are phased in over a period of time, morale and produc-tivity decrease as everyone waits and wonders who will be next. Teamworkbecomes a distant second to individual survival. The effect spreads acrossan entire organization. If the reduction is expected to include managers,then it will permeate all levels of an organization. As morale is lost, it tendsto be replaced with anger. Over time, organizational chaos will occur.

Even when a layoff is significant, far more people usually remain workingthan were released. Prolonged layoffs take their toll on the morale andattitudes of those who remain. Time is required for healing. The time isproportional to the magnitude of a staff reduction. Layoffs that are pro-longed and that inflict pain require more time for recovery. Phased-in layoffs are easier to administer. Operating managers have more time to


Employee Ranking Scale

(a) Qualifications/ExperienceStill learning the job 0Fully trained but limited experience 2Fully trained and experienced 4Fully trained in multiple areas, cross-functional capability 6

(b) Past PerformanceAverage of 3 most recent evaluations < 3.5 (standard) 0Average of 3 most recent evaluations 3.5 to 4.25 2Average of 3 most recent evaluations 4.26 to 4.70 4Average of 3 most recent evaluations > 4.70 6

(c) Disciplinary Counseling/Warnings (Recent 12 Months)Multiple problems; suspended one or more times 0More than 2 counseling, or no more than 2 warnings 21 or 2 counseling, or 1 warning 4No counseling, no warnings 6

(d) Seniority (Organizational)Less than 1 year 01 to 2 years 22 to 5 years 4More than 5 years 6

NOTE: This ranking scale is applied to groups of employees whowork within the same job description and are engaged in the samegeneral activities. Employees in the group should be arrayed fromhighest (possible 24) to lowest, with the lowest rankings receivingfirst consideration for reduction.


adjust layoff schedules. However, from an employee perspective, they pro-duce more stress and anxiety than a single mass layoff.

Other Layoff ConsiderationsMost organizations employ some form of severance policy in conjunctionwith layoffs that are considered permanent. These are reductions in whichemployees do not have a realistic possibility of being recalled to work withina reasonable period. Severance pay is ordinarily based on an individual’s finalsalary in combination with length of service. It is usually capped at a statedmaximum number of years. A common example of severance pay determi-nation is one or two week’s pay for every year of service. An alternative is toprovide two week’s pay per year of service to a maximum of, for example,15 years. On average, health care organizations tend to offer less generousseverance pay than can be found in other industries such as manufacturing.

In exchange for a severance pay arrangement, and possible outplacementassistance, an organization may ask a departing employee to sign a waiverof the right to sue. In doing so, an employee agrees not to bring chargesrelated to the termination in trade for what is likely to be a more generousseverance arrangement than would otherwise be obtainable. However,employees often successfully challenge such waivers after the fact. In reality,they provide no guarantee that legal complications will be avoided.

When a layoff is coming, all employees should be given the reasons forthe action. The approach should be as straightforward as possible andaccompanied by as much detail as is available and should be readily under-stood. Economic issues are the basis for most layoffs. While some employeeswill choose not to believe the reasons they are given, if no explanations areprovided, employees will feel that they are being treated in an unfair manner.Ideally, employees should be kept advised of an organization’s financial healthon a regular basis. Reminders that layoffs are possible may be useful.Surprises should be avoided. The reality of a layoff is sufficiently shockingwhen it is announced even if employees expect one.

No Easy TimeFrom the perspective of management and HR, nothing is easy about imple-menting a reduction in force. However, managers and HR have a far easiertime than do the employees who are being laid off. The initial impact isinvariably stressful for both laid-off employees and those who remain.

Feelings of anger and betrayal are normal among employees who arelaid off. Terminated employees face psychological stress and economichardship. Personal routines are disrupted, as are relationships that may haveexisted for years. For all practical purposes lives are turned inside out asindividuals are thrown into a mode that some of them may never haveexperienced. Those who have experienced employment displacement donot look forward to repeating the experience.

Layoffs 323



For many individuals, the loss of a job is as traumatic as a death in thefamily. The grieving process is proportional to the degree of loss. Employeeassistance programs and other resources may be used to help ease the tran-sition for both laid-off staff and stressed-out survivors. The overall impactof a reduction in force is eventually healed with the passage of time. Thisoccurs more rapidly if a measure of employment stability returns to anorganization.

■ RELATED DIMENSIONS OF TERMINATION

Unemployment CompensationAn employee who is discharged for cause is technically not eligible forunemployment compensation. One who is dismissed for reasons relatedto performance or laid off for lack of work or economic reasons is con-sidered eligible for unemployment. However, regardless of the reasonsbehind any particular termination, any discharged employee is free toapply for unemployment. It costs only the time to complete an application.Many claims are given favorable determinations even though an organi-zation considered them ineligible.

Consider an example. An organization following its own procedures forprogressive discipline provides counseling sessions and warnings before dis-charging an individual for chronic tardiness. As long as policy is followed andapplied in a consistent manner, an organization has every right to release suchan employee for not meeting the expectation of being on the job when needed.This individual is technically not eligible for unemployment. This personapplies for unemployment compensation and pleads hardship due to aninability to get to work on time. The stated reason may involve a supposedlyregular ride that has been erratic, a constantly changing bus schedule, childcare arrangements that are in a state of flux, or some other issue why thestarting-time expectation has not been met. If the unemployment office deter-mines that the discharged employee is eligible for benefits, the former employerwill be notified. If the employer protests the determination and the employeechooses not to accept the employer’s decision, then a hearing is held. An admin-istrative law judge renders a decision. Discharged employees claiming hard-ship are frequently granted unemployment compensation benefits.

Human resources, acting on the organization’s behalf, initially respondsto every claim for unemployment compensation, making an initial deter-mination as to which claims to contest and which to concede. Some HRdepartments have taken the authoritarian stance of automatically con-testing every unemployment claim. This practice accomplishes little morethan consuming time and energy while generating ill will. The HR assess-ment of each unemployment claim should involve an honest judgment of


the merits and validity of the claim. Only those claims that appear invalidor questionable should be contested.

When a contested claim results in a hearing before an administrative lawjudge, the department manager and an HR representative usually attendthe session. The former employee typically attends. The information thatthey provide will be used to make the determination. An unemploymenthearing can consume several hours when travel and waiting time areincluded. A conscientious HR manager will be mindful of the impact onmanagers and will contest only those claims that honestly appear to beunwarranted.

Employee PrivacyAny termination, regardless of the reasons behind it, should be accom-plished in private and in a place where the conversation is not visible oraudible to other employees. Terminations should be accomplished nearthe end of the workday so that an individual who has just been let go canleave the premises without being forced to give an explanation or answeremployee questions about what has happened.

Terminated employees should be allowed as much dignity as possible.Managers must weigh considerations of trust and caution. Many organiza-tions have policies that require dismissed employees to be accompanied whenthey return to their workstations or offices. This precaution is taken to ensurethat computer files or other property is not damaged. Human resources com-monly has the responsibility to recover keys, employee identification cardsand other organizational property. Security generally has the responsibilityto delete any electronic access codes given to former employees.

Discharged employees should be escorted out of the building. However,not all experts agree on this suggestion. Angry former employees maycommit acts of vandalism or sabotage. In contrast, employees who wereterminated and then escorted out have sued because of the humiliationexperienced in the manner of departure. Juries are frequently sympatheticto allegations that defamation can result from actions as well as fromwords. Terminations occasionally require the presence of security per-sonnel. A security officer’s presence should be discrete, not especially vis-ible but readily available.

OutplacementWhen significant numbers of employees are being released during the samereduction, organizations often provide access to some form of outplace-ment service. Individual outplacement services are often extended as partof the severance arrangement made with a manager or professional employee.These are individualized services intended to assist the person in preparinga resume, initiating a job search and securing future employment. Group

Related Dimensions of Termination 325


outplacement activities are often provided for rank-and-file employees.Direct contact with organizations that are known to be recruiting may bearranged. Any assistance toward new employment that can be providedwill lessen the feelings of betrayal or abandonment that employees experi-ence when they are laid off.

Human Resources Follow-UpFor all terminations, HR representatives should discuss issues related tobenefits with departing employees. An important topic is continuation ofinsurance coverage under the Consolidated Omnibus Budget ReconciliationAct (COBRA). Options should be discussed and employees should beshown how to apply for coverage. Other options should be explained.Unemployment compensation benefits, if applicable, should be discussed.Human resources should secure a signed release to give out reference infor-mation. Human resources will ordinarily explain how remaining vacationor sick time and applicable severance will be paid and whom the departingemployee should contact with questions.

■ THE SURVIVORS OF REDUCTIONBefore, during, and immediately after a reduction in force, people whohave been laid off receive a great deal of attention. Those who have beenterminated receive so much attention that individuals who remain oftenfeel forgotten. However, employees that remain must not only keep theorganization running but also pick up the slack created by the loss of thosewho were discharged. They often think of themselves as survivors ratherthan as regular employees.

Survivors commonly feel overworked, if not overwhelmed. This is mostacute in the days immediately following the reduction when the shortfallcreated by the absence of some staff is most pronounced. Survivors expe-rience guilt over having avoided the reduction while so many others losttheir employment. They distrust management for terminating so many oftheir coworkers and wonder about the security of their own employment,fearing that they will be next to depart. Survivors experience an overalldecrease in morale, productivity and employee loyalty. They feel less com-pelled to be at work on time or at all. This contributes to a general increasein absenteeism and tardiness. In some extreme instances, they may carryout acts of sabotage, violence or other disruptive behavior against theirformer employer or employees.

Inevitably, some survivors of a reduction react by looking for newemployment. In this way, critically needed staff may be lost due to the inse-curity of the environment. Skilled technical and professional employeesoften feel more loyalty to their occupations than to an organization.



Organizational loyalty has eroded with the reduction in force and employeesare ripe for offers of more secure employment. A job market favorable tohighly skilled professionals can cause an organization to lose staff mem-bers that they worked so hard to recruit or protect.

The attitude among the survivors of a reduction can be particularlygrim if their organization had implemented a total quality managementor other motivational program during recent years. These programs,launched and pursued with much promotional activity and a strongemphasis on the value of employee participation, delivered a single mes-sage. All employees are told that they are important, that their contribu-tions are essential for the organization’s continued success and that theyare needed. When layoffs follow, the message is changed. The organiza-tion says that employees have become less important. When a significantreduction in force follows a motivational program, the cumulative effectis more demoralizing than if employees had never heard about the orig-inal program.

Following a significant layoff, top management must be openly sup-portive of those who remain and must be visibly active in efforts to helpall survivors adjust to changes and return to normal operations.Reassurance about continuing employment without additional layoffs ishelpful. However, it is only useful if true. A second round of layoffs madeafter a message of employment assurance is often catastrophic to themorale or remaining employees. Decreased morale is often followed bydecreases in productivity. This cycle is vicious and highly detrimental toan organization.

Human resources and management at all levels can provide valuable sup-port to the survivors of a reduction in force by stressing training and edu-cation as people attempt to adjust to new or altered roles. Specifically, thisis an appropriate time to provide training in time management, copingwith change or managing stress. Any action that promotes a sense of busi-ness as usual or allays fear among workers has value. The overarchinggoal is to allay fear and change the focus of employees from survival andsecurity to service and productivity.

During the recovery period following a reduction in force, supervisorsmust maintain close communications with their employees. Employees willhave questions. Many of them cannot be answered. Employees will be stressedout, worried and demoralized. As employees, supervisors are subject to thesame negative influences as their subordinates. However, as managers, theymust keep their employees upbeat and willing to produce in spite of what isoccurring around them. This often requires great effort in the face of poten-tial discouragement. It also requires support from organizational executives.The outlook, morale and productivity of an entire group of people oftenhinges on the attitude of a single person, a departmental supervisor.

The Survivors of Reduction 327


■ CONCLUSIONInvoluntary terminations include layoffs and firing. The former are usu-ally triggered by economic considerations while the latter are due to prob-lems meeting organizational expectations or conforming to policies. Allowinga person to resign instead of being fired has great potential for creatingfuture organizational problems. Persons who are involuntarily terminatedmay be eligible for unemployment compensation benefits. Human resourcesprovides essential services whenever an employee leaves an organization.Survivors of any reduction in force have special needs. Ignoring these hasthe potential to cause great losses in employee morale and productivity.

The case of Joan von Willebrand demonstrates the importance of fol-lowing policies and procedures faithfully and consistently applying allrules during an involuntary termination.

Joan should be discharged. However, unnecessary information will haveto be collected and reviewed. Extra time and unnecessary aggravation willresult from George’s off-and-on, lax application of the tardiness policy.At present, enough information is available to document the fact that Joanwas given an opportunity to correct her offending behavior but did not doso. All of the provisions in the organization’s progressive disciplinary policymust be followed. George should be reprimanded for inconsistent appli-cation of his supervisory responsibilities. Repeating, in all involuntary ter-minations, it is essential that an organization has clear, comprehensivepolicies and procedures and that these are applied consistently and in a strict,non-discriminatory fashion.

Reference

1. Serb, C. (1998). “Is Remaking the Hospital Making Money?” Hospitals andHealth Networks, 72(14), 32–35.

Discussion Points

1. What are the differences between dismissal and discharge?2. In your opinion, should a general layoff be implemented at one time

or over a period of weeks or months? Why?3. What steps would you recommend that a department supervisor take

before laying off employees? Why?4. What are the principal advantages and disadvantages to an organiza-

tion in implementing a voluntary early retirement program?5. What is a constructive discharge? Provide an example of a construc-

tive discharge.



6. Why should some form of seniority be used as a criterion in identifyingemployees for layoff?

7. Why is it necessary to pay particular attention to the employees thatare retained following a reduction-in-force? What is the basis for con-cern, recognizing that these survivors still have their jobs?

8. When should employees who are laid off be expected to leave? Why?What are the advantages and disadvantages of leaving at the time thatthey are notified? What are the advantages and disadvantages of beingallowed to work out a reasonable period of notice?

9. Why do mergers and other affiliations often lead to the consolidationof positions and reduction of the work force?

10. Should a manager be able to use a reduction-in-force to rid the depart-ment of its less effective employees? Why or why not?

11. Once all employees have been designated for layoff, what should HRdo before the layoff is implemented? Why?

12. What steps can an employer take to minimize the possibility of ter-minations being overturned by legal action? Why?

13. Assuming that a significant number of skilled employees are desig-nated for layoff, how can an organization assist these workers fol-lowing dismissal? Can an organization protect selected skilled workersin a layoff? Why or why not?

14. Why is it advisable that human resources provide individual meetingswith each employee that is terminated in a workforce reduction?

15. Should an employee who is about to be discharged for cause be allowedto resign? Why or why not?

Resources

BBooookkssAnderson, C. (2004). Tool Kit for Human Resources. Lincoln, NE: iUniverse.DeCenzo, D. A., & Robbins, S. P. (2004). Fundamentals of Human Resource

Management. (8th ed.). New York: John Wiley.Fleischer, C. H. (2004). The Complete Hiring and Firing Handbook: Every Manager’s

Guide to Working with Employees—Legally. Naperville, IL: Sourcebooks, Inc.MacKay, I. (2005). 35 Checklists for Human Resource Management. London:

Ashgate Publishing.Riccucci, N. (2005). Public Personnel Management: Current Concerns, Future

Challenges. New York: Longman.

PPeerriiooddiiccaallssArthur, J. (1994). Effects of human resource systems on manufacturing perform-

ance and turnover. Academy of Management Journal, 37, 670–687.

Conclusion 329


Blackman, M. C., & Funder, D. C. (2002). Effective interview practices for accu-rately assessing counterproductive traits. International Journal of Selection andAssessment, 10, 109–116.

Galle, W. R., & Koen, C. M. (2001). Reducing post-termination disputes: Anational survey of contract clauses used in employment contracts. Journal ofIndividual Employment Rights, 9, 227–241.

Lansbury, R., & Baird, M. (2004). Broadening the horizons of HRM: Lessons forAustralia from experience of the United States. Asia Pacific Journal of HumanResources, 42(2), 147–155.

MacDuffie, J. (1995). Human resource bundles and manufacturing performance:Organizational logic and flexible production systems in the world auto industry.Industrial and Labor Relations Review, 48, 197–221.

Rhoades, L., & Eisenberger, R. (2002). Perceived organizational support: A reviewof the literature. Journal of Applied Psychology, 87, 698–714.

Roberts, R., & Hirsch, P. (2005). Evolution and revolution in the twenty-first cen-tury: Rules for organizations and managing human resources. Human ResourcesManagement, 44(2), 171–176.

Santora, J., Clemens, R., & Sarros, J. (1997). Views from the top: FoundationCEOs look at leadership succession. Leadership and Organisation DevelopmentJournal, 18(2), 108–115.

Saxton, M.J., Phillips, J. S., & Blakeney, R.N. (1991). Antecedents and conse-quences of emotional exhaustion in the airline reservations service sector. HumanRelations, 44, 583–595.

Storey, J., Quintas, P., Taylor, P., & Fowle, W. (2002). Flexible employment con-tracts and their implications for product and process innovation. InternationalJournal of Human Resource Management, 13(1), 1–18.



Case Study:Balancing Needs

Chapter Overview


• Understand the importance of following established procedureswhen hiring new employees

• Know how procedures protect an organization• Appreciate the importance of protecting individual employees

during the hiring process• Comprehend the ethical and moral aspects of human resource

guidelines and decisions• Understand how activities and decisions of a human resources

nature can affect all employees and managers in an organization• Appreciate that all managers and supervisors must be familiar

with HR policies as well as the reasons why they exist

■ CHAPTER SUMMARYHuman resources (HR) personnel make decisions daily that affect thelives of many individuals. They typically follow established policies andprocedures of an organization. Human resources personnel infrequentlyconsider the ethical and moral dimensions of their decisions. The activ-ities described in this chapter concentrate on the ethical and moral com-ponents of a situation involving HR aspects of an organization.

Case Study: Balancing Needs

This chapter is different. The entire chapter is devoted to a case study thatexplores the events related to hiring an employee. The organization is ofmodest size, and it has never employed more than 25 employees.

C H A P T E R

17

331


Appropriate procedures were not followed. Ignoring these set into motiona long series of events. After the dust finally settled, all of the parties in thesituation agreed that a lot of time was wasted. Legal expenses were in-curred. Organizational cohesion and morale were damaged. Experts whohave reviewed this case agree that most of these expenses could have beenavoided and much wasted time could have been saved.

The case study emphasizes moral and ethical principles. These are of-ten overlooked or relegated to a secondary position when HR rules andregulations are being applied. However, morality and ethics underlie mostHR regulations. The Civil Rights Act was passed to correct serious ethi-cal inequalities in American society. Similar moral imperatives can be foundin most other pieces of legislation that have impacted HR.

Ethics are important in any situation involving management. BecauseHR involves people and their means of earning a living, the importanceof ethics increases. Ethical behavior is taught to students throughout theirschooling. Reminders of the importance of conducting lives in an ethicalmanner are important.

The case is related from the perspective of the organization’s chief ex-ecutive officer. Because of this structure, an initial case study vignette hasbeen eliminated. Errors were made. Try to identify these as they appear.More importantly, try to understand the different forces that allowed theerrors to occur. What could have been done to avoid making the proce-dural errors? Could you have balanced the needs of the board, staff, andorganization? Although hindsight is very clear, could you have success-fully resisted the pressures applied to the chief executive officer? How?

■ DEFINING THE PROBLEMOne of the primary responsibilities of a leader is the effective and efficientuse of resources to support and further the mission of an organization.This case scenario takes place in a nonprofit organization where the pri-mary resources consist of its employees. A board of directors is responsi-ble for oversight and policy making for an organization. A chief executiveofficer (CEO) is responsible for policy implementation and day-to-day op-erations including all personnel matters. The staff is small in number (fewerthan 25 employees) and all work out of a central office.

At the time this case study started, the CEO had been recently promotedinto the position. The previous CEO had been removed by the board. Priorto being promoted, the new CEO had served in the same position on aninterim basis. In both the interim and then the permanent position, theCEO worked to rebuild board and staff relations and to rectify problemsoccurring during the tenure of the previous CEO. A renewed team spiritwas reemerging with both board and staff members working together on

332 CHAPTER 17 CASE STUDY: BALANCING NEEDS


objectives that supported the mission of the organization. The organiza-tion’s membership was growing, grant support was increasing, and cohe-sive relationships were emerging.

The growth of membership and funding provided an opportunity foran increase in staff to support these activities. A new position of mem-bership manager was proposed by a board member and accepted by thefull board. Once approved, the board member who suggested the new po-sition went on to propose that a past board member be contacted to fillthis position. This past board member was from out-of-state and hadserved on the board prior to the present CEO’s tenure. He was stronglyrecommended for the position and the board supported the suggestion ofcontacting him to fill the position.

The current CEO, being relatively new and knowing that the previousCEO had been removed by the board after a brief tenure, felt compelledto follow the board’s recommendation. The CEO had never worked withthe past board member, but had spoken to him over the telephone. The pro-posed candidate was extremely enthusiastic about both the job opportu-nity and the mission of the organization, had an impressive resume, andhad an established relationship with the organization that would reducetraining time and speed the relationship-building effort critical to the re-sponsibilities of this position. Hiring this person for the job would avoidthe investment of both time and money involved in a full job search effort.It would get someone in the position sooner, and it would support theboard’s recommendation.

According to organization policies and procedures, the board onlyhad responsibility for the hiring, evaluating, and firing of the CEO. TheCEO had sole and full responsibility for filling and maintaining all otherpositions. After considering the governing policies and the board’s rec-ommendation, the CEO felt efforts to search and recommend an un-known for this position would result in discord among the board membersand deteriorate the relationship-building efforts he had worked so hardover the past year to improve. He decided to trust the board member’sopinion and recommendation, offering the position to the past boardmember.

The offer was accepted, the past board member relocated from a dis-tant state and employment commenced. This position reported directly tothe CEO. The first six months (probationary period) went by with onlyminor adjustment difficulties noted. During the second six-month period,however, more severe job difficulties surfaced including insubordination,lack of team participation, inability or unwillingness to perform job re-sponsibilities, and failure to follow established policies and procedures. Theseactions, or in-actions, resulted in the deterioration of the team atmospherein the office (the community), a growing lack of trust among employees,and a growing threat to the CEO’s integrity.

Defining the Problem 333


Documentation of offenses and meetings to reconcile differences wererecorded and filed. Offenses included direct violations of the CEO’s re-quests and of organization policies, including using space that did not be-long to the organization even after being told not to, not calling in whenreporting late or absent, not performing job duties, not respecting the chainof command, not working as a member of the team, removing organiza-tion property from the premises even when told not to, and reports inac-curate and incomplete statements about the CEO and his management ofthe day-to-day operations to the board member who recommended him.Being such a small office, the other members of the team were negativelyaffected by the disruptive actions of this new employee.

■ MORAL AND ETHICAL ISSUESThe CEO was soon faced with resolving a deteriorating condition thatinvolved several moral and ethical dilemmas. The CEO had to respondprofessionally and convincingly to the board of directors who had adistant and fictionalized view of the situation, about both the past boardmember who was now an employee, and the board member who pro-posed him, and their motivations. The board was composed of fifteenmembers located in various states throughout the country. The boardmet by conference call monthly and face-to-face twice a year. In be-tween calls, the board member who proposed the position and pastboard member/employee actively called board members behind thescenes to garner support for their positions. During the board meetings,the board member was a force with which to be reckoned. She was arogue board member in every sense of the word with a personal agendathat only became clear at a later point in time. Her personality over-powered some board members and caused dissension among the oth-ers. She had strategically placed this past board member, who turnedout to have a personal relationship with her, internally to sabotage thecurrent operations of the organization and CEO. She then planned topromote herself into the CEO position and replace the job from whichshe was about to retire.

Conversely, the CEO had a responsibility to the staff to maintain thecohesiveness of the team, and a responsibility to the organization to useresources effectively and efficiently to further the mission and vision ofthe organization. The moral issue was lying by the newly hired employeeand the board member who proposed his employment. The new employeewould lie to the CEO as well as to other staff members and then usurp thechain of command by reporting lies to the board member who supportedhim. The board member would further fictionalize these lies to personallyattack the CEO and split the board with false information.



