Human Resources businesshealth
· Assignment 1: Health Care Human Resources Management
Due Week 4 and worth 240 points
Imagine that you have applied for the position of Manager of Human Resources at an acute care hospital in your community. The hospital is planning to expand its services to meet the needs of a growing community. As part of the application screening process, you have been asked to write a document that outlines the steps you would take, as the manager of HR, to improve the effectiveness of HRM in this organization.
Write a three to four (3-4) page paper in which you:
1. Analyze two (2) current trends in health care that are affecting human resources management that may likely impact your hiring decision as HR manager. Provide support for your analysis.
2. Suggest a significant opportunity for HR to become more of a strategic partner within an organization. Justify your response.
3. Recommend a model of human resources management that would be the most appropriate for this organization in question. Provide support for your recommendation.
4. Recommend a strategy that HR could implement in order to develop more effective relationships between Human Resources and the organization’s managers and senior executives, indicating how each strategy will achieve the desired goal.
5. Determine a specific employment law that may affect the hiring and selection process at the acute hospital in your community. Provide support for your rationale.
6. Use at least three (3) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify as academic resources.
Your assignment must follow these formatting requirements:
. Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
. Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
. Analyze the unique aspects of managing human resources (HR) in health care organizations.
. Evaluate the effects of major employment laws on HR functions in health care organizations.
. Evaluate the competencies necessary for effective health care human resources management.
. Use technology and information resources to research issues in health services human resource management.
. Write clearly and concisely about health services human resource management using proper writing mechanics.
Grading for this assignment will be based on answer quality, logic / organization of the paper, and language and writing skills, using the following rubric.
C H A P T E R
1
An Overview of
Human
Resources
Chapter Objectives
After reading this chapter, readers will be able to:
• Understand the history of human resources in healthcare organiza-
tions, as it originated from a few scattered tasks to a centralized
activity, assuming additional necessary responsibilities as 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 SUMMARY
The human resources department provides vital services to any organiza-
tion, including healthcare providers. The origin of most contemporary
human resources departments was an overworked administrator who
struggled to hire a sufficient number of employees to maintain normal
operations. Organizational growth and expansion of the services that were
being provided far exceeded the original administrator’s ability to hire
employees. Delegating this task created a personnel office. Compensation
issues were soon delegated to personnel. As legal requirements were im-
posed, the size and complexity of the personnel office increased. The name
of the department became Human Resources. Formal college-level training
programs for people wanting to spend their careers working in human
resources have been developed in recent decades. Contemporary human
resource professionals continue to struggle for equal status within the ranks
of an organization. The process of change is ongoing and is expected to
continue in the future.
As previously mentioned, a human resources (HR) department provides
essential services for any contemporary organization. Detractors claim
that an HR department does not generate revenue. While this statement
1
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is true for direct monetary inputs, HR does make significant indirect con-
tributions by ensuring that an organization does not violate reporting and
other requirements imposed by the federal government. Here we open the
dialogue on human resources and its operation.
Case Study: Mrs. Jackson’s Dilemma
In 1930, a hospital located in a prosperous town was growing along with its
community. Mrs. Clara Jackson was effectively the administrator of the hos-
pital, although it is doubtful that the title administrator was applied. Hospital
administration had yet to emerge as a specialized field of study and a profes-
sion in its own right. This hospital had started as many others had begun, as a
private clinic owned by physicians who eventually turned their operation over
to a community board that would convert it to a not-for-profit institution.
In 1930, few professions were represented in a typical hospital. There
were physicians, most of whom were in private practice and admitted
some of their patients to the hospital. A pharmacist might have been in
attendance at least part of the time, as well as a few others working in oc-
cupations that later developed into the health professions known today.
The dominant occupation in a hospital of that time by far was nursing.
Nurses originally provided nearly all of the services required by patients.
Because nurses composed the majority of the staff and the persons who
were in the hospital all the time, it was natural for a senior nurse, in this
case Mrs. Clara Jackson, to oversee the operation of the facility.
Growth was accompanied by the emergence of people assigned to per-
form specialized tasks and activities such as housekeeping and food service.
Despite their presence, Mrs. Jackson remained the principal manager in
the hospital. Her administrative responsibilities, however, cut into the time
she could spend where she felt she belonged, which was involved in the
nursing issues of patient care. The task that especially consumed much of
her time was hiring employees. Even though she was able to delegate the
hiring of non-nursing personnel to other group supervisors, Mrs. Jackson
was often swamped with activities related to hiring nurses. She felt trapped.
If she concentrated on nursing, where she believed she belonged, jobs went
unfilled and conditions worsened. If she gave her full attention to hiring
nurses, however, she had inadequate time available for her professional
nursing responsibilities. Her dilemma intensified when the hospital’s sole
bookkeeper and paymaster began to complain of having too much work
to perform for a single person in keeping up with staff additions and
departures. What options were open to Mrs. Jackson in 1930? What op-
tions would be available to her today? What other issues or requirements
did Mrs. Jackson have to think about in 1930? With what other issues,
requirements, or regulations would a contemporary hospital have to cope?
2 CHAPTER 1 AN OVERVIEW OF HUMAN RESOURCES
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■ AN EVOLVING DEPARTMENT
Common Origins
Many people refer to various activities when discussing the duties and
responsibilities of a human resources department within a larger organiza-
tion. Persons with specialized training in human resources often refer to
the same activities but use the name function when referring to the duties
and responsibilities. The word function is sometimes applied to an entire
human resources group or organization. Using that nomenclature, a hu-
man resources department becomes synonymous with a human resources
function. In this text, we have tried to avoid using the term function. We
raise the issue at this early stage so that readers will not be surprised when
encountering a reference to a human resource function. Throughout this
text we will use the interchangeable terms human resources and HR.
The human resources department, or office, of today originated and
developed in the same manner as other areas of a health care or any other
kind of organization. That is, beginning from what now are considered
to be a set of fairly narrowly defined responsibilities, human resources
originated and grew in the same manner as finance, purchasing, and other
organizational areas. Bits and pieces of necessary work that have some
characteristics in common tend to be bundled or gathered together. This
occurs partly because they are related to each other and partly because
their common tasks suggest the need for specialized skills and expertise.
For example, the finance department evolved as activities that involve
money, such as paying salaries, paying bills, receiving payments, maintain-
ing bank accounts, and handling investments became collected and central-
ized. Activities that might once have been known as accounting, keeping
track of money and reporting on its movements, and payroll, dispensing
compensation to workers, were bundled under this broader heading of
finance, the name ultimately given to the overall managing of money.
Before the term human resources emerged, the bundled organizational
activities related to people were called personnel. In what is likely a minor-
ity of organizations, this activity still remains known as personnel today.
In some organizations, as the activities related to people have evolved and
expanded, the change in nomenclature from personnel to human resources
has indicated real changes 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
more preferred title is being used, but the scope of activities has not changed.
Development of the Employment Office
Before personnel offices existed, there was an employment office. Before
the emergence of a formal employment office, managers like Mrs. Jackson of
the opening case study did their own hiring. In many instances, organizations
An Evolving Department 3
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were extremely small by contemporary standards, and the proprietor or most
senior worker was often the sole manager. As businesses grew and the manager
or managers became busier, however, they acquired help. The first assistance
was clerical in nature: a person to assist with hiring.
The employment office came into being in such organizations because of
the growth and accumulation of tasks related to hiring. When a sufficient
number of these tasks emerged, it made sense to concentrate them into a
single department. One of the reasons for bringing these tasks together in
one place was to relieve proprietors and managers of the growing burden
of work that did not generate revenue. Personnel work is essential but
actually does little to produce an organization’s products or services. The
two primary benefits of establishing an employment office included free-
ing managers from the necessity of personally having to find workers and
being able to establish consistency in hiring practices.
Initially, two significant activities pertained to employees and their needs.
Workers had to be hired, and they had to be paid. Before these employee-
related activities became centralized, they were ordinarily accomplished by
proprietors or their designees. In some instances, the task of compensating
employees became centralized before hiring. Many proprietors established
the position of paymaster. In many organizations, the activities of the pay-
master were merged into the newly established employment office. In this
way, the new area became known as the employment office. The two pri-
mary activities became known generally as “employment” and “payroll.”
The responsibilities of employment and payroll grew in scope and com-
plexity as organizations were affected by legislation at all levels of their
operations. With the introduction of wage-and-hour laws by state and
federal governments and the advent of income tax and Social Security with
their requirements for employers to withhold monies from employees, those
who hired and paid employees acquired more and more tasks to perform
within a business. These new tasks were in addition to complying with the
requirements of other government agencies.
In a few organizations, payroll remains part of human resources to this
day. In most organizations of appreciable size, payroll has long been a sub-
function of finance. The qualification “of appreciable size” acknowledges
the practice by many smaller organizations of having the payroll activities
provided by an outside vendor; this is an example of outsourcing. In such
cases, the human resources office often retains responsibility for transmit-
ting necessary information to the payroll service.
Tasks were added to the employment office as needs arose. These addi-
tions had one significant dimension in common: all were related to workers
and the process of finding qualified people, hiring them, and maintaining
them as employees. The employment office finally reached a point at which
it encompassed much more than simply employment (and often payroll).
Its name became less and less of an accurate descriptor of the department’s
activities and responsibilities.
4 CHAPTER 1 AN OVERVIEW OF HUMAN RESOURCES
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Over time, the employment office began to be known as the personnel
department. The title “Personnel Department” was considered to be a
far more accurate description of the department’s activities. All in all, the
word personnel essentially referred to people. All of the responsibilities of
a personnel department revolved around an organization’s people.
The Expanding Personnel Department
Other forces emerged and new external requirements were imposed.
Employers began to offer forms of compensation in addition to wages.
Some began to offer these on their own, while others were spurred by
unions. However, most instituted them as a result of competitive forces.
These added forms of compensation came to be called fringe benefits. They
imposed additional responsibilities on an organization. People to support
the new tasks had to be placed somewhere in the organization. Because they
related to employees and their family members—that is, to people—the
personnel department was a natural location for them.
In the economic boom that followed World War II, health insurance
programs became part of many organizations’ benefit packages or ben-
efits offerings. Government mandates such as Workmen’s Compensation
(later changed to Workers’ Compensation in the 1960s) entered the pic-
ture as statutory benefits. Statutory benefits are those that an employer is
required by law to provide. These include the employer’s share of Social
Security taxes per the Social Security Act of 1935, participation in Workers’
Compensation, and often state-mandated, short-term disability insurance
programs. During this time, retirement programs also proliferated, provid-
ing more work for personnel.
A major piece of government legislation that caused a great deal of
work for some organizations was the National Labor Relations Act of
1935, also known as the Wagner Act. This act provided legal protection to
labor unions and made the task of organizing workers considerably easier
for unions than it had been. It created a great deal of people-related work
for organizations that became subject to union organizing efforts. Once one
or more unions were established, their interactions with the employer had to
be organized so that business could continue. Some union-related activities,
such as running an antiorganizing campaign, conducting negotiations, or
administering a contract, were occasionally taken on by line managers. In
many organizations, these new activities fell to those who were already
in the people business. In contemporary organizations that have unionized
employees, an organizational entity known as labor relations may exist on
its own or as a subsidiary operation within human resources.
Prior to the early 1960s, a typical personnel department was respon-
sible for most activities related to employment, record keeping related to
employees, some degree of compensation and benefits administration,
and possibly labor relations. Over the years leading up to the early 1960s,
personnel departments developed an image of a staff or service group that
An Evolving Department 5
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ran an employment office, kept records, and generally pushed paper. In
the early 1960s, however, the importance of the personnel department
began to expand. In 1964, personnel departments were required to adopt
significantly expanded and increasingly more important roles. The pivotal
event in dramatically changing the activities of the personnel department
was passage of the Civil Rights Act of 1964.
Beginning in 1964, the work of the personnel department became in-
creasingly more complex, and the level of responsibility involved signifi-
cantly increased. Practitioners working in the personnel office required
more significant knowledge. Specialized education began to develop, and
personnel began to grow as a specific professional field. The title of human
resources came into being but did not immediately enjoy widespread usage.
Even as personnel work grew more complex, more requirements were im-
posed on the operation. More and different kinds of problems emerged, and
additional but different varieties of work had to be performed. The former
image of the personnel department as a group of people who recruited em-
ployees, kept files, and pushed paper continued to prevail. In many instances,
this older image was reinforced by personnel practitioners who, after two
or more decades in the field, were overwhelmed by the tide of change. Their
knowledge fell well behind the times and quickly became obsolete.
In academia, personnel administration became a specialized educational
field, joining labor relations in becoming a formal field of study. Several new
subdisciplines such as compensation analysis, benefits administration, em-
ployee testing, and selection began to emerge. In the mid-1970s, the person-
nel department became responsible for interacting with a variety of external
agencies and special-interest groups involved in issues such as Affirmative
Action, Equal Employment Opportunity, worker safety, and social responsi-
bility. Many new professionals came from the field of industrial psychology.
Others came from programs in management or administration.
Problems with the Term Personnel : Real and Perceived
Most of the personnel practitioners of the mid-1900s, from approximately
1945 to 1965, lacked education that specifically prepared them to enter
the field of personnel in general or for their specific jobs in particular.
When the great majority of these practitioners received their education,
most formal training in personnel administration consisted of one or two
courses included in other programs of study.
Healthcare organizations, especially hospitals, were once seen as funda-
mentally low-pressure environments that offered an escape for individuals
who had at times been described as industry dropouts. Many administra-
tors, directors of finance, personnel managers, and others came to work
in hospitals from businesses and industries in mid-career. Some person-
nel managers, for example, left manufacturing and industrial positions
for hospital jobs as an escape from union involvement. Their previous
6 CHAPTER 1 AN OVERVIEW OF HUMAN RESOURCES
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experiences in healthcare working environments were extremely limited.
A strong attraction for making such a career change was to escape from
unions, which, at the time, were not common in healthcare organizations.
Many of the problems associated with the image of personnel depart-
ments and encountered by individual workers were surely due to the perfor-
mance and behavior of senior personnel practitioners of the time. The lack
of educational training contributed to the antipersonnel bias occasionally
encountered. As the field became more complex and the pressures of the
1960s and 1970s from increasing union presence, mounting financial pres-
sure, and the government’s entry into health care via Medicare, Medicaid,
and state regulations continued to mount, many of these persons found
themselves in situations that far exceeded their training or experience.
Many people who spend their entire working lives in one particular job
or working environment do not readily adapt to change. Some of the practi-
tioners who entered healthcare personnel work between 1945 and 1965 fell
by the wayside as the field became more complex, tougher, and considerably
more demanding. Some were unable to cope with unions and the demands
of labor relations. Others became frustrated by the demands imposed by
Affirmative Action and other newly introduced civil rights concerns and
legislation. 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 department
still exist. A minority of senior managers continue to view personnel as a
relatively unimportant staff activity that does little more than hire people
and file papers. A considerable number of employees view the operations
of personnel as a necessary bureaucratic activity that exists primarily for
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
used. Many departments fulfilling the same overall responsibilities are still
called 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 limited
portion of the activities that are performed by a contemporary, full-spectrum
human resources department.
Is the term human resources more descriptive than personnel? Some
experts contend that an organization’s ultimate resource is financial, and
an organization uses financial resources to acquire both things (material
resources) and people (human resources). Therefore, in an organizational
context, human resources means people, as does the older, alternate title
of personnel.
What’s in a (New) Name? 7
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Why the Change?
Most scholars of the field agree that personnel became human resources
in many organizations for one or more of the following reasons: the new
name more appropriately reflected the workload of the department, the
change in name improved the image and elevated the status of the work
being performed, and the new name enhanced the professionalism of those
who were accomplishing the work.
Did the personnel department become human resources to escape the
existing and often negative image of personnel? For some practitioners
and organizations, the change was made to overcome the outmoded and
limited view of personnel and to gain both professional acknowledgment
and a measure of respectability.
A parallel transformation of organizational image occurred in finance.
Once there was only bookkeeping, which eventually became accounting as
reporting and analytical tasks were added to the simple business of keeping
track of money in and money out. As organizations grew, there developed
the necessity to raise money, invest money, and generally manage money
well beyond the needs of day-to-day operations, so the finance function
developed. In most instances those narrower money-related activities such
as payroll and accounting were brought under the umbrella of finance.
This particular transformation is incomplete and far from being universally
accepted; many contemporary accounting and finance practitioners are
dismissed as number-crunchers or bean-counters. Marketing professionals
incur a similar lack of professional respect or identity. Despite extensive
efforts to modify their image, many marketing departments are stereotypi-
cally referred to simply as sales, a term that has existed for decades and
frequently carries derogatory connotations.
Practitioners in every field are required to learn and grow. The alterna-
tive is to fall behind and eventually fail. Change occurs at various rates in
different occupational fields. In the field of personnel or human resources,
several bursts of change occurred within a sufficiently brief period to impact
the career spans of many practitioners.
Bias, whether real or perceived, cannot be overcome by a simple change
of name. Neither can respectability be acquired by a change of name.
Respect, however, can be earned over time as a new image emerges, one
that has nothing to do with the department’s title other than shedding the
negativity that some associate with the name personnel. Human resources
is taking its place among those activities now viewed as being essential to
the success and survival of a modern organization. It required decades to
form and solidify the image of personnel as being neither especially difficult
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
the name change to human resources. One personnel director described
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the trend to change the name of the company personnel office to the
department of human resources as “an excellent example of corporate
pomposity” (Hoey, 1987). The article argued that employees are hu-
man and special, not just another resource similar to real estate or spare
parts. As an interesting side note, not long after the article appeared in
the professional journal Personnel, the publication changed its name to
HR Magazine. Regardless of whether or not one approves of the name
change, no title alone will confer respect. That is a commodity that must
be earned through performance. When performance is forthcoming, re-
spect will follow.
Here to Stay
For a number of years, human resources has been the growing name of
choice for this service activity of an organization. The HR name has been
adopted by professional organizations, academic programs, and publica-
tions formerly designated as serving personnel. This is a fairly good sign
that the title of human resources will probably dominate for the next few
decades.
The changeover of name was most evident during the 1980s. Surveys
indicated that in 1986, some 40% of such departments used the HR des-
ignation. Just 42 months later, the proportion using the HR designation
was at 60% and still climbing. Also, the HR title was more prevalent in
larger organizations, in use in 80% or more of organizations having 2,500
or more employees (Stier, 1989).
The title Human Resources is more prevalent in larger organizations.
Professional organizations have also changed their names. The American
Society for Personnel Administration has become the Society for Human
Resource Management.
A number of additional surveys conducted by professional HR orga-
nizations during the 1980s and 1990s seemed to focus primarily on the
degree to which the name change from personnel to human resources had
affected the status of the department within its organization. Historically,
the position of the head of HR has carried the title of director or manager
among supposed peers who enjoy the title of vice president. The head of HR
frequently reports to a vice president rather than directly to the president
or executive vice president.
The component duties and responsibilities of HR are not uniform across
organizations. Changes are being made, but the relative status of HR within
most 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 address new
and more complex responsibilities.
Experts disagree as to the present status of an HR department within the
healthcare industry. Most do agree on several broad points, however. First
What’s in a (New) Name? 9
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and foremost, HR must continue to evolve so that it can remain current
with the changing needs of healthcare organizations. Next, HR must strive
to transcend its traditional reactionary role and adopt a more proactive
outlook and approach. Human resources should be available to minimize
undesirable occurrences to an organization through the systematic identi-
fication of potential problems. The next step is working to avoid them or
similar ones in the future.
In addition to performing all of the expected duties in support of an
organization’s employees, an effective contemporary HR department serves
as a full-fledged partner on an administrative team, participates in orga-
nizational strategic planning as a full-fledged member, guides succession
planning for an organization, and works as an agent for necessary and
healthy change.
Throughout the remainder of this text, the term human resources (or
simply HR) will be used as the prevailing name for the department or
functional area. This use is not to be construed as claiming that any group
that is called personnel or 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 1900s, human resources
in the healthcare industry essentially meant human resources in hospitals.
Until the 1960s, acute care hospitals were perceived as being the cen-
ter of the American healthcare system. Virtually all healthcare services
provided to people were delivered in a hospital. Those that were not
provided in hospitals were rendered in physicians’ personal offices. One
has only to look briefly at the different healthcare provider organiza-
tions in existence today to appreciate that human resources in health
care is now practiced in a variety of settings and organizations that are
both large and small.
Identifying only a small sample of organizations that deliver health-
care services will help to make an important point. Contemporary com-
ponents of the healthcare system include free-standing surgical centers;
urgent care providers; community health centers; public health agencies;
long-term care providers; groups specializing in imaging, physical therapy,
laboratory testing, and other activities; and several forms of medical and
surgical group practices of varying sizes. All of these organizations, from
the smallest partnership or group practice to the largest acute care hos-
pital, require the presence of human resources knowledge and expertise.
In larger organizations, this expertise is provided by a human resources
department. In a small organization, HR expertise may be provided by
an in-house individual whose time and duties wholly or partly focus on
personnel-related activities. Human resources needs may be outsourced
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or met by an external consultant who provides them on an hourly basis
or whose 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 healthcare environment.
■ CONCLUSION
The typical human resources department has grown from a single-person
operation into a multifaceted, complex organization. In some organi-
zations, a single person continues to perform all of the needed tasks,
although this has become an exception rather than the rule. The volume
of government regulations has greatly increased in recent decades. The
scope of duties performed has also increased. Changing the departmental
name from personnel to human resources reflects these developments.
People are now receiving specialized training in colleges and universities
for subsegments of human resource activities. However, they continue
to struggle for professional recognition and equal status with their orga-
nizational counterparts.
Case Study Resolution
Returning to the dilemma posed in the initial case study, the first step that
Mrs. Jackson took in lightening her load of non-nursing responsibilities was
to hire a helper. The selected person was a combination secretary and gen-
eral assistant who coordinated most of the hiring activities for the hospital.
In effect, this helper was the hospital’s first personnel worker. It is likely
that the first personnel records section was a drawer in this individual’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 govern-
ment regulations had yet been introduced in 1930; the Social Security
Act, with its automatic withholding of employees’ contributions, was not
created until 1935. Affirmative Action and Equal Opportunity legislation
was not enacted until the mid-1960s. The Americans with Disabilities Act
added additional duties in 1990.
Mrs. Jackson’s helper was a staff of one that became the hospital’s
employment office. Within a few years this office evolved into a personnel
department. Mrs. Jackson was extremely relieved to be able to delegate the
growing burdens of securing employees and looking after many of their
needs. She continued to be involved in employee acquisition to the extent
of interviewing potential employees for her own area, but she no longer as-
sumed the responsibility to find and screen all job applicants. Furthermore,
she did not have to process them into and out of the organization.
Conclusion 11
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References
Hoey, J. T. (1987). Human resources versus personnel. Personnel, 64(5), 72–75.
Stier, D. (1989). More use of the human resource title. Resource, Society for
Human Resource Management (SHRM), 10, 2–4. (SHRM was formerly ASPA,
the American Society for Personnel Administration.)
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 an
employment office. List the activities that were probably performed
and who was most likely to have performed them.
