w8

HCA 542 Journal

This is a 5 week reflective journal, worth a total of 50 points, 10 points per entry.

For five weeks, students are required to document and reflect on human resource issues encountered in his/her workplace. These can be personal experiences, observations or just HR functions that you would like to reflect on. In addition, this journal can be used to elaborate on topics discussed in the course, assignments or material covered in the text for learning purposes. If the student is not currently employed, an article specific to the current week’s chapter topic should be researched and discussed for that week’s entry.

Final grading of your journal will include the following:

Maintain confidentiality in all entries. Do not identify place of employment or employees.

0 – 20 points: Student provides detailed documentation (average of 3/4 to 1 page) of human resources reflections, experiences and learning for all 5 weeks of journal.

0 – 10 points: Entries are typically correct in grammar and format with minimal spelling errors. Information flows in a manner that makes sense and is easy to read and understand.

0 – 20 points: Entries vary each week, exploring new topics and ideas. Student shows learning and reflection of new ideas and application of materials.

Page 1 of 2

W8 Discussion Questions, Present Trends

****Choose only THREE (3) questions to answer – the three you find most beneficial to your learning and insight on this chapter.  This new format is due to feedback I received from students about chapter review questions feeling more like busy work than learning.  Thanks again for the course insight and enjoy the change!****

This w eek, 
use the attached discussion questions
, not those located at the end of the corresponding chapter for this week’s module.

Responses to these questions should be found in the assigned chapter and/or assigned current articles. Submit your answers as an attached word document. 

*** Answer only 3 questions of your choice.  Provide a page number(s) from your required textbook or article where you located the information.***

1. Define each of the following terms:

a. Evidence-based medicine,

b. Globalization,

c. Mutual patient referrals,

d. Work-life balance

2. Summarize the six (6) overall challenges in human resources management.

3. Explain “changing definition of family” as covered in your book.

4. Outline/describe at least two (2) ways that the human resources department/personnel can align its practices with the strategic goals of the health care organization and its department managers.

5. Referring to your book, identify at least three (3) human resource tactics that can help healthcare organizations with cost containment.

DB6: Your final discussion board!

For this discussion post, you will reflect on what your main “take away” is from this class.  What did you learn about HR, and health care, that you believe can/will be most beneficial in your current or future career.  And as always, tell us why.

· Your are NOT required to comment on the post of other students for this discussion board.

· No source is required for this post.

· All posts are expected to be academic in nature, insightful and respectful.

PRESENT TRENDS THAT AFFECT THE
FUTURE OF HUMAN RESOURCES
MANAGEMENT AND THE HEALTHCARE
WORKFORCE

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

CHAPTER

18

479

Learning Objective

s

After completing this chapter, the reader should be able to

• enumerate and discuss the trends that are occurring in the healthcare
marketplace, and

• list and explain the challenges in healthcare human resources
management.

Introduction

Healthcare human resources management (HRM) operates within a complex
external environment. Therefore, when we consider the future of healthcare
HRM and the healthcare workforce, we must take into consideration the
trends that are specific to the healthcare industry and its workforce, the con-
cerns that affect HRM as a whole, and the changes that will have an impact
on human resources (HR) functions in the future. These three sets of issues
are overlapping and interrelated.

Ten Healthcare Trends

Of all industries, the healthcare industry can easily be considered the most dy-
namic and, at least in some respects, the most unpredictable. This unpre-
dictability is natural in that healthcare is about people and hence absorbs the
changes that happen in all areas of society, including politics, the economy, im-
migration, and popular culture. The ten key trends that are expected to cause

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major changes in the healthcare industry, and consequently on its workforce,
are examined in this section and summarized in Figure 18.1.

Technological Innovation

One area that is not yet clearly understood but is geared to make an impact
on healthcare is genetics. The Human Genome Project reached a turning
point in April 2003 when the full human genome sequence was completed.
As research continues about the hereditary and genetic factors associated with
disease, more details concerning the treatment and management of disease
will emerge, raising the question, what kind of education, training, and spe-
cialization do physicians and other caregivers need?

Genetic counseling will continue to grow as a field, but how will this
profession change as a result of discovery and technological advances? What
new types of personnel will be required as the field of human genetics comes
out of the laboratory and into the clinical setting? Advances in genetic diag-
nosis and treatment likely will require a broad range of professionals in med-
ical genetics, gene therapy, organ transplantation, and pharmacogenomics,
among others. Demand for personnel in these areas will increase, and demand
will continue for researchers in gene sequencing, biotechnology, functional
genomics, proteomics, and microbial genetics.

The point here is that not only will personnel in genetics and research
be in greater demand but also that jobs will be created in these areas.