There were two clear conflicts of interest that required resolution. Oneconflict was the interests of the organization versus the personal hiddenagenda of one board member and the new employee. The other conflict in-volved acting in the best interest of an individual, including the CEO’s per-sonal code of ethics. The CEO believed in treating others as he would liketo be treated and that it was his responsibility to assist employees in suc-ceeding in their positions. He weighed these personal values against doingwhat was best for the organizational team and the organization as a whole.The CEO’s responsibility, as stated in the organization’s policies and pro-cedures, included managing the day-to-day operations and being respon-sible for the human resources assets of the organization. This became adelicate balance of trying to salvage a deteriorating employee situationwhile working to reestablish the entire team atmosphere of the office. As abackdrop to these concerns, the board of directors was in disarray.

Working toward resolution involved the CEO making decisions thatinvolved a potential conflict of confidentiality. He had to share enough in-formation with employees to help them understand but not violate an in-dividual’s privacy. Restated, he had to help employees understand enoughabout the situation to keep them focused on the mission of the organiza-tion yet not become so frustrated that he risked losing the employees whowere performing well because of one that was not. This had to be bal-anced with the documented fact of a long-term personal relationship be-tween the new employee and the rogue board member.

Employees should respect the board and the board should be setting thestrategic direction of the organization. The CEO had to keep the employ-ees focused on moving the organization forward during a time when theboard was pre-occupied and unable to fulfill its responsibilities. The situ-ation involved the CEO making decisions to keep stakeholders (the board,the staff, and himself) focused on the facts and the long-term best inter-ests of the organization without making the issue personal. It was impor-tant for the CEO to remain professional and not reply on a personal basiswhen that is how he was being attacked. The CEO’s goal was to keep fo-cused on the truth and not on emotions. An optimal resolution would notbe easy, but would allow the majority of the stakeholders to walk awaystronger and more knowledgeable and feeling that the issue was resolvedthrough an ethical recourse. Resolution, healing and lessons learned werethe end products of a very painful process.

■ ACCEPTABLE MORAL AND ETHICAL PRINCIPLESApplying three foundational ethical themes of critique, justice and caring,provides useful guidance when analyzing the conflicting moral and ethi-cal principles in this case. The Ethic of Critique continually questions the

Acceptable Moral and Ethical Principles 335


situation and the decision making process. Some questions to be addressedincluded the following. How did the organization get to its present situa-tion? How did the components combine to reach the present situation? Whatis the motivator? What is the history? Who holds the official and unoffi-cial power? These questions and others helped the CEO weigh the outcomeof choosing to fulfill his role of mentoring and growing a new employeeagainst a utilitarian choice that would produce the greatest good for thegreatest number.

The core of the moral atmosphere of an institution or environment isheld in its justice structure. The Ethic of Justice is the second of the threefoundational ethical themes. It raises a question about the nature of self-governance. The organization had invested resources, time, and moneyinto establishing and implementing policies and procedures to guide andgrow the organization. When guidelines are ignored, a price must be paid.The organization’s non-adherence to its own guidelines had created a dif-ficult situation. In addition to the immediate crisis or price, some agent hadto look ahead and address problems that would occur if the situation werenot resolved, if it were repeated or if it were ignored. What steps wouldsuccessfully resolve the present problem? What sanctions were appropri-ate for acting in violation of what has been implemented as acceptablebusiness behavior? Was ignoring the problem an option?

The last functional ethical theme is the Ethic of Caring. This focuses onthe demands of relationships from a standpoint of actual regard. It pos-tulates a level of caring that honors the dignity of each person and the de-sire to see that person actualize a fully human life. Many relationshipsmust be considered in this case. These included the relationship of the CEOand the new employee, the relationship between the CEO and the otherstaff members and the relationship between the CEO and organizationmembers. The CEO also had relationships with the organization, mem-bers of the board and with himself.

Consideration of the CEO’s personal code of ethics was a major factorin the choices that were made. The Principle of Equal Respect and treat-ing others as a person would like to be treated did not provide consistentresponses when looked at from the perspective of each relationship group.The Principle of Equal Respect conflicted with the Principle of BenefitMaximization. The latter required trading the welfare of some for the wel-fare of others. The CEO faced the challenge of finding an acceptable bal-ance for these conflicting rights and interests.

In addition to the internal operating challenges, the CEO had to resolvethe problem of unethical behavior displayed by an unofficial leader of theboard. This unethical leader was using her charisma and influence to en-hance her personal power over other board members to achieve self-serving goals and objectives. Her actions represent four corrupting in-fluences of power affecting a power holder and those in relationship with



her.1 Power is the desired end and is sought at virtually any cost. Holdingpower tempts an unethical leader to use an organization’s resources for self-benefit. The basis for false feedback and an exalted sense of self-worth arecreated. There is a corresponding devaluation of other’s worth and anavoidance of close contact with them.

A board of directors is responsible for board member actions and sanc-tions. A CEO is responsible for supporting the president of the board andthe executive committee by providing factual and timely information. Asa member of the board, a CEO is responsible for providing data to boardmembers so that they can make decisions that are in the best interest ofthe organization.

■ ANALYSIS: ETHICAL DECISION MAKINGIn a managerial position, a CEO’s duty to individual employees involvescaring and helping subordinates to grow and actualize themselves.Established policies and procedures provide guidance for performanceevaluations, disciplinary actions and, when necessary, termination. A CEOcan choose to work with a problem employee by identifying and discussingproblem areas, providing and encouraging additional training, commu-nicating on a regular basis and recognizing progress as well as areas thatstill need attention. These must be in accordance with established policiesand provide a course of action such as discipline or termination if unsuc-cessful. These must also support the CEO’s personal code of ethics in-cluding the Principle of Equal Respect. The true cost of such a course ofaction would be prolonged continuation of unsatisfactory job perform-ance and a destructive and disruptive force being perpetuated on the boardof directors and in the office. The benefit would be a salvaged employeewho could function as part of a team in supporting the goals of the or-ganization and the job responsibilities of team members.

The opposite alternative would compel the CEO to support actions thatproduced the greatest good for the greatest number of individuals. Stillfollowing the established policies and procedures, the CEO could movequickly through the documentation of deficiencies to disciplinary actionsand finally to termination without much thought about the effect on thedisruptive employee. This action conflicted with the CEO’s personal codeof ethics and might lead to even more disarray on the board of directorsby terminating one of their own without extraordinary interventions be-ing exhausted. Such a rapid resolution might salvage some of the team at-mosphere and allow a competent replacement to start addressing theworkload that was accumulating.

The CEO was partly responsible for this situation by not following estab-lished policies and procedures for a new hire. If references had been solicited

Analysis: Ethical Decision Making 337


and checked, the resulting information would have, at the very least, led toquestions. The board must also bear responsibility, initially for not sharing theirknowledge that the past director being proposed for hire was removed fromthe board for not fulfilling his responsibilities and in the end, for allowing afellow board member to micro-manage the operations of the organization. Theneed for resolution and its subsequent implementation had to be a joint effortshared by the board of directors and the CEO.

A more immediate problem resided with the CEO in reestablishing a func-tional team effort in the main office. The lies that were the basis of the em-ployment of the past board member constituted a grave breach of trust. Whenestablishing a caring relationship, trust is paramount. In addition to trust, acaring relationship is a reciprocal interaction that must include some meas-ure of commitment. The responses and interactions of a recipient (problememployee) are as critical to the process as are the actions of a giver (the CEO).Achieving teamwork demands a concern for maintaining responsibility, ac-countability, authenticity, and integrity in the leader-follower relationship. Ifan employee has no desire to be a part of the team or a part of the improve-ment process or a part of the caring relationships, all efforts will be fruitless.

This leads to the decision to make a response that yields the greatest goodfor the greatest number of individuals. In this case, the CEO chose to ter-minate an employee who was unable or unwilling to perform his job re-sponsibilities as quickly as possible, in strict accordance with the organization’spolicies and procedures. Such an action caused harm to one person but ben-efited other staff members and the organization. It allowed the organizationto minimize its losses and move on to hire a qualified employee able to per-form the required job responsibilities. Documentation of performance reviews,corrective action steps, and disciplinary actions protected the organizationfrom legal liabilities and provided the board of directors with unquestion-able reasons to support the CEO’s actions. This decision required the boardto clearly separate the responsibilities of the CEO and those of the board ofdirectors. The board had to sanction and eventually remove a board mem-ber who refused to abide by the organization’s policies and procedures andwho had stopped acting in the best interest of the organization. In follow-ing this course of action, the CEO and the board of directors upheld theirduty to themselves, to the staff, to the organization, and to its members.

Ignoring the problem employee was never considered as an option. Todo so would have simply perpetuated a difficult situation. The ethical prin-ciples of the CEO would have been compromised. Such an action had thepossibility of causing him to resign. The effect on the organization canonly be surmised. However, given the motives of the rogue board mem-ber, predicting her effect on the organization becomes risky. However, sev-eral organization experts familiar with the situation have privately thankedthe CEO for not resigning and, in their opinion, sparing the organizationextraordinary pain and the possibility of permanent damage.



■ CONCLUSIONMorality moves people beyond self-interest by requiring that they take therights and interests of others into account when acting on behalf of oth-ers or an organization. Self-interests and codes of conduct are relevantconsiderations when making moral and ethical decisions. When self-interest violates the rights and interests of others, any resulting actions become selfish and wrong. The board member who proposed the new position and the person to fill it may have had good intentions but theywere marred by deceit and self-interest. She may have honestly felt that shewas the best person for the CEO position. However, when she proceededto do whatever she needed to do to ensure that outcome, her good inten-tions became irrevocably flawed. In this instance, her love and passion forthe organization became distorted by her obsession for power and control.

The CEO’s reputation for integrity and honesty increased his chancesof eventual victory. When faced with decisions that affect the rights andinterests of others, sound and ethical reasoning must be the basis for mak-ing those decisions. The CEO was honest in communicating with the boardand all staff members and was able to support the actions taken by dis-cussing the advantages and disadvantages of various options and makinga recommendation that was in the best interest of the organization.

The ultimate decision to terminate an employee was difficult but nec-essary. A clear obstacle existed when trying to work with a new employeewho was unwilling or unable to accept the possibility of changing his be-havior. An attempt was made to overcome this seemingly irreconcilable ob-stacle and to seek a resolution involving a creative proposal. Theorganization’s policies and procedures could not be compromised, but adifferent job was offered with a more structured atmosphere in which theproblem employee could try to achieve success. Had this option proved suc-cessful, benefits would have been achieved for the CEO, the individual, theteam and the organization as a whole. Unfortunately, this was not the case.The problem employee declined the offer of an alternate position.

The CEO was not willing to sacrifice the staff team, the board team orthe organization he had worked so hard to build for what he viewed as un-ethical practices and outcomes that were not in the best interest of the or-ganization. More importantly, the CEO was not willing to relinquish aposition that he loved without a fight. After a reasonable effort to recoverand rehabilitate the employee who was not performing his job, the CEOundertook actions that he considered to be both organizationally correctand ethically just. He decided to stand strong for what he believed in, dowhat he felt was right and hoped that truth would prevail. Without regardfor the eventual outcome, there would be no regrets because ethical and moraldecisions were made with a duty to self and to the organization.

Conclusion 339


A leader, in this case the CEO, must maintain responsibility, account-ability, authenticity and integrity to achieve and sustain a team atmos-phere. The decision to terminate the problem employee and face theconsequences of the rogue board member was more than balanced by therespect (and relief) of other staff members, the satisfaction of abiding bythe organization’s policies and procedures, and the strength that was even-tually achieved by the board and CEO through reflection and the passageof time. Learning from the outcomes of this situation, loss of an employeeand a board member, although painful, has strengthened all ethical as-pects of the organization: critique, justice, and caring.

Reference

1. Kipnis, D. (1976). The Powerholders. Chicago: University of Chicago Press.

Discussion Points

1. What are the human resource responsibilities of a board of directors?2. What conflicts of interest had to be resolved?3. What was the potential conflict of confidentiality? Why was it a problem?4. Describe the Ethic of Critique. Why was it important in this situation?5. Describe the Ethic of Justice. Why was it important in this situation?6. Describe the Ethic of Caring. Why was it important in this situation?7. Describe the Principle of Equal Respect. Why was it important in this

situation?8. Describe the Principle of Benefit Maximization. Why was it important

in this situation?9. Was ignoring the problem an option? Why?

10. What was the first HR error to be made?11. When did the situation become unable to be resolved? Why?

Resources

BBooookkssHedge, J. W., Lammlein, S. E., & Borman, W. C. (2005). Aging Workforce: Realities,

Myths, and Implications for Organizations. Washington, DC: AmericanPsychological Association.

Marker, R., & Monat, M. (2005). Innovation and Employee Participation throughWorks Councils: International Case Studies. London: Ashgate Publishing.

Reeves, T. Z. (2005). Cases in Public Human Resource Management (2nd ed.).Florence, KY: Wadsworth.



Society for Human Resource Management. (2005). SHRM Generational DifferencesSurvey Report: A Study by the Society for Human Resource Management.Alexandria, VA: Society for Human Resource Management.

PPeerriiooddiiccaallssChambers, E. C. (1998). Asymptomatic HIV as a disability under the Americans

with Disability Act. Washington Law Review, 73(2), 403–431.Chan, F., McMahon, B. T., Cheing, G., Rosenthal, D. A., & Bezak, J. (2005).

Drivers of workplace discrimination against people with disabilities: The util-ity of Attribution Theory. Work, 25(1), 77–88.

Crosby, F. J., Iyer, A., & Sincharoen, S. (2006). Understanding affirmative action.Annual Review of Psychology, 57, 585–611.

D’Agostino, T. (1999). Suit says working at home is a form of job accommoda-tion. AIDS Policy Law, 14(19), 7–8.

D’Agostino, T. (2001). EEOC sues Wisconsin employer, claims HIV discrimina-tion. AIDS Policy Law, 16(19), 8–9.

Dalgin, R. S., & Gilbride, D. (2003). Perspectives of people with psychiatric dis-abilities on employment disclosure. Psychiatric Rehabilitation Journal,26(3):306–310.

Kurtz, J. M., & Mehoves, C. (2001). The Pregnancy Discrimination Act: Employerhealth insurance plans must cover prescription contraceptives. Employee BenefitsJournal, 26(3), 29–31.

Tammelleo, A. D. (2002). Male clerk files EEOC suit for sexual harassment by fe-male RN. Nursing Law’s Regan Report, 43(5), 1–7.

Tartaglia, A., McMahon, B. T., West, S. L., & Belongiam, L. (2005). Workplacediscrimination and disfigurement: The national EEOC ADA research project.Work, 25(1), 57–65.

Webber, D. W., & Gostin, L. O. (2000). Discrimination based on HIV/AIDS andother health conditions: “Disability” as defined under federal and state law.Journal of Health Care Law and Policy, 3(2), 266–329.

Conclusion 341


SuccessionPlanning

Chapter Overview


• Understand the goals of succession planning• Appreciate the importance of creating a succession plan for an

organization’s CEO• Know about the factors that have motivated healthcare

organizations to create succession plans• Understand the process of effective succession planning• Recognize the importance of grooming a successor to take over as

the next CEO• Understand why many healthcare organizations have not created

succession plans

■ CHAPTER SUMMARYSome chief executive officers (CEOs) abruptly depart their organiza-tions. They may leave by their own choice through retirement or res-ignation. They may be asked to leave by their boards of directors orother governing bodies. They may die unexpectedly or become inca-pacitated due to an injury or disabling illness. Fortunately the major-ity of organizational CEOs provide notice of their intention to leave,often doing so years in advance. However, a loss of an organization’sCEO can create an urgent, unanticipated need for succession. Sooneror later, all organizations’ governing boards are faced with the task ofreplacing their CEOs. Unfortunately, succession planning is not yet aroutine part of the long-term planning process for most organizations.This is especially true for non-profit and smaller organizations. Having

C H A P T E R

18

343


and implementing a succession plan can help to ease the leadership tran-sition. Grooming a successor is a viable alternative. This chapter addressesthe problem of organizations preparing for the eventual task of replac-ing their CEOs.

Case Study: Crash

A private jet chartered to fly from New York City to Orlando, Floridacrashed in the ocean, killing all aboard. Among the passengers were theMemorial Hospital CEO, his three top managers, and the chair of the gov-erning board. They were flying to Orlando to attend a national health careconference. The manager of human resources (HR) at Memorial Hospitalwas summoned to the phone to receive the devastating news. She gasped,turned pale, looked expressionlessly at her assistant and uttered four words,“Now who’s in charge?”

How would you handle the situation? How could this lack of continu-ity in leadership have been avoided?

■ INTRODUCTION TO SUCCESSION PLANNINGSuccession planning is an important issue for any organization. For thischapter we have chosen to concentrate on the health care industry, but thepoints made are applicable to all organizations in any setting. We havealso elected to focus on succession planning for the most senior executiveposition, a chief executive officer (CEO). Succession planning is useful forother managerial positions. Organizations should create succession plansfor their CEOs before moving on to other senior managers. Successionplans for middle managers are often more accurately described by the termcareer planning. A key difference between succession and career planningis the focus. Succession planning involves preparing a single, designatedsuccessor. In contrast, career planning involves preparing several candidatesfor a single position.

In the context of the health care industry, succession planning is a struc-tured human resources process that sets the stage for a strong leadershiptransition. It involves identifying and preparing a successor for the CEO.The process is conducted while a CEO is in that position. Succession plan-ning is a proactive approach to ensuring continuity of leadership at the high-est and most critical level of administration in an organization.1

Succession planning should not be limited solely to the CEO. Successionplanning can be used in a broader sense and involve other positions andgo deeper than just reserving it for the CEO role. A more comprehensivesuccession planning effort should include other key management positionsand other critical positions in an organization.

344 CHAPTER 18 SUCCESSION PLANNING


■ WHY ORGANIZATIONS SHOULD CREATE SUCCESSION PLANSDemographics reveal that the population of the United States is aging. Thisfact is likely to result in many retirements in the near future. The healthcare industry is not immune to these changing demographics. A sub-stantial cohort of senior health care leaders is expected to retire over thenext 5 to 10 years. For continuity of leadership to be maintained, it is im-perative to ensure that the next generation of senior leaders is adequatelyprepared to assume their roles. Changes in leadership at the top of anyorganization will inevitably cause great stress and uncertainty among em-ployees and members of their governing boards. In cases where a suc-cessor is not immediately apparent, uneasiness is intensified and maynegatively affect organizational performance. Conversely, organizationswith top-level succession plans are more likely to experience smoother lead-ership transitions. Given the pressure of impending retirements coupledwith the potential loss of specific knowledge related to organizational ex-perience (often referred to as institutional memories), organizations musttake appropriate steps to ensure leadership continuity by creating suc-cession plans.

Organizations without succession plans are essentially leaving the de-velopment of their future leaders to chance instead of systematically iden-tifying and preparing a high-potential person to carry on and provide thenecessary leadership. Health care organizations in particular may benefitmore from effective succession planning than other types of businesses.They are unusually complex and known to foster highly political envi-ronments. As a result, considerable time and effort may be required for out-side persons to understand and learn how to navigate and lead them. Manyindividuals have been drawn to the healthcare field because of its tradi-tionally stable work environment, and a smooth transition of a CEO canhelp to maintain both the look and feel of stability.1

■ MOTIVATING FACTORS BEHIND THE CREATION OFSUCCESSION PLANS

In most cases, it is a CEO’s responsibility to set succession plan devel-opment in motion and to direct the governing body or board until theplan is operational. A recent survey of more than 100 health care exec-utives identified three factors that motivated or triggered their organi-zations to pursuing succession planning. The first was either a governingboard member or the CEO having had previous succession planning ex-perience. The second related to having a person within the organizationinitiate and coordinate the effort. Third, they recognized the benefits totheir organization.2

Motivating Factors Behind the Creation of Succession Plans 345


Many health care organizations are not fortunate enough to have a keyperson such as a CEO or board chair with previous succession planningexperience. If they have had this experience, either with their current or-ganizations or with others, they are more likely to sponsor a successionplan. Similarly, governing board members who come from organizationsthat have succession plans in place are more likely to suggest or embracesuch a plan. Furthermore, if governing board members have previouslyexperienced the unexpected departure of a CEO, they are likely to recog-nize the value in having a succession plan. Gaining knowledge from first-hand experience at replacing a CEO often comes sooner than most boardsexpect. The current reality is that many hospital CEOs remain in their po-sitions for no longer than five years. Experts recommend that successionplanning should begin four years before a CEO is expected to step down,so most hospitals should begin succession planning within a year of hir-ing a new CEO.

Human resources departments can and sometimes must step in andserve as the catalyst for effective succession planning. Ultimately, the HRdepartment will have responsibility for managing the succession plan-ning process. It is vital for a human resources director to earn and main-tain the trust of the governing board and CEO. In some cases, an HRdirector or manager may have to broach the subject of succession plan-ning with the CEO and hope that it is accepted. As with most projects,at least one person in an organization is needed to support and cham-pion an initiative for it to become a reality. Succession planning is nodifferent in this respect. The idea for creating a succession plan will usu-ally receive more attention and have a better chance for acceptance if itis enthusiastically introduced and supported by the CEO or chair of thegoverning body.

Motivating the governing board by promoting the benefits of succes-sion planning to an organization should not be difficult. Over the longterm, succession planning will save organizations money. Executive searchfees are eliminated when succession planning is practiced. The cost is highwhen an executive search firm is used to find an outside CEO. Fees for suchare 30% or more of a new CEO’s first year’s salary.2 An organization main-tains leadership continuity when an inside person is groomed for the po-sition and promoted.

Grooming an internal person to take over has traditionally been considereda key element of for-profit sector succession planning.3 For-profit organi-zations that have hired external people to replace their CEOs have foundmaintaining financial stability more difficult than those for-profits that havegroomed internal persons to take over.4 More specifically, those who hirea CEO from the outside usually require 6 to 12 months before financial per-formance regains the level that existed prior to the replacement.



■ FIVE PRINCIPLES OF CEO SUCCESSION PLANNINGEach organization that develops a CEO succession plan will employ an ap-proach unique to its particular organization. Key principles for successionplanning have evolved among organizations that have gone through thesuccession planning process. Five key principles have emerged. Organizationsshould follow them when involved in CEO succession planning. It is im-portant to remember that the governing board, the current CEO, the in-coming successor, and an organization’s human resources department allhave important roles and are critical for ensuring that any succession planwill be successful.

1. CEO succession planning should be a board-driven, collaborativeprocess. Furthermore, it should be one of the governing board’s twoor three most important tasks as it seeks to ensure a strong and viableorganization. Selecting a successor must be a collaborative effort thatincludes the current CEO, but it is essential that the governing boardhave final accountability. The governing board and CEO should com-municate openly about the process. Any agreements or promises theboard makes must be communicated to the succeeding board leader-ship. If promises or agreements are needed or made, the current andsucceeding board should adhere to them.5

2. CEO succession planning must be a continuous process. A CEO candepart unexpectedly at any time. The untimely departure of the CEOfrom an organization without a succession plan creates an emergencywith no short-term remedy. Up to nine months may be required to re-cruit an outside successor. At all times, a successor should be available,being groomed and ready to step in if needed.

3. Key leadership criteria and competencies must be identified for any po-tential successor. Potential successors with the appropriate skill setsand talents should be identified as early as possible in their careers. Byidentifying a specific successor for the CEO role, significant develop-ment assignments can be arranged to ensure that appropriate experi-ences are encountered. Building feedback loops into assignments willensure that the successor is receiving the experiences necessary forprofessional developmental growth. Feedback can involve several ap-proaches, including 360-degree feedback, standard reviews, informaldiscussions, and post-assignment debriefings. This feedback shouldimprove the governing board and current CEO’s understanding of thesuccessor’s talents, aptitudes, and interests. It also increases the like-lihood that the transition will be successful.1

4. The goal of CEO succession planning is to bring the right leader in atthe right time. Specific goals and succession timelines should be created

Five Principles of CEO Succession Planning 347


and monitored. Human resources departments play an important rolein paying attention to ensure that planning is thorough and the as-signment process is complete. It is important for the transition to oc-cur as planned. For example, current CEOs should not delay thesuccession process in the interest of maintaining their current positions.A clear exit strategy should be developed for the outgoing CEO. It isimportant for organizations to construct and adhere to clearly writtentransition contracts.6

5. Once the transition has taken place, a post-succession assessmentshould be conducted to evaluate the results of the process. The hu-man resources department should review the overall effectiveness ofthe program to help understand what worked and what did not work.