2. With specific reference to activities found within healthcare organiza-
tions, describe how three departments or functional areas other than
human resources might have evolved in a manner similar to the evolu-
tion of HR. In each instance, describe the activities that might have
initially existed and then accrued to form the basis of each activity as
it is known today.
3. In your opinion, what did senior managers in the past believe were
the primary benefits of gathering a variety of employee-related tasks
together to form an employment office?
SPOTLIGHT ON CUSTOMER SERVICE
Customer Service: An Introduction
Customer service has become a buzzword in contemporary organizations. The
good news is that organizations are waking up and beginning to recognize
the importance of customer service. The bad news is that many of the same
organizations treat customer service as little more than a passing fad.
Customer service is important. Critics may be correct when they say that
customer service is only a single factor among many that contribute to an or-
ganization’s success. However, poor customer service alone has the potential
to cause organizational failure. Consider a restaurant that employs servers
with poor attitudes. Conventional wisdom asserts that all dissatisfied custom-
ers tell 20 additional actual or potential customers about their unsatisfactory
experience. Satisfied customers typically share their experiences with only
one or two other persons.
Quickly, the reputation for poor customer service spreads through a popu-
lation and buries perceptions of good service. The main cost associated with
customer service is remembering to provide it.
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4. In your opinion, what were the two or three earliest changes that in-
fluenced the development of a centralized operation to address matters
related to employees? Why?
5. Why might some people consider the term fringe benefits to be mislead-
ing at best or completely erroneous at worst? Why is the value of these
benefits 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. Is
the somewhat derogatory label of “industry dropout” reasonably or
unreasonably applied? Why?
7. Do you personally agree with changing the name from personnel to
human resources? Why or why not?
8. Do you support or oppose the abolition of a central personnel depart-
ment in favor of having individual managers assume the responsibility
for all such activities for their own departments? Why?
9. Do you believe that changing the name of personnel to human resources
substantially improved the image of the department or service area? Why?
10. Comment on the following quotation from Up the Organization
(Townsend, 1970): “Fire the whole personnel department. Unless your
company is too large (in which case break it up into autonomous parts),
have a one-girl people department (not personnel department).” Keep
in mind that this passage was written in the late 1960s.
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Ljungberg, J., & Smits, J. P. (2005). Technology and human capital in historical
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Mathis, R. L., & Jackson, J. H. (2005). Human Resource Management (11th ed.).
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Position
Descriptions
Chapter Objectives
After reading this chapter, readers will be able to:
• Understand the importance of a properly prepared position or job
description
• Conduct a position analysis
• Appreciate the contribution made by a position’s incumbent
• Describe the components of a position description
• Create a position description
■ CHAPTER SUMMARY
Position descriptions or job descriptions are the documents upon which the
day-to-day operations and activities of the employees of an organization are
based. They should support the mission, goals, and objectives of the organi-
zation that creates them. All job descriptions in an organization should use
the same format and a common vocabulary. Well-written position descrip-
tions include statements that clearly delineate duties and responsibilities and
fully describe compensable factors such as the level of responsibility, the
number of persons supervised, the resources controlled, and the experience
and minimum level of education needed to complete the job successfully.
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 position
for someone to conduct training for employees of the health department.
Registered sanitarians are the most common classification of employees
in the health department. They are not only difficult to recruit but also
C H A P T E R
6
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difficult to retain. Providing them with additional and ongoing training
should help with retention.
Matt Jefferson has been employed as a registered sanitarian for the
past six years. He recently completed a master of public health degree. He
approached Julie to ask for the training position, briefly making his case
that he was the best person to become the trainer. Julie told Matt that, ac-
cording to departmental rules, a search would have to be conducted to find
the best candidate for the position. Matt replied that if the job description
were written carefully, a sanitarian clearly would be the best candidate.
After thanking Matt for his thoughts, Julie began to work on the position
description, which she thought could be completed in half an hour. What
comments or advice would you offer to Julie?
■ INTRODUCTION
Lists of activities delineating a particular employee’s tasks are called job
descriptions or position descriptions. The term job description is older and
evolved from the field of industrial psychology. Position description is a
newer, more inclusive designation. The two terms are interchangeable.
With changes in the flow of work, position descriptions change. Fluidity
of positions is especially pronounced in fields related to health. Managers
must be aware of such changes and ensure that the descriptions of the
activities that their employees perform remain current and accurate. This
is relatively easy for supervisors to address with an annual review of the
descriptions for their supervisees. Human resources (HR) must be willing
to record changes in an organization’s master files.
A job analysis must precede the preparation of a position description.
The format of a position description varies among and within organiza-
tions. However, one general format is usually found throughout a single
organization. Health departments may use separate formats for clerical,
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 the overtime
provisions of FLSA. The FLSA established the length of a working week in
the United States, which is currently set at 40 hours. It requires employers
to pay affected employees at a rate of one and one-half times their hourly
wage for hours worked in excess of the maximum work week. All work
performed in excess of the maximum working week is called overtime.
According to the FLSA a position may be designated as exempt if it
meets certain requirements addressing salary, level of responsibility, and
the management or supervision of others. As long as a job meets the FLSA
test as professional, administrative, or executive, it is a “salaried” position
exempt from the overtime requirements of FLSA. Such positions typically
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include those of managers and supervisors, and any time these employees
work in excess of 40 hours is assumed to be a part of their normal job
duties. Employees who are paid by the hour are fully covered by FLSA
regulations; they are referred to as being nonexempt.
A position description generally has three main parts: identifying informa-
tion, a job summary, and a list of the principal duties performed. The process of
generating a position description begins with an analysis of the job or position.
Positions, not individuals, are classified. Occasionally, the temptation
exists to write a position description for a specific individual, tailoring
the requirements and experiences so that a preselected person becomes
the best candidate in a job search. This should be avoided. If that person
leaves the position, then the specifications will not readily change. Finding
a replacement may then become difficult. It is better for all concerned that
a position description be written for a job and not for a particular person.
■ POSITION ANALYSIS
A job description is the most obvious and visible output of a job analysis.
Comprehensive and accurate job descriptions, developed as a result of job analy-
sis, are used when selecting, training, evaluating, and compensating
employees.
The basis of any employment decision is job analysis, a fundamental activity
in human resource management. Accurate information about all positions is
required to direct and efficiently control the activities and operations of any
organization. Federal regulations and competition have both increased the
importance of job analysis. HR does not produce revenue, yet HR requires
significant cash outlays in an organization’s annual budget. Supervisors and
managers must have current and accurate information about all positions to
operate their businesses, deliver services, and conduct programs in an efficient
and timely manner. Smaller healthcare provider organizations and health
departments have often omitted compiling complete sets of position descrip-
tions. They rely on the professional nature of many employees’ duties for
guidance in supervising and evaluating professional employees.
Position descriptions provide more than just guidance for an employee’s
day. They are integral to an organization’s efforts to be fair and equitable
to all employees. Organizations providing healthcare services that do not
have current position descriptions for all employees become vulnerable with
regard to accusations of discrimination in employment practices. One way
to defend against charges of unfair employment practices is to conduct job
analyses and prepare job descriptions.
A job analysis involves extensive studying of a specific position and
yields information for a position description. The person conducting a job
analysis gathers information about positions from several sources. These
include interviews with people currently in the position (also referred to
as job or position incumbents), observing their performance of the job’s
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duties or tasks, worksheets or questionnaires completed by employees, and
information from sources such as the Dictionary of Occupational Titles.
Position analysts will compile their findings and review the resulting job
analysis with the current position incumbent. Once agreement is reached
with regard to the job description’s accuracy, the preliminary document
is given to an incumbent’s supervisor for review. Supervisors may add,
delete, or modify descriptions of duties, knowledge, skills, abilities, or other
characteristics. After supervisors approve individual position descriptions,
they are forwarded to upper management for final approval. A final posi-
tion description is prepared, signed, and dated. Copies are given to both
the incumbent and supervisor. A copy is also filed for future reference.
Role of a Position Incumbent
Job incumbents have an important role in the process of generating accu-
rate position descriptions. Position incumbents can assist in the process of
analysis by taking time to think about their jobs. They should keep a diary
of work-related activities or make notes about their job duties. These should
include all activities that occur during one complete cycle of duties. Typically,
a year may be required to complete all job duties. Unless job analysis occurs
when budgets are being prepared, budget-related tasks may be overlooked.
At the beginning of an analysis interview, incumbents should explain
their concept of the job to the analyst. The analyst should try to help the job
incumbent focus on the facts. Job incumbents should avoid overstating or
understating characteristics of a position, such as duties, required knowledge,
skills, or abilities. Both analyst and job incumbent should remain focused
and should minimize discussion of extraneous issues. Analysts are concerned
only with the position. Personal performances, fairness of wages, complaints,
and relationships with supervisors or coworkers are not relevant.
Senior managers determine the extent of a position’s impact on an organi-
zation and the boundaries of a job. Position analysts do not determine conse-
quences as part of their work. Such decisions are made by senior managers.
For example, salaries will not be reduced or a position eliminated because of
the analysis process. An analyst may recommend title changes or other posi-
tion realignments, but the final decisions are made by senior management.
Elements of a Position Description
A position description usually includes the following elements: job identi-
fication information, a job summary, a principal duties performed section,
and a job specification section.
Job Identification Information
Job identification information must include, at a minimum, the position
title, the department location, and the last date on which the content of
the position description was verified. Other data, such as the title of the
supervisor, help to show how the position fits within a larger organization.
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Job Summary
The job summary provides an overall rendering of the purpose, nature,
and extent of the tasks performed by the person in the position. In a
well-constructed system, the job summary should relate to the mission
statement of the department in which the position is located and to the
global mission of the organization.
Principal Duties Performed
This section presents job facts in an organized and orderly fashion. When pre-
paring the principal duties performed section, a job is normally broken down
into approximately five to eight different tasks or functions for the purpose of
describing the position. The job tasks should be listed in order of decreasing
frequency or occurrence. This means the task that requires the most time to
complete or that is the most critical for a given position should be listed first. For
each duty listed in this section, a description of the job’s activities (i.e., what is
done on the job), how the task is accomplished, and why it is necessary should
be provided. This is a convenient method of organizing a position description.
It quickly and effectively communicates a great deal of information about a
position to a reader who is unfamiliar with the job or position.
Position descriptions should be written using sentences that are complete,
clear, and brief, using action verbs and the present tense. In preparing a job
summary, the purpose of the position must be clearly stated. This state-
ment should be as brief as possible while still accomplishing its purpose.
Words should be carefully selected to convey the maximum amount of
specific meaning. General or vague terms should be avoided unless they
are absolutely essential as a substitute for a long and detailed explanation.
The principal duties performed section follows the job summary and
includes major job tasks, as previously outlined. Many organizations
include a fourth section in their descriptions that covers job specifications.
Job Specification
The job specification section outlines the minimum specific skills, effort,
and responsibilities required of an incumbent in the job. Job specifications
provide the basis and justification for values that will be assigned to fac-
tors used in evaluating a position. Factors are elements created by a job
analyst and subsequently used when comparing different positions within
a single organization. Job specification statements must describe the extent
to which a given factor is present and the degree of difficulty encountered
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 an
understanding of the details contained in the statement. Any specifications
that apply only to occasional duties should be indicated accordingly so that
the percentage of time or frequency with which the specification applies
will not be overestimated.
Position Analysis 119
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Educational requirements for a position description must be supported
by the analysis of actual duties. Higher educational requirements may legally
be included if they are such that the skills or training can be acquired only
through formal education or if it is only through formal education that
an individual can acquire a particular license or certification that may be
required to pursue the given occupation. Minimum levels of schooling must
be used. For example, the formerly encountered requirement for a “high
school diploma” has given way to the necessity for one to possess the ability
to “read and write and understand simple instructions.” Artificially high
educational requirements have been judged to represent a form of discrimi-
nation. They are not only illegal but unethical. Skills must be supported
by position analysis. These are factors that are linked to compensation.
Other factors that must be compensated include the level of responsibility
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. These
descriptions are for specific job categories, for example, Secretary 2,
Nurse Aide 1, Sanitarian-in-Training, or Environmental Supervisor 1.
The title indicates the major duties of a position. The number after it
may indicate the level of the position in the organizational hierarchy.
Higher numbers usually denote more senior or more responsible positions.
Whereas job specifications may be recorded for individual incumbents,
position descriptions are developed for general categories of jobs. Well-
written position descriptions should contain the items listed in Table
6-1. An example of a completed job description in the described format
appears in Appendix 6-A, which can be found at the end of this chapter.
Table 6-1 Position Description Components
Component Explanation
Title Specific title for the job
Status Exempt or nonexempt
Summary of duties Major tasks to be performed
Salary range The minimum, midpoint, and maximum
for the job
Knowledge required Specific training needed to perform the
job; specific experience, both type and
amount needed to perform the job
Skills required Specific skills expected
Effort required Both mental and physical; any heavy lifting
Responsibility Consequences of an error
Working conditions Hazards or other poor working conditions
General statement Other duties as required
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A position description becomes a vitally important HR management
document for managers and supervisors in that it sets out the major duties
and responsibilities for persons in specific positions. In many cases, the
position description may be detailed to the level where it can be used for
performance appraisals and employee evaluations.
The preparation and verification of a position description and its speci-
fications compose the first step in developing a base salary compensation
program. The next step in the process involves rating positions, or job
evaluation. Job evaluation is essentially a comparison of available infor-
mation for each position with rating scales that have been established to
assist in determining order among many different positions. Job evaluation
establishes the relative position of each individual position with respect to
all jobs in an organization. Typically, an HR department performs the job
evaluation. If it is a new or highly controversial position, then an interdis-
ciplinary job evaluation committee, composed of members from various
sectors of an organization, may evaluate a job.
■ CONCLUSION
Many people consider position descriptions to be dry and uninteresting.
Regardless, however, they are important documents for any organization.
Position descriptions should be closely linked to organizational goals and
objectives. They are used when determining compensation levels. Job descrip-
tions must employ a regular format, style, and language, and they should
be prepared with care and reviewed periodically for accuracy and currency.
Case Study Resolution
Returning to Julie, the health officer who began to write a job description
for the new training position, a pause is in order. Job descriptions are not
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 degree as
the minimum level of education for the job incumbent. While such a deci-
sion might appear to create a good opportunity for the sanitarian, formal
schooling is not the only place where expertise in training can be obtained.
An employee with several years of work experience who has had some
leadership responsibilities should be able to become a successful trainer.
Artificially high educational requirements are a form of discrimination.
Julie should be reminded that job descriptions are written for positions,
not individuals. To ignore this advice is to court problems when seeking a
replacement for the proposed employee.
Conclusion 121
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Reference
Hill, K., & Meyer, B. (1998). The worker of the future: A system outlines the
competencies its employees will need. Health Progress, 79(2), 29–32.
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 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 of 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?
SPOTLIGHT ON CUSTOMER SERVICE
Customer Service and Position Descriptions
Data obtained from a convenience sample of 42 position descriptions from
a number of different healthcare and public health organizations revealed
that only one of the descriptions contained a reference to customer service.
Holdings of the National Library of Medicine were checked. The search query
stipulated the presence of two search terms, “customer service” and “posi-
tion description.” This approach identified 14 articles. One of the identified
articles mentioned including customer service on position descriptions (Hill
& Meyer, 1998).
If every position description in an organization included “provides good
customer service,” three criteria would be realized:
1. The single goal of addressing customer needs is clearly expressed in the
program’s name: customer service.
2. An organization requires only one customer service program.
3. Customer service is a priority activity that should be shared by all
employees.
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Resources
Books
Byars, 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.
Mader-Clark, M. M. (2006). The Job Description Handbook. Berkeley, CA:
NOLO.
Wilson, M. (2004). Volunteer Job Descriptions and Action Plans. Loveland, CO:
Group Publishing.
Periodicals
Conway, J. M., & Peneno, G. M. (1999). Comparing structured interview ques-
tion types: Construct validity and applicant reactions. Journal of Business and
Psychology, 13, 485–506.
Fooks, C. (2005). Health human resources planning in an interdisciplinary care
environment: To dream the impossible dream? Canadian Journal of Nursing
Leadership, 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 out-
comes of candidate impression management use in job interviews. Journal of
Management, 28, 27–46.
Rosse, J. G., Stecher, M. D., Miller, J. L., & Levin, R. A. (1998). The impact of
response 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., Eidson, C. E., & Attenweiler, W. (2004).
What do structured interviews really measure? The construct validity of behavior
description interviews. Human Performance, 17, 71–93.
Van Iddekinge, C. H., Raymark, P. H., & Roth, P. L. (2005). Assessing personality
with a structured employment interview: Construct-related validity and suscep-
tibility to response inflation. Journal of Applied Psychology, 90(3), 536–552.
Conclusion 123
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Appendix 6-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 activi-
ties, including cost accounting, financial accounting,
general accounting, information systems, and general
office services
Scope: Work encompasses involvement in a broad range of
accounting activities that are essential to the mainte-
nance of facility operations and the dissemination of
financial information to the board, senior managers,
and owners
Summary of Duties:
1. Coordinates all essential accounting operational functions in a timely
and 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 ensure
adequate financial controls within each of the facility’s operational
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 financial
matters and expedites such matters to conclusion.
6. Directs this operation within the accounting parameters established
by facility, third-party provider, state, federal, and generally accepted
accounting principles (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.
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Number of
Supervision Exercised: Employees:
Direct: General supervisors in operational areas 2–3
Indirect: Other facility supervisors, administrative
and clerical personnel 15–20
Training and Education:
Certified Public Accountant (CPA) required; graduation from an accredited
program
Experience:
Must have at least five years of experience in accounting with some
supervisory responsibility
Responsibility:
Budget of $3,500,000 per year
All required insurance for hospital
State and federal filings for tax and other financial purposes
Effort:
Minimal physical effort required; no lifting
Mental effort requires ability to concentrate on numbers for long periods
of time and to occasionally work under severe deadlines
Working Conditions:
Well-lighted office; No exposure to hazards in the normal course
of work
The above constitutes a general summary of duties. Additional duties may
be required.
Approvals:
Supervisor: Date:
Department manager: Date:
HR Department: Date:
Reviews:
Person: Title: Date:
Appendix 6-A: Sample Position Description 125
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12
7
Services
The majority of departments or divisions in an organization produce prod-
ucts, coordinate programs, or deliver therapeutic remedies. Such outputs
generate revenue. Rather than creating revenue, human resources depart-
ments provide important services to an organization. Section II introduces
four important services of a typical HR department. Chapter 7 (Employee
Training) explores a variety of topics and different methods of delivering
information. Chapter 8 (Compensation and Benefits) introduces the related
concepts of pay and additional incentives. Few employees will work for
free. A small number of benefits are required by law; the rest are provided
at the discretion of senior managers or a governing board. Chapter 9
(Performance Appraisals) discusses methods for periodically evaluating
employees. Chapter 10 (Succession Planning) reviews approaches used to
replace organizational leaders.
S E C T I O N
II
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Employee
Training
Chapter Objectives
After reading this chapter, readers will be able to:
• Appreciate the importance of training and development as
continuing activities
• 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 SUMMARY
Training is one approach that leaders use to ensure that the organization to
which they belong will have the best possible chance to survive and grow
in the future. It helps to ease an individual’s transition into an organiza-
tion and facilitates movement within an entity that is larger than any of
the individuals that compose the organization. Training takes many forms.
New-employee orientation, mentoring, and on-the-job and off-site train-
ing are common examples. Managers often provide training in formal or
informal settings. Cross-training of employees with similar types of jobs
provides organizational flexibility. Giving developmental opportunities to
potential leaders facilitates succession planning.
C H A P T E R
7
129
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Case Study: A Blue Monday
“Monday mornings should not be so complicated”—at least that is what
Sam, the health commissioner, thought. The new epidemiologist was sched-
uled to report for work that Monday at 10:00 a.m. A second new employee
was scheduled to begin on Friday. “Two new people on two different days
in the same week,” thought Sam, with an air of defeat.
Sam had been reading about the importance of developing potential new
managers. The usual departmental duties would not diminish. Because the
previous Friday was a state holiday, the morning volume of email was extra
heavy. This had become more of a problem since a prankster had spread
Sam’s email address to websites that specialized in body reshaping surgery
or drugs to enhance performance. “Why couldn’t both new employees start
tomorrow?” mused Sam. What advice would you give to Sam?
■ INTRODUCTION: THE ROLE OF TRAINING
AND DEVELOPMENT
Senior 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
must be reduced. This is partly because of the difficulty of pinpointing cost
savings that can be attributed to continuing education. Most individuals
in management believe or know intuitively that education ultimately saves
money. The problem is that it is more difficult to measure the results of
education in terms of costs versus benefits than it is to measure cost savings
in most other areas of organizational activity. As a result, money spent on
education is often viewed as expending resources with few tangible results.
As important as training and development are to every healthcare or-
ganization, in many instances they receive minimal attention from upper
managers. Simply reminding department managers that they have a re-
sponsibility for employee development is insufficient. Managers should be
encouraged to view training and development as important because they
keep valuable employees interested and challenged.
Factors that motivate employees are found primarily in the nature of
work. Among the strongest motivating factors are the opportunity to do
interesting and challenging work and the opportunity to learn and grow.
Better-performing employees are usually so motivated. They are also the
individuals who are most likely to leave in search of more interesting and
challenging work and greater overall opportunities. One way for depart-
ment managers to increase the chances of retaining their better employees
is through visible support for training and development.
A department that places no emphasis on training and development may
seem to be standing still. In reality, such a department is essentially going
130 CHAPTER 7 EMPLOYEE TRAINING
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backward because the world continues to move ahead. With technologic,
economic, legislative, financial, and social change constantly occurring,
no department or organization can afford to stand still. A certain amount
of forward progress is necessary simply to remain abreast of change. As
contrary as it may sound, one must move ahead to stay even. Therefore,
maintaining or improving the abilities of staff must be an ongoing effort.
Continuing education is essential.
The Manager’s Role in Employee Training
Under the blanket heading of training is an entire range of employee devel-
opment activities, from providing new-employee orientation to assisting
employees in moving up into management. Employee development should
be one of the most important aspects of a manager’s job.
Managers are likely to have a greater depth and breadth of technical
knowledge and expertise in the areas or activities they manage than is found
anywhere else in an organization. Managers tend to be educated in the
fields in which they work. In addition, they have the advantage of practical
education acquired through experience. Therefore, managers are primary re-
sources for information about their departments and the work they perform.
Department managers are uniquely positioned to pass on their knowledge
and expertise to others. Department managers have the responsibility for
maintaining and improving the capability and competence of their staff.
The Manager as a Teacher
Because the department manager is usually well versed in the department’s
tasks and activities, the manager is best suited to provide some, although
probably not all, of the teaching in the department’s continuing educa-
tion program. For some of the topics, the manager will clearly be the most
qualified individual and the most readily available instructor, but chances
are there will be a few topics that other individuals can better address. For
example, a supervisor in health information management (formerly medi-
cal records) who is interested in cross-training several assistants in chart
completion review might prefer to use the person regularly assigned to this
task as the instructor. With proper encouragement and assistance, the per-
son who knows best how to perform a given task can be the best resource
for teaching that task to others. Regardless, however, even if the depart-
ment manager does not do all of the teaching, this manager nevertheless
remains responsible for the department’s continuing education program.