Other emerging technologies, including imaging, information tech-
nology, and telemedicine, are also poised to make an impact on the healthcare
workforce, similarly generating new types of positions and specializations.
More unpredictable than the types of jobs that may emerge is the impact of
these changes on the structure and functioning of healthcare organizations.

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FIGURE 18.1
Ten

Healthcare

Trends

1. Technological innovation

2. Consumer mind-set of patients

3. Focus on quality and evidence-based medicine

4. Security and privacy

5. New healthcare professionals

6. Information technology and decision support systems

7. Globalization

8. Demographic changes (aging, diversity)

9. Prevention and disease management

10. Patient safety

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Will current organizational charts be viewed as simplistic and obsolete as new
types of relationships form across organizational boundaries and as new orga-
nizational forms develop? Will current models of supervision become archaic
in the advent of new information technologies and innovations?

Information technology has changed the face of HR through the in-
creasing impact of human resources information systems (HRIS). Since HR
affects the entire workforce, the impact of HRIS can be dramatic in terms of
lowering administrative costs, increasing productivity, speeding up response
times, enhancing decision making, and improving customer service. These
impacts are achieved by automating routine HR functions. The most frequent
uses of HRIS include automating payroll processing, maintaining employee
records, and administering benefits programs (Human Resource Department
Management Report 2004).

One of the major HRIS trends today is self-service. This involves Inter-
net-based systems that allow managers to access employee records for admin-
istrative purposes and enable employees at all levels to change personal infor-
mation or benefits. The self-service system then reduces paperwork and offers
greater convenience to both managers and employees. Also, more and more
managers are using software to recruit, screen, and pretest job applicants on-
line before interviewing and hiring them. Software for training and promo-
tion purposes are also being used (Snell, Stueber, and Lepak 2007).

Consumer Mind-Set of Patients

With the increased availability of medical and health information on the In-
ternet come consumers who are more healthcare literate and savvy. This
trend is leading to a healthcare environment that is driven by consumers. In
the future, consumers will likely have possession of their own healthcare
record and perhaps maintain their health information through a personal
website. As consumers assume a larger share of their own healthcare costs, we
may see customized health benefit plans designed to meet the person’s
unique needs. Consequently, the healthcare workforce will need to be more
attuned to consumer demands and concerns, and healthcare organizations
have to improve the manner by which patients participate in their own med-
ical decision making. See Chapter 17 for a discussion on consumer-driven
healthcare.

Focus on Quality and Evidence-Based Medicine

Business pressures and the movement toward evidence-based medicine will
force healthcare organizations to set quality and clinical outcomes goals, work
toward achieving them, monitor them, and publicize the results. Organiza-
tions will need clinicians and teams to work together on quality improvement
initiatives, and those who are trained in quality improvement methodologies
will be more in demand.

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Total quality management (TQM) is a set of principles and practices
whose core ideas include understanding customer needs, doing things right the
first time, and striving for continuous improvement. Criteria for the Malcolm
Baldridge National Quality Award have provided the impetus for organizations
to rethink their approach to managing their human resources. Each year, the
Baldrige Award is given to an organization in each of these five areas: manu-
facturing, service, small business, education, and healthcare (Quality 2004).
However, TQM programs have not been a panacea for improving productiv-
ity and responding to customer needs. In many cases, managers viewed qual-
ity as a quick fix and became disillusioned when results did not come easily.

Recently, many organizations (both in and out of healthcare) have
adopted Six Sigma, a more systematic approach to quality that requires major
changes in philosophy and HR programs. Six Sigma is a statistical method of
translating a customer’s needs into separate tasks and defining the best way to
perform each task in concert with others. By examining the optimum process,
Six Sigma can have a powerful effect on the quality of products, the enhance-
ment of customer service, and the development of employees. Unlike other
quality tools, Six Sigma allows process mistakes and medical errors to be
caught before they happen (Pande, Newman, and Cavanagh 2000). This sys-
tem has also helped HR departments to shift their focus from administrative
activities to strategic planning (Gubman 2004).

Security and Privacy

Concerns over the security and privacy of medical records, heralded in large part
by the Health Insurance Portability and Accountability Act (HIPAA) of 1996,
will shift focus, as patient records become accessible and shareable through elec-
tronic means (e.g., website, personal digital assistant, e-mail). Information tech-
nology specialists who understand the technological, legal, and ethical impera-
tives involved in healthcare information privacy will be highly sought after.