When creating and implementing a succession plan, it is important to in-clude a process that promotes diversity and multiculturalism. This helps toensure that all potential individuals are considered. A best successor ratherthan a clone of the past is more likely to be identified using this approach.3

By following the foregoing principles, organizations are able to avoidsome common mistakes and avert failure. One avoidable mistake is think-ing that succession planning is a single event rather than a process. In otherwords, some organizations look at succession planning as a big bang the-ory of transition planning. They select an inside person as the heir appar-ent for a CEO. Without any work, five years later, suddenly a new CEOcomes into being. Succession planning is much more than a series of men-toring talks or handing off responsibilities in one sweeping motion.7

Another common succession planning mistake is the failure of an or-ganization to anticipate the concerns of key employees who may have beenoverlooked or feel like they have been overlooked as potential successors.It is best if only one specific inside successor is identified. Having multi-ple inside successors can lead to a contest that can be destructive to po-tential successors as well as the organization. In such situations, competingsuccessors no longer act as supportive team members. All are competitorsin an environment that only selects one winner at the end. It is imperativethat the selection process be conducted in a fair manner and that the ac-tual selection of a new CEO is made by the governing body or board withinput and assistance from the outgoing CEO and the HR department.6

■ GROOMING A SUCCESSORIdeally, the succession planning process should begin to identify a succes-sor at an early point in the potential successor’s career to allow opportu-nities for orchestrating significant developmental assignments. Anorganization must ensure that the successor is provided with the types ofdevelopmental opportunities that foster insights and allow needed skills



to be acquired and honed. The reward for such an undertaking is a new CEO who confidently and capably accepts new responsibilities.Developmental tasks should be sufficiently diverse to expose the succes-sor to the entire organization and its departments and operations.1 Groomingan inside person for the CEO position helps an organization ensure thatinstitutional memories will be preserved. With inside successors, there isgreater likelihood for the CEO to succeed and for the organization to main-tain its current strategic vision and competitive position.3

CEOs who have personally experienced being groomed for their cur-rent positions continue to be major supporters of this process. Testimonialsfrom these individuals consistently attest to the benefit of having beengroomed, reporting that existing relationships within their organizationshad allowed them to “hit the ground running.”2

There are potential pitfalls involved in grooming an inside candidate asan heir apparent. Inside candidates may have connections to social networksand psychological ties within an organization that can complicate effortsto change organizational culture if changes are needed. Some individualsbeing groomed for CEO positions may not have had appropriate experi-ences or been tested in relevant ways. Persons from specific departmentalareas within an organization may not be up to the task of leading the en-tire business. A significant shift in the nature of the industry or marketcould render the carefully groomed skills of some individuals as irrelevant.There is always the possibility that the credibility of an outgoing CEO andmanagement team is so sullied that only bringing in an entire new regimecan sweep an organization clean.8

When contemplating grooming a successor to a CEO, organizationsmay inventory their potential employees. This is often referred to as theprocess of assessing their inside bench strength. Those conducting the as-sessment may conclude that no suitable candidates have the necessaryknowledge, skills, and abilities. Such organizations should consider hir-ing an outside person at least 18 months and up to 5 years in advance oftheir CEO leaving. This is where succession planning can become an eco-nomic issue because of the expense of maintaining two individuals withhigh salaries over an extended period of time, one for the current CEOand one for the replacement.

■ WHY ORGANIZATIONS HAVE NOT CREATED SUCCESSION PLANS

Succession planning should be considered a key goal of the governingboard of every organization. Developing a succession plan requires timeand thought but is not a daunting task. Surveys have reported that fewhealthcare organizations have developed succession plans. The reason

Why Organizations Have Not Created Succession Plans 349


given for this finding is that the task is overridden by more immediate andpressing issues. Paradoxically, if a CEO departs unexpectedly, the mostpressing issue for the governing board becomes the planning for the nextCEO.7 Another reason that governing boards give for not focusing on suc-cession planning is their lack of experience with the process and their lackof knowledge of how it could benefit the organization. This lack of knowl-edge or experience was supported by survey results.2

Another reason for the low numbers of organizations with successionplans is the unfounded belief that by implementing such a plan, the gov-erning body or board is somehow hastening a CEO’s departure. SomeCEOs fear that they will lose power and become lame-duck leaders oncea succession plan is adopted. This perception is strengthened if the successionplan names the next leader. This aspect converts a succession plan into anexercise in grooming. Some CEOs have said that they feel like they areplanning their own funerals. Other CEOs have expressed the concern thatif they talk about leadership change, their governing board will think theyare planning to leave soon.

Governing boards, on the other hand, may not want to talk about suc-cession planning because they do not want to imply that they have lostconfidence in their CEO. In any of these cases, CEOs and governing boardsmust understand that while succession planning and implementation canbe uncomfortable, it should be considered an essential strategic goal thatis important for the continued success of their organization. Leadership iscritical for the long-term effectiveness of contemporary organizations.9

Some organizations elect to avoid succession planning because theirgoverning boards believe that regardless of the available inside talent anoutside person should be recruited to replace the CEO. Unfortunately, thisphilosophy is more common among health care organizations than it isamong large corporate businesses. Relying on replacing an outgoing CEOwith an outside person can be risky. The CEO is a prominent organiza-tional position. The more visible a position is, the more difficult it is to findand recruit a suitable candidate. Cultural and political influences inside ahealthcare organization can create problems and make it difficult for aperson recruited from outside to fit in, survive, and thrive. Furthermore,too much reliance on recruiting an outside person can come at the expenseof developing a new CEO from within. Although succession planning fo-cuses primarily on developing inside talent, there can be situations whenan organization finds itself looking for an outside person.10

Many of the barriers to succession planning are composed of self-imposed fears and concerns. These can easily be overcome if a CEO orgoverning board really wants to develop a program.2 By providing moreand better knowledge about the practice of succession planning, humanresources managers can mitigate most existing fears and concerns.10



■ CONCLUSIONAn appropriate succession plan clearly defines a successor’s qualifications,establishes the time frame for the transition, and is tailored to an organi-zation’s unique needs. Organizations that have taken the time and effortto create and implement succession plans are in the best possible positionduring a leadership transition to maintain their momentum and directionbecause there is a seamless transition to a new CEO. Although some bar-riers to succession planning exist, many CEOs recognize that a significantmeasure of their success is how their organization fares after they leave.Embracing succession planning and grooming a successor can help to en-sure that a gratifying and memorable legacy remains.

Returning to the case study, given the magnitude of the leadership loss,a succession plan for the CEO alone would have been insufficient. The ex-perience of Memorial Hospital demonstrates the need for identifying po-tential candidates for advancement to executive ranks in addition to havingan ongoing formal succession plan. Many organizations have policies thatprohibit key executives and managers from traveling together. Lacking anidentified successor, Memorial Hospital has few options. One choice is toengage the services of an executive search firm. A more drastic responsemay be a merger. While disruptive and unplanned, such a decision couldprovide experienced executive leadership.

References

1. Garman, A. N., & Tyler, J. L. (2004). CEO Succession Planning in FreestandingU.S. Hospitals: Final Report: A report for the American College of HealthcareExecutives, Chicago, IL. Oct. 27, 2004.

2. Hutton, D. H. (2003). “Succession planning—dress rehearsal for the under-studies.” Trustee, 56(6), 27–32.

3. Rothwell, W. J. (2005). Effective Succession Planning (3d ed.). Chicago, IL:AMACOM Books.

4. Lucier, C., Schuyt, R., & Tse, E. (2004). CEO Succession: The World’s MostProminent Temp Workers. Available at: http://www.strategy-business.com/article/05204?gko=47020-1876-9227977. Accessed March 27, 2006.

5. Caudron, S. (1999). The looming leadership crisis. Workforce, 78(9), 72–76.6. Gramam, A. N., & Glawe, J. (2004). Succession planning. Consulting Psychology

Journal: Practice and Research, 56(2), 119–128.7. Tyler, J. L. (2002). Succession planning: Charting a course for the future.

Trustee, 55(6), 24–28.8. Ram, C. (2005). Ending the CEO succession crisis. Harvard Business Review,

83(2), 67–72.9. Hall, H. (2006). Planning successful successions. Chronicle of Philanthropy,

18(6). 47–49.10. Greenwald, S. (2001). Why succession planning can’t wait. Workforce, 80(12),

34–38.

Conclusion 351


Discussion Points

1. Why is succession planning important?2. Briefly describe the five principles of succession planning.3. From the perspective of an organization, what are the advantages of

succession planning?4. What are the disadvantages of succession planning?5. Succession planning is widely practiced in industry. It is fairly com-

mon among large hospitals and medical centers. In your opinion,why is this so?

6. Succession planning is very uncommon among public health organi-zations. What are some reasons for this? In your opinion, are these rea-sons valid?

7. Briefly describe the elements of a succession plan that is based ongrooming an internal candidate as a successor.

8. What are the advantages and disadvantages of grooming an internalcandidate as part of a succession plan?

9. What are the advantages and disadvantages of seeking an externalcandidate as part of a succession plan?

10. Would grooming an internal candidate or seeking an external candi-date be the most advantageous approach to succession planning inyour own place of work (or proposed place of employment if you area student)? Why?

11. Why do organizations resist succession planning? In your opinion,are these reasons valid? Why?

Resources

BBooookkssByham, W. C., Smith, A. B., & Paese, M. J. (2002). Grow Your Own Leaders: How

to Identify, Develop, and Retain Leadership Talent. Upper Saddle River, NJ:Prentice-Hall.

Carey, D. C., & Ogden, D. (2000). CEO Succession. New York: Oxford UniversityPress.

Carey, D. C., & Ogden, D. (2002). CEO Succession Planning: A Window on HowBoards Can Get It Right When Choosing a New Chief Executive. New York:Oxford University Press.

Cohen, D. S. (2001). The Talent Edge: A Behavioral Approach to Hiring, Developing,and Keeping Top Performers. New York: Wiley.

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Conclusion 353


Relations withLabor Unions

Chapter Overview


• Understand the history of unionization• Know why employees turn to unions• Appreciate why organizational managers prefer to remain union-free• Know about health care’s unique treatment under prevailing labor laws• Identify different bargaining units that are possible in a unionized

health care facility• Describe a department manager’s role in the union organizing process• Be able to identify the visible signs of union organization activities• Understand the activities that occur following the arrival of a

petition for a representation election• Know what statements and actions managers can and cannot

legally make during a union organizing drive• Be able to advise a department manager when interacting with a

union on a day-to-day basis• Know the process by which employees can attempt to decertify an

existing bargaining unit

■ CHAPTER SUMMARYUnions have considerable allure for workers who are dissatisfied with as-pects of their jobs. Employees join unions when they believe that theirpersonal situations will be improved. Employers usually resist unioniza-tion because they will have to share control over their workers. Interactionswith employees are governed by a contract, also known as a collectivebargaining agreement.

C H A P T E R

19

355


Unions and managers are bound by laws. The National Labor RelationsAct of 1935, commonly known as the Wagner Act, is the basis of most ofthe labor laws in the United States. Labor legislation provides a set of rulesof conduct that apply to both employers and employees. Violations ofthese rules are called unfair labor practices. The rules also specify the stepsthat a union must take when seeking to represent workers. Unions can bedischarged through a process called decertification.

Case Study: Is that a Union Forming?

Jane Pinkerton was in a meeting with her supervisor, Chris Smith. “I wantedto share some observations with you,” said Jane. She continued, “Someof the employees in my section have become distant. Over the past sixmonths, they have had progressively less to say to me.”

“Do the employees have any problems that you’re aware of?” asked Chris.“No,” came the reply, “but they’ve become jumpier since the hospital

merger rumors started.”“I’ll bet the two events are related,” mused Chris. She continued, “See

what you can find out. Try meeting with a couple of groups of employees.”“Do you think the employees might be thinking about forming a union?”

asked Jane.“Maybe. That’s one of the things that I want you to find out,” replied Chris.What advice would you offer to Jane and Chris? Does the possibility

of a union change your advice? Why?

■ WHY WORKERS JOIN UNIONSWhen unions are organizing or when they are striking or threateningto strike, the public hears a great deal about monetary demands beingmade of employers. While economic issues are important, insecurity isusually a dominant factor in causing employees to seek union repre-sentation. Mounting health care costs, layoffs resulting from mergersand acquisitions, and fiscal belt-tightening all have caused many work-ers to seek protection from a union because they perceive that their jobsecurity is threatened.

Many factors compel employees to seek affiliation with a union. Often,senior managers make erroneous assumptions about their employees. Acommon error is to assume that the main goal of employees is economic.Another error is to believe that employees are inherently lazy and must beconstantly supervised to get them to produce.

If the basis of employee dissatisfaction is lack of trust, giving them moremoney will not resolve the underlying problem. Insecurity and lack of

356 CHAPTER 19 RELATIONS WITH LABOR UNIONS


communications are significant drivers of employee unrest. Employeeswant someone to listen to them. This need is strongest when conditionsare unsettled and they feel threatened. If workers perceive that no one intheir organization is willing to listen to them, they will turn elsewhere,seeking persons that demonstrate a willingness to listen and promise to helpthem. Union organizers are all too willing to be the ones who will listen.

Another classic error of top management is to assume that because theyhear few negative comments, everything is fine among the ranks of em-ployees. Information does not readily travel upward in an organizationalstructure. Numerous organizational obstacles block the upward flow ofinformation. If relationships are weakened by distrust or uncertainty, littleof relevance will reach senior managers. Most senior managers know littleabout what is on the minds of the people at the bottom of the structure.

Another mistake that top managers make is to assume that all first-linesupervisors and middle managers are, by virtue of their positions, auto-matically on the side of management when a union beckons. Many lower-level managers started as rank and file employees, and some of them havenever felt fully accepted by higher management. Senior managers may notrealize that they have ignored or mistreated their supervisors and middlemanagers until they are threatened by unionization.

Another significant error is to ignore lower levels of management whenunion organizing occurs. Top managers fear the possibility of supervisorsinadvertently committing unfair labor practices or making other legal er-rors. However, first-line supervisors are in positions to provide the strongest,most direct communication links between workers and higher manage-ment. Union organizing campaigns depend on communications. If first-linesupervisors are isolated, then management may be stifling its best com-munication channels.

Economics are usually involved in union campaigns. However, if allother factors are satisfactory, economics alone will promote interest in aunion only if the economic disparity is dramatic. Otherwise, employees mayseek unionization if they feel insecure about their employment and theirfuture prospects. Major changes in organizational structure, management,operating requirements, job content, and equipment changes that are madewithout notice or explanation invite unionization. If significant changesin upper management alter the prevailing style of organizational culturefrom being open to authoritarian or autocratic, then unions often follow.When employees are given little or no information about their organiza-tion’s financial status or its plans and key decisions affecting jobs and ca-reers are made in isolation, they often seek help from unions. Ignoringemployee dissatisfaction promotes unionization. If employees rarely re-ceive feedback from management in response to their questions, com-plaints or concerns, and the comments they hear are negative, then theywill seek unions that will listen to them.

Why Workers Join Unions 357


■ WHY ORGANIZATIONS TRY TO AVOID UNIONSManagement generally wants the organization to remain union-free. Aprimary reason is to preserve greater latitude in operations and managingemployees. When a union is in place, the terms of a contract must be fol-lowed. Specifying procedures imposes limitations on many managementprerogatives and operational processes.

Unions usually increase the costs of doing business and thus increasethe costs that must ultimately be borne by consumers. Increases in wagesand benefits gained through negotiations are not the only costs attributa-ble to a union. The costs of paying for a labor counsel and maintaining alabor relations department or staff can be considerable. From the per-spective of management, a union adds cost and effort to running an or-ganization without providing many tangible or revenue-producing benefits.

A union can significantly realign communication relationships withinan organization. Without a union, communications can flow directly be-tween managers and employees. With a union, some of that informationmust flow through the union. This has the effect of interjecting a third partyinto an existing two-party relationship. Additionally, unions often havetheir own agendas that are not consistent with an organization’s goals.

Once established, a major objective of a union is remaining in place. Aunion can remain and continue to collect its dues and assessments for along period only by providing value to its members (employees). One wayin which some unions attempt to establish value is by encouraging distrustbetween employees and management. If relations between employees andmanagement are completely open, cordial and satisfactory in all respects,then the union is not needed. From the perspective of management, there-fore, a union is an extraneous element that increases expenses and aggra-vation. Unions also make operations more difficult because they areself-perpetuating entities with their own agendas.

Management is often late in learning the value of positive labor relations.Senior executives understand some basic truths only after a union has be-come established. If employees are treated fairly, spoken to openly and hon-estly, and provided with salaries and benefits that are comparable to localcompetitors, then employees are unlikely to turn to a union to seek equality.

■ THE LEGAL FRAMEWORK OF UNIONSThe National Labor Relations Act (NLRA) of 1935, commonly known asthe Wagner Act, is the basis of most of the labor laws in the United States.This act guarantees the right of employees to join unions and engage in col-lective bargaining, as well as the right to refuse to do so. The NLRA wasamended in 1947 by the Taft-Hartley Act. The NLRA established the



National Labor Relations Board (NLRB). This is a governmental agencycreated to enforce the provisions of the NLRA.

Originally the Wagner Act put clout in the hands of the unions andended many practices of employers. After a few years, however, it beganto appear that too much power had been given to unions. Steps were takento achieve a better balance between labor and management. The Taft-Hartley Act was an attempt to level the playing field by returning some op-tions to employers and making unions more accountable.

From passage of Taft-Hartley in 1947 until 1975, not-for-profit healthcare institutions were exempt from all provisions of federal labor laws.During that period, only state labor laws applied to such organizations. In1975, the Taft-Hartley Act was amended to include not-for-profit healthcare organizations as covered employers. The 1975 amendments broadlydefined health care institutions to include any hospital, convalescent hos-pital, health maintenance organization, clinic, nursing home, extended carefacility, or any other institution devoted to the sick, infirm or aged. Theysuperseded all existing state labor laws that applied to non-governmentalhealth care provider organizations.

The amendments established a 90-day legal notification period for intendednegotiations for renewals or modifications of contracts. In all other industries,this period is 60 days. The new law requires that the Federal Mediation andConciliation Service be notified 60 days before a contract expires. In all otherindustries, the requirement for advance notification is 30 days.

The amendments stated that unions could be required to participate inmediation as necessary for both initial contracts and renewals. No suchrequirement applies to other industries. Unions must provide 10-day ad-vance notification of a strike, picketing or any other concerted refusal towork. No such requirement pertains to unions in other industries. In theevent of a work stoppage that can disrupt patient care delivery, the FederalMediation and Conciliation Service can order an impartial board of inquiryto investigate the dispute and report its findings. This provision is uniqueto health care industries. Finally, the legislation exempted employees be-longing to any religion, sect or other group that conscientiously objectedto participation in or support of labor organizations from being requiredto join or financially support a union as a condition of employment.

Congress intended the 1975 Taft-Hartley amendments to have the NLRBfocus on labor disputes and charges of unfair labor practices in health care.It wanted to ensure that patients could be transferred to other institutionswithout the risk of secondary strikes or boycotts while preserving the rightof health care employees to strike. It reaffirmed NLRB definitions of su-pervisors in health care institutions being considered as professional em-ployees. It tried to minimize the number of different unions representingemployees in a single institution.

The Legal Framework of Unions 359


Essentially ignoring the intent of the 1975 amendments, the NLRBmoved to increase the number of bargaining units in the late 1980s. TheBoard’s rule-making authority came under legal challenge. In April 1991,the United States Supreme Court found in favor of the NLRB and the newunit designations. The court allowed up to eight different unions in anyacute care facility regardless of its size. The eight units can represent reg-istered nurses, physicians, other professionals, technical employees, skilledmaintenance employees, business office clerical employees, security per-sonnel and other non-professional employees.

■ THE DEPARTMENT MANAGER’S ROLEIf a union is not present and there is no immediate prospect of one beingformed, most department managers will have little concern for them.However, employees can seek union representation at any time. Supervisorsshould have basic knowledge about how unions form and operate.

Before a Union is FormedThe most effective way to prevent union organizing is to create and main-tain a work environment in which employees do not feel that a union isneeded. Such a work environment includes caring managers who believethat satisfied employees are the best producers, that thorough and opencommunications are essential, and that one of the most important attrib-utes of supervisors is a willingness to listen to employees. Astute depart-ment managers are aware of one fact of organizational life upon which everyunion organizer counts: If no one in an organization is listening to them,then employees will turn to someone else that will listen.

Unions are uncommon in organizations that have clear, reasonable andwell-communicated work rules and personnel policies that are consistentlyapplied to all employees. When senior management treats first-line super-visors and middle managers as full-fledged members of management, unionsare rarely encountered. Executives make a serious error when they assumethat all supervisors are automatically pro-management and anti-union.Union-free organizations implement major changes only after giving amplenotice and thorough explanations to all employees. Such employers haveongoing communication channels to keep employees advised of the organi-zation’s status and its financial position. They convey an honest belief thatemployees and management together can do a better job of serving the or-ganization’s customers without the intervention of an outside third party.

Early Organizing Signs and ConcernsOrganizing drives are costly for unions. Unions deciding to organize theemployees of a particular organization may undertake their activities with-



out fanfare. Unions commonly test their appeal and potential to organizeby talking with employees. They quietly estimate their chances of successbefore becoming a visible presence.

Unions sometimes plan to organize employees in a particular geographicarea. They may undertake unionization because a number of employeeshave asked the union to do so. However, before seeking a representationelection, a union will still analyze a facility in an attempt to assess whetherthe overall climate is favorable.

First-line managers are the first line of defense in union organizing sit-uations. They are in the best position to be the eyes and ears of manage-ment before and during an organizing campaign. They are best positionedto serve as effective liaisons between employees and upper management.In general, employees typically view an entire organization in a way sim-ilar to how they view their own managers. If a supervisor, the member ofmanagement that employees know personally, is seen as cold, indifferent,or uncaring, this is how an entire organization is likely to be viewed.

The importance of security increases when a union is attempting to or-ganize employees. Health care organizations are busy places. Withoutproper and visible means of identifying and controlling visitors, a healthcare organization is as secure as any public gathering place.

When a union is investigating a facility, organizers commonly enter andmingle with employees in public spaces such as a cafeteria or snack bar.Without strict security, this is easily accomplished. As outsiders who haveno legitimate business in a facility, external organizers can legally be keptout of the building and off the grounds. They can be restricted to a pub-lic sidewalk. When internal access is denied, organizers will often visit ex-ternal locations frequented by employees. On occasion, they will hostoff-site informational meetings to which employees are invited.

Organizers look and listen for indications of employee unrest. They areespecially interested in identifying problem departments, areas of highturnover and employee dissatisfaction, and managers who are disliked fortheir harsh, authoritarian or arbitrary treatment of employees. Organizersoften look for martyrs or so-called victims of the system who feel that theyhave been unjustly treated.

Wages, benefits, and other tangibles receive mention from the very beginningof unionization activity, but rarely are these the real issues that push em-ployees toward forming a union. However, bargaining invariably includeseconomic issues. Although a union can demand pay and benefits, issues suchas respect, inclusion, and open and honest communication are sufficientlyintangible because they cannot be acquired by contractual inclusion.

It is common for many first-line managers to believe that the first indi-cation of union organizing activity is people passing out literature on side-walks around their facility and at employee parking entrances. In additionto containing information about the union and what it claims to be able

The Department Manager’s Role 361


to do for employees, distributed material usually includes a postcard thatemployees can use to request additional information or arrange a personalvisit. However, before leaflet distributors appear a union will most likelyhave already spent several weeks reviewing a facility and assessing itschances for success. Union representatives may have been quietly meetingwith groups of interested employees and have spent time circulating withinthe targeted facility.

Often, a department manager has no way of determining the basis forapparent union interest. However, when there is active interest in organ-izing, managers may notice changes in employee behavior. Specifically,they may observe new or unusual groupings of employees. When peoplewho have never before associated with each other seem close or secretive,it can mean that they share a common interest in a union. Employees fromother departments visiting workers during breaks or other personal timeare often internal organizers that are promoting union representation.

Small groups of conversing employees who disband and scatter as amember of management approaches are an indicator of union organizingactivity. An increase in detailed questions about specific employee bene-fits and other conditions of employment, especially demands to know whysome benefits are not more generous or why others are not provided of-ten herald an organizing campaign.

Other signs of union activity include specific disciplinary actions beingopenly and vocally challenged and a tendency for departmental employ-ees to question decisions of management. Employees know that to be loyalto an employer or openly opposed to unions can get them ostracized whenunions begin to form. They are kept out of organizing meetings. Employeeswho would ordinarily talk with a manager often become silent duringunion organizing; they do not want to compromise themselves by beingseen conversing with management.

