MANAGERIAL CHALLENGES IN A HEALTH CARE ORGASNIATION
WORDS:2775 (Excluding Reference)
The most important asset in any organization is the people (Kossivi, Xu & Kalgora, 2016). Indian healthcare organizations are experiencing a growth in the industry, Healthcare organizations are shifting from routine service to one of brilliance. Apollo Hospitals Enterprises Limited (AHEL) is a major player in the healthcare industry in India. AHEL has 61 hospitals with 10000 beds, more than 1500 pharmacies, over 100 primary care and diagnostic clinics, 115 telemedicine unit across 9 countries and 15 research academic institutions (NDTV, 2018).
The healthcare industry is one of the biggest industry facing an increasing employee turnover (Pawar & Chakravarthy, 2014). In AHEL, the main challenge for the healthcare manager is the employee turnover. This report discusses the challenges faced by the healthcare manager, sources of the employee turnover, and what factors affecting AHEL and how the manager can solve the turnover issues with different retention strategies (Sundararajan, 2016), in which this report aims to prove that compensation is one of the primary tools to retain the employees.
2.0SOURCES OF THE CHALLENGE
Hospitals depend largely on employees as the key to attain their overall objectives (Kohli, 2014). The employee turnover occurs due to internal and external factors, such as the following
2.1 Job Satisfaction: Most employees look for other jobs due to their dissatisfaction with their present employment (Ahmad, Riaz, 2011). Employees must be happy in their jobs and their roles; failure results in a change of employment (Belliveau, 2017).
2.2 Work Environment: Workplace is a major factor for employee attrition because every employee expects the work environment to be friendly and motivating (Rumman, Jawabreh, Alhyasat & Hamour, 2013).
2.3 Salary: Employer should satisfy the employee’s compensation expectation because it is most evident component affecting the employee’s attitude and performance (Al-Habil, Allah & Shehadah, 2017).
2.4 Training: Healthcare organizations are pressured to meet demand (Pawar & Chakravarthy, 2014), especially when adopting new standards of work. Therefore, the employer should give proper training and time to employers to adapt or else it will lead to employee frustration (Mimeo, 2016).
2.5 Alternative Job Opportunities: Different job opportunities in the market, reduce the motive to continue in the same organization (Al-Habil, Allah & Shehadah, 2017)
2.6 Work Load: Workload is one of many stressful factors. The work should be allocated to employees as per their working hours; failure to achieve the necessary work in the allocated time will affect commitment from the employees and leads to the turnover (Ahmad & Riaz, 2011).
2.7 Management Style: Management and senior leadership play a vital role in healthcare organizations for employee turnover (Belliveau,2017). Employees leave an organization mostly because of the management issues (Florentine, 2018).
2.8 Career Advancement: Employees should feel there is an opportunity for growth in an organization, failure of which tempts employees to look for other opportunities elsewhere (Florentine, 2018).
Sexual harassment, poor work – life balance, Inequality and workplace policies are the other factors.
To conclude Employee turnover is a threat to management because when employee’s leave the organization they take all the skills and information gained. Then it is difficult to replace such quality employees, may result in organization failure (Kavita ; Matta, 2013).
Occasionally employee turnover is positive for an organization because when a non-performer leaves the organization, there is an opportunity to hire a potential skilled employee which will improve the overall organization performance (Surji, 2013).
3.0IMPACTS OF THE CHALLENGE
The employee turnover affects the organization both positively and negatively (Surji, 2013) and the stakeholders such as management, co-workers, managers and external contractors are affected due to employee turnover.
Employee turnover is positive if a poor performer or weak team member leaves the organization (Kokemuller, n.d.). The positive turnover is beneficial to the stakeholders in the following ways,
3.1.1 Removal of Negative Influence: Losing an employee who is not performing is positive to the management because other employees feel a new comfort, as well as managers, no longer must deal with a headache that employee caused (Joseph, n.d.).