Teaching a class can loom as a formidable task to the manager who has
not previously done so. But a manager who is hesitant to adopt the role of
instructor can rest assured that just about everyone involved in teaching
or any other form of public speaking has experienced similar qualms. It
helps to regard one’s early experiences in teaching as learning experiences
in themselves, remembering that one is not a professional teacher and that
the department’s employees are familiar faces, not a group of unknown
Introduction: The Role of Training and Development 131
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“students.” The keys to building one’s effectiveness as an instructor are
preparation and practice. The more one teaches a given subject, the better
it can be taught in the future. The more often one faces a group of learners,
the less troublesome the feeling of uneasiness about teaching will become.
A manager who will serve as a teacher is advised to acquire knowl-
edge of adult learning principles. Pertinent information is available from
a number of sources, including some of the resources listed at the end of
this chapter. Most healthcare organizations of any appreciable size have
internal resources to tap. Depending on organization size, human resources
(HR) may have a training function that can assist managers, or a separate
education department may be available. At the very least it is usually pos-
sible to obtain information about adult instructional methods from nursing
in-service education. From a manager’s perspective, teaching should be an
integral part of management’s role. Teaching is also an essential part of
managerial delegation. Unfortunately, in the pursuit of everyday business,
employee development is often overlooked.
External Requirements
The importance of continuing education and training is underscored by
the extent to which different accreditation and regulatory agencies assess
training activities during their periodic surveys. For example, The Joint
Commission (TJC) (formerly the Joint Commission on Accreditation of
Healthcare Organizations [JCAHO]) publishes specific requirements for
the continuing education of doctors, nurses, and certain other personnel.
The accrediting organization checks regularly to see if employee orienta-
tions are routinely scheduled and attended. Some states have requirements
for all-employee orientations to address certain particular topics and offer
annual refresher education on the most critical topics.
Another indicator of the importance placed on continuing education
externally is the fact that many healthcare practitioners are required to
provide evidence of completing a certain number of continuing education
units each year to maintain their professional licensure.
■ NEW-EMPLOYEE ORIENTATION
All healthcare department managers should have a new-employee orienta-
tion plan for their own department. There should be a separate orienta-
tion plan for the organization overall. Orientation plans are required by
accreditation and regulatory agencies.
An organization usually provides a general new-employee orientation
that addresses common matters. Ordinarily prepared by HR, a general
orientation addresses such topics as the organization’s structure and leader-
ship, employee benefits, the performance appraisal process, the organiza-
tion’s dress code, employee parking, facility security, infection control, and
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universal precautions. Employee health and other benefits, the employee
assistance program (EAP), employee work rules, and generally applicable
policies are also typically included.
A department orientation should provide an introduction to the people
in the department and program areas and to the physical space, equipment,
processes, and any special department policies, as well as on-the-job guid-
ance in getting started doing the work for which the new person was hired.
One of the most inappropriate ways of treating new employees is simply
to allow them to begin working without the benefit of an orientation.
Even experienced and well-educated new employees require some guidance
concerning 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 the
new person’s first few days or weeks on the job. Mentoring offers valuable
benefits; it provides a personally guided orientation for a newcomer, and it
affords an opportunity for further development to an experienced employee.
■ TRAINING TO CORRECT PERFORMANCE PROBLEMS
Training must (or at least should) be a high priority for every manager.
Running a program area and getting out the expected work is a supervisor’s
number-one priority; nevertheless, training is important, especially regarding
new or revised work procedures and the correction of performance problems.
When assessing employee performance, supervisors continually compare
observed performance with expectations. Managers may have to be teachers
when helping employees correct performance problems. When an employee
displays performance problems that command a manager’s attention, it is
always appropriate to consider whether reasonable efforts are being made to
help the employee succeed. Many employees fail at their jobs because they were
inappropriately trained, insufficiently oriented, or inadequately supported.
It may sometimes be necessary to impose a requirement for a particular
kind of education or training as a condition of continued employment. For
example, an individual whose telephone manners have elicited many com-
plaints may be required to complete a program in telephone etiquette, or an
individual whose job requires writing but who has experienced problems
with grammar may be required to take a remedial English-language program.
■ DETERMINING DEPARTMENTAL LEARNING NEEDS
If 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
approach consists of making a simple chart for each job description in a
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department, with columns indicating the principal required skills and rows
listing the employees whose work includes those activities. It becomes a
matter of assessing all employees in terms of whether their skills are ad-
equate to meet normal job expectations. Each assessment that falls short
of normal expectations indicates a learning need. This approach helps
managers focus training activities on areas of greatest need. In addition
to managers’ assessments, noticeable performance problems also indicate
areas of need, as do tendencies toward repetitive errors or actions that
generate chronic complaints by customers, coworkers, and others.
A manager’s initial assessment of training needs is translated into train-
ing objectives. Learners must know initially where they are headed. Once
a goal 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 question about
what they are being asked to learn: “What’s in it for me?” In correcting a
severe performance problem, the answer may be as basic as, “You get to
remain employed.” There are numerous other possible responses, such as,
“You get to learn something that may eventually help you to be promoted,”
“You get more variety in your work,” or “You get to do something more
challenging than what you’ve been doing.”
Employee Training Within a Department
The following principles may assist a manager when addressing staff
training and development needs. All employees who are expected to learn
something deserve to know why they are learning, and all employees
should be advised of specific goals and objectives. Employees learn better
when they actually become involved in the process. The more hands-on
or learn-while-doing components that can be incorporated, the more
likely a training program is to be successful. Employees will more quickly
and more accurately absorb material that applies to their daily work
rather than having to learn material that they see as irrelevant. Thus,
in-department employee training should be practical and immediately
applicable rather than theoretical.
Most employees will accept new ideas more readily if these ideas support
their previous beliefs. New material, techniques, and processes are best pre-
sented within the context of a department’s mission. For example, “We’re
still here to serve members of the community, but now it can be done more
quickly and at lower cost.” Some employees learn best when allowed to
pursue their own areas of interest or needs at their own rate. For these em-
ployees, managers must provide clear expectations, necessary information
and materials, and general guidance. Many employees must be encouraged
to find learning pleasant. For some employees, the possibility of education of
any kind essentially means going back to school, which renders them resistant
to training. These people must be shown what is in it for them.
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Cross-Training for Efficiency
Department managers who supervise employees working in comparable
positions 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 in
the 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 people
are capable of doing all three jobs, the employees can be moved around
as 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 employees
in one another’s jobs. This requires time and effort. Each of the people can
train the other two in job particulars, with the supervisor providing general
guidance. This training will ultimately repay the time and effort involved.
A department gains considerable flexibility in addressing backlogs and
covering for vacations and illnesses. The individuals gain greater interests
and challenges associated with their work through increased task variety.
On-the-Job Training
On-the-job training is appropriate under many circumstances. For some
learning needs, it may be the best available approach. Much on-the-job
training is best accomplished under the direct supervision of a manager or
under the direct guidance of an experienced employee. Employees receiving
on-the-job training receive step-by-step instructions on how to accomplish
a task while actually performing it. After employees perform the task a suf-
ficient number of times under this direct guidance, the instructor may then
reduce or eliminate the verbal guidance and simply watch the employees
until assured that the activity is being performed in a satisfactory manner.
Thus assured, the instructor may further withdraw to a position of being
readily available to answer questions.
On-the-job training is not simply allowing employees to learn by trial and
error with only a rough idea of expected results. However, this is precisely
what it becomes when managers decide that they are too busy to address
training in a proper manner and simply turn new employees loose on the job.
Improper or inadequate on-the-job training can be dangerous or destruc-
tive. Employees may learn to perform their tasks in a highly inefficient or
incorrect manner, creating inappropriate work habits that will become
deeply ingrained and difficult to correct. It is far better for managers to
ensure that sufficient time and attention are devoted at the start of the
learning process so that on-the-job training can succeed as intended.
Another common but inadequate approach to training, or at least to
satisfying annual in-service education requirements, is to give staff members
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files or folders of information to review. Often, accreditation agencies or
state regulations require these documents to be reviewed. A reading package
is circulated among the staff with instructions for each recipient to review
the documents as required, check off to indicate that they have done so,
and pass the material to the next person. This is the loosest and weakest
approach to training. Short of questioning each recipient in detail, there is
no way to ensure that the material has been read and absorbed.
Most people recall a certain portion of information they hear (approxi-
mately 10%), a somewhat greater portion of what they both see and hear
(estimated to be 20%), and almost all of what they simultaneously see,
hear, and do (often 90% or more). This suggests that the most effective
job-related training should include a combination of lecture, demonstra-
tion, and hands-on practice.
Using multiple channels of sensory input increases the likelihood of
learning. This is why personal reading alone can be the least effective way
of learning, and why lecture alone is not a great deal better. When multiple
senses are used simultaneously, the chances of learning increase. Repeating
the same material after a lapse of time, and presenting it in varying forms,
can be highly effective in ensuring that the material will be retained.
Effective Mentoring
Mentoring can be most effective if it is officially sanctioned. It need not take
place within the context of a formal program, but it should be acknowledged
as an actively used employee development technique rather than simply an
ad hoc practice whereby people might happen to link up with each other.
The extent of the formality required may be minimal. A new employee and
an experienced employee or mentor are intentionally brought together by
a department manager, and all three parties agree on the objectives of the
relationship, specifying what the new employee is expected to learn. The
manager remains close enough to the process to be able to evaluate both
the new employee and the mentor during and after the relationship period.
By officially addressing mentoring as a means of employee development,
an organization sends a strong message to all employees concerning its com-
mitment to their development. Although mentoring is one of the least costly
development tools available, it can be extremely effective. Its visible use
proclaims that the organization cares about the development of its people.
For a new employee, a mentor can be a valuable facilitator, sounding
board, and source of advice and guidance. The mentor benefits as well.
Mentoring can provide a sense of fulfillment and satisfaction, especially
for a senior employee who is in need of additional challenges and who can
benefit from more interesting work experiences. The process helps mentors
further refine their skills and keep them sharp.
Employees most likely to realize significant benefits from a mentoring
relationship are those who demonstrate a willingness to learn, are proactive
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in expressing this willingness, and are ambitious and enthusiastic. Effective
mentors are able to assume full responsibility for their own growth and
development. They are receptive to coaching and constructive feedback
and have the ability to change behaviors based on positive experiences.
Experienced employees who are considered for mentoring responsibili-
ties should be persons who are willing to serve voluntarily and give the
undertaking the time and energy it requires. No mentor should ever be
unilaterally assigned or forced to serve. Similarly, managers should not
force new employees to work with any particular mentor. Both parties
should have an option to change a mentoring relationship if either becomes
dissatisfied. Potential mentors should possess sufficient knowledge and
expertise in the new employee’s areas of responsibility. They should have
good interpersonal skills and patience, and they should be supportive,
friendly, and effective listeners. Above all else, potential mentors should
demonstrate interest in the development of others.
Developing Potential Managers
An essential part of every supervisor’s responsibility is to help identify and
develop new managers. This includes identifying and developing one or
more potential successors. Many managers fall short of properly address-
ing the latter need.
The development of potential successors is closely associated with the
practice of proper delegation. This is the primary means by which succes-
sion planning evolves. It is an area of concern or threat for some managers,
especially people who are often insecure in their positions and fear the
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 incapacitated and 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 responsible
delegation. This takes time and planning on the part of management. Such
development requires delegating tasks that are increasingly more respon-
sible. Suitable tasks are often sufficiently appealing or important that man-
agers retain them personally rather than giving them up to subordinates.
At the very least, the manager who has a potential successor in the pro-
cess of development usually has readily available coverage for vacations and
illnesses as needed. No person is or should be absolutely indispensable, but
the loss or absence of a group’s leader when there is no ready backup person
can create significant inefficiency and inconvenience 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 in
delegating tasks and especially at whether that manager has one or more
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capable successors in the wings. Enlightened higher management may
well conclude that a supervisor who has paid no attention to developing a
potential successor shows little strength in delegation, a skill that becomes
increasingly important as one moves up in an organization. Executives in
an organizational hierarchy may be unwilling to promote a manager if
doing so means having to conduct an external search for a successor or
promoting an untried insider.
No manager wants to lose good employees. However, some of them are
going to be lost regardless of a supervisor’s actions. Managers who put
time and effort into developing potential successors may see many of them
eventually lost to other departments or other organizations as they take
advantage of opportunities to advance their careers. But these employees
are likely to be lost to the organization anyway if they are not given op-
portunities to develop. Some of them will be lost even sooner if they remain
unchallenged in their jobs. Therefore, prudent managers should take full
advantage of the talents that are available in their groups by delegating
tasks to the better and more willing employees and helping them to develop.
Only rarely does a manager have anything to fear from a subordinate
who is encouraged to develop and grow and learn some aspects of the man-
ager’s job. In fact, having one or two sharp, up-and-coming employees is
often just what a manager needs to remain effective and to continue to grow.
How Human Resources Can Help
It is customary for an organization’s general new-employee orientation
to be presented or at least coordinated by HR. As far as this orientation
is concerned, ordinarily all a manager has to do is ensure that each new
employee attends. However, some managers have to be reminded of the
necessity for all new employees to attend the orientation. Some of these new
employees may be filling positions that have been empty for some time, and
the department may be behind in its work. Occasionally, managers may
decide that new employees cannot be spared for the few hours required for
orientation. There may be a tendency to regard orientation as just another
HR thing that intrudes on a manager’s ability to run a department or pro-
gram. In most instances, a general orientation to the organization includes
topics that are required by accreditation or regulations. Orientation then
becomes partly a response to external requirements and partly a service
performed to get new employees pointed in the proper direction.
Beyond ensuring that new employees attend general orientation, it is the
manager’s responsibility to be aware of training needs and either attend to
them or refer them as necessary. When addressing issues of employee train-
ing and development, a department manager should expect HR to work
with supervisors to diagnose particular problems and determine the kinds
of training or education that might be helpful, to provide certain kinds
of needed training, to secure the involvement of other in-house training
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expertise, to identify external sources for specifically required training, to
determine how these sources are accessed, and to guide employees in using
an organization’s tuition assistance program when appropriate.
Training needs should be addressed on a continuing basis, both to assess
present circumstances to determine the skills and attitudes that must be
adopted or improved to meet current needs, and to attempt to determine
future needs based on trends that appear to be coming during the next one
or two years. Information for evaluating training needs can be gathered
in a variety of ways, including questionnaires completed by managers and
employees, focus group discussions, individual interviews with manag-
ers and employees, and exit interviews at which departing employees are
asked for their opinions concerning developmental needs. Subjects that
are frequently mentioned merit consideration as potential program topics.
Human resources can contribute information relevant to determining
training and development needs from direct contact with people on the job,
both managers and rank-and-file employees; from reviewing performance
appraisals, performance improvement records, and disciplinary actions;
and from monitoring trends in public health.
When guiding training and development activities, HR may recommend
involving both managers and employees in preparing training agendas and
determining program content. It often starts with needs that employees
appear to be the most strongly motivated to address. Human resources
focuses on present jobs and needs first, then looks to the future, focusing
primarily on behavior, in the belief that if skills are appropriately implanted
or modified then proper attitudes will follow. It will use on-the-job ex-
periential learning to the maximum practical extent, supplemented with
training from other sources.
When evaluating training efforts, HR will attempt to determine whether
the needs assessments that were conducted were accurate, whether targeted
skills have been learned and incorporated in new behaviors, and whether
employee attitudes appear to have been modified. Human resources must
assess what has been learned and how this audit of results can support the
next cycle of training.
■ CONCLUSION
Training and development should be ongoing and essentially continuous
activities. Managers are central to training efforts, identifying needs and
often serving as trainers. New employees must be properly and completely
oriented to a healthcare department as well as their own specific program
areas. Cross-training provides flexibility, especially in times of crisis. On-
the-job training is important and often conducted by a mentor. Potential
new managers rarely emerge without assistance. They must be nurtured and
developed by providing opportunities for them to actually supervise others
Conclusion 139
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or guide programs. Human resources personnel may provide assistance in
training and development.
Case Study Resolution
Returning to the harried health commissioner in the opening case study,
Sam should seek volunteers to serve as mentors for the new employees. This
will provide support for the new people and give Sam a chance to evaluate
the leadership potential of two subordinates. Sam should decide to take the
new employees to lunch on their third day of employment.
Although it would be efficient to provide one initial orientation session
for both new employees, Sam should avoid the temptation. This would
require the epidemiologist starting on Monday to either start without any
training or to waste four working days. Either alternative sends a negative
message to the new employee.
One year later, both new employees had become fully integrated into
the health department. One of the mentors seized the opportunity to shine
and was promoted seven months later. Both mentors reported increased
job satisfaction. Sam noticed the improvement in their job productivity.
The epidemiologist volunteered to serve as a mentor in the future.
SPOTLIGHT ON CUSTOMER SERVICE
Customer Service and Employee Training
Providing employee training on the topic of customer service would seem to
be an obvious priority for organizations interested in promoting the concept.
With that commitment made, the next decision becomes how to provide the
necessary training and what modality or approach to use. A common response
is to hire a consultant to teach employees the fundamentals of customer ser-
vice. Another less common approach includes using data from questionnaires
completed by people that have received or purchased products, programs, or
services (Thies, 1999). A third (Darby & Daniel, 1999) obtains input from
senior managers.
Each approach has advantages and disadvantages. Purchasing a generic
training package will reduce expenses, but at the cost of including situations
that are unique to the organization. Gathering data from users via ques-
tionnaires should provide information focused on the unique needs of an
organization. Obtaining such premium data would demand premium prices.
Tapping into the ideas of senior managers would not be expensive but would
include local biases.
The most pressing truths are the importance of customer service and en-
suring that all employees are adequately trained.
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References
Darby, D. N., & Daniel, K. (1999). Factors that influence nurses’ customer orienta-
tion. Journal of Nursing Management, 7(5), 271–280.
Thies, S. (1999). Customer service: Moving from slogan to point of differentiation.
Medical Group Management Journal, 46(5), 34–38.
Discussion Points
1. Why are training and development opportunities important to some
employees but apparently not to others? To which employees do they
appear most important?
2. Why is having training and development opportunities available to
employees 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 action
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 three
or four roughly comparable positions? Use actual or hypothetical
positions as an example.
7. How do a department manager’s skills as an instructor, teacher, or
mentor relate to the ability to delegate tasks?
8. Why should a department manager who plans on remaining in place for
as long as practical develop one or two capable employees as potential
successors?
9. It is frequently claimed that it is difficult if not impossible to quantify
the cost effectiveness of education. Do you believe this to be true? Why?
10. What are the advantages of using capable senior employees as mentors
or trainers for newer employees?
Resources
Books
Baume, S., Pink, D., & Baume, D. (2005). Enhancing staff and educational devel-
opment. New York:
Taylor & Francis.
Bradford, D. (2005). Reinventing organization development: New approaches to
change in organizations. New York: John Wiley.
Bubb, S. (2004). The insider’s guide to early professional development. New York:
Taylor & Francis.
Conclusion 141
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Buckley, R., & Caple, J. (2004). Theory and practice of training (5th ed.). London:
Kogan Page.
Divanna, J. A., & Rogers, J. (2005). People: The new asset on the balance sheet.
New York: Palgrave Macmillan.
Jakupec, V., & Usher, R. (2005). Policy matters: Flexible learning and organisational
change. Oxford: Routledge.
Kahnweiler, W. M., & Kahnweiler, J. B. (2005). Shaping your HR role: Succeeding
in today’s organizations. Burlington, MA: Elsevier.
Reddington, M., Withers, M., & Williamson, M. (2004). Transforming HR:
Creating value through people. Burlington, MA: Elsevier.
Roberts-Phelps, G. (2005). Training event planning guide. London: Ashgate.
Smith, J., & Golden, P. A. (2004). Human resources simulation (2nd ed.). Upper
Saddle River, NJ: Prentice Hall.
Stahl, G. K., & Mendenhall, M. E. (2005). Mergers and acquisitions: Managing
culture and human resources. Palo Alto, CA: Stanford University Press.
Stimson, N. (2002). How to write and prepare training materials (2nd ed.). London:
Kogan Page.
Werner, J. M., & DeSimone, R. L. (2005). Human resource development (4th ed.).
Mason, OH: Thomson South-Western.
Wilcox, M., & Rush, S. (2004). The CCL guide to leadership in action: How man-
agers and organizations can improve the practice of leadership. San Francisco,
CA: Jossey-Bass.
Wilson, J. P. (2005). Human resource development: Learning and training for
individuals and organizations (2nd ed.). London: Kogan Page.
Periodicals
Ellis, A. P., West, B. J., Ryan, A. M., & DeShon, R. P. (2002). The use of impres-
sion management tactics in structured interviews: A function of question type?
Journal of Applied Psychology, 87, 1200–1208.
Hegeman, C. R. (2005). Turnover turnaround. Health Progress, 86(6), 25–30.
Helgeson, L. (2005). Human resources I.T. starting to deliver. Health Data
Management, 13(11), 48–52.
Karsh, B., Booske, B. C., & Sainfort, F. (2005). Job and organizational determinants
of nursing home employee commitment, job satisfaction and intent to turnover.
Ergonomics, 48(10), 1260–1281.
Longman, S., & Gabriel, M. (2004). Staff perceptions of e-learning. Canadian
Nurse, 100(1), 23–27.
Price, J. H., Akpanudo, S., Dake, J. A., & Telljohann, S. K. (2004). Continuing-
education needs of public health educators: Their perspectives. Journal of Public
Health Management and Practice, 10(2), 56–163.
Stengel, J. R., Dixon, A. L., & Allen, C. T. (2003). Listening begins at home.
Harvard Business Review, 81(11), 106–117.
Sumrow, A. (2003). Motivation: A new look at an age-old topic. Radiology
Management, 25(5), 44–47.
Taylor, P., & Urwin, P. (2001). Age and participation in vocational education and
training. Work, Employment and Society, 15(4), 763–779.
Twitchell, S., Holton, E. F., & Trott, J. W. (2000). Technical training evaluation
practices in the United States. Performance Improvement Quarterly, 13, 84–109.
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15
Fundamentals
As noted in Chapter 1, a human resources (HR) department provides ser-
vices that are essential to the legal survival of an organization. The chapters
in this section review and discuss the core activities of an HR department.
Chapter 2 (How Human Resources Fits into an Organization) describes the
basic services provided by the HR department of an organization operating
in the health sector. Chapter 3 (The Legal Framework of Contemporary
Human Resources) reviews the relevant laws that shape and define many
of the services that a contemporary HR department is expected to provide.
Chapter 4 (Human Resource Activities and Managers) discusses the inter-
actions between HR staff and other managers. Chapter 5 (The Manager–
Employee Relationship) reviews the interactions involving managers and
their supervisees. Many of these interactions are mediated by HR. Chapter 6
(Position Descriptions) explains the importance of job descriptions, how
they are written, and how they should be used.