After an Election Petition ArrivesAfter an election petition arrives, managers often work with their legalcounsel and HR to develop a strategy for coping with the organizing cam-paign. Supervisors must implement the strategy by actively campaigningagainst union representation for their employees. All customary methodsof employee communication are used, including meetings, individual dis-cussions, question and answer sessions, and a significant number of memos,letters, and other written materials.

Managers will be informed of the legal limitations on their actions dur-ing an organizing campaign. Inappropriate conduct can have serious con-sequences. These can include negating the results of an election. A provisionof the NLRA defines an unfair labor practice as a threat of reprisal or forceor promise of benefits. The NLRA guarantees employers and unions the



right to campaign actively during an organizing drive but within specifiedlimits. A union has the right to explain its benefit to employees and con-vince them to vote for union representation. An employer has the right topersuade employees that they are better off without the union’s presence.

Management usually campaigns actively against a union’s bid to rep-resent employee groups. Employees are often told what they want to hearand what is known to appeal to them. Many unions are not known for full and frank disclosure of all implications of unionization. They often neglect to mention some of the perceived disadvantages of membership.

Steps Managers Can TakeDuring union organizing efforts, managers are permitted to express opin-ions or present arguments to employees. They may discuss the union andthe election. Supervisors may discuss the advantages of remaining union-free. They are permitted to compare existing wages and benefits with thosein unionized facilities. They may discuss the cost of dues, losses of incomeduring strikes and other work stoppages, the possibility of fines and spe-cial assessments for union members or of being required to serve on picketlines. Managers may note that a union contract may forbid employees fromdiscussing problems directly with managers. They may point out that aunion may demand union membership as a condition of continued em-ployment and the possibility that a strike may disrupt services and endan-ger health and safety for workers, managers, and the people that they serve.

Before a union election occurs, managers are allowed to inform em-ployees that signing a union authorization card is not a vote for the union,and doing so does not obligate an employee to vote for the union.Representation elections are conducted by secret ballot so that no one willknow how an individual votes. The outcome of a representation electionis determined by the majority of employees who actually vote, not by a ma-jority of all eligible voters. It is thus critically important that people op-posing union representation should be certain to vote because those whoare in favor of having the union will vote.

A local union is subject to the governance of its international organi-zation. In this way, considerable control over a facility can be exerted froma distance. Labor laws allow an organization to replace any employee whogoes on strike for economic reasons. Such replacements are permanent.Despite any promises organizers may make, no union can force an em-ployer to pay more than it is willing or able to pay in wages or benefits.

Steps Managers Cannot TakeDuring union organizing, managers cannot threaten or interrogate employ-ees, make promises, or spy on employees for the sake of learning about unionactivity. A communication is not protected by the free-speech provisions of



the NLRA if it contains any of the prohibited activities just delineated. In par-ticular, when unions are trying to organize, management is restrained frompromising that wages and benefits will be improved if the union loses its rep-resentation election. Supervisors cannot make promises of pay increases, pro-motions, or other special favors to individual employees in exchange foropposing the union. Department managers are not allowed to threaten em-ployees with job losses, demotions, pay cuts or reductions in benefits if theunion wins.

Transferring employees and changing assignments to isolate union sup-porters or break up concentrations of pro-union employees is an unfair la-bor practice and is illegal. Organizations cannot threaten to terminateoperations if the union is successful. Managers cannot ask employees anyspecific questions about union relationships, how people intend to vote,what they think about the union or who is or is not supporting the union.Questioning prospective employees about past or present union affilia-tions is illegal. Spying on union meetings or attempting to determine whois attending is an unfair labor practice. Using a third party to threaten, in-timidate, or coerce employees is not allowed. Managers may not visit thehomes of employees to campaign against a union, although union organ-izers may do so.

After a union has made its organizing intentions known, it sometimesprovides management with a list of internal organizers. These are usuallyemployees in specifically targeted departments. Once such individuals havebeen identified, their supervisors must become extremely careful in theirdealings with them. The status of internal organizer gives them no specialprivileges. However, because they have declared their organizing status, theywill be intentionally sensitive to any discriminatory treatment. By offi-cially identifying internal organizers, unions hope to trap managementinto committing unfair labor practices.

Challenges concerning a union and the eligibility of employees to voteusually occur before an election. Supervisors and managers are technicallynot included in union membership. An exception is made in some gov-ernmental institutions where representation is provided by public employerunions. Supervisors are usually claimed by the side that feels they wouldreceive a sympathetic vote.

The activity leading up to a representation election can be frantic andtime-consuming for those who are working to keep a facility free from aunion. Although both sides must observe numerous rules, managementand a union have a single overriding concern: winning. Each side carefullywatches the other for signs of irregularities. Charges of improper conductare common.

When election day arrives, the rules change. Managers may continue tospeak individually with employees and pass out printed information butmust avoid holding group meetings on work time at which employees are



obligated to hear anti-union messages. The NLRB feels that the day beforevotes are cast should belong to employees and should be as free from inter-ference as possible. The safest approach for management is to refrain fromactive campaigning on the day of the election. Supervisors often simply avoidany discussion of unions and only respond to employee questions.

After voting occurs, the NLRB will certify the results of the electionand make them official. This process requires a number of days even thoughthe vote count is immediately known. A simple majority of those votingdetermines the outcome unless a sufficient number of votes are challengedto question the outcome. Elections are monitored by employees on behalfof both sides. Individual votes may be challenged if the person voting isdeemed to be ineligible. Challenged votes are important in close elections.

A union that loses an election may not try again for a full year; NLRBrules require a lapse of at least one year before another election can be heldinvolving the same unit of employees. Unions may lose repeatedly whilemanagement can only lose once. In other words, management could con-ceivably have to win once a year for many years to stay union free, but theunion that wins once is in, usually for good because decertification electionsare not especially common. Regardless of the outcome, however, supervi-sors must re-establish their working environments after an election is held.

Interacting with a UnionIf employees have chosen union representation, all existing channels ofemployee communication must be kept open to the fullest extent possible.Managers must not back off simply because union representatives are reg-ularly talking with employees. Department managers must understand thelegal requirements of interacting with a union. They must develop a com-plete understanding of the collective bargaining agreement or contract thatis negotiated.

A common contract provision requires union membership as a condi-tion of continued employment. This provision, resulting in what is com-monly referred to as a “closed shop” is extremely important to unionsbecause their leadership wants to collect dues from all persons who willbenefit from their negotiations.

Department supervisors often find that a union brings predictability torelationships with employees. Rules govern many activities that formerlydepended on supervisors making decisions. For example, a formal griev-ance procedure may eliminate the need to argue with employees about someissues. Complaints are routinely processed rather than negotiated. Managersmay not like the process or its outcomes, but the need to generate solutionsis removed. Union contracts usually contain specific protocols for assign-ing overtime. These relieve managers of any responsibility for decisionsabout overtime. The rules of the contract dictate overtime assignments.



Departmental managers must adjust to the presence of a union. Theirpersonal preferences are not important. Unions change normal patterns.Predictability is a benefit. Additional channels of communication must bemaintained. Managers must never forget that unions have their own agen-das that are different from meeting the needs of members and the objec-tives of management.

■ DECERTIFICATIONAs initially passed, the National Labor Relations Act strongly favoredunions and took considerable steps to protect employees from abuse byemployers. In amending the NLRA, the Labor Management Relations Act(Taft-Hartley) took a more balanced approach to protecting the rights ofindividual employees from abuse by both employers and unions. Taft-Hartley made it possible for employees to get out from under a union thatno longer seemed to serve their purposes or be acting in their best interests.This change allowed employees to remove a union when its leaders failedto meet membership expectations through a process called decertification.

A petition for decertification cannot be filed within a union’s first orcertification year. A newly chosen union is given this period to negotiatea contract and demonstrate what it can do for its members. A bargain-ing unit is only allowed to have one representation election within any12-month period.

Management cannot be involved in initiating a move toward decertifi-cation. In particular, managers cannot volunteer information to employ-ees about how decertification can be accomplished. They cannot tellemployees that they would be treated better without the union nor canthey suggest that employees generate a petition to decertify a union. Finally,supervisors must avoid behaving in a manner that is intended to encour-age employees to seek decertification.

During the initiation stage, management is legally permitted only to re-spond to employee questions about decertification. Supervisors cannot in-clude any encouragement to pursue decertification or any unsolicited adviceon how to go about doing so.

Should a decertification effort reach the petition stage, the employercan still do little more than respond to employee questions. At this stage,however, some responses can be more specific and helpful. For instance,management can direct employees to appropriate authorities at the NationalLabor Relations Board and can provide additional information about thedecertification process as long as doing so is in direct response to employeeinquiries. However, this is assistance at a minimal level because manage-ment is still forbidden to help with the wording of a petition, or allow thepetition to be transmitted on the organization’s letterhead. Managers can-



not allow employees to solicit petition signatures during working hoursor provide space for signing to occur. Management cannot provide timeoff for an employee to file the petition.

Once a decertification petition is filed and a decertification electioncampaign officially begins, management has options for its activities.Management is allowed to express its views about the presence of a union.However, these views cannot include direct or implied threats of reprisalsfor retaining the union or promises of rewards for removing it. At thisstage of a decertification campaign, management may communicate itsviews to employees by letter or give comparisons of wages and benefits ofunion and non-union workers to employees. They may hold meetings withemployees, provided that attendance is voluntary.

Two important limitations exist. Management may not interfere withthe right of employees to choose between decertification or not. Neitherpromises nor threats that could upset the conditions under which em-ployees are to choose may be made.

■ UNIONS IN HEALTH CAREFor years, people who worked in health care thought that the health careindustry was invulnerable to recession or layoffs. These assumptionshave proven to be false. Financial pressures, mergers and other affilia-tions, and the proliferation of health care systems have transformedhealth care from an arena in which employment could be considered rel-atively secure to one in which job security is as elusive as it is in otherindustries. When faced with insecurity and uncertainty in an environmenttraditionally regarded to be stable, some employees have turned towardlabor unions.

In the United States, union membership has been steadily declining fora number of years. Simultaneously, union membership in the health careindustry has been increasing. In 1945 American union membership reachedits peak, accounting for some 36 percent of the work force. Late in theyear 2000, union membership totaled about 13.9 percent of the workforce, the lowest level of union membership in the country since the NationalLabor Relations Act was passed in 1935. Organized labor must add thou-sands of new members each year to simply keep current with losses inmanufacturing jobs. As a consequence of such losses, unions are listeningcarefully to workers in health care and technology industries.

Direct caregivers, particularly nurses, are especially susceptible to or-ganizing pressures. Dissatisfaction with pay and stressful work conditions,aggravated by a shortage of nurses, are spurring job actions and the for-mation of nursing unions. As of 2006, approximately one nurse in fiveworking in U.S. hospitals belongs to a union.

Unions in Health Care 367


The Department of Health and Human Services predicts a shortage of400,000 nurses by the year 2020. Although the number of registered nursesis slowly increasing at present, many are choosing to work in settings otherthan hospitals or nursing homes. Approximately two of every five newnurses are opting for positions with health maintenance organizations orpharmaceutical companies. Such jobs are often less physically demandingand higher paying when compared to hospital positions. Hospitals are notimmune to salary and staffing pressures. Currently, according to theAmerican Hospital Association, about one in three operates at a loss.

■ THE FUTUREThe future of unionization in the United States is uncertain. Union mem-bership peaked in the middle of the twentieth century. It has gradually de-clined since that time. Experts do not agree on the causes for the decline.Most agree that unions have lost members as the nature of the Americaneconomy has changed from basic manufacturing to service. PresidentReagan’s dismissal of the air traffic controllers in 1981, which effectivelybroke the Professional Air Traffic Controllers union, was an importantevent. Trade agreements have led to the further loss of manufacturing jobs.The sustained losses of auto manufacturers such as General Motors, Ford,and DaimlerChrysler and their suppliers have also led to losses in unionmembership. Health care workers have become the targets of unionization.Not only have many of these professional workers avoided unionizationin the past, but also they are being courted by groups such as the UnitedAuto Workers and Teamsters. The future of labor unions will be interest-ing for workers, employers and society.

■ CONCLUSIONUnionization is attractive to workers who are frustrated. Historically, unionshave offered what they claim to be a more attractive option to workers.Employers and employees have different opinions about unions. The for-mer feel that unions lead to a loss of autonomy. The latter feel that they havean additional entity that works for them. Collectively bargained contractsgovern the interactions between unionized workers and their employers.

Legislation governs the interactions and activities of unions and man-agers. The National Labor Relations Act of 1935, commonly known asthe Wagner Act, and its amendments remain as the basis of most of laborlaw in the United States. These statutes provide guidelines for employeesand employers as they interact with each other. Violations of these guide-lines are called unfair labor practices. The guidelines specify the steps thata union must take when seeking to be accepted as the representative of



workers as well as the steps necessary for them to be discharged througha process called decertification.

Returning to the conversation between Jane Pinkerton and Chris Smith,the two managers, Chris’ instructions to Jane were not in the best inter-ests of their employer. In fact, they could be interpreted as an unfair laborpractice. Managers must follow established rules when union formationis involved. The Wagner Act and its legislative modifications delineatesteps that employers can and cannot legally take. Managers must giveunion organizers reasonable courtesy and ensure that they are treated ina fair manner.

Discussion Points

1. Why would unions target health care workers?2. Why is unionization among health care providers increasing when

union membership in the total work force is declining?3. Define an unfair labor practice and provide three or four examples.4. Why do you think the majority of union elections are won or lost by

management long before a union ever appears?5. If non-economic issues drive employees to become organized, why are

nearly all bargaining table demands economic in nature?6. Why it is advisable to have a comprehensive policy governing solici-

tation and the posting of information on the premises in place beforeany signs of active union organizing appear?

7. Why it is considerably more difficult to decertify a union than toelect one?

8. Provide two specific examples of behavior that represent each of thefour prohibitions on management conduct during union organizing:threatening, interrogating, promising, and spying.

9. If two employees said, “We want to talk to you about this union stuffthat’s going around,” how would you respond?

10. As a supervisor, would you prefer to interact with one or severalunions? Why?

11. What are the advantages and disadvantages of working with a unioncontract on a day-to-day basis?

12. Why is distributing union literature to employees arriving to or de-parting from work frequently assumed to be the first stage of activeunion organizing?

13. What would you say to employees in a meeting if your organizationwas experiencing a union organizing campaign? Would you encour-age them to think carefully about favoring union membership? Whyor why not?

Conclusion 369


14. What help can you legally provide to a small number of employees thatask for your help in getting their union decertified?

15. What are the key differences between health care and non-health in-dustries in the manner in which work stoppages may be conducted?

Resources

BBooookkssLewin, D., & Kaufman, B. (2005). Advances in Industrial and Labor Relations.

Burlington, MA: Elsevier.Huzzard, T., Scott, R., & Gregory, D. (2005). Strategic Unionism and Partnership:

Boxing or Dancing? New York: Palgrave Macmillan.Rowley, C. (2005). The Management of People: Human Resource Management

in Context. London: Spiro Press.Scott, T., & Harker, P. (2005). Myth of Nine to Five: Work, Workplaces and Work

Place Relationships. Miami, FL: Santillana USA Publishing.Weckert, J. (2004). Electronic Monitoring in the Work Place: Controversies and

Solutions. Hershey, PA: Idea Group Publishing.

PPeerriiooddiiccaallssColvin, A. J. (2003). Institutional pressures, human resource strategies, and the rise

of nonunion dispute resolution procedures. Industrial and Labor RelationsReview, 56, 375–392.

Edelman, L. B., Uggen, C., & Erlanger, H. S. (1999). The endogeneity of legal reg-ulations: Grievance procedures as rational myth. American Journal of Sociology,105, 406–454.



Directions inEmployeeRelations

Chapter Overview


• Understand the evolution of employee relations through threedistinct philosophies: authoritarian, legalistic, and humanistic

• Comprehend the emergence of scientific management and thedevelopment of other means for organizing and managinghuman enterprise

• Understand assumptions about people that influence differentapproaches to management

• Have a brief review of human motivation theories• Be able to trace the growth of official government concern for the

social welfare of American workers• Understand the likely direction of labor relations for the coming years

■ CHAPTER SUMMARYSince people began working in organized settings and some were placedin positions of authority supervising others, the subject of employee rela-tions has been a workplace reality. Beginning as strict authoritarianismthat was frequently exploitative, the primary drivers of employee rela-tions have progressed from authoritarian management to legalistic management and finally to humanistic management. Authoritarian management continues to exist to a minimal extent. Legalistic manage-ment remains to a considerable but diminishing extent. Humanisticmanagement continues to spread.

C H A P T E R

20

371


In healthcare organizations, the nature of a specific department or thepersonal style of senior managers usually sets the tone for the entire organ-ization. Management style affects employee relations. The nature of a typ-ical healthcare organization is people-centered, as opposed to theproduction-centered character of many other kinds of organizations. Thus,a Human Resources practitioner or department manager that thrives inhealth care is one who understands that an organization is driven by indi-vidual human motivations and not by economic reasons.

Case Study: “The Buck Stops Here”

Mary Johnson, a registered nurse and the new manager of the clinical staffat Community Health Center, was not happy with the way her job was going.Just a month into her new role, she already felt like walking away fromthe job.

Mary decided that the problem was resistance to change among staffmembers. She knew that a certain amount of resistance to a new managerwas to be expected, but it seemed to her that everything she said or did wasresented and resisted simply because it came from her. There was so muchto do. Her area of responsibility had literally coasted for years under anapathetic manager. The magnitude of this problem was so large that shehardly knew where to begin. With so much to be done, she had begun tofix everything that required change as rapidly as possible.

As Mary related to her friend Sally Drake, a nurse manager in anotherfacility, “I resurrected the dress code and enforced it. You have no ideawhat was being tolerated in the way of appearance. I put a stop to personalphone calls and the use of food and drink and reading material withinpublic view. I’ve started to enforce existing policies on absenteeism and tar-diness. Sally, I can’t tell you how long these people have been allowed towander in and out whenever they felt like it.”

She continued, “And what do I get? A nearly complete lack of supportexcept for a couple of older employees who let me know that they felt itwas about time someone did something. I’ve told all the staff what wasexpected of them in no uncertain terms. I hold a staff meeting every weekand I’m trying hard to convince them of the need to improve the level ofprofessionalism in the place, but it seems like every order or instruction Ideliver just generates more bitterness and resistance.”

Sally responded, “It sounds like you inherited a real mess. But are yousure you’re not trying to do too much too quickly, giving orders and deliv-ering mandates without trying to get people to accept your plan? Haveyou allowed them to give you their ideas and involved them in decidingwhat to do?”

Mary waved dismissively. “Oh, I know all about that involvement stuff.Get employees to help decide what to do and how to do it and all that

372 CHAPTER 20 DIRECTIONS IN EMPLOYEE RELATIONS


modern stuff that is in textbooks. I’ve never depended on employees to domy work for me, and as far as I’m concerned the buck stops here.”

How would you describe Mary Johnson’s management style? Identifywhat she appears to have been doing wrong. How would you advise herto proceed from here?

■ THE EVOLUTION OF EMPLOYEE RELATIONSFrom the beginnings of organized work activity when first one persondirected the work of others, the subject of employee relations has evolvedthrough three identifiable philosophies of management. In a sense, thesephilosophies represent periods of time, stages or phases. Managementexperts hesitate to use the latter terms too freely because they have signif-icant overlap and all coexist in varying degrees among contemporary organ-izations. The management philosophies governing employee relations areidentified as authoritarian, legalistic, and humanistic.

Authoritarian schools of employee relations arose first, followed muchlater by both legalistic and humanistic styles of employee relations. It isstill possible to identify organizations that continue to operate using an essen-tially authoritarian philosophy, although pure authoritarianism is rare inAmerican business and is steadily declining. There are many organizationsin which a legalistic philosophy prevails. In a growing number of organi-zations, the humanistic philosophy is gradually replacing the others.1

Authoritarian ManagementAuthoritarian management encompasses the beginnings of organized enter-prise, including master-slave relationships. Authoritarian managementminimizes the importance of people. It operates on the assumption thatpeople have to be pushed and continually told what to do in order to obtainthe most output from them or the best possible results. Authoritarian man-agement was the generally accepted form for centuries. It is conceptuallysimple. A boss gives orders and expects them to be carried out. A funda-mental motivating force in authoritarian management is fear.

This is not to suggest that authoritarian management is always harshor cruel. Certainly an authoritarian manager is autocratic, but a varietyof autocratic styles exist. At one end of the scale is an exploitative auto-crat. These are generally cruel leaders who quite literally exploit their fol-lowers for personal gain. When pondering the style of exploitative autocrats,think of them as coming from the “Attila-the-Hun school of management.”At the opposite end of the scale is a benevolent autocrat. Benevolent auto-crats look after their followers and ensure that they are well cared for andprotected. This benevolence continues only as long as they do exactly asthey are told, without question. This can be referred to as the “Father-

The Evolution of Employee Relations 373


Knows-Best school of management.” Regardless of which end of the scalethey may be coming from, autocratic managers are unquestionably incharge. They establish the goals for their organizations, issue all of thedirectives, and give all the orders. Followers do have options. They can doas they are told or they can leave.

Authoritarian management is practiced today. Many people now in thework force have worked under strongly authoritarian managers. It is evi-dent, however, that even though pockets of authoritarianism still existhere, the philosophy and approach steadily diminished during the twen-tieth century. The rate of loss accelerated toward the end of the century.

For many years, authoritarian managers essentially acted as they wished.For a long while employees had very few legal rights, so managers couldmanage as they pleased with little regard for resistance and little fear ofencountering any legal repercussions. But then legalism intruded.

Legalistic ManagementThe legalistic movement began in the 1930s with the passage of wage andhour laws and the enactment of labor laws. It blossomed with passage of theCivil Rights Act of 1964. Since then, a steady stream of legislation has beenaddressing employment and employees. Many managers who were oncestrictly authoritarian have adjusted and changed. Their adaptations to accu-mulating legal restrictions have not always been made readily or willingly.

Managers began to treat employees differently because the law wasnow telling them what they could or could not do. This legalistic phase ofemployee relations has been shaped, defined and bounded by legislation.Managers now interact with employees out of a strict regard for employeerights. These changes have not always been internalized. They are oftengrudgingly made because the law requires them to act in a particularmanner. Employee relations have been changed and restructured becausemanagers wish to keep themselves and their employers out of legal trouble.The number of people simply complying with the law rather than under-taking actions because they are doing the right or proper thing is dwindlingover time due to retirements.

Humanistic ManagementTwo significant areas of influence have contributed to the growth of human-istic management. One is the still-expanding structure of legislation thatushered in legalistic management and mandated humane treatment ofemployees. The other is found in the lasting effects of the human relationsmovement in management that has been growing and developing sincethe middle of the twentieth century. The human relations movement rec-ognized employees’ rights before they became legally mandated. It fos-tered the belief that contented, well-treated employees who were dealt



with fairly and equitably were generally better producers and more loyalthan those who were not so well regarded.

A legalistic manager behaves in a particular manner because the lawrequires such behavior. Humanistic managers behave in a similar mannerbecause of their belief that it is right and proper to do so. This is a funda-mental difference between legalistic and humanistic management. Legalisticmanagement may continue to be driven by pessimistic and somewhatauthoritarian assumptions about people. In contrast, humanistic man-agement holds the optimistic view that satisfied workers produce best.The progression from authoritarian to legalistic to humanistic manage-ment can be described in the parallel progression from pushing to directingand finally leading people.

Residual AuthoritarianismIf managers know why laws addressing employee rights are to be respectedand obeyed, and if managers believe that satisfied employees are betterproducers, then why does managerial authoritarianism continue? Theanswer may lie in tradition. For centuries, autocratic management was theonly management style. It became deeply ingrained into the population’soverall view of management. Giving orders, bearing all responsibilities,making decisions and the placing or removing of people as needed ordesired was the norm. Management was authoritarianism by definition.

Most supervisors have traditionally learned about management by on-the-job observation. Although a growing number of managers now learnsome of the basics of management in formal education programs, manystill absorb most of what they actually use on the job, through their man-agement role models. A generation ago, the majority of managers learnedby emulating their role models who were authoritarian in outlook andpractice. Thus a strain of authoritarianism is still present. It is weakeningwith each subsequent generation of managers but has none the less beenpassed down to contemporary managers. Human behavior often changesslowly, especially in a pursuit such as management, in which old beliefs andattitudes have solidified over hundreds of years.