Maintenance and storage of personnel files are another issue in this
area. Employee files contain critical personal information, including perform-
ance appraisals, salary history, and disciplinary actions. Easy accessibility to
medical and personnel records, identity theft, and other technology-driven se-
curity breaches will plague healthcare managers and necessitate new policies
and standards. Generally, HR managers and supervisors recognize the impor-
tance of discretion in handling all types of employee information. Also,
HIPAA and its Privacy Rule protect the use and disclosure of medical infor-
mation, and the Electronic Communications Privacy Act (ECPA) of 1986
protects private electronic communications, although the ECPA offers limited
protection for e-mail use (a discussion of which is beyond the scope of this
chapter). One recent survey of 400 HR professionals found that 54 percent
of respondents work for organizations that have written privacy policies that
safeguard employee data (Bohlander and Snell 2007).

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Employer challenges to privacy rights in the workplace have sparked a
heated debate over the extent to which fundamental rights previously thought
untouchable may be lessened through the employment relationship. Employ-
ers defend their intrusion into employee privacy by noting their legitimate in-
terest in some of the personal affairs of employees, particularly those that may
directly affect productivity, workplace safety, and motivation or morale (Chieh
and Kleiner 2003). Examples are drug use, criminal activity, and coworker
dating. Court decisions generally attempt to balance an employee’s legitimate
expectation of privacy against the employer’s need to supervise and control
the efficient operation of the organization.

New Healthcare Professionals

Advances in technology and changes in the way disease is treated and man-
aged will bring about the possible reeducation and retraining of existing pro-
fessionals and the birth of new healthcare professionals. New employees, as al-
ways, will need to be trained and their competencies will need to be assessed,
and managers will have to determine these professionals’ role and place within
the organization. Existing professions will evolve in both predictable and un-
foreseen ways.

Information Technology and Decision Support Systems

Information technology has increasingly touched all aspects of healthcare. The
era of the manual, paper medical record is ending and moving toward the age
of paperless systems. Use of decision support systems will be more prevalent,
helping clinicians and teams to effectively use new diagnostic, surgical, clinical,
and medical devices and new pharmaceuticals. Information technology literacy
will be a core competency among healthcare personnel, enabling them to
match the technological savvy of healthcare consumers.

Globalization

The emergence of illnesses and health-related concerns that took root in other
countries (e.g., HIV/AIDS, SARS, foot-and-mouth disease, mad cow dis-
ease) and the ongoing threat of biological and chemical terrorism signal the
effects of globalization on healthcare. This trend will lead to the disintegra-
tion of the fine line between traditional medicine and public health, requiring
the healthcare workforce of all hospitals and healthcare systems to be trained
in areas such as disaster management and community surveillance. Public
health workers, physicians, and other caregivers will need to work together to
respond to new strains of diseases and to develop new methods of treatment.
These groups will require training in and acculturation to this collaborative
imperative.

In the United States, some consumers are going abroad to receive health
services. Known as medical tourism, this phenomenon is driven by the high costs

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of healthcare and the limited availability of certain products and services in the
United States. To respond to this trend, some healthcare organizations in this
country are partnering with foreign healthcare institutions through a process of
mutual patient referrals. Expected to be widely adopted in the future, mutual
patient referral initiatives will need to be staffed. The HR department will play
a role not only in staffing but also in evaluating such initiatives.

Demographic Changes

The aging of the population is a predictable change that will affect society
overall and healthcare in particular. The demographic projections are very
clear: By 2011, the number of U.S. residents in the over-65 age bracket will
be 40 million; by 2019, this number will grow to 50 million. The over-80
population will also see rapid growth: By 2020, the number of octogenarians
will reach 7 million (U.S. Census Bureau 2004).

Such rapid increases in the number of senior citizens have profound im-
plications on the types and volume of services demanded and on the compe-
tencies required of healthcare professionals. Employers are concerned that
older workers’ retirement will mean the loss of these employees’ expertise, a
loss that will be difficult to replace. Consequently, employers are making a real
effort to attract and retain older workers, particularly those who have taken
early retirement, and many of these workers are responding positively to such
initiatives. AARP reports that 68 percent of workers between the ages of 50
and 70 years plan to work in retirement, either full-time or part-time (Boh-
lander and Snell 2007). The healthcare costs for older workers are higher than
that for younger employees, but such costs are more than offset by the mini-
mized need (and costs) for recruitment, turnover, training, and transitions
(Hall 2005).

By 2050, the ratio of the nonwhite to white population in the United
States will be 1 to 3 (see Chapter 6 for this changing racial profile). The
growth in diversity will demand cultural competency and sensitivity from the
healthcare workforce. Healthcare organizations may meet this demand
through retraining their staff on diversity issues, recruiting members of under-
represented or minority groups to be part of the caregiving staff and/or man-
agement team, and incorporating cultural competence education into the staff
orientation and training curriculum.