S E C T I O N
I
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How Human
Resources Fits into
an Organization
Chapter Objectives
After reading this chapter, readers will be able to:
• Understand the placement of human resources within an
organizational hierarchy
• Distinguish between line and staff activities and classify human
resources as an essential staff operation
• Describe several models for organizing a human resources
department
• Describe how the human resources operation is commonly
organized to best serve an organization
• Appreciate the relationship between human resources and executive
management and other organizational departments
• Understand the role of human resources when implementing
changes within an organization
• Understand the effects of reengineering on services provided by
human resources
• Appreciate contemporary trends regarding outsourcing human
resource services
■ CHAPTER SUMMARY
The person heading a human resources (HR) department should report
to an organization’s chief executive officer (CEO). A variety of organiza-
tional structures are used in HR departments. These include models based
on clerical tasks, counseling, industrial relations, control, and consulting.
C H A P T E R
2
17
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Some HR professionals have proposed using similar approaches when
establishing an HR organization.
Line and staff employees perform different tasks for an organization.
Line operations advance the work of an organization. Staff operations
support and enhance the work of an organization by making it possible to
continue producing products or delivering services as intended.
The degree of effectiveness of HR depends on a chief executive offi-
cer’s attitude toward that activity. As a staff operation, HR does not issue
commands 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 with
a four-person personnel department,” said personnel director Sharon Kelly
to her immediate superior, chief operating officer Don Thomas. “But now
that we’re a so-called health system, it’s almost impossible to tell who is
supposed to be doing what for whom on any given day.”
Sharon’s allusion to a system was in reference to the recent merger of
their facility, Community Hospital, with a somewhat smaller rural facility
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 that
became satellite facilities for the system and became affiliated with two
sizable group practices, one medical and one surgical.
Sharon continued, “And now, as I understand it, we’re going to be called
human resources, not personnel. Is that right?”
Don nodded. “Yep, it’ll be Human Resources 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 really
pleased with being named personnel—that is, HR—director for the sys-
tem. But look at what we’ve got to work with. There are four of us here at
Community. Two people are in the department at the other hospital and
one personnel person at the biggest of the satellites, with just a secretary
taking care of personnel stuff at the other two satellites. Office managers at
the group practices are overloaded trying to take care of personnel matters
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 our facilities,
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 to
know how to organize the new HR department to best serve the Affiliated
Community Health and Education System. Every essential base has to be
covered, but keep in mind that nothing is forever, given that we’ll probably
continue to grow and change.”
18 CHAPTER 2 HOW HUMAN RESOURCES FITS INTO AN ORGANIZATION
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“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 expects us
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 should
recommend.
How would you respond to Don’s request? How should the new HR
department be organized? What issues should the HR department focus
on 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 to
one of the organization’s two top executives, generally the president or
chief executive officer, referred to in some healthcare organizations as
administrator or director. Alternatively, the head of the HR department
may report to the number-two executive in the organization, the executive
vice president or chief operating officer (COO), who may hold the title
associate administrator or assistant administrator. In many large contem-
porary healthcare organizations, people heading HR departments report
to the top executive. In a small facility, there may be no second level of
executive management, so the head of human resources will likely report
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 admin-
istrator can result in conflict with other organizational departments that
report to the CEO. The chief operating officer has responsibility for all
of the operating departments, which includes the majority of employees.
Other staff operations (for example, finance) typically report directly
to the president or 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 the chief operating officer. In such an arrangement,
HR might be incapable of fair and equitable dealings with others in the
larger organization.
■ LINE AND STAFF
Two important distinctions must be made when using the terms line and
staff. How do people in these different positions operate within an orga-
nization, and how do they differ? Although the actual relationships may
Line and Staff 19
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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 is as
elementary as the difference between doing and supporting. Line depart-
ments actually perform an organization’s work, while staff departments
facilitate the work, striving to enable overall efficiency and effectiveness.
Another way to describe a line operation is to say that it advances the
work of an organization. In the manufacture of a physical product, each line
activity that is performed changes the physical shape or state of a product
and brings it closer to completion. When a service is being provided, each
activity advances the state of completion of the service. If a line operation
is ignored or omitted, the final physical product remains incomplete or
unfinished; if a service is not delivered in a satisfactory manner or if an
activity that should have been performed along the way is omitted, then the
service is incomplete. In the food service area of a hospital, for example,
if one station on a tray assembly line is missing, then the meals that are
assembled on that line will be incomplete. In another example, if a nurse
neglects to administer a particular medication when scheduled, then the
services delivered to the affected patient will be incomplete.
A staff operation does not advance the work of an organization or
hasten its completion. Rather, it supports and enhances the work of
an organization by making it possible to continue producing products
or delivering services as intended. Staff positions may be removed and
the productive work of an organization will usually continue, at least
for a time. However, the organization is likely to become inefficient
and will eventually cease working without the necessary staff support.
Staff areas within a healthcare organization include HR, finance, house-
keeping (or environmental services), and maintenance (or engineering).
While none of these activities directly advance the provision of services,
if they are not performed, then patient care will eventually experience
both inefficiencies and losses in quality. The primary role of staff or
supporting areas is to maintain an organization’s service environment
and capability, making it possible for line operations to continue in an
optimal manner.
In most instances, it is possible to determine whether an activity is line
or staff by imagining what would happen to the workflow if the activity
were to cease. If an activity or position is abandoned and the workflow is
immediately disrupted, then it is a line operation. If there is no apparent
short-term effect on workflow, then it is a staff operation.
What happens when individuals engaged in line activities disagree about
how services should be provided or supported with those who perform
staff operations? If a conflict between line and staff cannot be resolved by
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the managers of the respective departments, then it is ordinarily referred
to 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 from
the department manager. This line includes all subordinate supervisors and
eventually reaches all rank-and-file employees. The line of authority is known
as the chain of command. A manager of a staff activity is also a line manager,
but only within that operational area. For example, the director of finance
has line authority over the employees in finance, but that authority does not
extend beyond the boundaries of the department. The director of finance can
exercise line authority within but not outside of finance. Every staff activity
has a limited chain of command embedded within it, but this line of author-
ity does not extend outside of the department. In line operations, the chain
of command can extend through several organizational levels and include
more than one department. For example, the CEO has authority over the
COO, who, in turn, has authority over the director of materials manage-
ment, who has authority over others, and so on to the final link in the chain
of command. The line of authority extends through all levels.
As described earlier, HR is a staff organization. The line and staff dis-
tinction is extremely important when considering where HR is located in
the organizational structure and how it operates. The person in charge of
HR has line authority only within HR. As a staff operation that provides
services, HR has no authority over any employees outside of its depart-
mental boundaries. The HR department may be an organization’s expert
and official voice regarding personnel policies, compensation, benefits, and
many of the legalities of employment, but HR has no power of enforce-
ment. A small minority of HR professionals object to this contention; they
operate within a control model under which HR assumes some enforce-
ment authority.
Occasionally, an operational area straddles the boundary between line
and staff. An obvious example is dietary services, which has the responsibil-
ity to feed patients, administer therapeutic dietetics (both line activities),
and prepare cafeteria and snack shop meals (both staff activities).
Managers working in a healthcare organization must understand that
although HR may ultimately report at or near the top of an organizational
structure, it is a staff operation. Its role is largely providing service and
rendering advice. As such, HR has no authority over any other operational
areas or departments in an organization. The HR department exists to
provide advice, guidance, assistance, and whatever other services may be
deemed appropriate according to the mission of the organization and the
needs of other departments.
Line and Staff 21
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■ THE APPEARANCE OF HUMAN RESOURCES
Perceived Human Resources Models
Human resources may be viewed in a variety of ways depending on the de-
partment’s position in an organization’s hierarchy. Relevant aspects include
how it is perceived by other employees, the behavior of HR management
and staff, and the expectations of senior HR managers. Other influences
include the traditional role of HR within an organization, the demands
placed on HR by the larger organization, and the education, training, and
experience of the HR staff and personnel. Previous perceptions of an HR
department are often viewed as models for HR service delivery. One author
discussed five recognizable models of HR organization: clerical, counseling,
industrial relations, control, and consulting (Andrews, 1986).
The Clerical Model
The clerical model represents the long-held and unflattering stereotypical
view of personnel. Under this model, an HR department exists to process
and file paper, maintain records, track statistics and key dates, and admin-
ister employee benefits plans. Under the clerical model, the top manager of
HR is likely to be experienced as a benefits administrator or have a similar
practitioner orientation. In organizations where this model still exists, HR
is rarely called upon to go beyond these expectations.
The Counseling Model
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 on
maintaining employees as effective producers. Under this model, HR is
likely to act as an advocate for employees, provide a resource to managers
for people problems, resolve disputes and disciplinary issues, place a high
priority on preserving privacy and confidentiality, stress training and de-
velopment throughout the year at all levels of an organization, lag behind
the state of the art in effective compensation and benefits administration,
and maintain a posture that is primarily reactive.
The Industrial Relations Model
The industrial relations model typically develops in organizations in which
the workforce is unionized and there are periodic contract negotiations.
Another aspect of this model is considerable activity having to do with
grievances, arbitrations, and similar confrontations. Under this model, an
HR group is likely to have its activities and procedures specified by contract
and performed automatically with little innovation. Because employees are
directed by a contract, they have few opportunities to display flexibility
or judgment as they perform their job duties. Human resources employees
are viewed as powerless within an organization’s structure. Such a view is
usually limited and not especially positive.
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The Control Model
Infrequently encountered in American organizations, under the control
model HR has substantial power. This usually stems from the charisma,
personality, or individual strength of its top manager and key staff. A
control-model HR department usually exerts dominance over any aspect
of operations having HR implications. Consistent with this model, many
managerial decisions are made only following clearance by HR person-
nel. Human resources staff members must be current and knowledgeable
concerning applicable legal requirements and must understand policies
and procedures. Other work rules must be consistently applied. Under
the control model, an HR departmental executive is a key member of an
organization’s administrative team. With this model in place, managers
of other departments may feel stifled and see the larger organization as
being inflexible, bureaucratic, and rule-bound. Under the control model,
employee involvement activities receive minimal if any support.
The Consulting Model
This model is ordinarily found in larger organizations. Here, HR practi-
tioners are usually expert resources. Employees, department managers,
and executive management rely upon them. The services provided by HR
personnel are determined by demand. However, this is primarily a reactive
model that provides effective service wherever an apparent need is identi-
fied but leaves some organizational needs either unmet or unidentified.
The models discussed earlier describe some dominant perceptions of
HR. These models are unlikely to exist in their pure forms. Rather, most
organizations feature a mix of the characteristics of two or three models.
This commonly prevails because of differing philosophies introduced by
a succession of HR heads. However, one particular model will usually
prevail in the perceptions of employees and their department managers.
Most HR professionals agree that an effective HR department is best uti-
lized as a consultant or advisor. Ineffective HR departments are relegated
to providing clerical services.
The greatest single problem with all of the models described earlier is
that they are primarily reactive. All of the HR services provided by the
models are needed. They should be delivered without any single model
dominating or overwhelming an organization. However, managers at all
organizational levels must constantly work to make HR a true strategic
partner in the achievement of an organization’s mission.
Alternative Human Resources Models
In the late 1980s, another approach to providing human relations services
emerged. Driver, Coffey, and Bowen (1988) created alternate models based
on the operational areas of an organization. Organizations would, in theory,
adopt the model that best reflected the most dominant aspect of their mis-
sion or core business. The next models to be described are similar to those
The Appearance of Human Resources 23
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already discussed. However, they reflect different points of view. The HR
activities and services of an organization can be accurately described by using
a combination of the foregoing classic models and the next revised models.
The next models include approaches based on alternative clerical approaches,
the law, finance, management, humanism, and behavioral science.
The Alternative Clerical Model
This is similar to the clerical model described earlier. According to this
model, the primary role of HR is to acquire data, maintain records, and
file required reports. Human resources personnel perform routine tasks,
process paperwork, comply with regulations, provide a steady pool of
prospective employees, and meet the needs of existing and retired workers.
This model presents HR as passive and relatively weak.
The Legal Model
Under the legal model, an HR department derives its primary strength and
reputation from its knowledge and expertise concerning legislation that
affects employment. Compliance with all applicable laws is the overriding
concern of all who work in such a department. Others in an organization
may view HR as a bureaucracy. Occasionally, others may judge it to be
intrusive, obstructive, or both. The legal model is frequently present when
part of a workforce is unionized. An advantage of the legal model is its
expertise and ability to negotiate contracts, monitor contract compliance,
and address grievances.
The Financial Model
An HR department operating under the financial model displays maximum
attention to human resource costs. Particular attention is paid to indirect
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
frequently well versed in matters of finance. A potential hazard of this
model is placing financial matters above all other employee relations issues.
The Managerial Model
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 decisions
in accordance with organizational managerial objectives. This model lends
itself to decentralization of HR activities and services, under which line
managers perform many of the tasks typically reserved for HR personnel.
This model sometimes results in inconsistency in the application of HR
practices because of having organizational guidelines interpreted by so
many different persons. A potential drawback of the managerial model is
that an organization may end up having no particular strategic outlook or
involvement in long-range planning.
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The Humanistic Model
The central tenet of the humanistic model of HR is that it exists primarily
to foster human values and potential within an organization. Individual em-
ployees are the primary focus of HR practitioners. Individual development
and career planning are emphasized. The model assumes that enhancing
the working life of each individual enhances the overall effectiveness of
an organization. Experts claim that the rising level of education and the
general sophistication of employees and their expectations of a high-quality
work experience provide support for this model.
The Behavioral Science Model
The behavioral science model assumes that disciplines such as psychology,
social psychology, sociology, and organizational behavior provide the
foundation for most HR activities. This model is frequently used when
designing performance appraisal systems, job evaluation classifications, re-
ward and incentive programs, employee development plans, and employee
interest and attitude surveys. Increasing sophistication of both managers
and employees provides some support for this approach.
As with the first set of models introduced, the alternative HR models
are unlikely to be found as pure types. For example, many managers con-
tinue to assume that HR provides clerical services. Despite how modern
and sophisticated HR becomes, organizations will continue to maintain
a significant number of records. In the highly unlikely event of a marked
change or reversal in the amount of legislation impacting employment,
the legal model will appear to prevail. Nevertheless, for many HR depart-
ments, one or two particular models will predominate, or at least seem to
according to the perceptions of line managers and rank-and-file
employees.
■ INTERNAL ORGANIZATION OF HUMAN RESOURCES
An HR department will customarily be organized according to an organiza-
tion’s expectations, reflecting the prevailing goals and structure of the organi-
zation that it serves. Smaller organizations typically employ HR generalists.
The usual reason for such a decision is staffing limitations. The requirements
of a small organization can usually be satisfied by a single person, sometimes
working less than full time. Larger organizations employ a mix of specialists
and generalists. Their requirements cannot be met by a single person, and they
have the resources to employ several individuals. In larger healthcare organiza-
tions, specialists are most often used. These specialists are listed in descending
order of the frequency with which they are most likely to be encountered.
1. Employment
2. Compensation and benefits
3. Employee relations
4. Training and development
Internal Organization of Human Resources 25
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5. Labor relations
6. Equal Employment Opportunity (EEO)
7. Security
8. Safety
The individuals or customers served by an HR department vary. Internal
customers include all existing or former employees at all organizational
levels. External customers include potential employees or applicants for
employment.
■ HUMAN RESOURCES AND SENIOR MANAGEMENT
The attitude of an organization’s CEO toward HR usually sets the tone for
the rest of the employees. Tone includes attributes such as the relative stand-
ing of an HR department within the larger organization and the respect that
is accorded to HR by others throughout the organization. Translated, tone
determines how much power or influence an HR department will be able
to exercise. Human resources departments that have power or influence
are respected; the reverse is also true. Respect leads to involvement and
interdependence throughout an organization. The respect is fundamentally
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, adminis-
ter compensation and benefits programs, and maintain personnel records.
These are the activities that HR experts include as the minimum or basics
of the profession. While many other activities can be assumed or provided
by an HR department, some senior managers demand only the basics.
A considerable number of CEOs expect their HR departments to provide
advice and counsel on employee matters. Many expect the head of HR
to serve as a personal adviser for personnel issues. In unionized working
environments, CEOs may expect someone in HR to monitor activities
related to labor relations.
Occasionally, a CEO wants to have an HR department that provides
the 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
not heard. In reality, this is a difficult assignment. Human resources is
expected to meet basic personnel expectations in a competent and profes-
sional manner but must not become advocates for innovation or positive
changes. The CEOs making such demands on an HR department often
have large or oversized egos.
Many CEOs say that they want a professional and innovative HR de-
partment. However, those that mouth the words are more numerous than
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individuals who truly desire, appreciate, and utilize competent and profes-
sional 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 simply
maintaining the status quo, then few changes are likely to emerge from HR.
Such executives are not oriented to the future or instituting changes. They
usually overlook HR’s potential value in business and strategic planning,
personnel and career path preparation, and the development of different
or innovative HR strategies.
Some management experts have observed that HR-related tasks have
dramatically expanded over the past several decades. Most of these
additional requirements have been mandated by legislation that began
with the Civil Rights Act of 1964 and received added impetus from the
Equal Employment Opportunity Act of 1972. Human resources de-
partments have become much larger as they attempt 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 opportunity to become more of a full partner in organi-
zational management. Many critical observers have wondered whether
HR is a full planner and decision maker or simply a firefighting activity.
This distinction is related to the attitudes of senior management.
Human resources becomes a more integral and important member of
a management team to the extent that senior managers regard HR as a
professional specialty. Furthermore, they ensure that the HR department
is staffed and led by competent people who have been appropriately
educated and trained. They provide support for an HR department in an
open and continuous manner.
How does a department whose responsibilities are continually chang-
ing and evolving remain current? Further complicating this question is the
widely held perception that HR is an entity to be tolerated rather than em-
braced because it does not generate revenue. Many managers are surprised
at the level of expertise displayed by HR personnel. Expressed differently,
how does an HR department become a strategic organizational partner
with its leader a full-fledged member of senior management? The field of
HR has been wrestling with this question for decades without reaching any
satisfactory conclusions. It has gained status in some healthcare organiza-
tions, but in many this has yet to become a reality.
■ HUMAN RESOURCES IN RELATION TO OTHER
DEPARTMENTS
From the perspective of departmental personnel, HR has traditionally
been viewed as more administrative than advisory, more as an enforcer of
policies than a policy maker. Many individuals throughout almost every
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organization regard HR as a group of paper pushers. It acquired this
sobriquet by virtue of its employment-related activities. Recent govern-
mental reporting requirements have reinforced this perception. In short,
in the minds of many people, HR merely hires people and files papers.
The proliferation of laws and regulations governing almost all aspects of
employment relationships has been a major factor in the changing role and
relative organizational position of an HR department. However, organiza-
tional managers outside of the HR department often cannot see or appreciate
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 makes the demands
that it imposes on other organizational units. For many, HR appears to be
a rule-bound, bureaucratic group that, in their opinions, is trying to prevent
them from accomplishing tasks that they feel are necessary. Even persons
who have a partial appreciation of the regulatory environment in which HR
must operate often come to view HR as little more than a necessary evil.
Many of the prevailing views or, more accurately, stereotypes, of an
HR department prevent managers from seeking appropriate counsel or
assistance until their needs or problems have become critical. The time
to call upon experts from HR for assistance is when the earliest signs of
a problem appear. When personnel-related issues involve discipline or
legal action, many opportunities for intervention have already been lost.
Full-blown problems can be resolved, but the cost is usually far greater
than it could have been if advice had been sought at an earlier juncture.
If an HR department exists to serve an organization, then why is it still
often viewed as an obstacle? Resistance sometimes emerges as a result of a
particular department’s approach or the attitude of its practitioners. When
individuals in an organization perceive a group as a miniature bureaucracy,
the reasons for the perception can usually be found in the behavior of the
HR staff. In addition, the reasons why persons in an HR department may
offer recommendations that are contrary to the expectations of department
managers are not clearly communicated. Consider the following example.
A department manager has had a key position open for several weeks,
and the lack of a person to fill the position is impacting the department’s
output. It is affecting other staff members who have been obliged to cover
the vacancy through mandatory overtime. An ideal candidate appears, is
referred to the manager by HR, is interviewed, and is immediately offered
the position. This ideal candidate accepts and indicates an ability to begin
work at any time. The manager responds to HR by saying, “I want this
person to start work tomorrow.”
However, protocols used by HR call for a delay. The recruiter in HR
responds to the departmental manager by saying, “We must have time to
check 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 manager
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understands that proper clearance means conducting reference checks and
completing a pre-employment physical examination, the manager insists
on a next-day start and says, “The reference checks and the physical can
be concluded next week. In the meantime, we can get a start on attacking
the backlog of work that has accumulated.”
Because HR refuses to authorize the immediate start, the department
manager proceeds to complain to other peer and senior-level managers
about HR’s inflexibility and unwillingness to cooperate. The involved HR
representative stands firm, without appreciating the fact that the complain-
ing department manager may not be aware that regulations (at least in some
states) legally prohibit a new employee from starting work in a healthcare
position before being medically cleared, or that the organization, reinforced
by personnel policy, has an obligation to make a good-faith effort to check
references before accepting an individual as an employee.
In this example, the HR representative is bound by state regulations
and corporate personnel policy. If this is not fully understood by the other
department manager, then HR’s opposition will appear as arbitrary resis-
tance. It does little good for staff from the HR department simply to cite
organizational policies and regulations to a manager. Such an approach,
coming from HR, usually sounds like more HR rules and generates divi-
sion. Education of line managers concerning existing legal and regulatory
restrictions that affect aspects of an employment relationship and have an
impact on their activities is required.
It is helpful to remember that the HR department does not issue com-
mands. Rather, it merely advises or makes recommendations. As in the
previous example, however, HR has the responsibility not only to make
a recommendation in favor or against a specific action but also to advise
others of the possible consequences of the proposed action. An HR depart-
ment manager should never expect to issue mandates and should avoid
allowing HR to command by default.
“This was really personnel’s decision,” or “HR made me do it,” are
two laments commonly heard by executives or senior-level managers when
lower-level supervisors are unhappy with a recommendation made by
HR. These defensive reactions can transform an HR recommendation into
an HR command. Human resources managers must explain the reasons
for their recommendations and be sure that they are clearly understood.
Human resources is purely a staff activity that operates by advising, counsel-
ing, suggesting, recommending, and occasionally by negotiating, persuad-
ing, or convincing—not by issuing commands.
Healthcare Human Resources and the Changing Scene
As with any other organizational activity, HR must adapt to a frequently
changing environment. Changes external to the healthcare industry and
changes within the industry itself affect the ways that health care is being
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delivered. In turn, these changes affect how the services of HR are provided.
Three kinds of changes are faced by a modern healthcare organization:
technological, financial, and social. Not only are the three interrelated, but
these major areas of change have also resulted in many specific modifica-
tions of the ways in which health care is organized and delivered.