■ THE EMERGENCE OF SCIENTIFIC MANAGEMENTAuthoritarianism in employee relations was aided, prolonged and intensi-fied by the emergence of a new approach that became known as scientificmanagement. In the early years of the twentieth century a movement emergedbased on the application of the scientific method of study to business man-agement activities. The goal of scientific management was efficiency, definedlargely by the amount of time required to perform any given task. Less timeto accomplish the same work equated to increased efficiency because more

The Emergence of Scientific Management 375


tasks could be completed per unit of time. Frederick W. Taylor, Frank andLillian Gilbreth, Henry L. Gantt and Frank Bunker figured prominently inthis movement. These pioneers of scientific management were largely respon-sible for defining the discipline of industrial engineering.

Scientific management seemed to intensify authoritarianism and sus-tain its existence in some business situations, especially manufacturing. Itwas extremely unpopular in other situations. Not all work activities canbe reduced to a string of simple segments and repetitive activities. Scientificmanagement focused on process and production while largely ignoringpeople. A November 1913 resolution of the American Federation of Laborreferred to the Taylor system as a “diabolical scheme for the reduction ofthe human being to the condition of a mere machine.”2

Taylor and his colleagues used the term “scientific management” todescribe their organized approach to analyzing work by the procedures thatwere used, employing standardizing methods and improving productivity.Scientific management made significant contributions to American indus-trial assembly lines and other repetitive work situations. It strengthenedthe concept of production-centered management.

■ PARALLEL MANAGEMENT SYSTEMS DEVELOPTwo systems or approaches to management developed in parallel duringthe early decades of the twentieth century, one related to activities in whichrepetitive work was dominant, and the other related to activities in whichvaried work prevailed. These two different approaches were described in1961 by Rensis Likert as the job organization system and the cooperativemotivation system.3

In Likert’s job organization system, repetitive work is dominant. Jobsare usually well organized with considerable structure to them so thatextremely specific job descriptions are possible. The tasks of assembly lineworkers provide convenient examples. Tight controls are possible. Outputcan be scheduled with considerable accuracy. Inputs to the processes canlikewise be accurately scheduled to feed into the system when and wherethey are needed. The overall speed of a process can be established andmaintained at a predictable level. In a properly designed process using thejob organization system, inefficiencies are held to a minimum and remainwell under control. This approach to management is ordinarily advancedand well organized.

Management within the job organization system is production-centered, focused on the process and its output. It is the system that movesthe people. More accurately stated, the people are carried along with thesystem. Picture an assembly line. The line runs at a set speed and employeesworking along it keep up with its pace. If one person is not available to



serve the line, another is plugged into that spot and the line continues tomove. Economic motivations of the workers keep the line moving. Peoplecome to work because they are paid to do so. This is the motivation thatmaintains the momentum in any variation of the job organization system.The success of the job organization system depends on economic motives.The work of Taylor and the other proponents of scientific management estab-lished and enabled the job organization system.

In Likert’s cooperative motivation system, varied work prevails. Mostjobs are loosely organized, with such a wide variety of possible activitiesand responsibilities that job descriptions are necessarily all-encompassingand decidedly non-specific. In a health care setting, the position descrip-tion for a registered nurse provides a convenient example. Tight controlsare not possible. Output cannot be scheduled except in the most vagueand general terms. Some secondary inputs to the processes can be sched-uled reasonably well but the primary inputs enter the system with unpre-dictable frequency. In most situations, speed of a process cannot bemaintained at a predictable level. An emergency room provides a goodexample in health care. People seeking treatment enter on their own timing,not on any established schedules, and the services they require are extraor-dinarily varied. Other than being prepared for a variety of demands, a sys-tematic approach to management is not easily maintained. Hour to hourmaintenance of such an environment requires judgment to be exercisedregularly and decisions to be made in an impromptu fashion.

Management within the cooperative motivation system is necessarilypeople-centered, focused on human elements. Both employees and the peopleseeking treatment or services provide examples from health care. People move the system. The system fails to operate, people do not make thathappen. Again consider a return to an emergency room. Given the natureof the problems encountered, the pace at which the department operates isup to the workers. If one person is not available to work an assigned job, allof the personnel present have to adjust to perform the duties normally doneby the missing person. Efficiency and output often suffer. Long waiting timesare often the result. In any variation of the cooperative motivation system,the people keep the system moving. People come to work not only becausethey are paid to do so but also because they are willing to do so. The veryoperation of a cooperative motivation system depends on individual enthu-siasm and motivation.

Management that is inclined toward authoritarianism is likely toencounter only token resistance within the job organization system. Withinsome environments the same managerial approach (authoritarianism) mayengender significant resentment and foment an adversarial relationshipbetween workers and management. However, because many of theemployees will be as production-centered as management, they will expect,

Parallel Management Systems Develop 377


and to a limited degree, accept their situation of being a managerial focussecondary to output.

Management that is inclined toward authoritarianism is much morelikely to fail in an environment where cooperative motivation often flour-ishes. Most health care situations fall under the cooperative motivationsystem, making them far more amenable to people-centered managementthan to production-centered management. With its focus on people, thehumanistic philosophy of employee relations gains in importance.

In summary fashion, Exhibit 20-1 compares the characteristics of thejob organization system and the cooperative motivation system.

■ OPPOSING VIEWS OF EMPLOYEESThe work of Douglas McGregor contributed greatly to the human rela-tions movement in management. In his classic paper, “The Human Side ofEnterprise,” McGregor provided a readily understandable continuum ofassumptions about people in terms of their work activities in the form ofhis Theory X and Theory Y.4

Within both Theory X and Theory Y, management is assumed to beresponsible for organizing and applying the elements of productive enter-prise. These include resources, initially money and then equipment, mate-rials, and people. However, this is the full extent to which Theory X andTheory Y are similar.

Theory X assumes that employees are indifferent, passive, and resistantto organizational needs. Managers must actively and continuously inter-vene to direct the efforts of subordinates, motivate them, control theiractions and modify their behavior to fit the needs of an organization. This


Exhibit 20-1 Job Organization System vs. Cooperative

Motivation System

Job Cooperative

Characteristic Organization Motivation

Dominant Work Repetitive Variable

Job Structure More Rigid Looser

Controllability of System Greater Lesser

Output Predictability Greater Lesser

Primary System Drivers Economic PersonalWillingness

Nature of Management Production-Centered People-Centered


pessimistic view of people holds that employees must be persuaded to dowhat is needed, rewarded for doing their assigned tasks correctly, and pun-ished for doing them incorrectly or wrong. In general, supervisors must con-stantly control their workers.

McGregor’s Theory X has several underlying assumptions. People areindolent by nature and inclined to work as little as possible. Most peoplelack ambition, dislike responsibility and prefer to be told what to do. Whenpeople become employees, they remain self-centered and generally indif-ferent to organizational needs. By nature, people are resistant to change.The average person is gullible, easily duped, and not particularly bright.

When applied, Theory X involves coercion, threats, punishment, closesupervision and tight controls on employee behavior. On the other hand,Theory X allows supervisors to be permissive, satisfy people’s demands andgive employees what they want to get them to cooperate, accept direction,and produce as desired. Despite the approach taken, the unflatteringassumptions about people remain the same. Furthermore, Theory X isinadequate for motivating employees because the human needs on whichit relies are unimportant as motivators of human behavior.

The relationship between supervisors and employees is succinctly sum-marized in an overheard comment made by a worker to his supervisor.“Your job is to get as much work as you can out of me. My job is to do aslittle as possible.”

Theory Y is the direct opposite of Theory X. Theory Y assumes that peopleare not passive or resistant to organizational needs by nature. If they appearto be so, they have become this way through experience in organizations.The motivation, capacity, potential and readiness to work toward orga-nizational goals are innately present in all people. Managers cannot putthese into people but are responsible for helping people to recognize anddevelop these characteristics. Supervisors must arrange conditions so thatemployees can best achieve their own goals by directing their personalefforts toward organizational objectives.

McGregor’s work included a hierarchy of human needs that paralleledone described by A. H. Maslow in “A Theory of Human Motivation.”5

Both McGregor and Maslow advanced the notion that humans were con-stantly trying to satisfy needs. As they satisfied needs at one level, other,higher-order, needs arose to take their place. The need hierarchies ofMcGregor and Maslow are similar. Physiological needs are the most fun-damental. These include air, food, and water. Both McGregor and Maslowused the same terminology for this level. Next are safety needs. Theseencompass the need for protection from harm and for shelter. Both usedidentical names for these requirements.

After ensuring safety, McGregor called the next needs social whileMaslow labeled them love needs. By either name, these represent the need

Opposing Views of Employees 379


to belong, to be accepted and to belong to groups. Groups exist in a varietyof situations, including work, family, religious and social. McGregor summarized the next level needs as ego while Maslow called them psycho-logical. These include the need for praise and reward, recognition, accom-plishment, satisfaction in work and the general need to feel good about one’sself. At the ultimate level, McGregor identified a need for self-fulfillmentneeds. Maslow used the term self-actualization. These are essentially sim-ilar. They represent the ultimate in need satisfaction that can be describedas actions that bring individuals personal fulfillment and satisfaction.McGregor and Maslow both wrote that higher order needs may be moti-vating only when all lower order needs are satisfied. Thus, self-actualiza-tion is meaningless when people are hungry.

Inherent in the work of both McGregor and Maslow is the belief thata satisfied need is not a motivator of behavior. In contemporary Americansociety, physiological, safety, and social needs are met for a majority ofpeople most of the time. When this is the case, individuals are then free tofulfill psychological or ego needs. They are free to accomplish and achievegoals; acquire physical, intellectual, or technical competencies; acquireknowledge; and seek recognition or appreciation. Lower-order needs pre-vail only when a person has suffered some form of deprivation and gonebackward in the hierarchy. For example, an individual who is out of workand running out of money must find employment to satisfy physiologicaland safety needs. Securing employment is far more important than socialor psychological needs. As quoted in McGregor’s landmark paper, “Manlives by bread alone, when there is no bread.”

■ LONG-TERM TRENDS IN ORGANIZATIONAL MANAGEMENTTwo long-term trends dominated management during the twentieth cen-tury. First was scientific management, introduced more than 100 yearsago. It had considerable influence on management practices. Even thoughit brought increases in productivity, scientific management had adverseeffects on human aspects of organizational activities.

The other trend began shortly after the conclusion of World War I, whensocial scientists began taking a critical look at the negative aspects of sci-entific management. This was the beginning of the human relations move-ment in management. This trend, although burdened by social legislation,continues to replace scientific management.

The human relations movement made a number of significant advancesbeginning in the 1930s. Studies undertaken throughout the middle of thecentury showed that when workers’ hostilities, resentments, suspicions,and fears were replaced by favorable attitudes, a substantial increase inproduction occurred.6 Experience with the human relations approach to man-agement has led many experts to conclude that in most circumstances,



people-centered management is more effective in inspiring productivitythan is production-centered management. Furthermore, close supervisionis associated with lower productivity when compared to more lenient super-vision and giving people responsibility and some control over their work.

■ GOVERNMENT INSPIRES A MAJOR SHIFTAn important milestone was reached with passage of Title VII of the CivilRights Act of 1964. This legislation has had greater impact than mostother recent legislation.

For a long time the United States Congress had been urged by organ-ized labor and other advocates to do more for working people. Since the1960s, the federal government has shifted much of the social responsi-bility for workers to business and industry. Many laws affecting employ-ment have benefited employees. People who are out of work can nowreceive unemployment compensation benefits. Applicants cannot be dis-criminated against when seeking employment. Furthermore, they cannotlegally be discriminated against when seeking promotion or advancementin their jobs. People performing similar jobs must receive similar com-pensation. Employees are entitled to receive care and compensation if theyare injured in the course of their employment. They are entitled to assis-tance and protection with difficult personal and family situations.

This growing structure of legislation has led to the legalistic philosophy ofemployee relations under which managers have reacted by changing theirbehaviors to avoid legal trouble. To some extent, all of the laws affectingemployment have added to the cost of doing business. For example, theImmigration Reform and Control Act (IRCA) adds effort, paperwork, filing,and occasional penalties to the cost of recruiting. The Family and MedicalLeave Act (FMLA) necessitates replacement costs and other expenses relatedto covering jobs during leaves. The Americans with Disabilities Act (ADA)requires direct expenditures for reasonable accommodations when required.

Whenever Congress creates new programs, its members must considerhow they will be funded. Three options exist to pay for new programs.Congress can discontinue an existing program, thus shifting funds to anew program. This action is usually politically sensitive and unpopular.Congress can raise taxes to cover the new program. This course of actionis currently unpopular and politically sensitive. Lastly, Congress can findsomeone else to pay for the new programs. Therefore, businesses and otherorganizations are often put in the position of having to pay for new pro-grams enacted by Congress.

Congress has accomplished much through legislation affecting employ-ment and has improved the wellbeing of millions of workers. However, theexpenses added to the cost of doing business have raised the cost of goodsand services for everyone. Members of the public in general and consumers

Government Inspires a Major Shift 381


in particular are paying for these improvements just as surely as they wouldthrough tax increases.

■ WHERE WE ARE, WHERE WE ARE HEADINGEmployees in the American work force have changed dramatically over theyears. More and more workers know about their rights under today’s lawsor are at least aware that they have well-defined rights. Employee knowl-edge has forced management into a legalistic posture. This trend has beenenhanced by labor unions and other external advocacy agencies.

Authoritarianism remains but is steadily diminishing. In general, author-itarianism is less common in health care organizations than in other indus-tries. Legalism remains fairly strong and is common in many contemporaryorganizations including health care. Managers simply interact with theiremployees in a particular manner primarily because the law says that theymust. However, legalism is slowly but steadily diminishing as the human-istic philosophy of employee relations grows in acceptance. Many people areslow to adjust when faced with societal change. Although a law can man-date behavioral change, legislation in and of itself cannot change someone’sattitudes and beliefs. The legislators who frame legislation are undoubtedlyaware that much early compliance comes as a result of obedience to the law,not because people wish to change their ways. They do know that accept-ance grows over time and that people who simply obeyed the law at first willeventually behave as they do because the new way has become the right way.

Some humanistic managers have always existed. Their considerate andpeople-focused style has been because of their fundamental values as individuals.It is not necessarily because of any conscious belief in humanistic manage-ment. Upon casual observation or limited exposure, the legalistic and human-istic approaches to employee relations appear to be very much the same.Often the difference between the two is that of management motivation. Ina legalistic environment, managers provide fair and humane treatment becauseit is required by law and they wish to protect themselves and their organiza-tions from legal troubles. In a humanistic environment, managers providefair and humane treatment because they believe that doing so is the properway to conduct themselves, manage others, and treat people.

■ CONCLUSIONAuthoritarian management remains alive in some contemporary organi-zations. It is often an organizational remnant or residue of earlier expo-sure to past role models. The approach can be found in isolated departmentsor pervading entire organizations.



Authoritarianism has been largely supplanted by legalistic and human-istic approaches to management. These were developed during the middledecades of the twentieth century. They evolved from scientific manage-ment. Major theoretical contributions to humanistic management weremade by Abraham Maslow, Douglas McGregor, and Rensis Likert. Thelegalistic environment has emerged since the enactment of the Civil RightsAct in 1964. Legal changes continue to be enacted.

Mary Johnson’s management style is clearly authoritarian. She sharesthis trait with a diminishing number of contemporary managers. Mary islegalistic in that she is sufficiently aware of the laws governing employmentto avoid doing anything that is blatantly illegal. It is clear that she deliversmandates and gives orders with the expectation that what she says will beheard and obeyed.

The resistance by her subordinates is understandable. A change in imme-diate supervision is always upsetting. Mary’s entry is all the more difficultbecause she seems determined to resolve all apparent problems at onceeven if she has to force unilaterally determined changes on the staff. Shetakes these actions with the knowledge that she is right.

Mary’s friend Sally was correct in suggesting that Mary was tryingto accomplish too much in too short of a time. The number of rules andpolicies is unimportant. If they have been ignored for a long period oftime, then for all practical purposes they do not exist. Mary is unilat-erally determining rules and policies and then trying to force them uponthe staff.

Mary has made some of the classic errors of an authoritarian manager.Foremost among these is thinking that involving employees, listening totheir ideas, and honoring their input are signs of weakness. Furthermore,she thinks that if she does not make all of the decisions by herself, then sheis abrogating her responsibility as a manager. Her concept of managementis authoritarian. Bosses give orders and employees obey them.

Mary must slow down and reassess her own approach to management.Trust must be established, but this is likely to require time. Mary mustinvolve her employees. She should consult with them to define problemsand establish priorities. Then, she should address one specific issue at a time.

References

1. Fallon, L. F., & Zgodzinski, E. (2005). Essentials of Public Health Management.Sudbury, MA: Jones and Bartlett.

2. Urwick, L. F. (1963). The development of industrial engineering. In: IndustrialEngineering Handbook (2nd ed.). H. B. Maynard, Editor-in-Chief. New York:McGraw-Hill, 5.

3. Likert, R. (1961). New Patterns of Management. New York: McGraw Hill.

Conclusion 383


4. McGregor, D. M. (1957). The human side of enterprise. Management Review,46(11), 22–28.

5. Maslow, A. H. (1943). A theory of human motivation. Psychological Review,50, 370–396.

6. Likert, R. (1956). Motivation and increased productivity. Management Record,18(4), 128–131.

Discussion Points

1. Cite two or three commonly observable practices in present-day orga-nizational management that indicate the presence of residual author-itarianism.

2. Identify and describe the fundamental difference between legalisticmanagement and humanistic management. Describe several indica-tors that can be used to distinguish one from the other.

3. Present three or four reasons why authoritarian management still pre-vails in American managerial situations.

4. In your opinion, why has authoritarian management prevailed forso long?

5. If scientific management was the diabolical scheme that some con-sidered it to be, why was it so widely adopted in the early part of thetwentieth century?

6. Reduce the parallel discussion of the job organization system and thecooperative motivation system to a single statement that reflects thegreatest single difference between the two approaches.

7. Name at least three major pieces of legislation that supported theadvancement of the human relations movement in management. Whywere they effective in producing change?

8. In your opinion, what will be the primary force that moves organiza-tional management from legalism to humanism in the future?

9. Using concepts related to employment and work, explain the implica-tions of Douglas McGregor’s statement, “Man lives by bread alone, whenthere is no bread.” How does this relate to employee motivation?

10. Identify one organizational setting outside of health care in whichstrict authoritarian management is not only prevalent but preferred.Why is this so and why is it needed?

Resources

BBooookkssBogardus, A. M. (2004). Human Resources Jumpstart. Alameda, CA: Sybex,

Incorporated.Connolly, P. M. and Connolly, K. G. (2004). Employee Opinion Questionnaires:

20 Ready-to-Use Surveys That Work. New York: John Wiley.



Drafke, M. (2005). Human Side of Organizations. Upper Saddle River, NJ:Prentice Hall.

Hyter, M. and Turnock, J. (2005). The Power of Inclusion: Creating a Culture ofDevelopment to Unlock the Potential and Productivity of Your Workforce.New York: John Wiley.

Ristow, A., Amos, T., & Ristow, L. (2004). Human Resource Management (2nded.). Lansdowne, South Africa: Juta Academic Publishers.

Winfield, L. (2005). Straight Talk about Gays in the Work Place: Creating anInclusive, Productive Environment for Everyone in Your Organization (3rded.). Binghamton, NY: Haworth Press.

PPeerriiooddiiccaallssBarney, J. (2001). Is the resource-based view a useful perspective for strategic man-

agement research? Yes. Academy of Management Review, 26, 41–56.Brooke, L., & Taylor, P. (2005). Older workers and employment: Managing age

relations. Ageing and Society, 25(3), 415–429.Ellem, B., & Shields, J. (1999). Rethinking “regional industrial relations”: Space,

place and the social relations of work. Journal of Industrial Relations, 41(4),536–560.

Ferris, G. R., Arthur, M. M., Berkson, H. M., Kaplan, D. M., Harrell-Cook, G.,& Frink, D. D. (1998). Toward a social context theory of the human resourcemanagement-organization effectiveness relationship. Human ResourceManagement Review, 8, 235–264.

Grandey, A. A. (2000). Emotional regulation in the workplace: A new way to con-ceptualize emotional labor. Journal of Occupational Health Psychology, 5, 95–100.

Herod, A. (2002). Towards a more productive engagement: Industrial relationsand economic geography meet. Labour and Industry, 13(2), 5–17.

Koeske, G., & Koeske, R. (1993). A preliminary test of the stress-strain-outcomemodel for reconceptualizing the burnout phenomenon. Journal of Social ServiceResearch, 17, 107–135.

Lawler, E. E. (2005). From human resource management to organizational effec-tiveness. Human Resources Management, 44(2), 165–169.

Lyon, P., Hallier, J., & Glover, I. (1998). Divestment or investment? The contra-dictions of HRM in relation to older employees. Human Resource ManagementJournal, 8(1), 56–66.

Pelletier, B., Boles, M., & Lynch, W. (2004). Change in health risks and work produc-tivity over time. Journal of Occupational and Environmental Medicine, 46, 746–754.

Thomas, G. (2005). Leadership: the undervalued element? Royal College of MedicineMidwives, 8(10), 424–425.

Truss, C., & Gratton, L. (1994). Strategic human resource management: A con-ceptual approach. International Journal of Human Resource Management,5(3), 663–686.

Turban, D. B., & Keon, T. L. (1993). Organizational attractiveness: An interac-tionist perspective. Journal of Applied Psychology, 78, 184–193.

Wang, G. G., & Li, J. (2003). Measuring HPT interventions: Dilemma, challenge,and solutions. Performance Improvement Quarterly, 42(10), 17–23.

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Wang, G. G., & Wang, J. (2005). Human resource development evaluation:Emerging market, barriers, and theory building. Advances in Developing HumanResources, 7(1), 22–36.

Wang, G. G., Dou, Z., & Li, N. (2002). A systems approach to measuring returnon investment for HRD programs. Human Resource Development Quarterly,13(2), 203–224.

Wharton, A. S. (1993). The affective consequences of service work. Work andOccupations, 20, 205–232.

Wilk, S. L., & Moynihan, L. M. (2005). Display rule “regulators”: The relation-ship between supervisors and worker emotional exhaustion. Journal of AppliedPsychology, 90(5), 917–927.

Wright, P. M., & McMahan, G. C. (1992). Theoretical perspectives for strategichuman resource management. Journal of Management, 18, 295–320.

Wright, P. M., & Snell, S. A. (1999). Toward a unifying framework for exploringfit and flexibility in strategic human resource management. Academy ofManagement Review, 23, 756–772.

Wright, P. M., Dunford, B. B., & Snell, S. A. (2001). Human resources and theresource-based view of the firm. Journal of Management, 27, 701–721.



Human ResourcesArbitration

Chapter Overview


• Understand the process of arbitration• Be able to cite the advantages of arbitration• Know the different variations of arbitration that are in use• Appreciate the advantages of arbitration• Know that arbitration is becoming more widely used in situations

related to human resources• Be able to differentiate between arbitration and mediation• Understand how arbitrators are credentialed and selected

■ CHAPTER SUMMARYArbitration is an alternative to litigation. Parties present their positionsto a neutral third party for resolution. Arbitration has different, morerelaxed rules when compared to courts. It is usually faster and less expen-sive than having a court hearing. Arbitrators are usually credentialed insome manner. Arbitration is becoming more common in human resources(HR) disputes. The use of arbitration usually is embedded in progressivedisciplinary policies or collective bargaining agreements.

Advocates note that arbitration usually seeks a resolution by con-sensus or compromise. It is usually conducted in a private setting.Arbitrators may cite precedents but, unlike courts, are not bound bythem. Critics argue that arbitration can be unfair to individuals andfavor large organizations. The lack of legal counsel is seen as a disad-vantage by some.

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Case Study: Ever Consider Arbitration?

Mike Stephens has been late for work five times in the last three months.Janice Brooks, his supervisor at Lakeview Medical Center, claims thatMike’s behavior is unacceptable and fires him. Mike’s union complainsthat the discharge was unfair because the hospital’s progressive disciplinepolicy was not followed. The union claims that Mike was not properlywarned that being late was considered sufficiently serious that dischargewas possible. Union and management representatives argue over the case.In four meetings involving progressively higher-level personnel, no agree-ment is reached. The options are dwindling. Mike wants to file for unem-ployment. A review of the collective bargaining agreement provides littleguidance but does mention arbitration. This has never been used. Whatrecommendations would you offer to the various parties in this case? Why?

