Human Resources ManagemenHealth Services Management

Human Resources Management: Health Services Management

Performance management is a critical aspect of any health care system. And this is true in the area of management of the organizations’ human resources performance management as well. The objective of this work is to critically examine the importance of human resources performance management health care system. This work will endeavor to apply critical analysis and make comments and suggestions on improvement of the unit of a department in the health care setting.

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System Establishment

The importance of establishing a performance-based management system cannot be overemphasized according to the work of Will Artley and Suzanne Stroh (2001) who state “All high-performance organizations, whether public or private, are, and must be, interested in developing and deploying effective performance measurement and performance management systems, since it is only through such systems that they can .” (p.i)

II. Intergovernmental Benchmarking Study

It is reported that the NPR “commissioned the first-ever intergovernmental benchmarking consortium involving not only U.S. federal agencies but also local governments and the government of Canada in a collaborative study of performance measurement.” (Artley and Stroh, 2001, p.ii) The study found that the best measure of performance and management systems and practices are those that “work within a context of strategic planning that takes its cue from customer needs and customer service.” (Artley and Stroh, 2001, p.ii) Additionally stated in the findings is that leadership is a critical factor in the design and deployment of effective performance measurement and management system. Also stated is the finding that performance measurement and management systems require a conceptual framework and that the keys to successful performance measurement are those of “effective internal and external communications.” (Artley and Stroh, 2001, p.iii) In addition, the study found that there is more required of performance measurement systems than simply compiling data, as they must make provision of information that is intelligent for those who are in charge of making decisions. The findings additionally report that the performance measurement system should be “positive not punitive.” (Artley and Stroh, 2001, p.iii) Stated lastly, is the finding that there should be open sharing with employees, customers, and stakeholders of the “results and progress toward program commitments.” (Artley and Stroh, 2001, p.iii)

II. The Performance Management Measurement Process

The performance measurement process is such as is shown in the following illustration labeled Figure 1 in this study.

Figure 1

Performance Measurement Process Model

Source: Artley and Stroh (2001)

Performance measures are such that can be grouped into six general categories stated to include the following:

(1) Conforms to requirements. (Are we doing the right things?)

(2) Efficiency: A process characteristic indicating the degree to which the process produces the required output at minimum resource cost. (Are we doing things right?)

(3) Quality: The degree to which a product or service meets customer requirements and expectations.

(4) Timeliness: Measures whether a unit of work was done correctly and on time. Criteria must be established to define what constitutes timeliness for a given unit of work. The criterion is usually based on customer requirements.

(5) Productivity: The value added by the process divided by the value of the labor and capital consumed.

(6) Safety: Measures the overall health of the organization and the working environment of its employees. (Artley and Stroh, 2001, p.4)

Performance measurement can benefit the organization in many ways include setting of goals and standards as well as detection and correction of problems and management, description and improvement of processes and finally to document accomplishments, gain insight and determine if the organization is fulfilling their vision and fulfilling customer centric strategic goals. Other benefits of performance measurement include the provision of measurable results to demonstrate the organization’s progress towards its objectives and goals and to determine if the effectiveness of each group, department, and division within the organization. (Artley and Stroh, 2001, p.5)

III. Most Common Mistakes in Measurement

Reported, as the most common mistakes made by the organization are the following stated mistakes:

(1) Attempting to measure too many variables;

(2) Amassing too much data — known as information overload;

(3) Focusing on the short-term;

(4) Failing to base business decisions on the data;

(5) Dumbing the data;

(6) Measuring too little

(7) Collecting inconsistent, conflicting, and unnecessary data

(8) Driving the wrong performance – Exceptional performance in one area could be disastrous in another.