Prevention and Disease Management

The aging of the population will mean not only more demand for healthcare
services but also more emphasis on geriatrics and its various subfields such as
chronic disease management and home health care. The concept of disease
prevention, although not new, continues to regain momentum as healthcare
consumers take more charge of their bodies and learn alternatives to tradi-

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tional medicine. Healthcare organizations are heeding these cues, providing
more preventive services and boosting their current disease management
programs. New professions will likely emerge to meet this trend, and again
the onus falls on healthcare organizations to provide training to current care-
givers and to recruit employees who are skilled and knowledgeable in these
concepts.

Patient Safety

As we learn more about medical errors and their causes, changes will likely
be required in healthcare processes and information technology. Such
changes affect HR practices in that staff will need to be trained in communi-
cating outcomes (adverse or otherwise) to patients and their family, report-
ing incidences of errors to management, managing conflicts that arise, and
other tasks within the purview of the staff ’s responsibilities. Training in the
use and application of medical technology and in the dissemination and shar-
ing of patient health information using electronic means is an appropriate re-
sponse to this trend.

Also, healthcare organizations have to create a culture in which staff are
not penalized for reporting errors or ostracized for committing mistakes. Such
a culture encourages improvement in staff performance and morale, which
then leads to fewer medical errors and higher quality. Performance evaluation
criteria should include a patient safety component as well.

SHRM’s Survey Results

In 2004, the Society for Human Resource Management (SHRM) conducted
a survey of HR executives. That survey revealed ten trends in the workplace
that respondents believed would affect the future of HRM. The order in
which these developments are presented here corresponds to the level of im-
portance given to them by the survey respondents (see Figure 18.2).

In 2006, SHRM updated this study to include six additional trends
(Schramm 2006):

1. Increased demand for work–life balance

2. New attitudes toward aging and retirement as baby boomers reach

retirement age
3. Growth in the number of individuals and families without health

insurance
4. More incidents of identity theft
5. Work intensification as employers strive for higher productivity with

fewer employees
6. Vulnerability of existing technology to attack or disaster

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Rise in Healthcare Costs

The rise in healthcare costs has multiple effects not only on individual health-
care organizations but also on the U.S. economy. First, it stifles economic
growth: The more expensive healthcare services get, the less able people are
to afford them and the less willing the government and third-party payers will
be to reimburse. Second, it causes greater tension between employers and em-
ployees, as organizations are forced to shift their healthcare costs to employ-
ees, which results in higher insurance premiums and higher copays. Third, it
fuels strike actions from employees who get frustrated with the employer’s at-
tempts to cut down on organizational costs.

Focus on Domestic Safety and Security

The threat of terrorism is pushing employers to devote substantial resources to
ensuring employee safety and security and to training employees on disaster

486 H u m a n R e s o u r c e s i n H e a l t h c a r e

FIGURE 18.2
Developments
and Practices

Inside and
Outside

Healthcare

2004 SHRM Study

1. Rise in healthcare costs

2. Focus on domestic safety and security

3. Use of technology to communicate with employees

4. Legal compliance

5. Use of technology to perform transactional HR functions

6. Global-market issues

7. Retirement and labor shortages

8. E-learning

9. Export of U.S. jobs to developing countries

10. Changing definition of family

2006 SHRM Update

1. Increased demand for work–life balance

2. New attitudes toward aging and retirement

3. Growth in the number of uninsured

4. Growth of identity theft

5. Work intensification

6. Vulnerability of technology to attack or disaster

SOURCE: SHRM (2004); Schramm (2006

)

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management. Security policies are being revised and tightened, and multiple
units of organizations, including HR, are involved in this process.

Use of Technology to Communicate with Employees

Developments in information and communication technology have changed
the manner in which employers communicate with employees. This trend has
brought out other issues, such as ensuring the privacy of the information be-
ing communicated, the need for employees to learn to use the new commu-
nication methods, and the concern over security of such communication
tools.

Legal Compliance

Legal requirements, particularly state-level legislation, concerning employ-
ment will continue to become increasingly complex and unpredictable. The
globalization of the economy has resulted in the need for employers to be
knowledgeable about the legal implications of recruiting and hiring employ-
ees from other countries. The emergence of the European Union places par-
ticular demands on human resources, as European countries’ employment re-
quirements in such areas as privacy, pension, and discrimination differ from
those observed in the United States.

Use of Technology to Perform Transactional HR Functions

HR departments face pressures to bring value to the organization and to pro-
vide HR services in an efficient and effective manner. One approach to hitting
this imperative is to use technology for a variety of functions, including train-
ing, evaluating compensation and benefits, and managing performance.

Global-Market Issues

Global insecurity and conflict are affecting all aspects of the economy, partic-
ularly businesses with an international presence. Organizations, especially
healthcare systems, are establishing tight security measures to protect their in-
terests. They are also coping with the economic downturn brought on by the
war in Iraq and by homeland security initiatives. The oil market, which is
deeply affected by the disturbance within oil-producing countries, is causing
significant fluctuations in prices as well. These global issues directly and indi-
rectly influence the supply of healthcare workers as well.