3.1.2 Fresh Perspective: If an unproductive employee resigns, it is an opportunity to hire new talent with top skills, someone who can create new ideas and innovations in the organization (Brown, n.d.)
3.1.3 Avoiding Painful Decisions: During a recession period when an organization decides to reduce manpower, if an employee leaves the organization, it is best for management because they do not need to take harmful action. If the employee is paid well but productivity is low, then management can hire a better person with a lower salary (Joseph, n.d.).
High turnover negatively affects the organization in many ways (Markovich, 2018). Especially stakeholders are highly affected due to more workload, revenue loss, less productivity and there are other impacts discussed below.
3.2.1 High cost: Skilled employee turnover is a high cost to the organization. When an organization hires new employee’s, the firm incurs costs of recruitment, induction programs and then the employee requires time to settle in within the organization (Mane & Jojare, 2012). However, if the employee leaves the organization, the salary, training and recruitment costs are lost to the organization (Waldman, Kelly, Arora & Smith, 2004). These hidden costs are linked to the project completion and the entire team goals and morale will be affected (Bliss, 2000).
3.2.2. Workload to co-workers: Employee turnover increases the workload for other employees which affects the quality of care (Focht, 2018). Once the quality reduces, obviously success rate and profit will be reduced (Mimeo, 2016).
3.2.3 Institutional Knowledge: When an employee leaves the organization, it is a knowledge loss to the company (Mohr, Young & Burgess, 2012) because long tenure employees know about the company technologies, policies, and know how to proceed and get things done in a smooth and appropriate manner, but a new employee lacks this knowledge (Zheng, n.d.).
3.2.4 Less Customer Service and Quality care: Bad customer service and care directly impact on the company growth (Markovich, 2018). This will lead to lose the overall competitive ranking in the industry and the relationship with patients (Surji, 2013) and (Collins, 2004).
3.2.5 Less in productivity: When a talented employee moves, there is a loss of skill and knowledge which affects the productivity and quality of the organization (Mane & Jojare, 2012). It is hard to maintain the similar performance level because new employees take time to reach that performance level, in which the overall productivity will be less (Zheng, n.d.).
3.2.6 Business Profit: Additionally, Full settlement including gratuity and other benefits and some turnover may cause legal process, it is also linked to cost, eventually, it affects the organization profit (Markovich, 2018).
3.2.7 Lack of Motivation and Low workplace morale: Attrition increases the poor morale among the employees, reduce employee’s loyalty (Pawar ; Chakravarthy, 2014). In other hands when an employee leaves, the other employees feel insecure and moreover, they are additionally burdened with extra work, resulting in demotivation (Zheng, n.d.: Markovich, 2018).
3.2.8 Poor Performance: High turnover will affect the overall team and organization performance. Because other employees are additionally loaded with left employee work and the new hire will take time to reach that level, so the organization performance is down (Kokemuller, n.d.).
There are other impacts such as an increase in overtime payment (Pawar ; Chakravarthy,2014) and Long-term vacancy.
4.0ANALYSIS OF OPTIONS
Employee turnover does not affect the patient satisfaction alone but also the treatment outcome, which results in high cost (Morgeson, 2015). To reduce the employee turnover the following retention strategies can be used.
4.1 Working environment: Implementing the employee retention is to develop the workplace which will attract and retain the employees (Kossivi, Xu ; Kalgora, 2016).
4.2 Broaden Recruitment Strategies:
According to Job Matching Theory, the employer should get the right skill and employee reach the right organization (Harris, Tang ; Tseng, 2002). Hiring the right candidate for the interview using the skill matrix, will have better working tenure (Gleeson, 2017). In the modern world, the healthcare employees are expecting the job opportunities with career growth, better compensation benefits and flexible schedule (Mimeo,2016).
4.3 Stay Interview: Manager should conduct a periodic interview with top skills to understand the clues that why they might quit (Blizzard ; Doug, 2015)
4.4 Employee Engagement: Engaged employees are more attached to the organization where they deliver innovations on cost saving and thoroughly inclined to patient’s needs (Avgar, Givan & Liu, 2011). Understanding the different levels of employee’s expectation, the manager should design a customize engagement strategy policy which will result in patient’s outcome (Kohli, 2014).