(9) Encouraging competition and discouraging teamwork

(10) Establishing unrealistic and/or unreasonable measures

(11) Failing to link measures

(12) Measuring progress too often or not often enough

(13) Ignoring the customer

(14) Asking the wrong questions/looking in the wrong places

(14) Confusing the purpose of the performance measurement system (Artley and Stroh, 2001)

IV. Purpose of Performance Measurements

The purpose of performance measurements is to analyze how the organization is doing and if the organization is meeting its’ goals and satisfying its’ customers. As well, performance measurement determines if the processes are in statistical control and if and where there are improvements that must necessarily be made. Artley and Stroh, 2001, paraphrased)

V. Human Resource Performance Management

The work of Bach (2000) reports that there is an increasing awareness “within the specialist HR literatureof the contribution of innovative forms of human resource management (HRM) to organizational performance. While personnel management has historically been associated with such as management and trade union relations as well as workforce control and adherence to organizational recruitment, appraisal and training policies “in recent years it has become commonplace for organizations to suggest that human resources are their most important asset. Whether termed human resource management or high performance management, the novelty of these approaches is that they emphasize pursuing a strategic approach to the management of people. Involved in this initiative is the development of a coherent human resources approach that has the “full backing of senior management with a tight coupling between human resources and ‘business’ policy.” (Bach, 2000, p.3) There are reported to be seven dimensions of HR that produce profits through people including those stated as follows:

(1) Employment security;

(2) Selective hiring of new personnel;

(3) self-managed teams and decentralization of decision making as the basic principle of organizational design;

(4) Comparatively high compensation contingent on organizational performance;

(5) Extensive training;

(6) Reduced status distinctions and barriers, including dress, language, office arrangements, and wage differences across levels.

(7) Extensive sharing of financial and performance information throughout the organization. (Bach, 2000, p.4)

Bach reports that the research evidence results in three broad conclusions, which he states as follows:

(1) Ownership — people are regarded as a strategic resource to be nurtured and developed with top managers that support such an approach;

(2) External fit — organizations with an effective approach to HR are alert to the external environment planning their HR requirements in a manner that incorporate the HR implications of a changing external environment and able to modify the strategy or resolve the problems arising from any environmental changes;

(3) Internal fit — this refers to an approach that is coherent to HR policy and which does not overly rely on only one element but instead is a combination of HR policies into an “integrated bundle of policies and processes.” (Bach, 2000, p.5)

VI. Three Broad Approaches to Measurement of HR Effectiveness

There are reported to be three broad approaches to the measurement of HR effectiveness and those are stated as follows:

(1) Quantitative or hard measures;

(2) Qualitative or soft measures; and (3) Process analysis. (Bach, 2001, p.14)

Quantitative measures of analysis are hard measures and reported to include “numerical measures of inputs, outputs, and outcomes.” (Bach, 2000, p.14) Qualitative are soft measures and are reported to “provide information on staff attitudes and line managers’ view of HR via surveys and focus groups.” (Bach, 2000, p.14) Finally, process analysis is able to trace a process through all of its stages including recruitment and selection and to measure the effectiveness of these processes. (Bach, 2000, p.14, paraphrased)

VII. Differing Concepts of Quality

The management of quality in social care is addressed in the work entitled “Managing Quality in Health and Social Care” which states that there are different concepts of quality including stakeholders in terms of “service users, friends and family; carers, professionals, managers, support workers; partners, and funding agencies.” (BTEC Higher National — H2, nd, p. 2) In addition, there are differing concepts of quality as it related to the specific models of quality, which are inclusive of “quality cycles, continuous improvement, total quality management, and quality standards.” (BTEC Higher National — H2, nd, p.2) Finally, there are differing concepts of quality as it relates to external agencies including “Sector Skills Councils, Centers of Excellence, SCIE, NICE, National Care Standards Commission, government departments, and local authorities.” (BTEC Higher National — H2, nd, p.2)