Retirement and Labor Shortages

The aging of the population is ushering the retirement of older healthcare
professionals and is consequently contributing to labor shortages.
Healthcare organizations situated in locales with a high proportion of
older workers may need to assess new approaches to retirement, including
phased retirement.

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E-Learning

Training and skills development will continue to be an important part of or-
ganizational strategies. However, training programs will increasingly be re-
quired to demonstrate their value, in terms of improving the performance of
employees and showing a return on investment. Use of more efficient com-
puter-based training modalities will continue to be popular.

Export of U.S. Jobs to Developing Countries

The debate continues over the appropriateness of offshoring jobs, especially
white-collar jobs, which once seemed immune from globalization. Whether the
practice of exporting jobs for the purpose of cutting costs will in any way abate
is uncertain, although security concerns may place some limits on this practice.

Changing Definition of Family

Debates over same-sex marriage and providing benefits to domestic partners
will likely continue, even as the number of companies that offer such benefits
rises. An annual survey by Business & Legal Reports states that the percentage of
companies that provide domestic-partner benefits to exempt and nonexempt
workers increased from 13 percent in 2003 to 19 percent in 2005 (Human
Rights Campaign Foundation 2008). Eleven percent of plant employers pro-
vided such benefits (up from 8 percent in 2003), and 7,768 companies made
this benefit available in 2005 (Human Rights Campaign Foundation 2008).

Six Overall Challenges in Human
Resources Management

Recently, SHRM examined and categorized various HR literatures to identify
current and emerging HRM challenges and issues (Schwind 2007). The top
ten were talent management, cultural transformation, managing change, lead-
ership development, HR technology, work–life programs, diversity, healthcare
cost management, globalization, and ethical leadership.

Table 18.1 shows the connection between the HR trends and the HR
management challenges identified by SHRM through its survey and study.
Each trend identified in the 2006 survey update involves implications that
must be addressed by both the HR department personnel and line managers
(Schramm 2006; Schwind 2007). Three of these trends (see trends 1, 3, and
7 in Table 18.1) will specifically affect healthcare, not just the general U.S.
workplace. All organizations inside and outside healthcare are forced to con-
front the cost dilemma and the uninsured status of many residents in the
United States. Whether these issues will be addressed in the 2008 presidential
election and whether politically acceptable solutions will be implemented in
subsequent years remain to be seen.

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HR Trends HRM Issues/Challenges

1. Rising healthcare costs • HR technology
• Management of healthcare costs
• Globalization

• Ethical leadership

2. Increased outsourcing of jobs • Cultural transformation
to other countries • Change management

• Diversity
• Globalization
• Ethical leadership

3. Threat of high healthcare costs to U.S. • HR technology
economic competitiveness • Management of healthcare costs

• Globalization
• Cultural transformation
• Ethical leadership

4. Increased demand for work–life balance • Talent management
• Cultural transformation
• Change management

• Work–life programs

5. Retirement of large numbers of baby • Talent management
boomers • Change management

• Leadership development
• Work–life programs

6. New attitudes toward aging and • Cultural transformation
retirement • Change management

• Work–life programs

7. Rise in number of uninsured individuals • Change management
and families • HR technology

• Management of healthcare costs
• Ethical leadership

8. Increase in identity theft • HR technology
• Ethical leadership

9. Work intensification through increased • Cultural transformation
productivity • Change management

• Leadership development
• Ethical leadership

10. Vulnerability of technology to attack • Change management
or disaster • HR technology

• Ethical leadership

TABLE 18.1
The
Connections
Between
HR Trends
and HRM
Challenges

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490 H u m a n R e s o u r c e s i n H e a l t h c a r e

Table 18.2 shows the overall and specific HRM challenges of health-
care organizations today. These factors extend beyond “people issues” and re-
quire the development of a skilled and flexible workforce as well as a profes-
sional HR function. Overriding the overall challenges is the need to measure
the effectiveness of HRM in achieving human resources goals and objectives
(again, what gets measured gets managed). Benchmarking of HR functions is
crucial. It requires that the levels of performance be determined on a wide
range of HR areas, including employee commitment, turnover and retention,
productivity, cost containment, diversity, job satisfaction, and compliance
with legal regulations. In addition, the organization may benchmark its own
outcomes against those of its competitors in areas such as cost effectiveness,
market share, customer satisfaction, clinical quality, technology, profitability,
and reputation in the community. Obviously, the HR department can more
directly influence employee outcomes than organizational outcomes, given
that the latter are affected by various external and non-HR factors. Neverthe-
less, determining where an organization stands on both employee and orga-
nizational outcomes relative to its competitors is a necessary prerequisite to
maximizing the impact of the HR function.