Technological change encompasses advances being made in methods of
diagnosis and treatment, including all new or improved equipment, new
procedures, and new or improved drugs. In short, this encompasses most
advances made in any dimension of restoring health and preserving life. But
technological changes collide with considerations of finance because the
cost of having the benefits of the latest and best equipment and the informa-
tion that such resources generate can produce conflict with the pressures
experienced to stem the rapid increase of healthcare costs. Social change
becomes a strong influence as the population ages and society experiences
the changing attitudes of contemporary generations.
The three major categories of change mutually affect each other. The re-
sults of this interplay can be seen in a number of changing forces within the
healthcare industry. Financial pressure increases as revenues are constrained
from growing in a manner that is consistent with actual cost increases. In
some instances, available funding is being reduced. Competition is increas-
ing as elements of a shrinking hospital system struggle to acquire or retain
a share of the available business in a particular area.
There is a growing emphasis on outpatient care. Technological advances
and financial pressures are continually conspiring to transfer more modes of
treatment to outpatient settings. Free-standing specialty centers that perform
some of the same services provided by hospital departments are proliferating.
Corporate restructuring is occurring as provider organizations consummate
mergers or other affiliations and form ever-larger health systems.
Turnover rates among healthcare executives are increasing. Some
organizations are folding under mounting pressures, while others are
discovering that mergers result in fewer executive positions. Medical
entrepreneurship is increasing as individual providers establish specialty
practices or attempt to tap into specific market segments. Emphasis on
productivity is growing, and getting more output from the same or less in-
put becomes necessary 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 associated with working
under increasing demands while short of critical staff. An increasingly better
educated and more sophisticated workforce of employees is finding that
they are less likely than members of earlier generations to accept what they
are offered without expressing what they want.
Change within a healthcare organization or in any enterprise occurs in
one of two ways. Change is either intentional, being planned and executed
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for some specific purpose, or it is forced, coming about in response to
circumstances beyond the control of an organization. Healthcare organiza-
tions, especially hospitals, experience far more reactionary changes than
planned changes.
Several reasons contribute to these developments. Change is difficult to
promote unless it is driven by a crisis. Few organizations engage in planning
that creates change. Because of workload and other continuing problems,
top managers have little time to focus on change. Resistance to change is
often prevalent throughout many organizations. Middle managers and
department 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 of
change. In HR departments, fostering a climate that is conducive to con-
structive change is especially important. This belief should be communicated
in all of HR’s interactions with organizational managers and employees.
Contemporary healthcare organizations benefit from a culture of change
that encourages innovation, rewards risk taking, and values employee
participation and input. Human resources can best communicate its belief
in a change process by implementing up-to-date policies and procedures
that convey respect for the capabilities of every employee.
Job descriptions should be flexible and should allow room for innovation
and employee participation and input. A modern performance appraisal
process that permits employees to set objectives for themselves and partici-
pate in their own growth and development fosters change. Opportunities for
promotion and transfer from within reinforce employees’ personal growth
and development. A compensation structure that includes the opportunity
to influence earnings through performance and a flexible benefits structure
that recognizes the divergence of individual needs also supports change.
Given its unique relationship with all line and staff operations and its
mission to provide service for all employees, an HR department is ideally
positioned to be a healthcare organization’s primary driver of internal
change. Whether it is used as such is up to executive management and
HR’s leadership.
■ HUMAN RESOURCES REENGINEERED
A Process by Any Other Name
Reengineering is intended to make work processes easier and more produc-
tive. Reengineering, a term used to describe many improvement-oriented
activities, is far more complex than many people realize. The term literally
means engineered again. It involves addressing something that is currently
being done and redesigning a process so that a different objective related
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to the same result is achieved—for example, savings in time or labor or
direct savings in money. Practically, this may be a reduction in materials
or supplies consumed or an improvement in quality without an increase
in cost. As applied to an entire organization or significant subunit, reen-
gineering is the systematic redesign of a business’s core processes, starting
with desired outcomes and then establishing the most efficient possible
processes to achieve those outcomes.
At the heart of traditional methods-improvement or problem-solving
processes is the way that something is currently being done. These pro-
cesses begin with the present method and look for ways to eliminate steps
or make improvements. By contrast, reengineering ignores how something
is currently done and focuses only on desired outcomes. Abandoning a
familiar routine is difficult; overcoming the comfort of familiarity is the
challenge of reengineering.
Reengineering is a business term that has replaced a number of other
buzzwords, such as reorganizing, downsizing, repositioning, rightsizing,
revitalizing, and modernizing. The term reengineering has evolved as the
intent has gradually clarified. It is now the preferred term because it con-
notes more of a focus on process and thus less of a focus on people. Despite
this meaning, an announcement of impending reengineering has come to
be synonymous with the likely loss of jobs.
Human Resources Meets Reengineering
As organizations change, the need to improve services and reduce costs is
the driving force behind most reengineering efforts. Reengineering consis-
tently results in reductions of staff. Many instances of reengineering have
been undertaken specifically to reduce the cost of services by reducing staff.
Human resources is so labor intensive that, with the exception of reducing
employee benefits, there is no way to achieve significant cost savings other
than reducing staff. As a consequence, HR is often unaffected by staff
reductions driven by reengineering programs.
Effects on Human Resources Staffing
Human resources staffing ratios in different areas of organizational activ-
ity vary. Healthcare organizations have approximately half of the number
of staff persons per 1,000 employees compared with HR departments in
industries such as manufacturing or finance. Human resources departments
in contemporary healthcare organizations have approximately one staff
member for every 100 to 150 total employees.
The Flatter Organization
Organizational flattening, the elimination of layers of management such
that the institution’s organization chart becomes flatter, often accompanies
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reengineering. As many managers have discovered, when an organization
is flattened, middle managers are often eliminated. The responsibilities of
remaining managers, usually first-line supervisors, are increased.
A typical HR department, even in a mid- to large-size healthcare or-
ganization, has only three layers. The middle layer, usually composed of
specialist-managers for activities such as employment or compensation and
benefits, may vanish, leaving only HR staff and a departmental supervi-
sor. When this occurs, an organization’s department managers must then
relate directly with several staff-level individuals rather than with two 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 cen-
tralization. Whichever outcome occurs affects not only HR personnel and
how they do their jobs, but also department managers.
When HR’s activities are decentralized, individual managers must be
more aware of HR concerns because decisions must be made closer to
an organization’s lowest levels. For example, if some aspects of employ-
ment are decentralized, then a department manager may have to screen
incoming applications and decide which applicants have the qualifications
for a particular open position. Such tasks were handled by HR before
decentralization.
Some forms of technology—for example, computerized telephone sys-
tems—have led to the centralization of question-and-answer protocols
and other systems for geographically scattered organizations. When using
newer communication systems, employees at multiple locations have been
able to transact business about their benefits without having to travel to an
HR office. In turn, this can enable an organization to maintain a smaller
HR presence at satellite locations while handling all business centrally.
For widely dispersed organizations, toll-free numbers for employees who
have benefits questions provide an effective and financially viable partial
replacement of HR staff with technology.
Outsourcing
Outsourcing is defined as having an external vendor provide, on a continu-
ing basis, a service that would normally be provided within an organization
(Harkins, Brown, & Sullivan, 1995). Although outsourcing is frequently
linked to staff reduction in HR departments, budget cuts and staff reduc-
tions are not always the leading reasons for outsourcing. Exhibit 2-1 lists
common reasons for outsourcing in approximate descending order of their
frequency of occurrence.
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Cutbacks related to economic pressures and reengineering have created
opportunities for companies that specialize in HR services. Exhibit 2-2
lists a number of activities that are commonly outsourced and the reasons
for so doing.
Payroll is the most commonly outsourced activity, although it is now
normally based in the finance department. Payroll processing requires con-
siderable detailed knowledge of the Fair Labor Standards Act and related
regulations that affect payroll deductions and other aspects of payment.
Firms that specialize in payroll have created automated systems that fully
account for all of the detailed requirements of wage payment. Users submit
input information. The payroll service creates paychecks or direct deposits
and generates all necessary records. This particular form of outsourcing
has eliminated a great deal of frustration for businesses. It is usually less
expensive than an internal payroll operation. Because many smaller health-
care organizations have small payrolls, purchasing an automated payroll
system is cost efficient.
Some of the downsizing of HR operations has resulted in outsourcing to
save money. In 1999, 58% of all companies were outsourcing at least one
HR activity. In 2002, this number had increased to 74% (Knight Ridder
News Service, 2002).
Many small facilities lacking the resources to employ adequate full-
time HR staff rely heavily on outsourcing, particularly on firms known
as professional employer organizations (PEO). A PEO takes over and
provides all HR services. When an organization or business contracts
with a PEO, its employees become co-employees of the PEO. A PEO
charges a percentage of payroll, typically 2% to 4%, for its services.
These ordinarily include benefits administration as well as payroll. In
one instance, by contracting with a PEO, a small healthcare provider
Exhibit 2-1 Common Reasons for Outsourcing Selected Human
Resource Services
• Use the expertise of specialists (for example, payroll, pension plan
administration, 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
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organization reduced its costs of personnel administration from 9% of
payroll to 3% (Perl, 1996).
Reengineering aside, HR departments have outsourced activities because
doing so often makes economic sense. Activities such as administering
a self-funded health insurance or disability program or coordinating an
employee assistance program are frequently provided by nonorganization
employees for reasons of confidentiality. This prevents the company from
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 processed
has an effect on HR staff.
• Outplacement services. These services are outsourced because
they are needed intermittently or infrequently.
• Employee assistance program administration. This is outsourced
to maintain confidentiality for employees.
• Employee training and development. Many organizations contract
with training specialists or consultants for services because they
are needed intermittently.
• Relocation services. These are outsourced because the need for
them is intermittent or infrequent.
• Benefits administration. Many benefit programs are internally ad-
ministered. Pension plans and self-funded insurance programs,
such as dental and short-term disability, are often administered
by external trustees.
• Compensation planning and administration. This is occasionally
outsourced, especially when executive incentive compensation
plans are involved.
• Recruitment and staffing. Some elements are outsourced.
Organizations experiencing rapid expansion or adding a signifi-
cant service may outsource application and résumé screening and
initial interviews.
• Candidate background checks and credential verification. Very few
healthcare organizations attempt to perform their own background
checks or verify credentials. These activities are frequently out-
sourced.
• Safety and security. Few organizations entirely outsource these
activities. Many organizations contract with specialists to supply
such services.
Human Resources Reengineered 35
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having 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 of
reengineering. As HR staff members are eliminated, adjustments are made
in the HR workload. However, essential tasks that remain may occur so
infrequently that it is inefficient to retain and pay staff to perform them.
Almost any HR operation can be a candidate for outsourcing. Commonly
outsourced HR activities include payroll, insurance claim processing, EAP
administration, retirement and savings plan administration, employee edu-
cation, and employment candidate background checks.
Effects on Corporate Culture
Corporate culture is made up of the shared basic assumptions and beliefs
developed by an organization over time. It requires time for an organiza-
tion’s culture to develop to the extent that those entering can tell the kind
of organization they have entered in a relatively short time.
It also takes time for an organization’s culture to mature. Time is also
required for an organization’s culture to adapt to change. Reengineering
is inevitably accompanied by change. For an organization’s culture to suc-
cessfully absorb and accommodate, change should occur in increments that
can be absorbed without trauma. The pace of change should allow full
assimilation of one significant modification before another is introduced.
In many healthcare organizations, the pace of change has been so rapid that
the corporate culture has had no opportunity to reach a new equilibrium
before once again being thrown off balance.
Reengineering inevitably introduces turmoil into an organization’s cul-
ture. Mergers; acquisitions and other forms of reaffiliation; downsizing,
rightsizing, and other forms of reorganization; increasing external regula-
tion; and all forms of cost cutting involve organizational turmoil.
■ CONCLUSION
To ensure maximum effectiveness in all organizational relationships,
the individual in charge of HR should report to the CEO. Line and staff
tasks are different. Line and staff employees perform different tasks for
an organization. Line operations advance the work of an organization.
Staff operations support and enhance the work of an organization by
making it possible 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 recog-
nized by some HR professionals.
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The degree of effectiveness for HR depends on the attitude of a CEO
toward HR. Human resources does not issue commands. It is vulnerable
to changes because of reengineering. Outsourcing HR services is relatively
common.
Case Study Resolution
Returning to the opening case study, Sharon, the HR director for the newly
designated health system, reports to the COO. This is the second best of
the two acceptable reporting relationships for HR. Her organizational
standing is compromised from the outset.
Sharon was wise enough to realize that she could not immediately establish
the kind of HR department that she would like to have. Despite a change in
name, the CEO still thinks of HR as personnel. Uniting all of the scattered
elements of personnel into an HR department to serve the new health system’s
needs was a significant challenge. Her present HR structure, a combination of
the clerical and counseling models, would have to prevail until she could get
HR properly organized and transform it into a full-fledged business partner.
She realized that this might not occur until the current CEO left.
Sharon’s initial recommendations included opting for partial decen-
tralization of some HR activities, with the senior person at the smaller
hospital, a single HR person at the largest satellite, and the office managers
at the other satellites and the group practices handling local matters. These
included making changes to the employee information and benefits data
bases and addressing employee matters as they arose. In addition, they
would serve as channels for policy interpretation.
Sharon decided to keep recruiting centralized, primarily to maintain
consistency in such matters as formulating salary offers, explaining ben-
efits, checking references, and initiating background checks. She was
concerned about organizational consistency in pre-employment activi-
ties. She opted to maintain all personnel files centrally, but created a
procedure to ensure quick access by managers at any location when
necessary. Finally, she established a helpline for employees to call at any
time. Through this service, employees could learn where and how they
might access HR or benefit information or secure assistance in addressing
problems related to benefits.
Sharon realized that she would have to provide direct support to her HR
staff by visiting the satellite facilities in person. She planned to ensure that
all of her HR managers were trained. She would send them to local colleges
or universities for instruction by HR experts. Supervisors having the least
HR experience would be the first to receive training. Sharon established a
personal goal to make HR activities as easy as she could for the managers
who had only part-time involvement in HR matters.
Conclusion 37
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References
Andrews, J. R. (1986). Is there a crisis in the personnel department’s identity?
Personnel Journal, 65(6), 86–93.
Driver, M. J., Coffey, R. E., & Bowen, D. E. (1988). Where is HR management
going? Personnel, 33(1), 28–31.
Harkins, P. J., Brown, S. M., & Sullivan, R. (1995). Shining new light on a growing
trend. HR Magazine, 40(12), 75–81.
Knight Ridder News Service. (2002, February 17). Outsourcing human-resource
tasks. Democrat & Chronicle, Rochester, NY.
Perl, L. (1996, November 26–27). Outsourcing, health-care style. Detroiter: For
Business in Greater Detroit.
Discussion Points
1. Describe a specific outsourcing practice about which you are knowl-
edgeable, and explain what you believe are the primary benefits
achieved by having the services provided by outside persons rather
than keeping them within an organization.
2. Why do experts contend that a primary characteristic of line personnel
is present within a clearly defined staff activity such as HR or finance?
3. What is the fundamental difference between a line activity and a staff
activity? Provide two examples of each in a healthcare setting.
4. What problems develop when the head of HR reports to any executive
other than the chief executive officer?
SPOTLIGHT ON CUSTOMER SERVICE
Integrating Customer Service into an Organization
This chapter has focused on integrating human resources into an organiza-
tion. Contemporary human resources departments are very complex, with a
myriad of responsibilities. While customer service is similar, its functions are
spread across an organization more than the functions of human resources
are. Every employee should contribute to the customer service effort in an
organization. Three important concepts relate to customer service:
1. The single goal of addressing customer needs is clearly expressed in the
program’s name: customer service.
2. An organization requires only one formal customer service program.
3. Customer service is a priority activity that should be shared by all
employees.
38 CHAPTER 2 HOW HUMAN RESOURCES FITS INTO AN ORGANIZATION
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5. Describe under what organizational circumstances the following mod-
els of HR could be successful in a healthcare organization: Clerical
Model, Control Model, Industrial Relations Model, Legal Model,
Consulting Model, and Financial Model.
6. Which of the HR models appears most appropriate for managing
personnel in a healthcare organization? Why?
7. Describe how an HR department in a healthcare organization might
evolve through different organizational models as the department
grows and matures.
8. How do the expectations of an organization’s CEO shape the model
or manner in which HR services are delivered?
9. What are the primary areas of conflict between HR and department
managers? How might these conflicts be reconciled?
10. What are the advantages of a decentralized organization for delivering
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 healthcare organizations? How does reengineering
differ from minor modifications of existing practices?
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Compensation
and Benefits
Chapter Objectives
After reading this chapter, readers will be able to:
• Describe the role that human resources and department managers
have in matters of compensation
• Understand the roles of human resources and department
managers regarding benefits
• Discuss statutory benefits such as Workers’ Compensation and
short-term disability
• Have a better understanding of a manager’s role in the
employment process and what occurs behind the scenes in
human resources
• 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 SUMMARY
Compensation and benefits are two significant human resources (HR)
activities. All employees expect their compensation to be fair and expect
HR to collect information related to compensation in a regular and sys-
tematic manner. Managers should be familiar with compensation scales
for their employees. Exchanging pay scale information with professional
colleagues 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 by
law, and those that are voluntarily offered by the employer. Organizational
C H A P T E R
8
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policies surrounding benefits have been changing. Currently many organi-
zations are changing from defined benefit to defined contribution pension
plans, and organizations that for years have offered the same benefits to all
are adopting flexible or “cafeteria” plans that allow a range of employee
choices. Statutory benefits include Workers’ Compensation, unemploy-
ment compensation and insurance, and disability insurance. Government
agencies investigating claims may involve an organization’s employees, and
inquiries from external agencies should be referred to HR.
Case Study: First Impressions Can Be Wrong
Ben Baldwin, CEO of the Westside Health Consortium, summoned Rob
Jameson, vice president for Human Resources, and Pat Collier, chief
financial officer, to his office.
He told them, “Rob, I agree with your suggestion to change the structure
of our benefits 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 both of you to work together to develop options for a new plan to
replace our existing approach that gives all employees the same benefits. I know
that individual and family needs change with time. Westside must institute
changes 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 Ben provide any additional
guidance? If so, what information should he give? Why?
■ INTRODUCTION
Not all of the activities of HR are visible to department managers. Many
of the activities discussed in this chapter are hidden in the sense that they
occur within HR and elsewhere and are rarely the responsibility of a de-
partment manager. Compensation and benefits are matters of concern for
most employees. This chapter is intended to provide a basic understanding
of compensation and benefits.
■ COMPENSATION
One of HR’s primary responsibilities is to maintain an organization’s com-
pensation structure. Human resources ordinarily strives to remain current
and competitive with compensation levels in the healthcare industry and
the local labor market. On a predetermined basis, usually annually, HR is
expected to make recommendations for changes in compensation. These
recommendations are usually reviewed by an organization’s board of direc-
tors before being implemented.
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Annual compensation recommendations often include suggestions
related to the timing of changes and the rationale for the suggested dis-
tribution of increases. Recommendations usually include the basis for the
changes being proposed. These are typically related to prevailing industry
or area compensation practices. Proposed wage increases may include all
employees, often referred to as cost-of-living adjustments, or they may be
restricted to employees in specific professional groups.
Knowing the Compensation System
Supervisors and department managers are usually the first persons to receive
questions regarding compensation and benefits from their employees. To
respond adequately to such inquiries, a department manager should be
knowledgeable about how pay increases are related to performance and the
general level of performance required for receiving merit-based increases.
A supervisor should know the differences between merit pay increases and
increases provided through pay-scale changes, also sometimes referred to
as cost-of-living increases. A manager should know when merit increases
or scale increases can usually be expected to occur and how and when
other types of pay increases, such as probationary increases, are granted.
A manager should be familiar with current pay scales for all positions
in the department, and should maintain current pay scale data on file for
reference. When pay scales are changed, HR usually supplies up-to-date
published pay scales to department managers. Current pay-scale informa-
tion is needed when addressing particular employee questions, but the dis-
semination of this information should be selective, based on an individual’s
need or right to know.
Strategic planning figures prominently in compensation administration.
Organizations must make decisions about the nature and extent of the com-
pensation and benefits that they will offer to their employees. Will they de-
cide to pay their employees at the regional median, similar to others in their
region? Some consciously decide to pay less than the prevailing wage; they
know that they will be saving some money but will be accepting a higher
than normal degree of employee turnover as a consequence of their decision.
Others decide to pay at a rate or level greater than that of other organiza-
tions, accepting the higher wage costs in exchange for more highly skilled
or reliable employees and a lower than usual level of employee turnover.
Organizations must make similar deliberate decisions concerning ben-
efits. Will their benefits package be similar to or different from the packages
of other organizations? A common question reflects the nature of the local
pool of prospective employees and the extent to which they will have to
compete for employees.
Yet another strategic decision reflects the nature of benefits that will
be offered. Traditionally, organizations have offered all employees a simi-
lar package of benefits that typically differs only in reflection of years of
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service. Many contemporary organizations are making strategic decisions
to allow individuals to select benefits from a menu of options. Such an ap-
proach is referred to as a flexible benefits plan or a cafeteria benefits plan,
under which employees are allotted a certain amount of benefits credits to
distribute as they see fit among available benefits. Employees appreciate
being able to select options that are relevant to them, and organizations
are able to better contain their benefit expenses.
Historically, benefits were paid to provide incentives for individuals to
choose one organization over another. After employment began, benefits
provided incentives to continue employment. Thus, companies were able
to attract and retain desired employees. Funding for benefits reflects a
financial commitment by employers. The ability to pay for benefits must
be periodically reviewed as budgets are developed, as new employees are
hired, 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 wage
mix of an organization. Phrased differently, benefits are usually propor-
tionate to wages. Some benefits are mandated; Workers’ Compensation
and unemployment insurance are common examples. All benefits other
than those required by law are provided at the discretion of the employer.
Individual employees have the right to know the hourly rate minimum
and maximums for their pay scales 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 managers
have the responsibility to safeguard this aspect of employee privacy. A man-
ager can exercise no control over those occasional employees who voluntarily
share their pay information with one another, although this practice should
be discouraged when the manager has the opportunity to do so.
When Compensation Challenges Arise
A department manager is often the initial target when employees challenge
the compensation system. Some individuals challenge the equity of their
own rates of pay; they compare their pay with that of others who have
similar positions. The perceived similarity may be based on occupation,
job title, or another means of comparison. A typical claim is that they are
underpaid for performing the same or comparable work. Their information
is often secondhand, inaccurate, or outdated.
A department manager should recognize several responsibilities related
to possible pay inequities. First, a manager should know enough about
the pay level for each person being supervised to recognize pay inequities
within the group when or before they surface. In a relatively small group,
substantial pay inequities are uncommon. A manager who has a small group
of employees should be well aware of how these people stack up against
each other in terms of pay. In a larger department, the cumulative effects of
several years of hiring at differing levels as well as merit and probationary
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and annual pay increases may mask inequity until an employee raises the
issue. When this occurs, the manager should do some preliminary research
concerning the inequity. If warranted, the problem should be referred to
HR for further analysis and a recommendation for change or correction.