VIII. Strategies Used in Quality Achievement

Strategies used in achieving quality include the minimum standards in addition to best practice, benchmarks, performance indicators, charters, codes of practice, legislation on several levels. (BTEC Higher National — H2, nd, p.2 paraphrased) Stated as a second strategy type is the implementation of quality which includes such as “planning, policies and procedures, target setting, audit, monitoring, review; resources (financial, equipment, personnel, accommodation), communication, information, and adapting to change.” (BTEC Higher National — H2, nd, p.2) The third stated strategy for quality achievement is that of establish quality systems including “ISO 9000 series, Investors in People, charter Mark, Business Excellence Model, European Quality Mark and other specialist standards.” (BTEC Higher National — H2, nd, p.2)The work of Kabene, et al. (2006) examines the health care system from a global perspective and the importance of human resources management (HRM) in the initiative to improve patient health care outcomes and delivery of health care services. Kabene et al. states that there is an increased level of attention focused on human resources management and that specifically “human resources are one of three principle health system inputs, with the other two major inputs being physical capital and consumables.” (2006) Human resources in the areas of health care is reported as being able to defined as “the different kinds of clinical and for public and individual health intervention.” (Kabene, et al., 2006) According to Kabene et al. (2006) the performance and the benefits that the system can deliver are greatly dependent upon “the knowledge, skills, and motivation of those individuals responsible for delivering health services.” (Kabene et al., 2006) The balance between the human and physical resources is reported as critical for maintaining the “appropriate mix between the different types of health promoters and caregivers to ensure the system’s success.” (Kabene, et al., 2006) Kabene et al. states that it is critically important that there is a differentiation in the manner that human capital and physical capital is handled by HR in the health care organization and state that the relationship between HR and health care “is very complex.” (2006) Hornby and Forte (nd) state in the work entitled “Human Resources Indicators and Health Service Performance” that public expectations combined with increases in financial pressures are making a requirement that health services “adopt new approaches to the management of their resources, particularly human resources.” Fundamental implications for management of HR in health care organizations include: (1) whether the objectives are being achieved; (2) whether the service provided is as effective as possible; (3) whether the processes through which the service is delivered are efficient; (4) whether service delivery is improving or worsening over time; and (5) how the organization compares with others in its efficiency and effectiveness. (Hornby and Forte, nd) Decentralization of service management is reported as a measure that is “observable and which serves to reflect the change in attitude and is increasingly the direction in which many health service systems are moving.” (Hornby and Forte, nd) It is reported however, that in a decentralized system there is “the potential danger of loss of control, particularly with an inadequate information base.” (Hornby and Forte, nd) HR management decisions are reported as being “constructed from generally available data and describe constituents of organizational activity, namely inputs, processes, and outputs.” (Hornby and Forte, nd) This data is used by managers in “monitoring and as a basis for decision making.” (Hornby and Forte, nd) The indicators are stated to make the literal provision of the “indication of the relative state of key determinants of efficiency and effectiveness in comparison to norms of organizational activity. These norms may be derived from:

(1) external comparisons with other similar organizations;

(2) internal comparisons with the previous performance of the organization; and (3) comparisons with some pre-determined standard. (Hornby and Forte, nd)

Prior to establishing a Human Resources Indicator system there is a requirement for preliminary work for establishing a range of indicators that are “appropriate to national circumstances and needs” and which would focus on:

(1) clarifying the primary purposes for the use of indicators and identifying the desired outcomes;

(2) specifying the set of indicators to be used and define data requirements;

(3) setting out the process for gathering data and constructing and distributing indicators across the country; and (4) deciding how the indicators would be used by management to increase the organization’s efficiency and effectiveness. (Hornby and Forte, nd)

Conditions that are reported as necessary for the development of a management indicator system that is successful are the following stated conditions:

(1) support from the central authority;

(2) a logical framework of indicators;

(3) a focus on relative rather than absolute performance;

(4) an ability to ;

(5) an efficient presentation and distribution system; and (6) good training and education support for users. (Hornby and Forte, nd)

General steps in setting up an indicator project include establishing the reasons that the indicators are being used and the objectives that must be achieved in addition to an initial appraisal of the existing administration and managerial framework “to conform lines of accountability responsibility.” (Hornby and Forte, nd) Also required is that managerial levels be established at which the indicators are to be used and a description of the required indicators. Also required is the identification of existing and required sources of data and the establishment of data collecting and processing procedures. There must be the development of an indicator distribution network, which includes the timescale for data collecting and processing, and the development of the indicator sets and how this “fits into any existing schedules for disseminating information or for local planning/budgeting/review cycles if they exist. It is also necessary to consider the medium by which the indicators are to be distribute, who they are to be given to, and what actions are required by recipients.” (Hornby and Forte, nd) Finally training and education in the use of indicators must take place. This makes a requirement of explaining how and why indicators are being introduced and how the indicators should be interpreted. There must also be the development of a reward system for the use of the indicators. (Hornby and Forte, nd, paraphrased) The work of Preker, et al. (nd) states that financial resources alone “are insufficient for individuals to benefit from the opportunities presented by modern health care systems.” The reported challenge is bringing together the many inputs and doing so at the appropriate time and in the appropriate place in order to achieve the maximum gains in health care service delivery. Buchan (2004) addresses the difference that a good HRM makes. Richard and Thompson (1999) and MacDuffie (1995) note that these are three broad perspectives on the ways that the business performance is contributed to by the HR practice and state those as follows:

(1) Best practice — a set of HR practices that can be identified, that, when implemented, will improve business performance;

(2) Contingency — business performance will be improved when the best ‘fit’ between business strategy and HR practices;

(3) Bundles — specific bundles of HR practices can be identified that will generate higher performance in organizations; the most effective composition of these ‘bundles’ will vary in different organizational contexts. (in Buchan, 2004)

Summary and Conclusion

This work in writing has examined performance management specific to the health care system and even more specifically in the area of human resources performance management. As noted in the literature reviewed in this study a performance-based management system must first be of the nature that has an emphasis on effective measurement of performance and upon the performance management system’s worth. This study has additionally noted that leadership is critical in the implementation of a performance management system for HR in the health care setting. It has been found during the research conducted in this study that the performance management system cannot simply make provision of a compilation of data but instead must make provision of specific usable information and should be a positive rather than punitive performance management system. There should be a buy-in of all stakeholders so that the system can realize its potential success. The performance management system measures the organization and its employees level of conforming to the requirements and efficiency in addition to quality, timeliness, productivity, and safety. Performance measurement benefits the organization in its goal- and standard-setting and problem detection. The performance management system is appropriate for use in any health care setting to measure the performance of employees and to ensure that the organization sticks to and fulfills the goals that have been set out for the organization and its employees. Additionally reviewed in this work are performance indicators and how to implement performance indicators in the HR management strategy of the health care organization and the importance of human capital overriding the importance assigned to physical capital within the organizational objectives.


Bach, Stephen Dr. (2000) HR and New Approaches to Public Sector Management: Improving HRM Capacity. Workshop on Global Health Workforce Strategy Annecy, France, 9-12 December 2000. Retrieved from: http://www.who.int/hrh/en/Improving_hrm_capacity.pdf

Buchan, James (2004) What Difference does ‘Good’ HRM Make? Human Resources for Health 2004. Retrieved from: http://www.human-resources-health.com/content/2/1/6#B10

Establishing an Integrated Performance Measurement System (2001) The . Volume 2. 2001, September. Retrieved from: http://www.orau.gov/pbm/pbmhandbook/volume%202.pdf

Hornby P, Forte P: Guidelines for Introducing Human Resource Indicators to Monitor Health Service Performance. Keele: Centre for Health Planning and Management, Keele University; 2002.

Hornby, Peter and Forte, Paul (nd) Human Resource Indicators and Health Service Performance. World Health Organization. Retrieved from: http://www.who.int/hrh/en/HRDJ_1_2_03.pdf

Kabene, SM et al. (2008) The Importance of Human Resources Management in Health Care: A Global Context. Human Resources for Health 2006 4:20. Retrieved from: http://www.human-resources-health.com/content/4/1/20

MacDuffie J: Human resource bundles and manufacturing performance: organizational logic and flexible production systems in the world auto industry. Industrial and Labor Relations Review 1995, 48(2):197-221.

Preker, AS, et al. (nd) Strategic Management of Clinical Services. Retrieved from: http://files.dcp2.org/pdf/DCP/DCP73.pdf

Richardson R, Thompson M: The Impact of People Management Practices on Business Performance: A Literature Review. London: Institute of Personnel and Development; 1999.

Unit 28: Managing Quality in Health and Social Care (nd) BTEC Higher National — H2. Retrieved from: http://www.leavalleycollege.com/PDFs/Managing%20Quality%20in%20HSC.pdf

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