Human Resources and Strategic Management

Human resources represent the single most important cost in most health-
care organizations. How effectively the organization uses and integrates its
human resources with its strategy can have a dramatic effect on its ability to
compete and survive in a hypercompetitive environment. The goal is to de-
velop the organization’s human resources so that its skill, knowledge, and
distinctive capability exceed those of its competitors. Obviously, the specifics
depend on the nature of the organization and its market. By assessing exter-
nal factors, the organization can exploit environmental opportunities and
neutralize threats.

Human resources management should also be responsive to the mar-
ket. HR functions should be focused on producing staff who are ready, will-
ing, and able to respond to customer needs and wants in terms of quality, in-
novation, variety, and service excellence. As seen in Table 18.2, such goals are
not easy to achieve in light of environmental challenges such as rapid change,
workforce diversity, and skill shortages. Shortages, in particular, represent a
severe challenge because a typical healthcare organization does not educate
and graduate healthcare professionals, so it is dependent on educational insti-
tutions to produce appropriately trained graduates.

In addition, the integration of HR and strategy does not occur in a
static internal environment. The organization faces continual pressure from
external stakeholders to restructure, outsource, downsize, and modify its

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491C h a p t e r 1 8 : P r e s e n t T r e n d s t h a t A f f e c t t h e F u t u r e o f H R M
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492 H u m a n R e s o u r c e s i n H e a l t h c a r e
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culture. While integration of HR and strategy can enhance organizational per-
formance in the long run, many short-term pressures can impede this integra-
tion in the real world.

Nevertheless, benefits of such integration include the following
(Gomez-Mejia, Balkin, and Cardy 2004, 21–22):

• Encouragement of proactive rather than reactive behavior
• Explicit communication of organizational goals to all stakeholders
• Stimulation of cultural thinking and examination of assumptions
• Identification of gaps between the current situation and the future vision
• Participation of line managers
• Identification of HR constraints and opportunities
• Creation of a common bond

Using Technology

Advancements in information technology have enabled healthcare organiza-
tions to take advantage of the information explosion. With myriad electronic
and Internet-based networks, unlimited amounts of information can be
stored, retrieved, and used in a variety of ways. Even in healthcare, which has
a long tradition of “hands-on” service, the web is transforming the way orga-
nizational goals are accomplished. Computer-mediated connections are giv-
ing rise to a new generation of virtual workers, who work from home or wher-
ever the work takes them.

The implications of information technology for managing human re-
sources are enormous. Because it allows coordination of activities with indi-
viduals and groups outside the organization, information technology can:

• lower administrative costs, increase productivity, speed response times,
improve decision making, and enhance service;

• support efforts to link and leverage the organization’s human resources
to achieve competitive advantage;

• enhance service and employee empowerment (through remote access to
HR databases that can support HR decisions and increase the ability to
connect with other parts of the organization); and

• expand the scope and function of the HR department because it enables
the provision of training through e-learning or distance learning.

Technology has changed the speed with which HR communicates with
employees. HR can draft a company memo and, within minutes, e-mail it to
all employees. Also, many organizations have created intranet sites that pro-
vide employees with a variety of information. Lastly, technology can assist in
benchmarking the HR function against that of similar organizations. Such a
comparison reveals which areas of the HR function are strong and weak and
what HR experiences can be benchmarks.

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As beneficial as it is, technology also presents a number of concerns, in-
cluding employee privacy and intellectual property rights. Confidentiality of
employee data is a growing concern, and employer liability in the event of se-
curity breaches is still unclear (SHRM 2004).

Enhancing Productivity

Obviously, the Internet can enhance employee and organizational productivity—
defined as quantity and quality of output divided by input. Other factors also
enhance productivity as noted in Table 18.2, including flexibility in job design
to accommodate different family patterns; organizational restructuring, out-
sourcing, and downsizing; optimal recruitment and retention policies; en-
couragement of a high-productivity culture; design of a compensation system
to enhance motivation; employee empowerment; and benchmarking HR or-
ganizational processes and outcomes against those of other organizations.
These and other factors have been discussed throughout this book.

The challenge is to find the appropriate mix of tactics that will enhance
productivity without reducing organizational commitment, loyalty, and re-
tention. Many healthcare organizations recognize that employees are more
likely to choose an employer and to stay if they perceive the environment of-
fers a high quality of work life. A perception that the workplace is great is pos-
itively related to high job satisfaction, low absenteeism, and low turnover,
and these traits in turn are related to good customer service. An exclusive fo-
cus on quantitative/accounting measures of productivity to the exclusion of
HR considerations can reduce an organization’s employee commitment, loy-
alty, and retention.