■ ARBITRATIONUnder the law, arbitration is a legal alternative to litigation. Arbitration isused to avoid clogging court calendars. In arbitration, the parties in a dis-pute present their positions to a neutral third party for resolution. The par-ties involved may agree to the arbitration. Alternatively, it may be requiredby a contract provision or statute. The third party is called an arbitrator.In binding arbitration, the decision of an arbitrator cannot be challenged.

The American Arbitration Association creates arbitration panels fromamong its members. Unless one party protests that there was gross injus-tice, collusion, or fraud, arbitration that is specified by a contract can beconverted into a legal judgment. This requires a petition to the appropriatecourt. Often, states will require mandatory but non-binding arbitration togive involved parties a clear preview of the result that they may receive inan attempt to have them accept an arbitrator’s decision.

Arbitration uses rules of evidence and procedures that are less formalthan those followed in trial courts. This usually leads to a faster and less-expensive resolution of disagreements.

Many types of arbitration are in use. Binding arbitration is similar to acourt proceeding in that an arbitrator has the power to impose a decision.Binding arbitration may be limited by one or more agreements made inadvance of a hearing. A common example involves setting lower (min-imum) and upper (maximum) limits on a settlement. In non-binding arbi-tration, an arbitrator has the power to recommend but not impose adecision. Many contracts require mandatory arbitration in the event of adispute. This may be reasonable when an arbitrator is neutral. However,it is criticized with reason when a company that writes a contract is able

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to influence the choice of an arbitrator. Financial and healthcare organi-zations frequently impose such requirements.

Another method that is used to resolve conflict is mediation. A medi-ator is a third party who attempts to find points of agreement betweendisagreeing parties. Mediation is a method of resolution that is designedto help disagreeing parties resolve a dispute without going to court. Amediator’s goal is to find a compromise that is fair and acceptable to bothsides in a dispute. The process is less formal than arbitration. A mediatorhas no power to impose a solution. A mediated agreement is not legallybinding without a court order. Mediation has no formal rules of evidenceor set procedures to follow. A mediator and the parties usually agree oninformal ways to proceed. Mediators interact, but their goal is to help dis-agreeing parties to find common ground. Mediation does not always resultin a settlement. When mediation fails, a court trial typically follows.Infrequently, a judge may order arbitration.

Occasionally, an arbitrator is required to choose between the proposalsof the parties. This is called final offer arbitration and is specified beforethe arbitration begins. This approach is designed to encourage the partiesto moderate their initial positions.

The only real limitation on arbitrators is that they may not exceed thelimits of their authority in their award. An example of exceeding authoritymight be awarding one party in a dispute a personal possession belongingto the other party when the case concerns a contract dispute related tobusiness.

To ensure that arbitration is effective and to increase the credibility ofthe process, arbitrators sometimes work in groups. This is known as sittingas a panel. The most typical panel size is three. Often, one member of thepanel is known to be sympathetic to one party, the second member is knownto be sympathetic to the other party while the third is neutral. Another divi-sion may include two attorneys with expertise in different aspects of the dis-pute and an experienced, neutral arbitrator as the head panelist.

Certification is more commonly encountered in mediation than in arbi-tration. Certification is based on specific and substantive knowledge relatedto a case at hand. The standards of membership for some specialized organ-izations for which membership is voluntary often serve as a proxy for cer-tification. The National Academy of Arbitrators provides a convenientexample. This organization restricts membership to labor arbitrators thathave written a specified number of decisions within the preceding fiveyears.

Rosters of arbitrators are normally assembled and based on combina-tions of the criteria used for credentialing. The composition of differentrosters relies heavily on educational qualifications and experience ratherthan an assessment of performance. When rosters are used to assemble a

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panel of potential arbitrators, a short list of names is put together. Theneach side is alternatively allowed to strike names until a single arbitratoris selected. An alternative approach is to apply a similar procedure to a listof pre-screened roster of members.

■ ADVANTAGES OF ARBITRATIONArbitration permits all participating parties and the arbitrator to observeany damage or other problems for themselves. This is especially useful indetermining fault regarding adequate disclosure. Arbitration resolves prob-lems rather than simply stating or restating opinions. It often prevents futureconflicts from occurring by resolving present problems. Instead of creatingadversarial positions, arbitration promotes relationships that can be con-structive and helpful. In situations that involve customers, goodwill is notdamaged because intact customer relationships are not destroyed. Arbitrationsaves time. Hearings can be scheduled in a matter of weeks rather than themonths typically required for a court hearing. Arbitration is flexible. Partiesto arbitration have the option of being represented by an attorney. Arbitrationis an attractive alternative because of its flexibility and its cost, which isusually far less than a court proceeding.

Arbitration can usually be conducted in a private setting so others willnot be aware of its proceedings. Arbitrators are chosen for their expertisein the area of conflict. They are typically lawyers or other experienced pro-fessionals with a specific background in the type of case involved. In con-sumer and other small-scale disputes, arbitrators may simply be localcitizens who are willing to serve in this capacity.

Unlike attorneys and courts of law, arbitrators are not bound by prece-dent. They enjoy significant latitude in matters such as accepting evidence,participating in the proceedings, questioning witnesses, and reaching con-clusions. Arbitrators may visit sites outside of a hearing room, seek addi-tional evidence, or call on expert witnesses. They have the autonomy todecide if the parties may be represented by legal counsel. They are notbound by the rules of procedure that guide court proceedings.

In labor-management cases and similar disputes, an arbitrator normallyrenders a decision in writing. This is accompanied by as much detail as afull written opinion handed down by a court. In other settings, awardsmay be delivered with no written or oral explanation. In general, full-length written awards are used in situations where parties expect that thecase may provide guidance in similar situations in the future. A decisionwithout a written explanation is generally used where the parties desire speedor economy. Unwritten decisions may be requested in situations wherethere is fear that a losing party might use an error in the decision to chal-lenge the result in court.



Arbitration is appropriate when two parties know that they will be unableto resolve a dispute by negotiation or mediation. The parties usually desirea decision that is likely to be both faster and more expert than they thinkthey will receive in court. Arbitration is useful as a last resort that is embeddedinto a structured relationship in advance. It is typically the last step in nego-tiation because the prospect of compulsory and binding arbitration mayhelp both parties to concentrate on achieving a settlement. Such a resolutionmay be less than ideal, but is usually better than a court decision. It is usu-ally less risky and always less costly than a trial. Arbitration is not useful insituations where one party seeks a definitive answer that will provide publicprecedent for similar cases in the future. Situations that appear to fit such aprofile should be examined closely because they are usually uncommon.

Certification, credentialing, and rosters are different concepts that reflectlevels of training or qualification for arbitrators. Certification is an offi-cial designation conferred on an arbitrator who has met particular stan-dards. Credentialing is the process by which an official or semi-officialbody determines the standards appropriate for practitioners of a partic-ular profession or providers of a given service. Arbitrators may be cre-dentialed by more than one group. Credentialing may be determined byphilosophy or it may be determined after reviewing the decisions of anarbitrator. Credentialing may refer to the act of obtaining particular cre-dentials. Rosters are lists of professionals. Rosters may contain lists ofarbitrators who have been determined to be appropriately credentialed.Inclusion on a roster does not guarantee formal certification. Typical sys-tems for credentialing, certification, and assembling rosters vary.

Establishing credentials for arbitrators usually involves educational qual-ifications and an assessment of prior experience and performance. Educationalqualifications may include an advanced degree or other specialized educa-tion or evidence of having completed a particular course of training.Assessment of performance is done by observing actual arbitration casesby an experienced arbitrator who rates the new arbitrator’s performanceon the basis of established performance criteria. Alternatively, similar obser-vation and rating may be completed in a simulated setting. Unlike media-tion, in which meetings provide the best opportunities for observation, mostof an arbitrator’s work is performed away from the disputing parties. Afull written rationale usually accompanies all arbitration decisions. Wherea full written rationale is required to accompany a decision, important cri-teria include being able to understand the facts in a case and interpretingconflicting facts in a sensible manner. An arbitrator must then decide thecase according to standards, usually contractual, that actually apply to agiven situation. Finally, an arbitrator must be able to explain the decisionin a clear manner, using language that will be acceptable to a losing party.

Critics of arbitration argue that the process can be unfair to an individualin a dispute with a large organization. In such situations, the choice of an

Advantages of Arbitration 391


arbitrator, as defined in a contract, may limit options of individuals. Arbitrationpanels may not be balanced. Critics feel that an absence of legal represen-tation is harmful to individuals. They also note that arbitration proceedingsare rarely public events. These potential disadvantages increase the impor-tance of professionalism and ethical standards among arbitrators.

■ HUMAN RESOURCES ARBITRATIONAs human beings interact with each other in organizational situations,problems can and do arise. Many are resolved through conflict resolutionprocesses and progressive discipline programs. Others are resolved usingsteps that have been outlined in collective bargaining agreements. In recentyears, arbitration has been introduced as another method. Managers andemployees both appreciate the flexibility of arbitration. They also appre-ciate the opportunity to have a neutral third party listen and design a res-olution that usually involves a measure of compromise. The element ofcompromise is often mentioned as a positive aspect of arbitration.

Organizations that have elected to incorporate arbitration usually specifyit as a component or option of progressive discipline. Arbitration is spec-ified in some collective bargaining agreements. The source for an arbi-trator is also specified. Successful organizations delineate a method forselecting an arbitrator.

Once an arbitrator is identified, a hearing date is agreed upon. The par-ties present their arguments and any additional material that they feel isneeded. The arbitrator listens, asks questions as needed, and then dismissesthe parties. A few weeks are typically allowed for the arbitrator to reviewthe information of the case and search for other arbitration cases that maybe relevant. The arbitrator usually renders a binding decision.

The majority of individuals and organizations that have used arbitra-tion with problems related to human resources have been satisfied with theprocess. Winning and losing parties both typically feel that they have beentreated in a reasonable manner. All parties appreciate the speed of bindingarbitration. They appreciate the common element of compromise. Each partygains something in most decisions. Allowing both parties to save face con-tributes to a more rapid restoration of normal relationships when comparedto dispute resolution according to a set of inflexible rules.

■ CONCLUSIONArbitration offers an attractive alternative to litigation. A neutral third party,an arbitrator, hears the positions of two parties in a dispute. The arbitratorpresents a solution to the problem. When compared with traditional courtsystems, arbitration uses different, more relaxed rules of operation. Arbitration



usually results in faster and less expensive resolutions compared with courts.Arbitrators are typically credentialed by a professional organization or throughother means. Many disputes related to human resources are being arbitratedrather than litigated. Guidelines for the use of arbitration are typically foundin collective bargaining agreements or progressive disciplinary policies.

Arbitration is usually conducted in a private setting. The process achievesresolution using consensus or compromise. Arbitrators may cite prece-dents. However, unlike courts, they are not bound by them. Critics sug-gest that arbitration can favor large organizations and be unfair toindividuals. Others note that the lack of legal counsel is a disadvantage.

Returning to the matter of Mike Stephens, arbitration is the only remainingoption. It is specified as the final step of the grievance procedure. The unionrequests arbitration. Lakeview Hospital has no choice but to agree. The unionsubmits a form to the Federal Mediation and Conciliation Service requestinga panel of five potential arbitrators. The federal agency sends a similar list offive arbitrators and their biographies to the union and hospital. The namesare chosen at random from the hundreds on file with the agency. Taking turns,each party strikes a name, alternating until only one name remains. Thisperson becomes the arbitrator. The parties arrange a date for a hearing withthe arbitrator. As is normally the case, the hearing is completed in a morning.The hospital and union agree to file informational briefs within thirty workingdays. A month later, the arbitrator issues a decision that is binding on all con-cerned. The arbitrator determined that the hospital acted improperly andordered Mike to be reinstated. The hospital was also ordered to give him75% of his back pay. At the same time and in accordance with the progres-sive discipline policy, the hospital may place a written warning to Mike’s per-sonnel file, bypassing the requirement for a verbal warning. This case illustratedone of the important features of arbitration: compromise.

Discussion Points

1. Is arbitration an option for HR problems? How do employees enterarbitration?

2. How are the processes or rules of arbitration different from those of courts?3. What are the advantages of arbitration?4. What are the disadvantages of arbitration?5. How does arbitration differ from mediation?6. What is final offer arbitration? What are its advantages and disadvantages?7. What, if any, limitations exist for arbitrators?8. What advantages and disadvantages exist for using a panel of arbitrators?9. How are arbitrators credentialed?

10. Would you prefer arbitration or a court hearing to resolve an issue? Why?

Conclusion 393


Resources

BBooookkssBradley, K. R. (2005). Human Resource Management: People and Performance.

London: Ashgate Publishing.Burke, R. J., & Cooper, C. L. (2005). Reinventing HRM. London: Taylor and

Francis.Cook, M. F. (2004). The Complete Do-it-Yourself Human Resources Department

2005. Amsterdam: Wolters Kluwer Company.Dessler, G. (2004). Human Resource Management (10th ed.). Cambridge, UK:

Pearson Publishing.Heneman, R., Tansky, J., & Greenberger, D. B. (2005). Human Resource Management

in Virtual Organizations. Greenwich, CT: Information Age Publishing.

PPeerriiooddiiccaallssBingham, L. (1997). Employment arbitration: The repeat player effect. Employee

Rights and Employment Policy Journal, 1, 189–220.Brutus, S., London, M., & Martineau, J. (1999). The impact of 360-degree feed-

back on planning for career development. Journal of Management Development,18, 676–693.

Delery, J. E. (1998). Issues of fit in strategic human resource management:Implications for research. Human Resource Management Review, 8, 289–310.

DePaulo, B. M., Lindsay, J. L., Malone, B. E., Muhlenbruck, L., Charlton, K., &Cooper, H. (2003). Cues to deception. Psychological Bulletin, 129, 74–118.

Estreicher, S. (2001). Saturns for rickshaws: The stakes in the debate over predis-pute employment arbitration agreements. Ohio State Journal on DisputeResolution, 16, 559–570.

Gillespie, T. L. (2005). Internationalizing 360-degree feedback: Are subordinateratings comparable? Journal of Business and Psychology, 19(3), 361–382.

Hazucha, J. F., Hezlett, S. A., & Schneider, R. J. (1993). The impact of 360-degreefeedback on management skills development. Human Resource Management,32, 325–351.

London, M., & Beatty, R. W. (1993). 360-degree feedback as a competitive advan-tage. Human Resource Management, 32(2/3), 353–372.

Mahony, D. M., Klaas, B. S., McClendon, J. A., & Varma, A. (2005). The effectsof mandatory employment arbitration systems on applicants’ attraction toorganizations. Human Resource Management, 44(4), 449–470.

Richey, B., Bernardin, H. J., Tyler, C. L., & McKinney, N. (2001). The effect ofarbitration program characteristics on applicants’ intentions toward potentialemployers. Journal of Applied Psychology, 86, 1006–1013.

Siderman, M. N. (2001). Compulsory arbitration agreements worth saving:Reforming arbitration to accommodate Title VII protections. UCLA LawReview, 47, 1885–1894.



Using HumanResource

ConsultantsChapter Overview


• Know about the different kinds of consultants• Understand the reasons for engaging consultants• Appreciate the services that consultants provide• Know how to find a consultant• Be able to create a contract for consultant services

■ CHAPTER SUMMARYConsultants provide timely and useful services to organizations. Theyprovide experience and technical expertise. Using a consultant is not thesame as outsourcing. Consultants must be selected with care. Their ser-vices represent a partnership to an organization. They should be regardedas any other professional resource.

Case Study: Correcting Hodge-Podge Growth

Tom Nathanson had been appointed as the president of a community healthsystem eighteen months ago. In addition to a 350-bed hospital, the systemhad an outpatient facility, a rehabilitation center, and an occupational healthclinic that served the workers of several industries in the surrounding area.Since taking over, he had come to know the senior managers and had metall of the other supervisory personnel in the system. He appreciated just

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how closely the people in the community regarded the health system. Pridein their organization was readily evident.

The system had grown slowly over the years. No master plan for growthhad ever been devised. This fact was becoming painfully obvious as he con-templated the organizational chart for the system. The outpatient clinichad begun as an independent practice started by three physicians. In a singlemonth, the senior partner had become the hospital’s medical director, anotherhad been tragically killed in an automobile accident, and the third had beenrecalled to naval duty. The hospital simply absorbed the practice.

The occupational medicine clinic had begun as a rehabilitation service forthe clinic and had been working to return local farmers to their fields. Severallarge manufacturing facilities had located in the area and had brought jobsand more people to the community. None of the growth had been planned.

Tom wanted to reorganize the system. He discussed the idea with sev-eral senior managers. Each one had a different suggestion for Tom. Hetried a second round of informal conversations that had yielded similarresults. Tom preferred to think of them as non-results. He was getting frus-trated. Tom’s classes in business school had not included training in orga-nizational design or human resources. He decided to seek out the servicesof a consultant or consulting firm that specialized in human resources.

Why should Tom think about getting help from a consultant? Whatadvice would you offer to Tom? Where could he find a consultant? Howcould he engage the services of a qualified consultant?

■ USING CONSULTANTSExpert advice and assistance is needed or appreciated in almost any busi-ness or organization. One source for such help is an external consultant.Consultants are usually experts in their field with both experience andeducation that spans years. They are able to address a particular problemor issue. Consultants work with an organization’s employees when seekingsolutions to problems. The findings and recommendations of a consultantare based on specific knowledge. The findings will be absorbed by an orga-nization’s managers and employees. This knowledge often provides thebasis for resolving immediate problems. Frequently, recommendationsmade by a consultant retain their utility for long periods of time.

Engaging the services of a consultant does not constitute outsourcing.By conventional definition, outsourcing refers to a permanent or long-termarrangement between an organization and an outside party to provide spe-cific services. Common examples of outsourcing include payroll servicesand providing specializing skills that are needed on an infrequent basis.

396 CHAPTER 22 USING HUMAN RESOURCE CONSULTANTS


Experts provide both outsourcing and consulting services. The key termis the length of time for which services are engaged. Outsourcing is usu-ally permanent whereas consulting is temporary. A consulting engagementmay extend over months, but this is uncommon. Typically, a consultant ishired or engaged to address a particular problem or issue. When the objec-tives of the consulting project have been met, consultants leave.

Senior managers often ask why consultants are needed. They are oftenregarded as outsiders who lack knowledge about the managers’ organization.Consultants are hired or engaged for several common reasons. They havespecialized knowledge, technical expertise, or experience that can bebrought to bear on a particular problem. Outsiders are needed when noemployee in an organization has the needed skills or knowledge.

Often, making changes or developing the capability of a particularsector of an organization benefits the organization from the perspectiveof an outsider. Although such persons may lack specialized, organization-specific knowledge, they are not fettered by the traditions, experiences andpolitics of existing employees. Their point of view is free of organizationalbias. An experienced outsider or consultant is free of a stigma. Such stigmamay arise for employees who have previously attempted to address orresolve a problem and failed.

Consultants are often used to do work for which regular employees donot have the time. Consultants are also used to perform difficult tasks orwhen a task must be performed for which no one wants responsibility.Framing this statement in a different way, a consultant may be used whena scapegoat is needed or when difficult decisions must be made and seniormanagers decide to protect their own personnel from having to make deci-sions that are likely to cause bad feelings. Examples include reorganiza-tion or downsizing that may involve discharging employees. Consultantsin such roles do the “dirty work” for an organization and then leave.Remaining managers are then able to progress without the ill feelings thataccompany an executive who took actions that led to the discharge of apopular but ineffective manager. Providing another example, senior man-agers may decide to reorganize a business unit, so an outside consultantmay be brought in to suggest changes. After the consultant makes thechanges and leaves, remaining employees are spared from having to assumeresponsibility for making unpopular decisions.

Consultants often represent cost efficient alternatives. Their servicesare specialized and are needed for relatively brief periods of time. Using aconsultant avoids the costs associated with recruitment, orientation, andtraining. When a project is completed, the consultant can leave, saving anorganization the costs of termination and severance. Because consultantsare not employees of the organization contracting for their services, theydo not receive benefits.

Using Consultants 397


Consultants provide an independent perspective. They are usuallyimmune from political pressures or demands that exist in an organization.They are free to provide expert opinions. Their opinions are usually well-grounded in experience or specialized education. People or groups pro-viding outside funding may engage the services of a consultant to providean independent assurance or opinion about a project before investing init. Conversely, the expertise of a consultant may improve the credibility ofan organization concerning a decision that has been made. However, expe-rienced consultants view such a use as highly unethical.

Bankers and other investors may use an outside consultant to provideadditional expertise. This increases their confidence in an organization.In turn, this increases the probability of investment. Consultants are usedto provide training for key employees. The services of a consultant areused to provide temporary leadership while an organization searches fora permanent successor to a person that unexpectedly departed.

Consultants provide benefits to the organizations that use their services.With their added expertise, business plans are often strengthened andfocused. They introduce new expertise and skills into an organization ordepartment. A consultant can usually focus attention in a sufficiently clearmanner that objectives are clarified and targets become more achievable.Consultants enable incomplete jobs or projects to be finished by providingtime and expertise. Astute employees try to learn from consultants. Often,their ability to solve problems improves more than their technical knowl-edge. An employee or management team usually receives guidance fromconsultants. Even if the advice a consultant provides is not better than theadvice existing supervisors and managers provide, because the consultant’sadvice comes from an outsider, employees perceive it as superior.

■ TYPES OF CONSULTANTSBased on the services that they provide, consultants can be divided into twomajor categories, process and expert. Process consultants typically havegeneral knowledge about business or organizations, and they are hired toaddress a variety of general issues. Their experience is usually similar butin a variety of settings. Variety of experience is their strength. Process con-sultants draw upon their experience to solve problems in new situations.Because they are outsiders, they can provide a less biased perspective thancan an existing employee.

In comparison, an expert consultant has specific training or experience.An expert consultant is hired for that specialized knowledge. In humanresource terms, experts are often hired to conduct training, create a strategicplan, or provide focused advice.

A process consultant is often used when an organization decides to iden-tify problem areas and make changes. Such a consultant may be used when



no clear consensus exists among senior managers. Process consultants gatherinformation by reviewing data and observing and talking with employeesthroughout an organization. During the conversations, process consultantsoften teach employees about alternative procedures or operations. Althoughemployees usually appreciate such information, they must understand thatthe consultant is a helper and facilitator of change, not a permanent employee.At the conclusion of the fact-finding phase of an engagement, a processconsultant meets with senior managers to discuss proposed changes andhow best to introduce and implement them into the organization.

The services of an expert consultant are typically engaged to address aspecific problem. Reorganizations are common tasks that are assigned toexperts. They are also used to analyze problem areas or processes. Examplesinclude recruitment, payroll, employee training, benefits administration,and creating retirement packages. Expert consultants usually have expe-rience directly applicable to the problem. After gathering data and analyzingan organization’s situation, they make recommendations to senior man-agers. Implementation of their recommendations may be continued by theexpert consultant, coordinated by a different expert, or handled by theorganization’s employees who have the necessary knowledge and expertise.

■ ENGAGING A CONSULTANTUnderstanding the need to be addressed by a consultant provides usefulguidance before actually contacting or interviewing potential consultants.Once the need has been specified and the type of consultant has been deter-mined, prospective consultants can be identified. A package of information,often called a request for proposal (RFP), should be prepared before seekingan individual consultant or firm. The request should include an overview ofthe organization, its structure, its mission, and a short history. The requestshould outline the problem and why the organization considers it to be anarea or topic of concern. The expectations of the consultant, an estimate ofthe time to be made available, and a starting date should be included. Finally,the request should identify the organization’s contact and person who willoversee the project if they are not the same. The request for proposal will beused by potential consultants to generate their proposals.

Consultants are identified by several processes. Experience or word ofmouth is typically a reliable method. Professionals who provide servicesare usually able to recommend qualified consultants. Such referrals arereliable to the extent that the word of the person making the suggestionsis trusted. Local universities and colleges may have faculty members withthe desired expertise. The reliability of such contacts rests on the reputa-tion of the educational institution and the person being asked for thereferral. Most reputable consultants and consulting organizations belongto professional associations. These associations can provide leads for

Engaging a Consultant 399


consultants. The reliability of the leads is proportional to the code of con-duct that such associations have and the extent to which it is enforced.Telephone directories list consultants. This approach is appealing by its sim-plicity and ease of access; however, the directory publisher simply collectsa fee for listing and does not screen or review any persons or firms thatare listed. A local Better Business Bureau or Chamber of Commerce maybe able to provide information about complaints received.