4.5 Exit Interviews: Conducting the exit interviews will give the clue to understanding the different reasons behind employee turnover and it gives an improvement where the management can improve to retain the talents (Mane & Jojare, 2012).
4.6 Extra Allowances & Benefits: Supporting employee with additional benefits like entertainment allowance and others, which will allow the employees to continue (Mane, Jojare, 2012). Offering discounts to employees and its family for health services.
4.7 Rewards & Recognition Program: Recognised employees are loyal and dedicated, which results in higher performance. Managers should be concerned about the employee’s happiness, in return employee will go an extra mile to provide better care to patients (Abduljawad ; Al-Assaf, 2011).
4.8 Build a Strong Culture: The organisation culture prevent negative impacts (Mohr, Young ; Burgess, 2012). The organization culture must be incorporated into the induction and other training programs and the managers should appreciate and award the employees who follow the organization culture and awareness can be created among the employees by displaying the organization values in the notice board and in the office areas where nurses and doctors meet often (Yazinski, 2009).
4.9 Reduce Stress: The Management should create the workplace with less stress where employees can be productive at the same time can contribute time to their personal activities (Yazinski, 2009).
4.10 Training ; Development: Every employee expects development in their career, which can be given to employees by conducting training programs which will improve employee’s skills and abilities (Kossivi, Xu & Kalgora, 2016). This is beneficial to an employee as individual skill gain and for the organization it supports the employee to desire the outcome (Shen & Leggett, n.d.).
4.11 Open Communication: Create an open communication policy where employees and management people meet often for face to face discussion to encourage, motivate and guide the employees to reach their goals (Al-Masri, 2015).
4.12 Compensation: Poor compensation is the major factor for employee resignation followed by career advancement (Sundararajan, 2016). Efficient compensation structure is critical in the employment contract because it is the main reason why employees to engage in the organization (Kossivi, Xu & Kalgora, 2016). The importance of better compensation is to motivate the employees to achieve the organization goal but when the compensation is unfair it leads to dissatisfaction.
Why is Compensation the Best Retention Method?
The organization is the place where employees visualize their goals and development. Employees are likely to stay within the organization where they can develop their skills with better compensation. In healthcare, organization salary is the main reason for turnover (Pawar & Chakravarthy, 2014).
70% of the employees leave their jobs due to dissatisfaction with their compensation (Welch, 2006). Providing the better compensation will improve the loyalty and commitment of the employees because committed employees are more productive and make the organization financially sound (Kholi, 2014).
Compensation is not fair and competitive to all healthcare professionals in AHEL. It is also evident from the strike that the Apollo employees took part for their salary issues (TNN, 2017). General Practitioners and other physicians are getting less compensation (Pay scale, 2018) when compared to developed countries like Australia and Canada (Sabin, 2016).
The workload and the expectation level is high in AHEL but the salary range is less compared to their competitor Fortis hospital. When the health care professionals perform the same job in different organizations with different salaries, leads to alternate employment.
Retaining an employee and reducing the staff turnover is a major crisis in AHEL, and there are many factors at work, in which compensation strategy is one of the key retention methods to reduce employee turnover and retain the talent (Hainstock, 2016) with better performance and productivity (Al-Masri, 2015).
A Complete compensation plan includes not only the salary but includes health and other benefits. A defined plan is helpful to recruit the right talent and retain them. Should create the pay structure where jobs are defined with clear roles and competitive compensation, which guarantee the equality (Lotich, 2017).
While implementing the compensation plan, the manager should consider the main stakeholders are Employees, clients, and employer. Because Compensation should be fair and this leads to client satisfaction and the compensation plan should not be a burden to the employer (Hopkins, 2017).