A manager’s other responsibility related to alleged pay inequities is
to work with HR when the challenges involve claims of underpayment
in comparison with what persons of comparable skills are supposedly
receiving at other local facilities. Employees will sometimes approach the
department manager with such challenges looking for the manager’s sup-
port and advocacy. They want the manager to champion their cause and
seek to have one or more pay scales increased and corresponding pay
raises granted for individuals. Such claims must be addressed with care;
in some instances individuals have offered “proof” of higher wages paid
by local competition by producing actual paycheck stubs bearing hourly
rates clearly more generous than what their home organization is paying.
However, investigation usually reveals that these more generous payments
are the rates paid to per diem employees who receive a higher amount per
hour for limited hours because they receive no benefits.
Although conscientious and caring managers are probably inclined to
be advocates for their employees, claims of pay inequity relative to other
organizations should always be referred to HR. This action should be taken
before agreeing to take on any employee’s cause. Assessing such claims of
inequity requires detailed information about wages paid in the immediate
area. There are legal and practical restrictions on how such information
may be obtained. It is no longer safe to do as many HR departments once
did and simply survey wage rates around one’s local area to obtain infor-
mation that might help in adjusting rates for equity and competitiveness.
In the early 1990s, the United States Justice Department put a stop to
the direct sharing of wage and salary information. As part of a consent
decree involving the settlement of a civil antitrust complaint, the Justice
Department laid down some rules for surveying rates of pay, specifically:
• Surveys must be designed, conducted, and published without the
involvement of participating organizations (accomplished, for
example, by a hospital association or neutral third party).
• Surveys can include only historical or current pay information
(that is, they cannot ask for intended increases).
• Surveys cannot request actual pay rates, only ranges and averages
for specific job titles.
• Surveys must disseminate data of 10 or more organizations if
current information is involved, or five or more if the data are
more than three months old.
• No one organization’s data may represent more than 25% of the
weighted value of any statistic (this way, the data from one large
facility cannot dominate the results).
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• Data must be presented in such a manner that no individual
participating organization can be identified.
Data from McCareins, R. Mark, Information Exchanges in the Health Care Field, Winston
& Strawn LP: January 1994.
Managers should never give in to the temptation to conduct a personal
wage survey by calling on contacts or colleagues throughout the community
to determine what other organizations are paying for the specific kinds of
skills in question. Since the early 1990s, the free exchange of wage informa-
tion has been legally regarded as price fixing under antitrust regulations.
The Justice Department eventually decided that not-for-profit healthcare
organizations should be held to the same standards as other industries.
Therefore, department managers who solicit or exchange wage information
with colleagues at other institutions are technically engaging in an illegal
activity. Rather than attempting to verify the validity of employees’ claims
of wage inequity relative to other organizations, a department manager
should take the issue to HR to conduct the appropriate investigation.
Wage surveys are permitted, but only when conducted according to
established 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 have
their data arranged in such a way that no participating institutions can
be readily identified. Generally, five or six organizations are enough for
an appropriate survey, provided that none can be readily identified. For
example, a survey cannot have separate categories for “university medical
centers” or “hospitals of 100 to 200 beds” if only one of each is included
in the survey’s sample or area of coverage.
Interviewing Prospective Employees
The department manager is expected to be conversant with all pay scales
used in the department. Thus, in most organizations a manager may cite the
appropriate pay range for a job during an interview. However, a manager
should not make a specific financial offer during an interview. Having made
a decision to offer a position to a particular applicant, the manager should
collaborate with the HR recruiter to determine the starting pay that 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 refer-
ence checks, passing a pre-employment physical examination and passing
any drug or substance screening tests that are in use by the hiring orga-
nization. Second, it is the responsibility of the HR department to protect
an organization’s compensation system against inequities. This can best
be accomplished if all offers emanate from a single office. Third, some
organizational policies for determining starting pay offers may state, for
example, that people with a given amount of experience may be offered a
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starting pay at a specified percentage of the pay grade. This is also most
easily controlled if all offers emanate from a single point.
A department manager should have a voice in recommending starting
pay if there is any flexibility in so doing. This input should be made in
conjunction with HR, remembering that HR always extends the formal
offer of employment.
■ BENEFITS
A department manager should have basic benefits information available for
employees. At a minimum, this should include information in the personnel
policy and procedure manual and the employee handbook. No matter how
strongly employees are urged to become familiar with their benefits, 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 someone in HR. This is espe-
cially true concerning health and dental insurance benefits, about which many
employees remain nearly completely ignorant until a specific need emerges.
Department managers are not expected to be experts in the interpretation
of employee benefits. However, managers should be sufficiently conversant
with the benefits structure to answer simple questions and to know the
appropriate person in HR to refer employees for inquiries about benefits.
Some areas of employee benefits can become complex. For example, a large
hospital may carry five or six different health insurance plans, each having
hundreds of details. Questions about them are best addressed by a person
who is qualified and knowledgeable about the different plans.
Flexible Benefits Plans
Flexible benefits plans proliferated through the 1980s and 1990s. They
are commonly referred to as cafeteria plans, and their use recognizes that
the majority of workers prefer to have some control over their benefits.
The array of options available is often a consideration for an applicant
in determining whether to accept a position with a particular employer.
The three benefits most preferred by the majority of employees, in order
of their preference, are health insurance, a pension plan, and paid vacation.
Despite the fact that these have formed the core of most organizational
benefit plans, they are not of equal importance to everyone.
Employee benefits are available in many different forms and variations.
This variety is useful when not all employees want or need the same benefits.
Even pension benefits, which will ultimately be a concern for everyone, are
not a consistent choice for all employees at all times. Younger employees
often pay less attention to pension plans than do older workers. Younger
employees prefer to have cash or additional paid vacation time. Older
workers tend to prefer pension benefits. Choices were introduced into
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benefits programs as employers endeavored to stretch benefits budgets as
much as possible while giving employees options for the benefits that they
perceived were most needed. Flexibility and choice will be increasingly
important 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 entirely
flexible or partly flexible around a small number of core benefits. Programs
that allow an employee to waive medical coverage after establishing that
coverage is provided by other means—for example, through a working
spouse’s medical insurance plan—and applying the value of that benefit
elsewhere have been especially successful. Plans that permit buying or sell-
ing some vacation time by trading it off for other benefits are quite popular.
A logical progression beyond flexible benefits is the use of benefits vouch-
ers. These provide employees with the equivalent of a set amount of money
to apply outside of an organization as they choose. Stated differently, such
a plan allows employees to spend an organization’s contribution toward
their benefits on whatever is most meaningful to them. Vouchers have
proven to be especially advantageous to some employees during layoffs and
downsizing. Many employer-furnished benefits end when employment is
terminated, but benefits secured externally with vouchers are purchased for
a fixed period of time and do not necessarily end when employment ceases.
Another emerging trend is the use of voluntary benefits. This approach
allows employees to purchase specified insurance coverage and financial
products for savings and retirement at their place of employment. Voluntary
benefits have been used in work organizations for many years in the form
of supplemental insurance programs. The concept appears to be spreading
to include some products or options formerly regarded as core benefits.
Portable benefits are becoming more common in benefits administration.
This concept has been advanced by many as the solution to maintaining ben-
efits for workers in a mobile society. It recognizes that individuals may work
for several different organizations during the course of a normal career and
therefore may be best served by benefit products that can move with them.
Defined benefit pension plans are being replaced by defined contribution
plans. Because defined contribution plans limit liability exposure, they result
in savings for employers. They also allow organizations that formerly offered
defined benefit plans to escape the hassle of government reporting, avoid
annual funding of plans, and get out from under the constantly increasing
premiums charged by the Pension Benefit Guarantee Corporation (PBGC).
Commonly defined contribution products include 401(k) plans for invest-
ments and savings and 403(b) plans for tax-deferred annuities. Individuals
who have either plan can transfer the funds to subsequent employers.
The Health Insurance Portability and Accountability Act (HIPAA)
addresses an aspect of benefits portability by providing for continuity of
coverage when workers change employers.
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Some experts have predicted that the ultimate development in benefits
administration is to offer no benefits at all other than those required by
law, such as those required by the Federal Insurance Contributions Act
(FICA—that is, Social Security), Workers’ Compensation coverage, and
unemployment insurance. Employers will simply pay their employees the
value of the organization’s benefits contribution as a part of their salary
and allow them to spend the money as they choose. This is in conflict
with the direction and philosophy established by the government in
employment legislation that encourages employers to assume greater social
responsibility for their employees. Many workers in the lower tiers of the
economy currently receive no benefits other than those required by law.
The government has been trying to address and improve the situation of
these people, especially with regard to health insurance.
Statutory Benefits
Statutory benefits programs exist by virtue of legal requirements. These pro-
grams are usually administered by HR. Foremost among these are Workers’
Compensation and unemployment compensation in all states. A number of
states also have a legal requirement for short-term disability compensation.
Human resources usually coordinates these programs, although there are
implications for a department manager.
Workers’ Compensation laws are in effect in all 50 states, American
Samoa, the District of Columbia, Guam, Puerto Rico, and the Virgin
Islands. Including both medical benefits and compensation for lost income,
billions of dollars in Workers’ Compensation benefits are paid to American
employees every year.
The medical benefits paid under Workers’ Compensation laws gener-
ally equal full actual medical expenses. The amount of benefits paid for
lost wages varies considerably from state to state. Nationwide, the most
common benefit paid amounts to two-thirds of wages up to a specified
maximum. Most states place limits on both maximum and minimum weekly
benefits, the total number of weeks that benefits can be received, and the
total dollar amount of benefit eligibility. Most states also provide lifetime
payment for permanent disability. Some states pay additional amounts 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 people in
an organization who have separate but not well-defined roles in controlling
Workers’ Compensation costs. The best approach to controlling such costs
is to have an effective accident prevention program. Here, a manager’s role
is to be constantly aware of the requirements of the program and ensure that
all employees observe those requirements. Specifically, it is up to managers
to ensure that employees are thoroughly educated in safe work practices,
including, in the healthcare setting, safe handling of needles and other sharp
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objects and safe lifting techniques. Puncture wounds have always been
a concern in health care, and back strain resulting from improper lifting
remains one of the most common on-the-job injuries experienced by health-
care personnel. Managers must enforce compliance with organizational
safety procedures that have been mandated by governmental entities. They
must also ensure that their employees are trained and appropriately use all
required safety equipment as they perform their jobs.
When pursuing an effective accident prevention program, a manager is
clearly responsible for encouraging a high level of consciousness about the
need for safety among employees. Managers must discipline their employees
for unsafe practices. Ignoring a safety procedure is no different from violating
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 inappropri-
ate. To monitor claims properly, a manager must be thorough and timely
in providing all documentation that may have a bearing on a claim. This
includes 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 determine
whether Workers’ Compensation is appropriate or whether the case should
be processed as a short-term disability resulting from an off-the-job occur-
rence. Employees may report off-the-job accidents as occurring on the job,
especially in states and organizations that lack a short-term disability benefit
or where Workers’ Compensation benefits are more generous than short-
term disability benefits. After an injured employee’s personal physician, the
employee’s supervisor is often the next most important person in determining
whether a given occurrence legitimately falls under Workers’ Compensation.
Unemployment Compensation
The Social Security Act of 1935 made the individual states responsible for
their own unemployment compensation insurance programs. A federal tax
was imposed on employers, but most of this tax could be offset by state
taxes. All programs were to be controlled at the state level.
Unemployment insurance programs are in effect in all 50 states, the
District of Columbia, and Puerto Rico. These programs are continually
undergoing change. The majority of these changes lead to increased benefits
for employees and increased costs for employers.
Although differences exist throughout the country, employers are gener-
ally subject to experience rating. This means that they are taxed according
to their past records. An employer that decreases its unemployment claims
by employees will also decrease its unemployment tax costs. The majority of
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business organizations, and virtually all profit-making businesses, are taxed
directly using experience-based rates established by each state. In a number
of states, not-for-profit organizations, including most healthcare organiza-
tions, pay for their unemployment on a dollar-for-dollar basis rather than
paying a tax based on a percentage of their payroll. This means that such
organizations pay their actual unemployment costs as they are incurred.
Because unemployment compensation is intended to make up for wages
lost due to periods of unemployment beyond an employee’s control,
unemployment compensation is not ordinarily made available to people
who voluntarily resign their employment or who are discharged for cause.
Rather, unemployment compensation is intended primarily for employees
who are laid off through no fault of their own or who otherwise find that
their services are no longer required. Individuals who have been dismissed
because of their apparent inability to meet the requirements of their positions
generally qualify for unemployment compensation. In a few states, employees
who are on strike can receive unemployment compensation after a specified
waiting period, usually six or more weeks from the start of the strike.
To the extent that it is possible for a department manager to influence
some forms of employee turnover, a supervisor can have an effect on an
organization’s unemployment compensation costs. Care and thoroughness
in hiring will help limit the likelihood of acquiring an employee who may
turn out to be unable to succeed on the job. It is not possible to refine the
hiring process to the point where the right choices will always be made.
Nevertheless, if a manager sticks to minimum education and experience
requirements and does not rush a decision based on insufficient information
or an insufficient number of candidates, it is often possible to minimize
or avoid performance problems before they begin. This also minimizes
potential unemployment costs.
A manager should scrupulously follow all of an organization’s poli-
cies regarding hiring, orientation, disciplinary action, and applicable legal
processes. Disciplinary actions, especially those taken in a series that could
eventually result in termination, are especially important. All such actions
must be thoroughly documented and should be taken strictly in accordance
with policy and Equal Employment Opportunity guidelines. It is frequently
necessary to use records of disciplinary actions to refute nonlegitimate
claims for unemployment compensation. Because the primary purpose of
disciplinary action is the correction of behavior, it is often necessary to
produce documentation of a series of related actions to demonstrate that an
employee had the opportunity to correct errant behavior but failed to do so.
A manager should remove a substandard performer during the proba-
tionary period. An organization’s probationary period may be too short
to be able to make a definite decision concerning an individual’s ability,
especially in the case of a marginal employee. However, the probationary
period is usually sufficient to give a manager a fairly clear indication of
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an employee’s potential. Separation for reasons related to performance is
usually easier to justify if it occurs during a probationary period. Because
unemployment costs are related to the length of time an employee has
worked for an organization, separation by the end of the probationary
period serves to hold costs down.
Working in conjunction with HR, a manager should challenge all unem-
ployment claims that appear inappropriate. Many people automatically file
for unemployment regardless of why or how they left their positions. They
have nothing to lose by trying to collect benefits. Many former employees
will state their reasons for termination clearly in their favor. The former
employer then has the responsibility to dispute such claims to avoid unem-
ployment costs. If a claim goes undisputed, then a former employee, deserv-
ing or not, will automatically collect unemployment compensation. Thus,
every effort should be made to dispute claims that appear inappropriate.
A manager should consider the use of temporary help when it will be
needed for only a short period of time. Hiring a regular employee to cover a
given need and then laying the person off when the need has passed increases
unemployment costs. Using temporary help for particular tasks or for brief
periods of time will avoid such costs. In most parts of the country, 26 weeks
of work are required for an employee to become eligible for unemployment
benefits. Thus, any need that is less than six months long and can be met by
using temporary help will reduce an organization’s unemployment costs.
Short-Term Disability
Unlike Workers’ Compensation and unemployment compensation, which
are statutory requirements throughout the country, short-term disability
is not a universal legal requirement. But if one’s state requires short-term
disability coverage, this becomes another cost-control concern for the
department manager.
The premium for disability insurance is linked to usage. Technically,
this is called an experience rating. The claims actually paid in a given
year are reflected in the subsequent year’s premium rates. Therefore, most
organizations pay dollar-for-dollar. They eventually pay the total actual
costs for all claims plus administrative expenses.
The single action that can have the greatest impact on an organization’s
overall disability costs is a corporate decision to become self-insured. Such
a policy is typically coupled with a comprehensive employee health and
safety program. At the level of an individual department, a manager can
pass along information to employees concerning personal health and safety
in general and particular hazards or illnesses that are germane to an orga-
nization. Supervisors should urge employees to take advantage of annual
physical examinations or health assessments and should always be prepared
to refer employees to the employee health office when questions arise or
problems become apparent. Finally, managers should scrupulously fulfill
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all departmental responsibilities related to disability procedures by ensuring
that all necessary forms are completed and submitted in a timely fashion.
Legal Actions
From a department manager’s perspective, involvement in a legal action
may take the form of brief periods of extremely intense and demanding
activity, interspersed with lengthy stretches characterized by little or no
visible activity. A department manager who may become involved in a legal
action against the organization must be patient. Attorneys’ schedules, court
calendars, and official waiting times all extend the time that is required
to resolve legal actions. There is little point in allowing the suspense of a
situation to impact the routines of employees when the timing of events
lies well beyond their control.
Supervisors must accept the normal sequence of events. During long
quiet periods, nothing may seem to occur. Many activities such as motions,
depositions of various individuals, and settlement conferences that do not
involve a manager may be transpiring. Managers should simply accept
the apparently slow pace of resolution. Managers should not be overly
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 appear
in court. Because there is no way to avoid such an appearance, worrying
about doing so is a waste of time and energy. Resigning one’s employment
will not remove the legal obligation. When completing any form, a manager
should offer only what is necessary and always do so objectively and with-
out personal bias or name-calling. The manager should complete all forms,
being attentive to dates and signatures. Managers should remain sensitive
to the implications of a case in their day-to-day dealings with employees.
Words as well as actions have the potential to create problems. In response
to direct questioning, managers should not discuss an open case with oth-
ers in the organization except for those few who are actively managing
the organization’s involvement. Smart managers avoid the temptation to
make predictions concerning the eventual outcome.
External Agency Investigations
Human resources staff members often spend a considerable amount of time
interacting with representatives of different government agencies. Following
is an overview of the agencies commonly encountered by an organization.
Equal Employment Opportunity Commission (EEOC)
and the State Division 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 many
states a complaint reaching EEOC first is automatically referred to DHR for
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initial processing. The initial point of contact for both agencies is usually
human resources. HR typically gathers the requested information and re-
sponds formally to a complaint. The manager of a complaining employee’s
department will often be contacted for information to help in developing
the organization’s response. That manager is likely to be interviewed dur-
ing 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 investi-
gate specific complaints or allegations of unsafe practices that have been
received. Human resources is often an organization’s point of contact.
The initial contact may be a particular administrator, a risk manager, or
a safety manager. Engineering may also be involved because many safety
issues or violations involve the physical plant. The manager of a depart-
ment where a potential unsafe practice is observed or alleged can expect
to become involved.
State Employment Service
Human resources is heavily involved in every claim for unemployment
compensation. Since an employee’s level of compensation is based on in-
come, information about earnings must be provided. Human resources
must supply the reason for termination and must indicate whether or not
the claim will be protested. A protested claim usually results in a hearing
before an administrative law judge. A hearing usually involves the former
employee’s immediate supervisor as well as an HR representative.
Immigration and Customs Enforcement (ICE)
Under the provisions of the Homeland Security Act of 2002, the Immigration
and Naturalization Service (INS) was dismantled in 2003 and separated into
three components: the U.S. Citizenship and Immigration Service (USCIS),
Immigration and Customs Enforcement (ICE), and Customs and Border
Protection (CBP). Completed Employee Eligibility Verification I-9 Forms
verifying individuals’ status as legally employable in the United States and
retained in employees’ personnel files are subject to inspection and audit by
ICE. Forms may also be inspected by the Department of Labor and certain
immigration-related branches of the Department of Homeland Security
other than ICE. Financial penalties are imposed for missing or incomplete
I-9s. Also, there can be significant legal repercussions should illegal aliens
be discovered in the workforce. Usually the department manager will have
no involvement in an I-9 audit, except perhaps as the channel for an I-9
related question from HR to an employee.
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
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organization may be visited by either state or federal DOL representatives.
Their interest may be a routine audit of selected wage payment practices.
Overtime payments are often the subjects of investigation. The DOL also
investigates employment practices such as compliance with child labor laws.
DOL investigators occasionally investigate irregularities in wage payments.
The primary points of contact in such investigations are usually human
resources and payroll departments. Department managers can become
involved in providing information to determine whether an employee is
properly classified as exempt or nonexempt, or whether time worked has
been appropriately reported.
Few people look forward to an investigation by an external agency.
However, such contacts are inevitable. Most human resources depart-
ments regard external agency inquiries as opportunities to review selected
practices for possible violations and determine how these practices can be
improved. Even though an external investigator may appear to be unnec-
essarily forceful, nothing is accomplished when HR personnel or others
respond by being defensive or uncooperative.
A considerable part of human resources’ 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 deter-
mine whether it is valid. If it is, HR can recommend corrective action in
addition to formulating the organization’s response to an external agency.
There is no gain in resisting a complaint if an organization appears to be
in the wrong. However, HR professionals are usually well aware that an
external investigator who is acting on an individual’s complaint has heard
only one side of the story. Unless the particular complaint to be addressed
is a discrimination charge from EEOC or DHR that cannot be disposed
of at an early stage, human resources is usually able to keep a department
manager’s involvement with external agency representatives to a minimum.
■ CONCLUSION
Compensation and benefits are important aspects of employment for most
people. Compensation information is coordinated by HR. Benefits policies
are changing. Organizations are trying to reduce expenses associated with
benefits. Flexible benefit plans have evolved as organizations try to provide
meaningful and relevant benefits to employees with a wide range of ages
and interests. Rather than simply paying for a standard benefits plan for
all, organizations are allowing individuals to make their own decisions
regarding benefits. Benefit programs are usually administered by an HR
department. Workers’ Compensation, unemployment compensation, and
insurance and disability insurance are required by law. All other benefits
are offered at the discretion of an employing organization.
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Case Study Resolution
Returning to the initial case study, Ben should either provide a general
dollar amount to offer to each Westside employee or instruct Pat to de-
velop such an amount. Rob and Pat should contact other organizations in
the area that compete for employees to ascertain what components their
benefits packages include. They should consider obtaining the opinions of
a sample of Westside employees as to the desirability of the benefits under
consideration. Once the fundamental questions of dollar amount and
plan elements are addressed, Rob and Pat can develop a plan for Ben to
consider. Based on employees’ years of service and relative position within
the organization, the plan should define the dollar amounts Westside will
provide for its employees and the options from which they can choose for
their benefits. Because they are thorough, Rob and Pat should develop a
range of options for Ben to review. Ultimately, Westside’s board of direc-
tors will have to approve the proposed changes in benefits.
SPOTLIGHT ON CUSTOMER SERVICE
Customer Service, Compensation, and Benefits
Customer service, compensation, and benefits are fundamentally linked by
virtue of the fact that an organization must earn revenues in order to be able
to pay its employees. Customer service, if regularly practiced by all employees,
usually improves on organization’s chances of not only staying in business
but also prospering and expanding. Conversely, ignoring customer service
may be an attractive option to persons seeking shortcuts. Such individuals
are probably surprised when layoff notices are distributed to employees or
an organization fails.
The bottom line in this thought process is to think of customer service as
a form of insurance. Providing good customer service on a regular basis is
an inexpensive form of insurance premium.
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 making
specific pay offers to potential employees?
3. How should a supervisor reply to a male employee who complains that
he is being paid less than another individual who is doing the same work?