Two to four potential consultants are commonly identified, presented withthe RFP and asked to submit a proposal that responds to the request.Proposals from ethical firms or individual consultants should include abudget. A proposal forms the basis for negotiations. As negotiations progress,individuals or firms submitting non-competitive proposals should be iden-tified and notified that their proposals have been rejected. This is both politeand an appropriate business practice, and it retains the possibility of againsending RFPs to these firms some time in the future. Issues of work andcost are discussed until a single consultant is identified and selected. Allparties should clearly understand the nature of the services that will be pro-vided, who will be performing the work, the nature of any products to begenerated, who will own them, the cost, and the schedule for activities. Acontract that is based on the proposal is created and signed. A sample con-sulting contract is found in Appendix A at the conclusion of this chapter.

A consulting contract should include details of the work to be com-pleted, products to be developed, and a means for evaluating progress.Fees should be delineated. Time and available money for each phase of aproject should be clearly defined. The responsibilities of both the con-sulting team and the organization’s personnel should be defined. A schedulefor payment should be included. Finally, a means for terminating the con-tract should be agreed upon. Although contracts for consulting engagementsare infrequently terminated early, agreeing upon a method before begin-ning work is appreciated if such a need arises.

Large engagements often require many individuals to perform the work.Personnel who will be performing the work should be understood andagreed upon. Ethical consultants discuss the qualifications and costs ofproposed members for a consulting team. The person presenting the pro-posal may not be the individual supervising the activities of junior consultantson a day-to-day basis. Access and clearance for all members of a consultingteam must be arranged prior to the beginning of a project.

On the first day of an engagement, members of the consulting team andorganization managers should be introduced to each other. Organizationpersonnel to be included should reflect internal political protocols and thenature of the project to be addressed. The location for working should beagreed upon. Organizations usually provide space for consultants to dotheir work. This alternative is usually preferable to taking data and doc-uments away from the premises of a client.



A consultant’s progress should be monitored on a regular basis. Regularmonitoring helps to prevent surprises for all concerned. Regular meetingsprovide an opportunity to learn and identify related or unanticipated issues.Potential solutions can be discussed. Consultants have an interest in mon-itoring the implementation of their proposed solutions to ensure that theyare carried out as planned. The essentials of this section are summarizedin Exhibit 22-1.

Engaging a Consultant 401

Exhibit 22-1 Rules or Guidelines for Using Consultants

1. Define the scope or boundaries of the problem or issue to be addressed

2. Investigate expertise of consultant• Previous clients• Previous work• Basis for expertise:

•• Education•• Experience

3. Know the fee and how it is calculated• Hourly• For the engagement

4. Establish responsibility for expenses• Who pays for what• What expenses are included:

•• Food•• Transportation•• Lodging•• Per diem

5. Payment schedule• What documentation is required• When are expense reimbursements due• In what form

6. Set limits on service or length of engagement7. Establish prior to signing a contract

• Objectives• Timetable• Deliverables• Standards for evaluation• Exit strategy or conditions

8. Establish supervisory and reporting relationship in organization9. Establish mechanism for dissolving contract


■ SUMMARY: WHY A CONSULTANT?Consultants are hired or engaged for a number of reasons. They are com-monly used to resolve a particular problem. Expertise may or may not beavailable within an organization. An organization may have tried to resolvea problem and failed. A consultant provides a fresh start and opportunityfor resolution. A consultant may represent a compromise when an organi-zation’s internal managers cannot reach a consensus. Time may be lacking.

Consultants should not be used when complete trust is lacking betweenan organization and a proposed consultant. They should not be used whenquestionable or illegal activities are contemplated. Finally, they should notbe used when the qualifications of the consultant can not stand up toexternal scrutiny.

In general, all parties should strive to minimize or eliminate surprisesexcept in the nature of findings generated by a consultant. Trust is an essen-tial component that must be present before a project begins. Rememberthat a consultant is an outside contractor that is usually engaged for a par-ticular purpose or to achieve a specific objective.

■ CONCLUSIONConsultants are becoming more commonly used by organizations throughoutthe United States in health care as well as in other industries. Managers inhealth care must understand the potential uses for consultants as well ashow to work with them. Successful consulting relationships are brief part-nerships. Establishing trust and good working relationships are only thebeginning. All parties must fully understand their own roles and respon-sibilities as well as the expectations of the other partner.

Returning to Tom Nathanson, president of a medium sized communityhealth system, his plan to engage the services of a consultant or consultingfirm that specialized in human resources made sense. If carefully selected,the consultant had the potential to make up for an educational deficiencyin Tom’s professional training. Using a consultant also allowed Tom andother senior managers to avoid criticism when reorganization was announced.The responsibility for initially unpopular changes could be attributed to theconsultant, allowing Tom and the other managers to move forward.

Tom called several friends whose opinions he trusted. Their suggestionsled to two different consulting firms. Tom checked out the reputations ofeach before making a personal contact. He also put together a request forproposal that outlined his goals for the hospital system, provided a bit ofhistory and included a general timetable. Both firms responded with pro-posals. Over the next two weeks, Tom discussed each proposal. When onebegan to emerge as satisfactory, Tom contacted the other firm. He appre-



ciated the efforts put forth by the firm but let them know that anotherconsultant offered a proposal more appropriate to his organization’s needs.The competitor thanked Tom and offered to stay in contact in case diffi-culties arose in the future. Their business relationship was preserved.

Tom completed and signed a contract. Because of the work that hadgone into the plan and the amount of detail it contained, the consultingengagement was successfully completed. The consultant helped affectedmanagers adjust to different roles in the healthcare system. At their finalmeeting, the consultant asked Tom if he would be willing to provide abusiness reference in the future. Tom agreed and the consulting engage-ment was brought to a successful conclusion.

Discussion Points

1. List at least three advantages to using a consultant.2. List at least three disadvantages to using a consultant.3. What are the sources of a consultant’s expertise? Why are these valid?4. What information should be included in a request for a consulting

proposal? Why is each component important?5. How should a consultant be selected?6. Briefly discuss three different situations in which a consultant can pro-

vide value to an organization.7. List three absolute prerequisites that must exist before an organiza-

tion should sign a consulting contract.8. Why is a consulting contract needed?9. Why should the personnel of a consulting team be described in a contract?

10. Why should a consultant’s progress be regularly monitored?11. Can consultants replace outsourced activities? Why or why not?

Resources

BBooookkssBudd, J., & Scoville, J. (2005). The Ethics of Human Resources and Industrial

Relations. Ithaca, NY: Cornell University Press.Holman, D., Wall, T. D., Howard, A., Sparrow, P., & Clegg, C. W. (2004). The

Essentials of the New Workplace: A Guide to the Human Impact of ModernWorking Practices. New York: John Wiley.

Hunter, I., & Sanders, J. (2005). The Future of HR and the Need for Change: NewOperating Models to Deliver Increase Value. Princeton, NJ: Thorogood.

Torres-Coronas, T., & Arias-Oliva, M. (2004). E-Human Resources Management:Managing Knowledge People. Hershey, PA: Idea Group Publishing.

WetFeet. (2005). Specialized Consulting Careers Health Care, Human ResourcesInformation Technology. San Francisco, CA: WetFeet, Inc.

Conclusion 403


PPeerriiooddiiccaallssCarson, K. D., & Bedeian, A. G. (1994). Career commitment: Construction of a

measure and examination of its psychometric properties. Journal of VocationalBehavior, 44, 237–262.

Chait, H. N. (2005). Human resources business process outsourcing: Transforminghow HR gets its work done. Personnel Psychology, 58(2), 547–550.

Champ, B. (2005). Human resources business process outsourcing: Transforminghow HR gets its work done. Human Resource Management, 44(4), 511–512.

Farjoun, M. (1994). Beyond industry boundaries: Human expertise, diversifica-tion and resource-related industry groups. Organization Science, 5, 185–199.

Kochan, T. (2004). Restoring trust in the human resource management profes-sion. Asia Pacific Journal of Human Resources, 42(2), 132–146.

Lawler, E. E., & Mohrman, S. A. (2003). HR as a strategic partner: What does ittake to make it happen? Human Resource Planning, 26, 15–29.

Lepak, D. P., & Snell, S. A. (2002). Examining the human resource architecture:The relationships among human capital, employment, and human resourceconfigurations. Journal of Management, 28, 517–543.

Moss, K., Swanson, J., Ullman, M., & Burris, S. (2002). Mediation of employ-ment discrimination disputes involving persons with psychiatric disabilities.Psychiatric Services, 53(8), 988–994.

Paauwe, J., & Boselie, P. (2003). Challenging “strategic HRM” and the relevanceof institutional setting. Human Resource Management Journal, 13(3), 56–70.

Wright, P. M., & Snell, S. A. (2005). Partner or guardian? HR’s challenge in bal-ancing value and values. Human Resources Management, 44(2), 177–182.



Appendix A Sample ContractSample Contract Agreement for

Consulting Services1

This Agreement for Services, or Contract, is for a project [describe theservices expected and objectives of the engagement].

1. [Identify the consultant or firm] (hereafter called Contractor) agreesto provide the following products and services to [Recipient or organ-ization seeking advice and assistance] (hereafter called Client):

A. Information gathering: Contractor will review the following infor-mation compiled by Client:1. Background information related to objectives2. Data related to objectives3. Samples of data available in organization (as needed)4. Financial information related to the project and its goal (as needed)

Contractor will also inquire into the availability of [external datathat has relevance for project, as needed].

Contractor will also confer by phone with [relevant individuals ororganizations, as needed].

B. [Describe first phase of project in sufficient detail so that the tasksare clearly understood. Describe responsibilities of both Contractorand Client.]

C. [Describe next phase of project in sufficient detail so that the tasksare clearly understood. Describe responsibilities of both Contractorand Client.]

D. [Continue for all phases of project.]

E. Contractor will travel [describe travel expected: destinations, organ-izations, expected results, time allocated and justification].1. [Describe the expected results of travel. Include responsibilities

of Contractor and Client.]2. [Describe additional issues related to travel.]

F. Contractor will conduct training [describe training expected: people,destinations, organizations, expected results, time allocated andjustification].1. [Describe the expected results of training. Include responsibili-

ties of Contractor and Client.]2. [Describe additional issues related to training.]

Appendix A: Sample Contract 405


G. Before completing this engagement, Contractor will give to Client:1. [Describe project deliverables in relation to project goals and

objectives.]2. [Schedule for deliverables.]3. [Recommendations, as needed.]

This work will be completed no later than [insert completion date]and will be conducted by Contractor’s agent [insert consultant incharge of engagement].

It is understood that circumstances arising during the conduct ofthe consulting project may require the activities described above tobe modified or changed. Such changes will be made with mutualagreement of both parties. The modifications may be recorded asan addendum to this agreement or in an exchange of letters betweenthe parties proposing and accepting the changes. Products and deliv-erables produced during this engagement will become the propertyof the Client with the following exceptions: [insert a list of excep-tions to be owned by the Contractor]. Changes will be made bymutual agreement.

2. Client agrees to:

A. Participate in consulting activities as requested. This includesarranging meetings, providing meeting venues and amenities, andproviding information requested by Contractor. [Insert other spe-cific items to be provided by Client including working space andaccess to data, as needed.]

B. Pay Contractor a fee not to exceed $ [insert maximum fee] plusexpenses. Expenses to be billed include: [For each expense categoryor item, list rate of reimbursement and maximum allowable amount.Commonly reimbursed expenses include travel, meals, lodging,telephone and any copying or mailing costs excluding normal com-munications with Client.] All expenses will be documented withreceipts. Requests for reimbursement will be submitted within 14days of occurrence.

Payment for consulting services will be made in three installments:One-third [insert amount] on signing this contract, one-third [insertamount] upon completion of [insert a significant event approxi-mately half-way through the project] and one-third [insert amount]upon completion of this project. The project will be consideredcomplete when all deliverables have been submitted and accepted.

C. Authorize [insert name of Client representative] to accept Contractor’swork and approve payment as specified in this Agreement.



D. Authorize [insert name of Client representative] to approve pay-ment of expenses delineated in this Agreement or additional expensesas agreed upon by Contractor and Client.

3. Either Party may terminate this agreement with written notice of thirtydays. If the agreement is terminated, Contractor will present Client witha statement of account showing all fees paid to that point and itemizeall services rendered. If work performed exceeds fees paid to date,Client will pay Contractor for such work at the rate of $ [insert agreedupon rate] per hour. If fees paid exceed work performed to date,Contractor will return unearned fees to Client.

Signed:for [Client]:

Date

for [Consultant]:

Date

Reference

1. Based on model prepared by Barbara Davis, 317 South Hamline, St. Paul,Minnesota 55105 and used with permission.

Appendix A: Sample Contract 407


Maintaining anEffective Human

ResourcesDepartment

Chapter Overview


• Be able to describe the characteristics of an effective humanresources department

• Understand how to advise department managers about adopting aproactive approach with human resources, suggesting how toapproach human resources in a number of areas of concern

• Know how senior managers can increase the value and strengthenthe effectiveness of human resources

• Be able to suggest some future options for human resources

■ CHAPTER SUMMARYHuman resources (HR) provides needed services for an organization.Human resources does not generate revenue. The protective nature ofthe services it renders more than compensates for any lack of direct rev-enue contribution. Senior managers who support their HR departmentare usually more successful than are those who do not.

Managers should approach HR as partners, helping HR by providingdata in a timely manner and complying with deadlines and schedules thatHR devises. Human resources should be consulted when job descriptionsare prepared, when employees are reviewed, and whenever significant

C H A P T E R

23

409


disciplinary action must be taken against employees. Working in partner-ship with supervisors, HR should provide accurate and timely information.Such actions often diminish the extent of informal channels of communi-cation among employees by rendering them unneeded.

Case Study: Alarm Bells

Feedback Specialists has just announced that Jamie Durango will beassuming the duties of chief executive officer in six weeks. Her selectionculminated a nation-wide search to replace Ed Worthington in the posi-tion. Jamie scheduled meetings with her senior managers to get betteracquainted with them and to better understand the organization. FeedbackSpecialists conducts surveys and other research for companies throughoutthe region. Although its clients are drawn from all sectors of the economy,Feedback specializes in hospitals. Nearly 1,000 employees work for the firm.

Jamie’s first meeting was with Ed Worthington. She asked him aboutthe company. After ten minutes of conversation, she realized that HR hadnot yet been mentioned.

“Ed, how are the employees served? You haven’t mentioned humanresources at all. Are HR operations outsourced?” asked Jamie.

Ed replied, “Payroll has been outsourced for almost ten years. No majorproblems have ever arisen.”

“What about other aspects such as benefits and the usual HR services?”“I believe in equality. Everyone receives the same benefits package. It

really is quite generous. The supervisors assume all of the other responsi-bilities that HR often provides. This is doubly cost effective. Extra employeesare not needed and concern about the lack of revenue generated by an HRdepartment is avoided,” said Ed with a satisfied smile.

Alarm bells started to ring in Jamie’s head. What thoughts would youoffer to Jamie at this point? Why? What would be your first suggestion toher? Why?

■ AN EFFECTIVE HUMAN RESOURCES DEPARTMENTUsers evaluate the effectiveness of HR departments. When viewing aneffective HR department, managers should see evidence of concern forpeople as valued assets and as individuals rather than as disposable com-modities. Senior management should support HR and its programs, andHR leaders should be members of an organizational administrative team.Compensation throughout an organization should be competitive withinsimilar industries in the immediate region and should recognize and rewardperformance. Benefits options offered to employees should be able toaccommodate their different needs.

410 CHAPTER 23 MAINTAINING AN EFFECTIVE HUMAN RESOURCES DEPARTMENT


Training and development activities should be effective and construc-tively focused, and employees should have opportunities for growth andpromotion within the organization. These opportunities should be supportedby organization-wide policies. Open and candid communications allowemployees to feel included and know what is happening within their organ-ization. Effective HR operations retain employees. This is supported byemployee turnover rates that are less than the regional average for theindustry. Finally, employee participation is encouraged and input is valued.

Visible weaknesses in any of the aforementioned areas should beinterpreted as signs of needed improvement. In an effective organiza-tional environment, no management employee should hesitate to bringapparent weaknesses to the attention of HR management. If HR cannotresolve the issue, it should be able to begin to seek a remedy once a needhas been identified.

Every department manager has needs that can be addressed entirely orin part by HR but only if HR is made aware of the needs and the extentof the assistance required. Department managers in need of assistanceshould not wait for HR to offer help. Rather, they should be proactive andchallenge HR to provide needed assistance. Human resources personnelappreciate being treated as professionals. They are usually willing to nego-tiate reasonable deadlines, and they appreciate follow-up that is made ina professional manner.

Involve HR in Compensation QuestionsAlways bring HR into the process of resolving wage complaints, especiallythose involving real or perceived inequalities of wage scales. Specific ques-tions about errors on an employee’s paycheck can be addressed either byHR or by the payroll section of the finance department, depending on anorganization’s payroll system.

Get Answers for EmployeesEmployees who have questions concerning HR matters that cannot beanswered locally should be referred to HR. Rather than simply sendingemployees to HR, effective managers accompany them. They better pre-pare themselves to respond to employee questions, and they also demon-strate an interest in employee concerns.

Address Recruitment IssuesReview applications and resumes for possible interviews promptly and thenreturn them to HR with preferences noted. Such prompt reply accom-plishes two important goals. It accelerates the process of arranging inter-views and prompts HR to respond. This pattern of interaction acknowledges

An Effective Human Resources Department 411


the professional nature of all persons and avoids complacency related toprocrastination.

When working with HR recruiters to fill a position, request additionalcandidates if those provided have been inappropriate. Providing a reasonfor rejecting the candidates will help the recruiter to focus on an organi-zation’s needs. Managers are reminded not to look for a perfect candidate.If HR is doing the job it ought to be doing, then all of the applicants pro-vided will possess the minimum qualifications for a position. Truly per-fect candidates rarely come along.

After selecting a suitable candidate and agreeing with HR on a tenta-tive offer, stay in close contact with HR or a recruiter as appropriate untilall requirements are satisfied. Active interest keeps a process moving.Remember to allow HR to do its job without being a nuisance.

Insist on Current Job DescriptionsEffective supervisors keep the job descriptions for their department’semployees up to date. The same managers ensure that HR retains currentcopies. Positions must be currently graded and associated with appropriatepay scales. Position descriptions should be reviewed whenever there is achange in method, procedure, or equipment that affects the performanceof a job. A job description should be updated at the time changes becomeeffective and not left until an up-to-date job description is needed forrecruiting, performance appraisal, or for some other immediate purpose.

Use HR for Support on Disciplinary ActionsHuman resources assistance should be used in disciplinary actions. Humanresources does not have the responsibility to actually perform disciplinaryactions; however, HR should be available for guidance regarding the con-sistency, appropriateness and legality of disciplinary actions. All discipli-nary actions of any consequence should be reviewed with HR before theyare finalized and delivered. Department managers should seek and receiveadvice and guidance from HR. The ultimate decision in a disciplinaryaction resides with a department manager, but HR is there to ensure thatdisciplinary action is delivered in a means both fair and legal.

Human resources should have a process for invalidating or removingpast disciplinary actions that are in employee personnel files. A time limitshould be set. Employees who do not repeatedly violate rules should rea-sonably expect previous warnings to be removed after a period of con-formity with organizational policies. For example, a facility may invalidateand remove a written warning if, after 22 months, no additional relatedinfractions have occurred. A routine or regular purge of personnel filesfor this purpose is impractical. However, whenever a particular file is



reviewed or audited and an action older than 22 months is found, it shouldbe removed. The objective of a warning is to correct behavior, and thepoint of invalidating and removing older warnings is to prevent an infrac-tion from permanently harming an employee who may have demonstratedcorrection. Documents that are removed should not be destroyed in casethey are needed in future legal action, but they should be re-filed in a sep-arate, central location.

Complete Performance AppraisalsIf an organization’s system calls for anniversary date appraisals, then super-visors should keep track of scheduled review dates for their departments’employees. Managers should be prepared to follow up with HR if appraisalforms and schedules are not forthcoming. Avoiding or indefinitely delayingappraisals is not an option.

Human resources should periodically offer refresher training in how toconduct performance appraisals. This should be provided annually andwhenever changes in the system or process are instituted. Supervisors shouldbe required to complete refresher training biannually. At a fixed time in theappraisal cycle, HR should provide summary statistics about the appraisalprocess. Such information should include the range, mean, and standarddeviation. This should be available to departments and for the organiza-tion as a whole. Release of departmental information is usually restrictedto its own supervisors and to very senior managers or executives.

Informal Channels of CommunicationAll organizations have informal channels that disseminate information. Acommon term for such information sources is “the grapevine,” whichmight also be referred to as the communications network of the informalorganization. Informal channels are natural; they will always be there, andthey can occasionally be used by managers to communicate positive news.Negative informal channels of communication have the potential to makeemployees feel threatened and helpless, and they can frustrate and embar-rass managers.

Informal channels can spread bad news, good news, truth, untruth andspeculation faster than most legitimate means of communication. Althoughoften distorting information, informal channels can rapidly carry infor-mation. They can impede and impair effective management decision-making. They cannot be eradicated. As a result, many HR professionalsbelieve that rather than trying to stifle or eliminate informal channels, themedium should be managed.

The surest way to manage informal channels of communication is toprovide accurate information. Open, honest, free-flowing organizational

An Effective Human Resources Department 413


communication usually limits the appeal of rumor mills. When employeesfeel left out, they feel that information is being withheld from them. Thisleads to speculation that is usually shared with others. Uncommunicativesupervisors inadvertently allow employees to fill in the gaps in their infor-mation by talking with each other.

To combat the process of continually speculating employees, depart-ment managers should remember that an effective, continuing relation-ship with each employee is an excellent defense against unwarrantedspeculation. They should build reputations as sources of accurate infor-mation. Being able to say “I don’t know” requires self-confidence, andsuch statements, although saying nothing substantive, also help maintaincommunication lines. Effective supervisors correct misinformation beforerepeating it. HR is often an excellent source of correct information.

Take Training Needs to HRSupervisors and managers are advised to approach HR with training needsif a separate training or education department does not exist. HR can usu-ally provide or arrange to meet most training needs.

Provide Current Information to HRProfessionals in the HR department will ordinarily be doing their best tofulfill the needs of line departments. To do so, however, HR must hearabout these needs on a regular basis. Communicating with HR eliminateshaving to guess about needs. Human resources staff members appreciateknowing what policies and procedures require revision as well as hearingrecommendations about recruiting, retention and retraining. Feedbackabout employee attitudes toward pay, benefits and other conditions ofemployment is always useful. Complaints and complements are welcomedwhen they are offered in a constructive manner.

Encourage Human Resources to Prove Its WorthHuman resources services are often characterized as soft because they donot generate revenue. Quantifying them requires thought. For example, keyindicators concerning employment activity, such as average cost per hireand average time required to fill a position can be quantified. Employeeretention can be measured by addressing turnover within specific organi-zations, departments or job titles, and by month, quarter, or year. Humanresources can be compared with standards used throughout an organiza-tion, for example, measuring HR cost as a percentage of total expenses orstaffing as a ratio of HR workers to the total number of employees.

The effectiveness of training can be assessed by comparing scores on pre-training and post-training testing. Human resources can usually establish



benchmarks or baselines for measuring its own performance; comparingthese with industry benchmarks enables comparisons over different periodsof time.

■ HR AND OPTIMAL ORGANIZATIONAL EFFICIENCYThe fundamental nature of HR should be a concern of organizationalleaders. Is HR reactionary? Does it wait for problems to develop or a crisisto occur before it acts? Restating this question, has HR made a sufficientsystematic assessment of the organization’s needs to identify potentialproblems in advance?

Human resources professionals are best utilized when they work asinternal consultants to management, involved in strategic planning andserving as part of the executive team. Organizations waste a resourcewhen they use HR as simply a source of information to call upon whena problem has implications for employees. Top management should insiston linking plans for recruitment, retention, training and development,performance appraisal, and compensation and benefits to the overallstrategies of their organization. Human resources activities should bean integral part of an organization’s strategic planning process, withmanagement insisting on close cooperation between HR planning andcorporate planning.

Executive managers should insist that both HR professionals and linemanagers be involved when designing HR programs. They should alwaysinsist that line managers be involved to the maximum extent possible whenimplementing HR programs. The approach that allows top managementto receive the best from an organization’s HR department is to insist thatHR managers be proactive. To facilitate this goal, executives must pro-vide visible support for the HR department.