The compensation can be implemented in the following ways,
5.1 Budget Allocation: Initially, allocating budget for compensation and manager must regulate the budget towards salary and other benefits (Lotichl, 2017).
5.2 Develop Salary Ranges: Create the competitive pay structure based on the industry standards and individual job responsibilities. The manager should create and monitor the work carried out by the employee which matches with the salary range (Lotichl, 2017).
5.3 Base Compensation: Healthcare managers should define the base pay according to the basic qualification and be focusing on employee performance and future productivity. Once the pay is defined, it should be validated and appraised periodically. But the appraisal should cover the individual responsibilities such as derived goals, better care, safety, patient satisfaction, then the review process will be appropriate. By doing this, employee engagement can improve with more loyalty and eliminate the poorly performed employees (Lotichl, 2017).
5.4 Variable Pay for Performance Strategies: Added to the annual appraisal, implementing the variable pay for performance will benefit the employees to achieve the extra mile outcome of the organization (Singh, 2017). Variable pay can be given in a short time and long-time basis. Short time pay is structured with a set of goals and this can be can be assigned to the physician and other management employees based on their better health care service outcomes and quality care (Al-Habil, Allah & Shehadah, 2017). Long-term pay should be designed to set of people who can more contribute to the organization for a longer run. Creating this type of plan with the grouping of time and performance-based and this approach is helpful for both performance and retention (Ahmad & Riaz, 2011).
5.5 Benefit Packages
The manager should create the better benefits packages but not limited to health, reimbursement, Allowances and Superannuation plan and other benefits. Because these extra benefits are the elements for the employees to join an organization or an employee who is considering leaving (Kossivi, Xu & Kalgora, 2016).
5.5.1 Health Benefits: Manager should create the health benefits which is affordable for both the employees and an organization.
5.5.2 Ancillary Benefits: Managers responsibilities are to design the plan to provide Group Mediclaim policy and group Accident policy which cover them and their family members. These Ancillary benefits can create the other way of job satisfaction to employees (Lotich, 2017).
5.5.3 Perquisites: Vehicle Allowance, Vacation pay, Telephone Allowance, Gas Allowance, Cafeteria Discounts and Education Reimbursements.
5.6 Legal Compliance: All the employees are expecting the better whole structured compensation with all statutory benefits. So, the manager should ensure all the compliance are fulfilled such as Retirement Savings, Pension scheme, Health Insurance, Gratuity and Overtime pay (Lotich, 2017).
5.7 Structured Administration: Offering good pay with benefits do not serve the purpose, but the following needs are to be done.
5.7.1 Instituting a standard process: Manager should create and set the pay plans, which are fair enough to new employee who is receiving an offer as well as for employees pay hike.
5.7.2 A pay communication strategy: Once the payment plan is set, it is the responsibility of the manager to communicate to all employees and create the transparency among the employees where they can understand how their pay rates are finalized.
5.7.3 Paid time off: Offering employees hourly wages rather fixed wages, which will be more beneficial to the employees. Because most of the healthcare professionals work a long time, so paying hourly wages will improve their morale and productivity (Singh, .2017)
5.8 Performance Management System: Finally, the manager creates the hands-on Performance Management System(PMS), where employees are assessed and appraised based on their achievement, pertained to corporate goals (Lotich, 2017).
5.9 Feedback: The Manager should a systematic approach to accomplish the best compensation plan, this can be achieved by creating proper roles and responsibilities, job evaluation method, salary structure and periodic survey according to the AHEL policy.
To conclude, retaining talent is crucial in this modern corporate world (Kossivi, Xu & Kalgora, 2016) because organization well-being is measured by them. Managers understand that retaining the top talent is vital for the organization and that can be achieved through different retention strategies. Implementing variable pay is important because the employee can avail variable pay based on their performance, so they will put their maximum effort to achieve the target by which they meet the organization goal and increase in productivity. There are many retention strategies in which compensation is the best method, but other strategic methods are also equally important to retain the employees (Bryant & Allen, 2013).