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How should a supervisor reply to a female employee making the same
complaint about a male colleague? Are the responses different? Why?
4. Why should a department manager avoid comparing employee pay
scales with those of other organizations?
5. An employee asks, “What is the difference between a defined benefit
pension 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
injury or illness should be considered under Workers’ Compensation
(job-related) or short-term disability (not job-related). Knowing
that an employer ultimately pays for both, why is this distinction
important?
9. What role should a department manager have in controlling the cost
of unemployment compensation?
10. How should managers react if representatives of an external regulatory
organization arrive at their departments to audit their activities?
Resources
Books
Baker, A. J., Logue, D., & Rader, J. S. (2004). Managing pension and retirement
plans: A guide for employers, administrators, and other fiduciaries. New York:
Oxford University Press.
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.
Boyett, J. H., & Boyett, J. T. (2004). Skill-based pay design manual. Lincoln, NE:
iUniverse.
Bragg, S. (2005). Payroll best practices. New York: John Wiley.
Ellison, R., & Jones, G. (2005). Dealing with pensions: The practical impact of
the Pensions Act 2004 on mergers, acquisitions and insolvencies. London:
Spiramus.
Fornero, E., & Sestito, P. (2005). Pension systems: Beyond mandatory retirement.
London: Edward Elgar.
Henderson, S. (2005). Compensation management in a knowledge-based world
(10th ed.). Upper Saddle River, NJ: Prentice Hall.
MacIntyre, A., & Bodmer, B. A. (2004). Executive compensation: A study of corpo-
rate excess. Salt Lake City, UT: American Book Publishing Group.
Rosenbloom, J. S. (2005). Handbook of employee benefits (6th ed.). New York:
McGraw-Hill.
Conclusion 159
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Society for Human Resource Management. (2005). SHRM benefits survey report
2004: A study by the Society for Human Resource Management and the SHRM
Foundation. Alexandria, VA: Society for Human Resource Management.
Periodicals
Baird, M. (2004). Orientations to paid maternity leave: Understanding the
Australian debate. Journal of Industrial Relations, 46(3), 259–274.
Clark, I. (2001). Strategic HRM and a budgetary control mechanism in the large
corporation. Critical Perspectives on Accounting, 12, 797–815.
Gornick, M. E., & Blair, B. R. (2004). Employee assistance, work–life effectiveness,
and health and productivity: A conceptual framework for integration. Journal
of Workplace Behavioral Health, 20(1–2), 1–29.
Ichniowski, C., Shaw, K., & Prennushi, G. (1997). The effects of human resource
management practices on productivity. American Economic Review, 86,
291–313.
Michie, J., & Sheehan, M. (2005). Business strategy, human resources, labour
market flexibility and competitive advantage. International Journal of Human
Resources Management, 16(3), 445–464.
160 CHAPTER 8 COMPENSATION AND BENEFITS
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The Legal
Framework of
Contemporary
Human
Resources
Chapter Objectives
After reading this chapter, readers will be able to:
• Understand the evolution of the regulated environment within which
human resources must work in serving a healthcare organization
• 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 human
resources
• 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 SUMMARY
This chapter is intended to provide readers with sufficient background and
knowledge of employment legislation to enable them to develop an under-
standing of the effects of employment law on the activities of a department
manager. It provides a review of the laws affecting aspects of the employment
relationship. These pieces of legislation are described using nonlegal terminol-
ogy. In each instance, how the pertinent piece of legislation approaches its
subject is discussed. The importance of each law is reviewed, along with the
C H A P T E R
3
41
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success each has had in addressing a societal need through the legislation’s
stated intent. Effects of the more significant laws are reviewed, 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 County
Memorial Hospital. She had generated an impressive record during her
training, possessed good references from prior employment in two different
private duty situations, and interviewed well. Susan was clearly very heavy.
Helen Harding, director of nursing at County Memorial, estimated her
weight to exceed 300 pounds. An ideal weight for her five-foot, five-inch
body was 125 to 130 pounds. A reasonable weight range for someone of
that height was 120 to 140 pounds. After the interview, Helen extended a
tentative offer of employment to Susan. The offer was contingent on pass-
ing the hospital’s pre-employment physical examination.
The County Memorial employee health physician examined Susan but
declined to approve her for employment unless she could first achieve a safer
weight, in her case less than 275 pounds. Susan failed to get the job because of
her overweight condition. She then filed a complaint with the State Division
of Human Rights charging discrimination based on disability, citing Title
VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act
of 1990. She claimed that her only responsibility was to demonstrate that
she was capable of doing the job, and that in spite of her physical handicap
she could still adequately perform all required duties of the job. Her obesity,
she claimed, was due to a medical condition over which she had no control.
County Memorial moved for dismissal of the complaint on three
grounds. First, it argued that obesity was not a true physical impairment
under the law. Second, it claimed that Susan’s condition resulted from her
own voluntary actions. Finally, the hospital claimed that she could reduce
and control her weight if she so chose.
How might the foregoing situation be resolved? Is obesity truly a disabil-
ity, or will a different argument prevail? Do you believe that the hospital will
be successful in getting the complaint dismissed, or will Susan successfully
persuade the Division of Human Rights to act on her complaint? Why?
■ A REGULATED ENVIRONMENT
An important disclaimer is in order before proceeding with the contents of
this chapter. Nothing in this chapter constitutes legal advice, and no such
advice should be inferred from its contents. Individuals with questions about
the applicability of any particular point of law should take those questions
to the appropriate people in their organization. These may be persons in
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human resources (HR), administration, risk management, or perhaps even
in-house legal counsel who can provide or secure appropriate responses.
The pivotal year when HR began to change to its current incarnation
was 1964. Internal operations that addressed issues related to employees
were still called “personnel” in most organizations. Sweeping civil rights
legislation came into being with the passage of the Civil Rights Act of 1964;
the specific turning point was the appearance of Title VII. This legislation
marked the beginning of significant changes in relations between government
and business. It marked a change in philosophy that resulted in a completely
new direction for government 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 they
chose, with only two exceptions: wage-and-hour laws and labor-relations
laws. Prior to 1964, the only laws that had noticeable impact on the em-
ployment relationship were the Fair Labor Standards Act and related state
laws, and the National Labor Relations Act.
The Fair Labor Standards Act and its numerous amendments governs
the payment of wages and other related conditions of employment. This
and similar laws existing in some of the states are commonly referred to
as wage-and-hour laws.
The National Labor Relations Act governed relationships between work
organizations and labor unions. Similar laws existed in some but not all
states. They were relevant only to organizations where employees were
unionized or where active union organization efforts were under way.
Prior to 1964, managers did not have to be knowledgeable about many
regulatory requirements. Few legal restrictions impinged on HR operations or
on managers in general. The majority of business organizations complied with
the wage-and-hour laws as a matter of operating routine. Leaders of organi-
zations where there was a union presence, either being organized or already
under contract, generally expected to comply with all applicable labor laws.
Other applicable legislation was in place before 1964, but the Fair Labor
Standards Act and the National Labor Relations Act were the only ones hav-
ing a visible influence on HR operations and department management. These
two are discussed more fully in the chronology of legislation that follows.
The turning point of 1964 heralded a change in philosophy concern-
ing government’s relationship with business. For years, the governing
philosophy had largely been one of hands-off to the maximum practi-
cal extent. Employers were expected to concern themselves only with
wage-and-hour requirements and restrictions imposed by labor relations
legislation. Since 1964, however, the government has been addressing
many of the perceived needs of individuals by involving employers in
meeting those requirements. President Lyndon Johnson’s signature on
the Civil Rights Act in 1964 initiated a significant change in the actions
A Regulated Environment 43
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that government would be taking on behalf of its citizens. This trend
continues to the present day.
The Growing Regulatory Environment: Chronology of Legislation
Some of the legislation included in the following chronology will receive
little more than a brief description because it is addressed more thoroughly
in subsequent chapters. These laws will be so identified. For others, implica-
tions for HR and department managers are briefly reviewed.
Norris–LaGuardia Act (1932)
The first significant piece of legislation to address the growing organized
labor movement in the United States was the Norris–LaGuardia Act of
1932. This law reflected an important shift in public policy concerning
labor unions, from a posture of legal repression of unions and their ac-
tivities to one of actual encouragement of union activity. Although the
Norris–LaGuardia Act legalized union organizing activities and affirmed
workers’ rights to organize for collective bargaining purposes, it did little
or nothing to directly restrain employers in their conduct toward labor
organizations. During the first three decades of the 1900s, many workers
who attempted to organize for collective bargaining lost their jobs because
of their involvement with the organizing process and other union-related
activities. Often, their organizational efforts were countered with violence.
The impact of the Norris–LaGuardia Act today has waned. It is mentioned
here because of its 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 employers in labor organizing and collective bargaining situations.
Although it seemed largely to favor unions and encourage their presence,
the NLRA established some boundaries on what unions could do in their
organizing activities. In addition to affirming the right of employees to
organize, the NLRA made it illegal for an employer to refuse to negotiate
with a union. This requirement assumed that the union had conducted
a legal organizing campaign and had won a proper representation (cer-
tification) election.
The NLRA created the National Labor Relations Board. This body was
charged with administering the Wagner Act by conducting representation
elections 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 appropriate
unit would be the exclusive representative for all employees in the unit.
The NLRA delineated a list of unfair labor practices that were punishable
by fines. Many unfair labor practices pertain to management reactions
to union organization activities. The NLRA was subsequently modified
by the Taft–Hartley Act and the Landrum–Griffen Act.
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Social Security Act (1935)
The Social Security Act established a basic system of contributory social
insurance 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
expanded to cover workers who become permanently disabled. Coverage
under the Social Security Act was again expanded in 1965 to provide
Medicare health insurance coverage for the elderly.
Fair Labor Standards Act (1938)
In part, the Fair Labor Standards Act (FLSA) was intended to reduce the
high 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 among a greater number of workers. In
addition to defining a normal work week, the FLSA set minimum pay rates,
established rules and standards for the payment of overtime, and regulated
the employment of minors. Over the years, FLSA has been amended many
times by raising the minimum wage due to changing circumstances imposed
by inflation and other economic and social concerns. The FLSA remains
as the country’s basic wage-and-hour law and has served as the model for
the wage-and-hour laws of many states.
Labor–Management Relations Act (1947)
The Labor–Management Relations Act, commonly referred to as the Taft–
Hartley Act, amended the National Labor Relations Act. As passed in 1935,
the NLRA clearly favored unions over employers. The principal intent and
subsequent effect of the Taft–Hartley Act was to level the playing field to some
extent by more appropriately balancing the responsibilities and advantages of
both unions and employers. Taft–Hartley listed additional unfair labor prac-
tices. Although many experts still view it as a law favoring labor unions, the
Taft–Hartley Act was clearly a change in the direction of management’s rights.
Two points are of immediate interest concerning the Taft–Hartley Act.
Most mentions of the NRLA are actually referring to the NLRA as amended
by Taft–Hartley. The Taft–Hartley Act was itself amended in 1975 specifi-
cally to address not-for-profit hospitals by removing the exemption that
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 commonly
known as the Landrum–Griffen Act. It further amended the National Labor
Relations 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 employers, in-
cluding not-for-profit hospitals and other nonprofit healthcare facilities,
to report any financial arrangements or transactions that were intended to
improve or retard the process of unionization in detail to the Secretary of
Labor. Reporting and disclosure requirements were imposed on unions.
A Regulated Environment 45
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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 who worked
for the same employer in the same establishment performing equal work on
jobs requiring equal skill, effort, and responsibility, and performing under
similar working conditions. Simply put, people doing the same work in the
same place in the same way have to be paid equally regardless of gender.
Although the Equal Pay Act came into being before 1964, it had no notice-
able impact on the activities of HR and no effect on the roles of department
managers. To this day it remains evident that 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 rela-
tionship by the government. Title VII provided the legal basis for all people to
pursue the work of their choosing and to advance in their chosen occupations
subject only to the limitations imposed by their own individual qualifica-
tions, talents, and energies. This legislation defined unlawful employment
discrimination as the failure or refusal to hire or to otherwise discriminate
against any individual with respect to compensation or other terms, condi-
tions, or privileges of employment because of that individual’s race, color,
religion, sex, or national origin. The act prohibits setting limits, segregating,
or classifying employees or applicants for employment in any way that de-
prives them of employment opportunities or otherwise adversely affects their
status as employees because of race, color, religion, sex, or national origin.
The Civil Rights Act of 1964 established the Equal Employment
Opportunity Commission (EEOC) to enforce the antidiscrimination re-
quirements of Title VII. The act was amended in later years to compensate
for perceived erosion of its strength and effectiveness owing to a number
of Supreme Court decisions.
Age Discrimination in Employment Act (1967)
The Age Discrimination in Employment Act (ADEA) legally established the
basic right of individuals to be treated in employment situations on the basis
of their ability to perform the job rather than on the basis of age-related
stereotypes or artificial age limitations. The ADEA prohibits discrimination
in employment on the basis of age in hiring, job retention, compensation,
and all other terms, conditions, and privileges of employment. Originally
enforced by the Department of Labor, in 1978 enforcement of the ADEA
was transferred to the Equal Employment Opportunity Commission. 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, employ-
ers were free to mandate retirement at a specific age. The most commonly
mandated age for retirement was 65. When passed in 1967, the ADEA raised
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the limit such that employers could no longer mandate retirement at any age
younger than 70. When the ADEA was again amended in 1986, the age 70
limitation was removed. This means that retirement can no longer be required
by any specific age. The sole legal criterion for continuing employment is an
individual’s ability to fulfill the requirements of the job. Some exceptions exist
under which retirement by a stated age can be mandated for a limited number
of specific occupations. These include police officers, firefighters, airline pilots,
surgeons, and some policy-making executives—generally all occupations for
which it can be established that age is a bona fide occupational qualification
(BFOQ). In many instances the ADEA has permitted people who wished to
keep working to do so. This has ensured the continuing employment of some
workers who might otherwise have to depend on government assistance.
Occupational Safety and Health Act (1970)
Passed in 1970 and effective in 1971, the Occupational Safety and Health
Act (OSHA) is a highly influential piece of legislation concerning employee
safety in the workplace. Before this law was passed, efforts to ensure health
and safety in the workplace were minimal. The “A” in OSHA indicates either
Act or Administration, depending on the specific situation and reference. The
intent of Congress in establishing the Occupational Health and Safety Act
was to provide all persons with workplaces free from recognized hazards that
have the potential to cause serious physical harm or death to employees. The
Occupational Safety and Health Administration is authorized to promulgate
legally enforceable workplace safety standards, respond to employee com-
plaints, and, as necessary, conduct on-site inspections to follow up on employee
safety complaints or on lost-workday injury rates that are considered exces-
sive. The act also created the independent Occupational Safety and Health
Review Commission to review enforcement priorities, actions, and cases and
established the National Institute of Occupational Safety and Health (NIOSH).
On May 25, 1986, OSHA began enforcement of the second phase of
an elaborate set of rules known formally as Hazard Communications.
These rules provide workers with the right to know about any hazard-
ous substances to which they are exposed or handle in the course of
performing their job duties. According to OSHA’s hazard communica-
tion rules, health facilities are required to create and deliver programs
for informing and training employees about hazardous substances in
their workplace, ensure that warning labels on all incoming containers
are intact and clearly readable, and inform and train employees in the
nature and appropriate handling of hazardous substances at the time of
initial assignment. Suppliers are required to create and distribute a ma-
terial safety data sheet (MSDS) for all products containing a hazardous
substance that they produce. These must be provided to all purchasers
of their product. The OSHA hazard communication rules mandate that
employers maintain copies of MSDSs for all hazardous substances in
the workplace, supply copies of MSDSs to employees upon request, and
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maintain current copies of MSDSs for all products so that they are ac-
cessible to any employee on all work shifts.
Under OSHA regulations, more than 1,000 substances are considered
to be hazardous. A number of the states have enacted right-to-know laws
with requirements that are similar to OSHA regulations. Federal and state
standards for the handling of hazardous substances require that employ-
ers distribute material safety data sheets, ensure that warning labels are
always in evidence on workplace containers, and be able to produce a
written employee orientation program at any time. Department managers
are typically assigned the responsibility for ensuring that these regulations
are followed and all requirements are fully satisfied within the department
or areas under their direct supervision. Personnel from HR usually supply
training materials and provide supportive services to department managers.
A section of the act permitted and encouraged states to adopt their own
occupational safety and health regulations, providing that state standards
and enforcement are at least as effective as the federal act in cultivating a
safe and healthful workplace.
Health Maintenance Organization Act (1973)
This legislation was passed as part of a Nixon administration cost contain-
ment initiative, preempting all state regulations that posed any barriers to
health maintenance organization (HMO) formation. It set conditions for
HMOs to become federally qualified and mandated that most employers
offer an HMO option if a federally qualified HMO in the area requested
inclusion in their benefits offerings (this condition was eliminated in 1995).
In theory the act was intended to reduce costs by eliminating regulatory
barriers to HMO development and encouraging the proliferation of what
was seen as a more cost-effective healthcare 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 Act
of 1973. Congress recognized that the handicapped were subject to cultural
myths and prejudices similar to those biases that existed against women
and ethnic minorities. However, this law applied only to employees of the
federal government and to employers doing a specified amount of business
with the government.
One portion of the Rehabilitation Act prohibited discrimination in the
hiring, promotion, and other employment of the handicapped, essentially
paralleling Title VII of the Civil Rights Act of 1964. Another portion
required employers doing more than $2,500 in business with the federal
government to apply affirmative action guidelines so as to employ and
promote qualified handicapped individuals. Employers having more than
50 employees and fulfilling government contracts worth $50,000 or more
were required to have written affirmative actions programs as required by
the Office of Federal Contract Compliance Programs. These employers were
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required to make reasonable accommodations for the physical or mental
limitations of employees or applicants. The Rehabilitation Act is significant
because it was a precursor of the Americans with Disabilities Act (1990).
Employee Retirement Income Security Act (1974)
The Employee Retirement Income Security Act (ERISA) established four basic
requirements governing employee retirement plans. The Employee Retirement
Income Security Act mandated that employees must become eligible for retire-
ment benefits after a reasonable length of service (also known as vesting or
being vested), adequate funds must be reserved to provide the benefits promised
under the plan, the persons who administer the plan and manage its funds
must meet established standards of conduct, and sufficient information must
be made available on a regular basis so plan participants, auditors, or other
interested parties may determine whether ERISA requirements are being met.
The provisions of this act were later reinforced by legislation included in the
Retirement Equity Act of 1984 that greatly increased the complexity of ERISA
and added multiple layers of Internal Revenue Service regulations.
Taft–Hartley Act Amendments (1975)
The Taft–Hartley Act, which, as noted earlier, was an amendment to the
National Labor Relations Act, was itself amended in 1975. This “amend-
ment to an amendment” was created specifically to address not-for-profit
hospitals by removing the exemption that had been in place since Taft–
Hartley’s original passage in 1947. Beginning in 1975, not-for-profit hos-
pitals could no longer be considered beyond the reach of labor unions. The
exemption was removed, but specific rules were created in recognition of the
special circumstances of this vital service that deals in matters of human life.
For example, written notice must be provided by a union to the healthcare
institution and the Federal Mediation and Conciliation Service 10 days
prior to engaging in any picketing, strike, or other concerted refusal to
work. No such notice is required prior to similar actions in other industries.
The 1975 amendments preempt all state labor laws that previously ap-
plied to nongovernmental hospitals. Also, the 1975 amendments apply to
healthcare institutions previously covered by the act, such as proprietary
hospitals and nursing homes, as well as to all those institutions brought
under federal law by these amendments to the act.
A significant element of Congress’s intent in passing the amendments was
to provide time to transfer patients from a struck or threatened institution to
another facility and to obtain limited assistance from another facility without
risking secondary strikes or boycotts against the assisting institution.
Pregnancy Discrimination Act (1978)
The Pregnancy Discrimination Act defined that discrimination on the basis
of pregnancy, childbirth, or related medical conditions as unlawful sex
discrimination under Title VII of the Civil Rights Act of 1964. From this
point forward, pregnancy has been considered to be a medical disability
and is treated accordingly as a disability of some six to eight weeks’
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duration. The exact length varies and depends on whether federal or state
guidelines are applied.
Consolidated Omnibus Budget Reconciliation Act (1986)
The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a complex
piece of legislation that addresses many concerns. However, most pertinent to
employment is the provision that COBRA allowed for the extension of group
insurance coverage to employees and their dependents on a self-pay basis for
set periods of time for those who would otherwise lose group health or dental
benefits due to a loss of employment, change in employment status, or other
defined events. The maximum period for COBRA benefits is 36 months. The
length of the period depends on the qualifying event or the reason for accessing
COBRA. By making it possible for these employees and dependents to remain
on the group contracts under which they had been covered, COBRA shifted
to employers a portion of the cost of health coverage for many individuals
who would otherwise be uninsurable except under government programs. As
far as health insurance is concerned, COBRA simply provides temporary or
stopgap coverage. Persons who continue coverage under COBRA must secure
other insurance after the eligibility period expires. Insurance coverage can be
continued up to 18 months for laid-off employees, up to 29 months for dis-
abled individuals, and up to 36 months for dependents following separation,
divorce, or the death of the previously covered employee. Should the employer
go out of business or for some other reason terminate its health insurance plan,
however, all rights under COBRA immediately cease.
Immigration Reform and Control Act (1986)
The Immigration Reform and Control Act (IRCA) requires employers to
review and, as necessary, modify their hiring practices. They must institute
procedures to verify that all job applicants are United States citizens or oth-
erwise legally authorized to work in the United States. This law established
civil and criminal penalties for knowingly hiring, recruiting, referring, or
retaining in employment persons designated as unauthorized aliens. The
act prohibits employers from discriminating against job applicants on the
basis of citizenship status or national origin.
Much initial business reaction to IRCA was strong, vocal, and nega-
tive. Because IRCA forces employers to take steps to screen out illegal
immigrants (the majority of whom enter this country with employment
as a goal), many organizational heads have expressed the belief that busi-
nesses are being made to perform a function that more correctly belongs
within the purview of the federal government. Skrentny (1987) provided
the following early assessment of the act: “This onerous piece of legis-
lation for business turns every employer in the country, whether he or
she hires a lone housekeeper or 10,000 auto workers, into an arm—an
agent or a cop, if you will—of the Immigration and Naturalization Service
(INS).” The Homeland Security Act of 2002 required the INS in 2003 to
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be dismantled and separated into three components: the U.S. Citizenship
and Immigration Service (USCIS), Immigration and Customs Enforcement
(ICE), and Customs and Border Protection (CBP).
Most employment legislation specifies the minimum-size organization
to which it applies. For example, the Family and Medical Leave Act applies
only to employers with 50 or more employees. The Immigration Reform
and Control Act pointedly applies to all employers of one or more employ-
ees. The basis for this requirement is the premise that a significant number
of undocumented aliens find work as household help.