Human resources provides benefits to individuals and to the organiza-tion. An HR department exists to protect the rights of individual employeesand department managers and supervisors. It assumes these responsibili-ties not simply because there are laws requiring organization to do so butbecause safeguarding the rights of individuals is the ethical action to take.Human resources also protects organizations or at least minimizes theirexposure to legal risks.

Human resources encompasses personnel, and personnel encompassespeople. By extension, every manager of people becomes a member of HR.The department called human resources is a staff support activity. It existsto provide services that enhance the efficient operations of an organiza-tion. Successful supervisors and managers ensure that in their interactionswith HR, they support HR while receiving the services that are offered.

HR and Optimal Organizational Efficiency 415


■ FUTURE DIRECTIONS FOR HUMAN RESOURCESThe future is uncertain. With some trepidation, we offer a few observa-tions for what the future may hold for HR:

• Both the size and scope of responsibility of HR are likely to change.Consistent with other sectors of business and industry, the demandsand responsibilities are likely to increase while employee resourcesare likely to remain static. However, the importance of HR is highlylikely to increase.

• More outsourcing of routine HR services can be expected.Organizations are likely to increase managerial spans of control. Asbudgets become tight, education and training activities may be dis-continued. The trend toward increased automation in creating andmaintaining records should continue. We should expect to see per-sonnel records interface with increasing numbers of other datasources. Electronic security will have to be increased.

• The use of merit-based systems of compensation (also known as pay-for-performance) is likely to increase. This will be linked to a declinein automatic rises or so-called cost-of-living increases.

• In benefits, we expect to see more defined contribution retirementplans and more cafeteria benefits programs. Employee choice isbecoming an important factor in recruitment and retention.

• Organizations are likely to listen more closely to employee attitudesas they seek to increase levels of employee interest and involvement inorganizational management.

• We will likely see a renewed emphasis on productivity enhancement pro-grams as organizations continue trying to do more with less and providequality products and services with constrained and restricted resources.

• Finally, we expect to witness increasing concern for organizationalvalues. Employees who become more attuned to their organizationalcultures are likely to advance and experience professional and per-sonal satisfaction. For their part, we expect employees to be moreattuned to the mission, vision, goals and objectives of the organiza-tions for which they work and upon which they depend for their con-tinued economic livelihood.

■ CONCLUSIONOrganizations receive necessary services from HR. An HR departmentdoes not generate revenue, but the protection provided by its services ade-quately makes up for the lack of direct revenue contribution. Organizations



in which senior managers support their HR departments are usually moresuccessful than are those that do not.

Managers at all levels and HR should form a partnership. Organizationsassist HR by providing data in a timely manner and meeting deadlines andschedules established by HR. Human resources should be consulted when-ever job descriptions are prepared, employees are reviewed, or significantdisciplinary actions are contemplated for employees. Human resourcesand organizational supervisors working together should provide accurateand timely information. These activities often lessen the impact of informalchannels of communication among employees.

Returning to Jamie and her ringing alarm bells, she immediately resched-uled the appointments she had made for the next two days. She called arespected consulting firm that specialized in HR and requested a meetingfor the next day. “Yes, it’s that important,” she replied to the surprisedprincipal of the consulting firm that had responded to her call. Establishingand launching an HR department became her first and greatest priority.

After agreeing on the general structure for a new HR department forFeedback Specialists, Jamie resumed her meetings with senior members ofthe management team. She expressed concern over the absence of an HRdepartment. She also asked the senior managers to help construct the newdepartment. She emphasized the need to establish partnerships with HR.

An HR head was identified within the ranks of Feedback Specialists. Fouradditional new employees were hired for HR.

“Consider this to be a beginning. Let me know if you need additionalhelp,” Jamie remarked to the new members of HR two months later.

During lunch with a first-line supervisor a year later, Jamie learned thatemployees had been talking about forming a union before she arrived. Thetalking had stopped within a month after the new HR department beganoperation. The supervisor told her that the rumor mills had essentiallystopped. The flow of accurate and timely information from managers andHR had made the rumor mills unnecessary.

Jamie enjoyed her dessert that day.

Discussion Points

1. Why must an HR department have to be occasionally prodded toensure that it operates on a proactive basis?

2. How could a department manager help HR to resolve an organizationalissue?

3. Why is the response, “go talk to HR” not always appropriate whenemployees ask questions related to human resources?

4. Why might a department manager have to remind HR about an aspectof the performance appraisal process?

Conclusion 417


5. Why do many organizations require that significant disciplinary actionsbe cleared with HR before they are implemented?

6. How can department managers help to ensure that organizational jobdescriptions are current and complete?

7. How can an HR department assist department managers to controlrumors?

8. Why should a supervisor insist that HR provide statistics related toturnover, cost per hire, and average time to fill a position?

9. Why should an individual manager be interested in supporting HR?10. In your opinion, how will HR change in the future? Why?

Resources

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Hess, M. J. (2004). HR and the Changing Management Paradigm. Bloomington,IN: AuthorHouse.

Jackson, S. J., & Schuler, R. S. (2005). Managing Human Resources throughStrategic Partnerships, 9th ed. Mason, OH: Thomson South-Western.

Scullion, H., & Linehan, M. (2005). International Human Resource Management:A Critical Text. New York: Palgrave Macmillan.

Swart, J., Mann, C., Brown, S., & Price, A. (2005). Human Resource Development:Strategy and Tactics. Burlington, MA: Elsevier.

Ulrich, D., & Meisinger, S. (2005). Future of Human Resource Management: 64Thought Leaders Explore the Critical HR Issues of Today and Tomorrow. NewYork: John Wiley.

PPeerriiooddiiccaallssAshforth, B. E., & Humphrey, R. H. (1993). Emotional labor in service roles: The

influence of identity. Academy of Management Review, 18, 88–115.Aycan, Z., Kanungo, R. N., & Sinha, J. B. P. (1999). Organizational culture and

human resource management practices: The model of culture fit. Journal ofCross-Cultural Psychology, 30(4), 501–526.

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal ofManagement, 17, 99–120.

Bean, K. B. (2005). Mentoring. Gastroenterology Nursing, 28(4), 275–276.Boxall, R., & Steeneveld, M. (1999). Human resource strategy and competitive

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Busine, M., & Watt, B. (2005). Succession management: Trends and current prac-tice. Asia Pacific Journal of Human Resources, 43(2), 225–237.

Cohn, J. M., Khurana, R., & Reeves, L. (2005). Growing talent as if your busi-ness depended on it. Harvard Business Review, 83(10), 62–70, 155.

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Datta, D. K., Guthrie, J. P., & Wright, P. M. (2005). Human resource manage-ment and labor productivity: Does industry matter? Academy of ManagementJournal, 48(1), 135–145.

Conclusion 419


AAbsenteeism, 267–269

control of, 268–269costs of, 267–268counseling for, 268–269manager’s attention to, 268

Acquisitions, effects of, 316Affirmative Action, 6, 7, 71–72Age Discrimination in Employment

Act (ADEA), 45, 161Americans with Disabilities Act

(ADA), 47, 52–54, 161, 381Anecdotal notes, manager’s, 306–307Appraisal, performance, 219–246

See also: Performance appraisalArbitration, 387–393

advantages of, 390–392as alternative to litigation, 388binding, 388certification and, 389, 391credentialing and, 389–390criticism of, 391–392final offer, 389human resources and, 392mediation and, 389by panel, 389

Authoritarian management, 373–374Authoritarianism, residual, in

management, 375Authority, line, 19Award and recognition, 71

BBargaining units, 360Behavior, employee, results of, 253Behavior problems

addressing, 256, 260–261defined, 254disciplinary action for, 256, 260–261

Behavioral interviewing, 178–179Behavioral science model, human

resources, 23

Benefit maximization, principle of,336

Benefits, 68–69, 207–213compensation and, 201–216fringe, introduced, 5and the manager, 82portable. 208plans, flexible, 207–208statutory, 209–213voluntary, 208vouchers for, 208

CCareer planning, 344Caring, ethic of, 336Centralization, decentralization vs.,

31–32Certification, 389, 391Chain of command, 19Change

external, kinds of, 28financial, 28–29technological, 28social, 28health care and, 28–30reactionary, 29

Child care, 71Citizenship and Immigration Service

(CIS), 215See also: Immigration and

Naturalization Service (INS)Civil Rights Act of 1964, 6, 41, 42,

44–45, 47, 50, 52, 60, 161,283, 381

1991 Amendments, 54Civil service, 147–158

compensation in, 151–154discipline under, 156–157dismissal and appeal in, 156–157examinations for, 152, 154–155federal, history of, 148–149hiring in, 154–155

I N D E X

413

35310_EMxx_Final.qxd 1/30/07 4:20 PM Page 413

layoff in, 155–156position and classification in, 150–154promotion in, 154–155rule of three, 154state, 149–150union agreements and, 152using system, 150–157

Civil Service Act, 149Civil Service Reform Act, 149Clerical model, human resources, 20

alternative clerical model, 22Communication

absence affecting, 101channels, informal, 413–414

Compensation, 30, 68–69, 202–207annual recommendations, 203and benefits, 201–216challenges to, 204–206executive, 72–73human resources involvement in, 411interview discussion of, 206–207the manager and, 82–83salary bumping in, 139–140salary surveys and, 205–206system, knowledge of, 203

Confidentiality, employee, 282–286Consolidated Omnibus Budget

Reconciliation Act, (COBRA), 48–49, 326

Constructive discharge, 314–315Consultants

engaging, 399–401guidelines for using, 401 (Exhibit)human resources, 395–403reasons for using, 396–398, 402types of, 398–399use of, 396–398

Consulting model, human resources, 21Consulting services, sample contract,

405–407Contract, sample, consulting services,

405–407Control model, human resources, 21Cooperative motivation system, 376–378,

378 (Exhibit)Corporate culture

defined, 34

changes to, 34reengineering and, 35

Corrective action, effective, 272–273consistency in, 272timing of, 272

Corrective processes, intent, 253–254Cost

of ignored employees, 107–108of turnover, 107–108

Counseling, employee, 291–293Counseling model, human resources, 23Credentialing, 389–390Critique, ethic of, 335–336Cross-training, 193

DDecentralization, centralization vs., 31–32Decertification, union, 366–367Decision making, ethical, 337–338Defamation, 132–133Department of Labor (DOL), 215

audit by, 215Dictionary of Occupational Titles, 116Disability

short-term, 212–213weight as a, 40

Discharge, 270, 313–314constructive, 314–315dismissal versus, 270

Discharge/dismissal notice, 267 (Exhibit)Disciplinary action

human resources and, 271support for, 412–413

Discipline, progressive, 256, 260–261model policy and procedure for, 261–267

Dismissal, 270, 314discharge versus, 270See also: Layoff

Documentation, 297–308and anecdotal notes, manager’s,

306–307of employee problems, 273–274importance of, 299legal implications of, 273–274missing or incomplete, 307

Drug Free Workplace Act, 50–51

414 HUMAN RESOURCE MANAGEMENT IN HEALTH CARE


EEmployee(s)

acquisition, 77cost of ignoring, 107–108empowerment, 87exempt, 114maintenance, 77–78manager’s relationships with, 104–107nonexempt, 115participation, 86, 97–98as recruiters, 42retention, 78–79separation, 79troublesome, 105

Employee assistance program (EAP),73–74, 76, 253, 269–270

Employee handbook, 304–305employee receipt for, 304

Employee health and safety, 70Employee information, release of, 305Employee Polygraph Protection Act

(EPPA), 51–52, 284Employee privacy, 282–286

confidentiality and, 282–286health records and, 285–286information access and, 285legal orders and, 284searches and, 285

Employee problemsdocumentation of, 273–274inevitability of, 251–252managers and, 249–275performance and behavior, separation

of, 254prevention of, 271–272, 281–282sources of, 252–253

Employee relations, 69authoritarian management in, 373–374directions in, 371–383evolution of, 373–375humanistic management in, 374–375legalistic management in, 374–375the manager and, 83preventive, 271status of, 382

Employee Retirement Income Security Act(ERISA), 47

Employmentadvertising in, 134–135function, purpose of, 68job fairs in, 136legislation affecting, 59 (Exhibit)the manager and, 81–82offers of, 130reference checking and, 131–134termination of, 311–328

Employment documentationconfidentiality, guidelines for, 303

(Exhibit)legal implications of, 299–302personnel files, 301–302retention of, 300–302

Employment office, 4, 206–207benefits of establishing, 4

Employment service, state, 214Equal employment opportunity, 6Equal Employment Opportunity Act of

1972, 25Equal Employment Opportunity

Commission, (EEOC), 43–45, 72,214

Equal Pay Act, 44, 161Ethic

of caring, 336of critique, 335–336of justice, 336work, 97

Ethical decision making, 337–338Ethical principles, 335–337Ethics, 332Executive compensation, 72–73Expert consultants, 398–399

FFair Credit Reporting Act, 284Fair Labor Standards Act (FLSA), 41, 43,

114–115Family and Medical Leave Act (FMLA),

54–55, 381Federal Insurance Contributions Act

(FICA), 209Federal Mediation and Conciliation

Service, 48, 359Finance, development of department, 3

Index 415


Financial model, human resources, 22–23Finder’s fee, 141Flexible benefits, 207–208

G“Grapevine, the,” 413–414

HHazard Communication, 46Health care system, components of, 11Health Insurance Portability and

Accountability Act (HIPAA), 56–57, 209

Privacy Rule in, 56–57Security Rule in, 57

Health Maintenance Organization(HMO) Act, 46

Human resource(s)activities, 67–77, 75 (Exhibit)adoption of name, 9arbitration in, 387–393consultants and, 395–403department, effective, 409–417and department managers,

comparisons, 84–88expectations of, 24–26future directions for, 416humanistic model of, 23models of, 20–23organization of, internal, 24organizational efficiency and, 415as partner on administrative team, 10as perceived obstacle, 27personnel files and, 302, 303proliferation of name, 9and reengineering, 31relationships with other departments,

26–28reporting relationships, 10, 17and senior management, 24–26specialties, 24as staff activity, 19–20

Human resources departmentmajor activities, 80 (Exhibit)origins of, 3

Human Rights, State Division of, 72, 214Humanistic management, 374–375

IImmigration and Naturalization Service

(INS), 49Immigration Reform and Control Act

(IRCA), 49–50, 381Industrial relations model, human

resources, 21Industry dropouts, 7Internet, the, 137Information, employee, release of, 305I-9 Form, 49–50Interview(ing)

as acquired skill, 183applicant’s objective, assessing, 176application or résumé review for,

162–163appropriate language in, 164–165behavioral, 178–179bona fide occupational qualification in,

168, 176employee selection, 159–184follow–up on, 166, 177–178forbidden information volunteered in,

176–177gaps in employment history, probing,

162–163job description review for, 161–162leading questions, avoiding, 165–166legal prerequisites, 161listening in, 179–180open-ended questions, avoiding, 165in performance appraisal, 234, 238putting applicant at ease in, 164questions for assessing intangibles, 175

(Exhibit)questions illegal to ask in, 166–173,

172 (Exhibit), 174 (Exhibit)questions legal to ask in, examples of,

174 (Exhibit)questions, opening, 163references in, 180–183résumé fraud, 181–183short-answer questions, avoiding, 165time and place for, 163, 164writing during, 166

Investigations, external agency, 214–215Involvement, employee, 290–291



JJob descriptions, 30

human resources and, 412See also: Position descriptions

Job fairs, 136Job organization system, 376–378, 378

(Exhibit)Job standards, inability to meet, 314Joint Commission on Accreditation of

Healthcare Organizations(JCAHO), 190, 240, 301

Justice, ethic of, 336

LLabor, Department of, (DOL), 215Labor-Management Relations Act, 42–43Labor-Management Reporting and

Disclosure Act, 44Labor relations, 69–70

activity, 6Landrum-Griffen Act

See: Labor-Management Reporting andDisclosure Act

Layoff(s), 317–324actions preceding, 317in civil service, 155–156difficulties of, 323–324dismissal as, 270employee privacy in, 325human resources follow–up on, 326other consideration, 323outplacement and, 325–326selection of employees for, 317–318timing of, 318, 322–323unemployment compensation and, 324

Legal actions, 213–214Legal model, human resources, 22Legislation affecting employment, 42–57,

59 (Exhibit)Legislation, cost implications of, 57–58Legalistic management, 374Likert, Rensis, 376–377Line and staff, 17–20

and chain of command, 19difference between, 18

Line departmentdefined, 18functions of, 18

MManage

consultative, 98organizational orientation of, 103–104participative, 98people-centered, 99production centered, 99

Managementauthoritarian, 373–374human relations movement in, 98humanistic, 374–375legalistic, 374organizational, long–term trends in,

380–381production-centered, 96production-centered vs. people-

centered, 100 (Exhibit)scientific, 375–376style, 85systems, parallel, 376–378

Management by objectives (MBO), 222–223Manager(s)

absenteeism, attention to, 268anecdotal note files, 306–307and job descriptions, 303–304and employee counseling, 291–293and employee involvement, 291and rating in performance appraisal, 223reference checking and the, 131–134role during union organizing, 360–365role in legal action, 213–214and union, interacting with, 365–366visibility and availability of, 99–103workplace violence and, 289

Managerial model, human resources, 23Maslow, A. H., 379–380Material Safety Data Sheet (MSDS), 46McGregor, Douglas, 378–380Mediation, 389Mentoring, 194–195Mergers, effects of, 316Motivation for succession planning, 245–346

NNational Labor Relations Act (NLRA),

41, 42–43, 358–360, 364, 366, 367Taft-Hartley Amendments to, 47–48See also: Wagner Act

Index 417


National Labor Relations Board (NLRB),42–43, 359–360, 365

Needs, human, basic, 379–380Negligent hiring, 132–133Networking, 135–136New York Civil Service Reform

Association, 149Norris-LaGuardia Act, 42

OOccupational Safety and Health Act,

45–46Occupational Safety and Health

Administration (OSHA), 45–46,214, 301

Offers of employment, 206–207Office of Federal Contract Compliance, 47Older Workers Benefit Protection Act, 54On-the-job training, 193–194Open-door policy, 101–102Organizational development, 73Organizational flattening, 31Organizing, union

See: Union OrganizingOrientation

new employee, 190–191and training, 86

Outplacement, 74Outsourcing, 32–34, 75–77

activities subject to, 33 (Exhibit)defined, 32payroll and, 33–34reasons for, 32 (Exhibit)

PParticipation, employee, 97–98, 290–291Paymaster, origins of position, 4Pay, severance, 323Payroll, 74–75

function, origin of, 4outsourcing of, 4as part of human resources, 4

Pensiondefined benefit, 208defined contribution, 208

Pension Benefit Guarantee Corporation(PBGC), 50, 208

Pension Protection Act, 50Performance appraisal, 30, 219–246

anniversary date vs. all-at-once, 233–234average vs. standard in, 232–233benchmarks in, 229–230checklist form of, 222conduct of, 222–223critical incident form of, 222defined, 221employee comparison form of, 222essay form of, 222as essential process, 245form for, generic, 241 (Exhibit)form, position-specific, 241–242 (Exhibit)form used form, 240human resources and, 413, 244–245interviewing in, 234–238legal implications of, 240, 244management by objectives (MBO) in,

222–223managers and rating in, 223mandates for, 221–222need for, 221–222objectives use of in, 230, 231 (Exhibit)obstacles to, 223–224personality–based evaluations in, 224,

225–227 (Exhibit)policy for, model, 235–237position descriptions in, 227–228purpose of, 221ranges in, 230scale points in, 231–232scales, poor, 232 (Exhibit)self appraisal in, 238–239standards and measures in, 228–230of teams, 239timing of, 233–234

Performance problemsaddressing, 255–256, 251–259 (Exhibit)defined, 254

Personal relationships, 286–287sexual harassment and, 286

Personnelemerging subdivisions, 6as specific professional field, 6name change of, 3origins of name, 5



synonymous with human resources, 3Personnel administration, as specialized

educational field, 6Personnel department, other names for, 8Personnel records, the manager and, 83–84Planning, career, 344Planning, succession

See: Succession planningPolicy and procedure, personnel, 300, 305Polygraph, use of, 51–52Position analysis, 115–116Position description(s), 114–120

defined, 114elements of, 117–119job specification in, 118in performance appraisal, 227–228sample, 122–123, 229shortcomings of, 228

Practitioners, human resources, 84–85Pregnancy Discrimination Act, 48Principle of benefit maximization, 336Principle of equal respect, 336, 337Principles of succession planning, 347–348Privacy Act of 1974, 283Privacy, employee, 282–286

legislation affecting, 283–284Privacy Rule, HIPAA, 56–57Process consultants, 398–399Production-centered management, 96Professional employer organization

(PEO), 34services of, 34

Programs, government, funding for, 381–382

Progressive discipline policy, 261–267(Exhibit)

Promotion from within, 137–139

RReasonable accommodation, 52–54Record retention, 300–302Recruiter, every employee as, 142Recruiting, 125–143

during shortage periods, 140–142employee referral in, 141external vs. internal, 138–139finder’s fees in, 141

Internet in, 137internship programs in, 140issues, human resources and, 411–412job description in, 128–129legal concerns in, 127manager and human resources

partnered in, 127–130personnel requisition in, 128–129search firms in, 136–137signing bonuses in, 141tips for, 136See also: Employment

Reduction in force (RIF), 315–317model policy and procedure for,

319–322 (Exhibit)survivors of, 326–327See also: Layoff

Reengineering, 30–35, 315–316defined, 30and human resources, 31

Reference checking, 131–134and legal repercussions, 132–134

Rehabilitation Act, 47Request for proposal (RFP), 400Respect

earned, human resources, 9equal, principle of, 336, 337

Résumé fraud, 181–182Requisition, personnel, 81Retirement Equity Act, 47Retirement Protection Act, 55Reward, assumptions concerning, 87Right-to-Know Law, New York State, 301Risk management, 72Rules, Hazard Communication, 46

SSalary bumping, 139–140Salary surveys, 205–206Search firms, 136–137Security, 71Security Rule, HIPAA, 57Severance pay, 323Sexual harassment, 287–288

defined, 287as major concern, 288

Scientific management, 375–376

Index 419


pioneers of, 376Short-term disability, 212–213Signing bonuses, 141Small Business Job Protection Act, 55–56Social Security, 4Social Security Act of 1935, 43, 210Spoils system, 148–149Staff department

defined, 18examples of, 18functions of, 18human resources as, 19

Statutory benefits, 5, 209–213Strike, advance notice of intent, 359Succession planning, 78–79, 343–351

failure to pursue, reasons for, 349–350human resources as catalyst in, 346introduction to, 344motivation for, 345–346principles of, 347–348reasons for, 345

Successor(s)grooming, 346, 348–349potential, for manager, 195–196

Suspension, form for, 267 (Exhibit)

TTaft-Hartley Act,. 358–360

1975 Amendments, 359–360, 366See also: Labor-Management Relations

ActTaylor, Frederick W., 376Termination, 270–271, 311–318

discharge as, 313–314Theory X, 376–378Theory Y, 376–378Toxic Substance Control Act, 301Training and development, 70–71Training, employee, 187–198

to correct performance problemscross-training in, 193determining learning needs in, 191–192developing managers in, 195–196development and, role of, 188–189external requirements for, 190

human resources assistance in, 196–198the manager as a teacher in, 189–190the manager’s role in, 189–190mentoring in, 194–195on-the-job training in, 193–194Turnover, 107–108of health care executives, 29

UUnemployment compensation, 210–212,

324–326challenging claims for, 212eligibility for, 314manager’s influence on, 211not-for-profit organization’s and, 211response to claims,. 324–325

Union, 355–369bargaining units, potential, 360communications and, 358decertification of, 366–367economic issues and, 357election for, 364–365future of, 368in health care, 367–368legal framework for, 358–360management errors concerning,

356–357manager’s role regarding, 360–366membership statistics, 367–368non-economic issues and, 357organization’s avoidance of, reasons for,

358reasons for joining, 356–357strike notice requirement, 359

Union organizinghuman resources role during, 362–363leafleting during, 361–362management activities during,

permitted, 363management activities during,

prohibited, 363–364manager’s role during, 360–365petition for election in, 362–363security and, 361 signs of, 360–362



VViolence, workplace, 289–290, 289

(Exhibit)

WWage and hour laws

See: Fair Labor Standards ActWagner Act

See: National Labor Relations Act

Warningoral, form for recording, 265 (Exhibit)written, form, 265–266 (Exhibit)

Work ethic, 97Work group, heterogeneous, 96–97Worker Adjustment and Retraining

Notification Act (WARN), 52Workers’ Compensation, 5, 209–210

Index 421