New investments in technology have rapidly increased the productivity
of American workers over the past decade. However, investments in faster
computers and other technologies are beginning to level off. Thus, additional
and continued productivity will have to be the result of developing knowledge
and ability, improving work environments, and providing enhanced employee
motivation. This makes the role of human resources management all the more
crucial in the future (Miller 2005).

Containing Costs

Employees, managed care, and government insurance programs (i.e., Medicare
and Medicaid) have all put pressures on healthcare organizations to lower costs
and to improve efficiency. In response, organizations have tried a number of ap-
proaches, including restructuring, downsizing, outsourcing, and employee leas-
ing. Each method has had a direct impact on HR policies and practices.

Each approach presents significant potential downsides, particularly in
terms of reducing employee attachment to the organization. In well-managed
healthcare organizations, accounting considerations focused on short-term
data should never have priority over longer-term HR considerations. Labor

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costs can be controlled through a compensation system that uses innovative
reward structures to control labor costs and reward staff for behaviors that re-
late to achieving strategic goals. In addition, costs may also be contained by
some combination of the following HR tactics:

• Select better candidates, which will lead to the likelihood that they will
stay and perform better.

• Train employees to make them more efficient and productive.
• Structure work to reduce time and resources needed to deliver quality

services (i.e., decentralization).
• Empower employees through reducing direct supervision and increasing

the span of control.
• Reinforce cultural values that emphasize service and efficiency.
• Create economic incentives for employees to enhance their health status

and economize their use of healthcare services.

Managing Diversity

Nearly 90 percent of the growth in the U.S. workforce from 1995 through
2005 involved women; immigrants; and people of African American, His-
panic, or Asian heritage (U.S. Census Bureau 2005). In the past, the typical
U.S. worker was a white male and a member of a single-earner household.
Fewer than 20 percent of today’s employees fit that “typical” description. In
March 2005, an estimated 10.9 percent (or 30 million) of the U.S. popula-
tion was foreign born, and this percentage is rising as a result of high rates of
international immigration (U.S. Census Bureau 2005).

A diverse workforce is becoming the norm in American businesses.
Healthcare consumers and employees alike have become and will continue to
become more diverse. Specific diversity challenges include the following
(Gomez-Mejia, Balkin, and Cardy 2004, 120–53):

• Linking affirmative action programs to employee diversity so that the
two systems support one another

• Identifying how each of the HR functions can contribute to the
successful management of diversity

• Reducing potential conflicts among employees that cause cultural clashes
and misunderstandings

• Developing a profile of employee groups who are less likely to be well
represented in higher-level positions, and creating policies targeted to
their needs

• Implementing HR systems that assist the organization in managing
diversity

To accommodate the changing demographic trends, many healthcare
organizations have increased their efforts to recruit and train a more diverse

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workforce through providing more internships to members of minority
groups, flexible work-schedule options for women and older workers, phased-
retirement options for older workers, diversity training programs, a culture of
mutual respect, access to higher-level positions, and an environment that re-
spects and is sensitive to different cultural beliefs.

Among the most important impediments to managing employee di-
versity are prejudice, resistance to change, group cohesiveness, segmented
communication networks, resentment of perceived favoritism to minorities,
and competition for opportunities. Managing diversity requires awareness
and sensitivity to all of these factors.

Complying with Legal Standards

Much of the growth of the HR function in the past four decades is attributa-
ble to its crucial role in keeping the organization out of legal trouble. Most
healthcare organizations are concerned about potential liability resulting from
HR decisions that may violate laws or regulatory guidelines set by federal,
state, and local governments and legislators. These laws and regulations are
continually interpreted and reinterpreted in cases brought before government
agencies, state and federal courts, and the U.S. Supreme Court.

We live in a highly litigious society, and this fact shows no sign of letting
up. In fact, federal lawsuits that charge violation of human resources legislation
have increased faster than any other area of civil litigation—up by 125 percent
since 1991 (Bernardin 2007). In 2005, 24 percent of judgments against com-
panies were for $1 million or more, compared with only 7 percent in 1994.

A healthcare organization’s HRM depends significantly on its ability to
deal with government legislation and regulation. This requires keeping track
of the external legal environment and developing internal systems to ensure
compliance and to minimize legal challenges. Establishing formal policies and
internal administrative channels to address sensitive legal issues (e.g., sexual
harassment) can help to reduce claims.

Healthcare managers need to understand legal issues that affect how
they manage their staff because many of their decisions are constrained to
some extent by laws. They should be particularly sensitive to legal issues when
making decisions about whom to hire or promote, how to compensate, what
benefits to offer or not offer, how to accommodate dependents, and how and
when to terminate.

Legal compliance in HR practices has become more complex as a result of
new employment laws, regulatory guidelines, and court decisions that interpret
existing laws. Examples of newer employment laws are the Americans with Dis-
abilities Act and the Family and Medical Leave Act. Court decisions relate to is-
sues such as worker safety and sexual harassment. All of these changes have made
HR decisions more difficult and risky and have increased the cost of making poor
decisions. HR managers can advise and consult with departmental managers

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about the legal aspects of personnel decisions. Obviously, legal compliance is not
the only priority in employment decisions but should be heavily considered along
with other work-related factors such as timeliness, service quality, and productiv-
ity. Well-managed healthcare organizations go well beyond legal compliance in
managing their human resources; they attempt to consistently practice the golden
rule—do unto others as you would have them do unto you.

Summary

This chapter examines the present and future trends in the business and
healthcare industries to determine the effects they will have on healthcare
HRM. Six overall challenges are also identified, with the overriding challenge
being how to best integrate strategic management and human resources man-
agement so that the HR function becomes a full partner in the pursuit of the
organization’s objectives.

Strategic human resources management requires that each HR func-
tion be aligned both horizontally and vertically. Horizontal alignment occurs
when each HR function reinforces and supports other HR functions. For ex-
ample, it would make no sense to recruit the best people and then fail to of-
fer them opportunities for growth and advancement. Vertical alignment, on
the other hand, occurs when each HR function reinforces and supports one
or more strategic goals or objectives. For example, it would make no sense to
have a strategic goal of providing the highest-quality service and then com-
pensate staff below the market or provide little or no training. The result of
that would be mediocre staff, high turnover, and dissatisfied patients.

Continually monitoring and evaluating the organization’s programs are
critical. This can be done using a variety of HR indicators, such as absenteeism,
turnover, employee attitude survey data, time to fill positions, and customer sat-
isfaction data. Benchmarking such indicators against those of other organiza-
tions that provide similar services provides an external validation of organiza-
tional strengths and weaknesses. Such data should then be used to implement a
cycle of continuous improvement.

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Discussion Questions

1. Which of the specific environmental and
organizational HR challenges identified
in this chapter will be most important in
healthcare in the next 20 years? Use
your own experience in your answer.

2. Most HR executives in healthcare do
not have a major responsibility for
achieving top management priorities
such as improving productivity, quality
of care, cost containment, customer

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For the past 20 years,
Metropolitan Hospital

celebrated the fact that 50 percent of its new
hires in management positions had been
women. The hospital assumed that with such
a practice, women would eventually repre-
sent 50 percent of their top management ex-
ecutives (vice presidential level and above).
But something unexpected happened. Five
years ago, the hospital became concerned
that its diversity program was not producing
results. Instead of seeing an increase in the
number of women in executive positions, the
organization was observing a decline. Tal-
ented female managers were leaving, drain-
ing the pool of capable people.

To address this problem, the hospital
founded the Task Force on Retention and Ad-
vancement of Women in Executive Positions.
This task force aimed to pinpoint the reasons
that female executives were leaving. The
task force conducted a massive information-
gathering initiative, interviewing women in
all position levels and women who left. The
team uncovered three main areas of concern
through the interviews: (1) limited opportu-
nity for advancement, (2) lack of mentoring
and networking, and (3) existing work and
family issues.

In response to these findings, Metro-
politan Hospital retooled the workplace, re-

498 H u m a n R e s o u r c e s i n H e a l t h c a r e

service, and financial performance. What
do you think are some of the reasons for
this gap? Outline several ways that an HR
department can align its practices with
the strategic goals of the organization.

newing its commitment to flexible work
arrangements, reduced workloads, and flex
time. The hospital also developed plans for
company-sponsored networking and formal
career planning for its women employees.
Since these initiatives were implemented, the
results have been positive. Retention of
women employees at all levels has risen, and
turnover rates of those in management posi-
tions (just below the executive level) have
been lower for women than for men. In ad-
dition, the hospital promoted the highest
percentage (41 percent) of women as new
executives in its history.

Metropolitan Hospital is now basking
in its new reputation as a woman-friendly
employer. This gives the organization exter-
nal recognition in the marketplace, which
helps with recruiting efforts, and enhances
their reputation in the community.

Case Questions
1. How and why did the problems at

Metropolitan Hospital occur in the first
place?

2. How did the changes address the
underlying problems?

3. What managerial actions are required to
successfully implement a diversity
program?

Case

3. What are the pros and cons of a more
diverse workforce? Are more diverse
healthcare organizations better able to
compete because of their diversity?
Why?

Experiential Exercise

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499C h a p t e r 1 8 : P r e s e n t T r e n d s t h a t A f f e c t t h e F u t u r e o f H R M

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