This legislation has created work in the form of a document known
as the Employment Eligibility Verification Form I-9, which is ordinarily
completed in HR as part of the hiring process. Each new employee or
employee-to-be must furnish specified proofs of identity and, in the instance
of legal aliens, proof of authorization to work in the United States. After
examining (and usually copying) the appropriate proofs, a representative
of the employer signs the I-9 attesting to having seen the documents. An
employer has three business days from the date of hire to complete an I-9
form. This requirement changes to the first day of employment if the term
of hire is to be less than three days. Completed I-9 forms are retained in
employees’ personnel files, where they are subject to inspection and audit
by ICE. Forms may also be inspected by the Department of Labor and
certain immigration-related branches of the Department of Homeland
Security other than ICE. Financial penalties may be imposed for missing or
incomplete I-9 forms. Significant penalties can be imposed if illegal aliens
are discovered in the workforce.
Some critics have claimed that the Immigration Reform and Control
Act has resulted in increased employment discrimination. Employment
applicants who look or sound foreign, especially Asians and Hispanics, are
often faced with an increased likelihood of discrimination by employers
who may shy away from hiring them because they fear inadvertently hiring
illegal aliens and thus exposing themselves to action by the ICE. Laws af-
fecting employment have proliferated to such an extent that some of them
occasionally come into conflict with each other. Title VII of the Civil Rights
Act declares that discrimination on the basis of race or national origin is
illegal, while the Immigration Reform and Control Act encourages closer
scrutiny of applicants on the basis of national origin.
Pension Protection Act (1987)
This act requires organizations with underfunded pension plans to make
additional 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. In
addition to increasing employers’ payments to the PBGC, this legislation
reduces or eliminates the deduction of contributions by employers for
better-funded plans.
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Drug-Free Workplace Act (1988)
The Drug-Free Workplace Act requires organizations having $25,000 or
more in federal contracts or grants to make good-faith efforts to maintain a
drug-free workplace and to establish drug education and awareness programs
for their employees. As a precondition to receiving a contract or grant, the law
requires an organization to certify that it will provide and maintain a drug-
free workplace. The manager of any department involved in the fulfillment
of any portion of an appropriate federal contract or grant will be involved
at several points in the following process. An organization must notify all
employees in writing (via a published statement) that the possession, use,
manufacturing, or distribution of a controlled substance in the workplace
is prohibited. The statement must include the penalties that will be imposed
for violations of company rules. Each organization must establish a drug-free
awareness program to inform employees of the dangers of drug abuse in the
workplace; comply with the external requirement of a drug-free workplace
as a condition of seeking and accepting contracts and grants; note drug
counseling, rehabilitation, or employee assistance programs that may be
available to them; and enumerate the penalties to which the organization
may be exposed for violations that occur in the workplace.
An organization must require that each individual employee who is to be
involved in the fulfillment of an appropriate contract or grant possess a copy
of the organization’s published statement concerning controlled substances.
Furthermore, the organization must notify all employees receiving the con-
trolled substances statement that they are expected to abide by all terms of
the statement and notify their employer of any criminal drug statute convic-
tion for a violation in the workplace no later than five days after conviction.
Within 10 days of receiving such a notice of criminal drug statute convic-
tion, the granting or contracting agency must be notified of the conviction.
Within 30 days of receiving notice of an employee’s criminal drug statute
conviction, an employer must take appropriate disciplinary action against
the employee, or require the employee to complete an approved drug-abuse
assistance or rehabilitation program in a satisfactory manner. Finally, each
employer must make a good-faith effort to maintain a drug-free workplace
through implementation of the foregoing procedures and requirements.
All healthcare institutions have an interest in keeping their work environ-
ments free from dangers to patients, visitors, and employees created by the use
of illegal drugs or controlled substances. For a number of years, drug abuse in
the workplace has made it necessary for employers to develop and implement
different means of addressing this growing problem. Although the require-
ments of the Drug-Free Workplace Act apply only to employees receiving
federal contracts and grants, conscientious management practices suggest that
a comprehensive policy and drug-free awareness program be implemented for
all employees. Conscientious departmental managers should have a strongly
vested interest in displaying a high level of concern for maintaining a drug-free
work environment whether or not there are external requirements for doing so.
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Employee Polygraph Protection Act (1988)
The Employee Polygraph Protection Act (EPPA) prevents most private-
sector employers from requiring job applicants or current employees to take
polygraph (lie detector) tests. Under EPPA, the routine use of polygraph
tests is permitted only in organizations that produce and distribute con-
trolled substances and in those concerned with nuclear power, transporta-
tion, 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 suspicion
or, somewhat inaccurately, as reasonable cause. However, an employee
may not be disciplined or discharged solely on the results of a polygraph
test. Under EPPA, an employer may not ask an employee or job applicant
to submit to a polygraph test other than in the situations already delin-
eated. Furthermore, an employer may not take any adverse action against
an employee or applicant for refusing to take a polygraph test. Finally, the
results of a polygraph test to which a person has submitted for one specific
reason cannot be used for a different purpose.
Worker Adjustment and Retraining Notification Act (1988)
The Worker Adjustment and Retraining Notification Act (WARN) requires
employers with 100 or more employees at any individual site to provide ad-
vance notification of major reductions in force. An employer must provide 60
days’ notice of an impending layoff of 50 or more employees, and must notify
local government and the appropriate state agency, bureau, or unit responsible
for dislocated workers that provides employment 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 access
equal to that available to others in regard to employment, transportation,
and telecommunications, and ensures that all services and facilities are
available to the public, whether under private or public auspices.
Disabilities are broadly defined under the Americans with Disabilities
Act, including, in addition to physical limitations ordinarily thought of as
disabilities, hearing and visual impairments, paraplegia and epilepsy, HIV
or AIDS, and literally dozens of other conditions. The list of recognized
disabilities is long, and it continues to expand as legal challenges continue
over what constitutes a disability.
The ADA prohibits potential employers from asking about a job appli-
cant’s medical conditions, if any, and imposing major limitations on pre-
employment physical examinations. Under the law, a physical examination
cannot be conducted until after a job offer has been extended. If a physical
examination reveals a medical condition that does not affect the person’s
ability to perform the major functions of the job being sought, an employer
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may be expected to make a reasonable accommodation to the needs of the
applicant. The key to applicability of the ADA lies in an individual’s ability
to perform the major functions of a job satisfactorily. Thus, an individual
cannot be denied a job because an impairment prevents performance of
a minor or nonessential activity. The employer may find it necessary to
make a reasonable accommodation for the condition, providing such
accommodation does not cause unreasonable expense or hardship.
From time to time each department manager may have reason to be
familiar with some aspects of the law concerning disabilities. Involvement
surely will be required should a need arise to make a reasonable accom-
modation for one or more employees in the department. However, it is
not always possible to identify an individual who is disabled. Unlike race
or gender, disabilities may not be visually apparent.
Managers should not be concerned unless they know factually that a
disability exists. To obtain protection available under antidiscrimination
laws, employees must identify themselves as being disabled. If a disability
is neither apparent nor declared, then the employee in question should be
treated the same as any other worker. Managers who suspect the presence
of a disability that has not been declared are advised not to inquire about
the situation with the employee in question. Furthermore, they should not
offer unsolicited advice to an employee about a possible but undeclared
problem. Such a course of action has been ruled as treating an employee
in 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 that the
ADA went too far in allowing disabled public employees to sue state and
local governments in federal court (Hearst News Service, 2000). States and
localities generally have immunity against such lawsuits unless Congress
has documented sufficient discrimination in the states to deny them that
immunity. The federal government must invoke its power under the 14th
Amendment to ensure that people have equal protection under the law.
States have contended that Congress has been lax in demonstrating that
individual states were 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 having
an impairment does not make one disabled for purposes of the ADA,” that
a person’s ailment must extend beyond the workplace and affect everyday
life, and that the ability to perform tasks that are of central importance
to most people’s daily lives must be “substantially limited” before an in-
dividual can qualify for coverage under the original legislation that was
intended to protect the disabled from discrimination because of physi-
cal impairments (Newsday, 2002). In other words, the court ruled that
individuals who could function normally in daily living could not claim
disability status because of physical problems that limited their ability to
perform some manual tasks on the job.
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In another opinion that was viewed by some as a defeat for disabled
workers, the Supreme Court ruled that disabled workers are not always en-
titled to premium assignments intended for more senior workers (Associated
Press, 2002a). The practical implication of this ruling is that, in the majority
of instances, seniority can take precedence over disability. In continuing its
series of clarifications and rulings limiting rights under the ADA, the court
ruled that disabled workers cannot demand jobs that would threaten their
lives or health (Associated Press, 2002b). This ruling arose from a case in
which a worker with a particular medical condition wanted to return to
his original position although it was considered medically risky for him to
do so. The ADA’s requirement for reasonable accommodation has always
made exceptions for those who may be a threat to the health or safety of
others on the job. This decision interpreted the exception as applying to
workers who may present a risk only to themselves.
In September 2008, Congress passed the Americans with Disabilities Act
Amendments Act (ADAAA), intended to provide broader protections for
disabled workers and reverse a number of court decisions that Congress
considered too restrictive. The ADAAA added to the ADA a number of ex-
amples of “major life activities” and overturned a Supreme Court case that
held that an employee was not disabled if the impairments could be corrected
by mitigating measures, specifically providing that an impairment must be
determined without considering corrective measures. It also overturned the
interpretation that an impairment that substantially limits one major life
activity must also limit other activities to be considered a disability.
Case law continues to influence the ongoing implementation of the ADA.
A number of cases are still pending, and it is likely that the Americans with
Disabilities Act will continue to be refined through Supreme Court deci-
sions over the next several years.
Older Workers Benefit Protection Act (1990)
The Older Workers Benefit Protection Act (OWBPA) amended the Age
Discrimination in Employment Act (ADEA) by clarifying the authority
of the ADEA relative to employee benefits. Although still requiring equal
benefits for all workers, as a result of several legal decisions, the ADEA
allowed reductions in benefits for older workers in situations where added
costs were incurred to provide the benefits. The OWBPA removed employ-
ers’ option to justify lower benefits for older workers. It requires that any
waivers or releases of age discrimination must be voluntary and part of an
understandable, written agreement between employer and employee. In
other words, this law prohibited an employer from unilaterally providing
a reduced benefit to an employee on the basis of age.
Civil Rights Act Amendments (1991)
Adding to the original Civil Rights Act of 1964, the 1991 amendments allowed
employees to receive compensatory and punitive damages from employers
who committed violations with malice or reckless disregard for an individual’s
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protected rights. They allowed women and disabled workers to sue for com-
pensatory and punitive damages, a right they previously did not have. This
legislation provided for jury trials in such discrimination cases. Previously, these
had been handled with nonjury processes. For employers, the overall impact
of these amendments was to increase the likelihood of longer and costlier legal
processes and to increase potential penalties. The effect of this act was to add
“teeth” to portions of the Civil Rights Act of 1964, expand certain other parts,
and generally make possible more and larger damage awards.
Family and Medical Leave Act (1993)
The Family and Medical Leave Act (FMLA) applies to eligible persons in orga-
nizations having 50 or more employees. The FMLA defines eligible employees
as those having been employed for at least one year and having worked at least
1,250 hours during the previous 12 months. These persons are permitted to
take up to 12 weeks of unpaid leave during any 12-month period when unable
to work because of a serious health condition, or to care for a child upon birth,
adoption, or foster care, or care for a spouse, parent, or child with a serious
health condition. Under specified circumstances, leave may be taken intermit-
tently or on some reduced time schedule. This has the potential to extend any
given leave over a period longer than 12 calendar weeks. Employees who are
entitled to a set amount of paid time off are ordinarily required to use that
time as part of their 12 weeks. Most employees on leave ordinarily use up their
available paid time off rather than experiencing their entire leave without pay.
The Family and Medical Leave Act does not take precedence over any state
or local laws that happen to provide greater leave rights. Some states mandate
a threshold lower than 50 employees. For example, in Maine the threshold is
15 or more employees for private employers and 25 or more for pubic employ-
ers; in the District of Columbia the threshold is 20 or more employees. Several
states have their own definitions of “family.” Some, for example, include
“domestic partners,” and a number include grandparents and parents-in-law.
With FMLA, as with all instances in which federal and state governments have
passed laws addressing the same issue, it is the more stringent law—that is, the
one that is more generous to employees—that applies.
While on approved leave, employees must continue to receive healthcare
benefits but are not entitled to accrue vacation, sick time, or seniority. The
employer must guarantee that, upon returning from leave, an employee will
be reinstated to the previous position held or placed in a fully equivalent
position with no loss of benefits or seniority.
In many situations, the Family and Medical Leave Act has made life con-
siderably more difficult for department managers. When an employee in an
essential position takes leave, that position and its responsibilities must be
covered. Some positions cannot be left vacant for a few days, let alone for a
12-week period. Filling the position and later returning the employee to an
equivalent position is not readily accomplished. Courts and other external
agencies have repeatedly interpreted equivalent as essentially the same in all
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aspects: pay, benefits, tasks, and responsibilities. Some courts have ruled that
equivalent extends to reinstating similar hours and shifts. Because equivalent
has been so strictly interpreted, the safest course of action for managers is
to preserve the original position of the person on leave. Managers are often
advised to juggle coverage until the employee returns from leave. This often
requires the use of temporary employees, overtime, reassignments, and other
means. The practical result of the FMLA is that staffing and scheduling has
become more difficult, time consuming, and expensive for some managers.
Some critics of the FMLA suggest that the law mandates various forms
of leave that are used more often by female employees than by males and
thus renders women more expensive to employ than men (the same criticism
has been leveled at the Pregnancy Discrimination Act of 1978), arguing that
this will encourage employers to engage in subtle discrimination against
women in the hiring process. Supporters point out that since FMLA applies
to both women and men, it encourages both men and women equally to
make use of family-related leave.
Along with the ADA, the FMLA continues to be subject to frequent
clarification and adjustment. In late 2009, Congress acted to provide alter-
nate eligibility criteria for airline flight crew members with some additions
specific to that employee group. Also, a section of the National Defense
Authorization Act of 2010, passed in October 2009, expanded the defini-
tion of “serious injury or illness” to specifically include aggravation of
existing or preexisting injuries or illnesses incurred in the line of military
duty. Also in late 2009, the Department of Labor (DOL) updated its regula-
tions to provide better understanding of workers’ rights and responsibilities.
The DOL expanded FMLA coverage for military family members, and
revised employee notice rules to minimize workplace disruptions due to
unscheduled FMLA absences.
It is likely that the FMLA, along with the ADA, will be affected by pe-
riodic adjustments and clarifications for some time to come.
Retirement Protection Act (1994)
The Retirement Protection Act strengthens and accelerates funding of
underfunded pension plans and increases Pension Benefit Guarantee
Corporation (PBGC) premiums for plans that pose the greatest risk. It im-
proves the flow of pension-related information for workers and increases
the 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 small
businesses. This legislation included the 1996 increase in the minimum
wage. It increased pension protection and makes it easier for workers to
roll over (change to another fund or plan) their retirement savings upon
changing employment. It simplified pension administration to an extent
and reduced the vesting period for selected multiemployer plans from
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10 years to five years. The act allows specified smaller employers to estab-
lish simplified 401(k) plans for their employees.
Health Insurance Portability and Accountability Act (1996)
When the Health Insurance Portability and Accountability Act (HIPAA)
came upon the scene in 1996, as far as most persons working in health
care were concerned, HIPAA had little effect. At the time the most visible
portion of HIPAA addressed “portability and accountability” in reference
to employee health insurance. The intent was to enable workers to change
jobs without losing coverage. This let workers move from one employer’s
plan to another’s without gaps or waiting periods and without restrictions
based on preexisting conditions. A worker could move from plan to plan
without interruption of coverage.
Not a great many managers in health care concerned themselves with
HIPAA in 1996. Human resource managers were the ones who became
most aware of this new legislation because it affected their benefit plans.
However, even many HR managers had little involvement with HIPAA.
In most instances the required notifications were handled by the employ-
ers’ health insurance carriers, so there was little for HR to do other than
answer employee questions. At that time nothing about HIPAA affected
the role of individual non-HR managers. In the minds of many who did
not look beyond the simple implications of the law’s title, the organization
had little more to do than to ensure the portability of health insurance.
However, the real impact of HIPAA was yet to come, and its arrival was
a surprise to many.
HIPAA consists of five sections or “titles,” each addressing different
topics and different areas of responsibility:
• Title I: Healthcare Access, Portability, and Renewability
• Title II:
A. Preventing Healthcare Fraud and Abuse
B. Medical Liability Reform
C. Administrative Simplification
• Title III: Tax-Related Health Provisions
• Title IV: Group Health Plan Requirements
• Title V: Revenue Offsets
THE CONTENTIOUS TITLE II
The portion of HIPAA having the most far-reaching implications for many
healthcare managers in the performance of their jobs is C, Administrative
Simplification (which for many has proven to be anything but “simple”).
Managers within health care, some to a greater or lesser extent than
others, are finding or are yet to find their jobs affected by portions of
HIPAA. Eleven separate “Rules” have been designated. Not all of them
have yet been released for implementation, so for healthcare managers
HIPAA implementation will be a continuing process for some time to come.
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The controversy over the intent versus the reality of HIPAA primarily
concerns the requirements of the Privacy Rule. The intent was to strike a
balance between ensuring that personal health information be accessible
only to those who truly need it and permitting the healthcare industry to
pursue medical research and improve the overall quality of care. Essentially,
patient privacy is at the center of most current interest in HIPAA.
HIPAA has impacted not only HR but also nearly every department
and division of all healthcare organizations. Although there may be future
modifications to some of its rules and mandated procedures, the heightened
emphasis on personal privacy and the confidentiality of patient informa-
tion is here to stay.
Patient Protection and Affordable Care Act (2010)
The Patient Protection and Affordable Care Act (PPACA) was signed into
law on March 23, 2010, and was immediately amended by the Health
Care and Education Act of 2010, which became law on March 30, 2010.
The PPACA is, of course, the currently controversial “healthcare reform”
undertaking of the Obama administration. The law includes provisions
that take effect over several years, including expanding Medicaid to cover
more lower-income people, subsidizing insurance premiums for persons
of a certain income level, providing incentives for businesses to provide
healthcare benefits, prohibiting denial of claims or coverage because of
preexisting conditions, and other fixes aimed at expanding coverage to in-
clude greater numbers of people, controlling costs, and reducing the deficit.
Passage of the PPACA did not stem the continuing controversy over how
the nation should address the widespread problems of health insurance
cost and availability. If anything, controversy increased as the law came
under criticism from several quarters and some in Congress and elsewhere
began advocating its repeal.
Some of the changes called for during the first year of enactment
(2010–2011) included the following: insurance companies were barred
from dropping people from coverage because of illness, young adults could
remain on their parents’ plans until age 26, coverage was made possible
for uninsured adults with preexisting conditions, insurers were forbidden
to deny coverage to children with preexisting conditions, and a number
of changes were made that affected Medicare. Changes targeted for 2011
included: Medicare bonus payments to primary care physicians and general
surgeons, Medicare coverage of annual wellness visits, and other changes
to Medicare and Medicaid.
The legislation stipulated that additional reforms would be imple-
mented annually between 2012 and 2015. Some new requirements are
scheduled for 2018. One extremely controversial feature scheduled for
implementation in 2014 is the requirement for most people to obtain
health insurance coverage or pay a tax if they do not so.
The PPACA is likely to affect most healthcare managers in two ways.
First, the manager may be affected as a participant in the employer’s health
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insurance plan. Depending on the nature of the plan and its features, there
could be changes that affect coverage for all employees, including the manager.
Second, the individual manager is likely to be asked questions by employees
who want to know how the plan’s changes will affect them and what will
happen to their present coverage. The manager will need to be knowledge-
able enough to respond to general questions and to know where in Human
Resources to go for more complete answers. For the most part, the interpreta-
tion of the features and effects of plan reform on the organization’s health insur-
ance plan will reside with the benefits-management area in the HR department.
■ GREATER RESPONSIBILITIES AND INCREASED
COSTS FOR ORGANIZATIONS
In addition to the laws described in the previous section, there are state laws
that often vary from state to state. Other federal statutes have employment
implications, but these are not discussed in this chapter.
The closing decades of the 1900s were accompanied by the federal
government spreading its influence over an increasing number of aspects
of the employment relationship. Fortunately, the proliferation of employ-
ment legislation has slowed since 1999. In addition to creating added work
for HR personnel by designating what cannot be done or imposing new
requirements, many of the laws affecting employment have created new
or tighter boundaries within which managers must operate.
Overall, the effect of employment legislation has been to compel employers
to be more socially responsible for their employees. This is especially evident
in significant pieces of legislation such as the Americans with Disabilities Act
and the Family and Medical Leave Act. Legislation affecting social respon-
sibility and rules of conduct for interactions between employers and their
employees imposed added work responsibilities and supporting systems to
organizations. These requirements have increased the cost of doing business
and thus increased costs to the ultimate consumers of all goods and services.
While some new laws have required only minor changes in procedures or
modest alterations in recordkeeping practices, most have clearly increased
the cost of doing business because provider organizations and their custom-
ers are the only entities available to pay the increased costs. Legislators
know very well that costs are associated with implementing any new law.
Legislators and senior managers are often far from agreement concerning
the costs of implementing new legislation. When elected officials create
new programs, they are undoubtedly aware that only three options exist
to cover the costs associated with implementation. Legislators can discon-
tinue an existing program to free up funds. This rarely occurs because it
is politically unpopular. Legislators can raise taxes, but suggesting to do
this is even more unpopular. Finally, legislators can find other parties or
organizations (someone else) to bear the costs of new legislation. The enti-
ties that have been paying to implement most of these laws affecting the
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employment relationship are businesses and other commercial enterprises.
Ultimately, the costs are passed along and paid by individual consumers.
■ A CUMULATIVE EFFECT: SOME PERSONAL COMMENTS
Exhibit 3-1 presents a list of all of the laws discussed earlier by decade of
passage. It is not difficult to see the shift from the pre-1964 concerns with
collective bargaining and wage-and-hour issues to the growing post-1964
concerns with social responsibility.
A simple comparison of the pre-1964 years with the present day dem-
onstrates how significantly the employment environment has changed.
Although very few of the laws reviewed replaced features of earlier legisla-
tion, most of the legislation enacted since 1964 has exerted new and often
different influences on how work organizations treat employees and how
managers can direct their own departments. The accumulation of more
than four decades of legislation affecting the employment relationship has
transformed personnel from the days of an employment office to the mod-
ern HR department. A contemporary department manager must comply
with countless rules for supervising and directing employees. Although the
accumulation of new legislation seems to have slowed somewhat, most
experts agree that the future is likely to bring more, not less, regulation.
Discrimination cannot be legislated out of existence. Discrimination is
extremely personal, as it resides in individual attitudes, likes, and dislikes.
It is the product of both home and culture. Therefore, no job is completely
immune from the possibility of discrimination.
A new law can come into being in a relatively brief period, yet it can
take a very long time for the changes in human behavior required by that
law to come about. Title VII of the Civil Rights Act of 1964 provides a
useful illustration. Employment discrimination has been prohibited by law
for five decades, but problems of discrimination continue to exist in many
organizations. However, the workforce in the United States is becoming
increasingly diverse. Organizations that eliminate discrimination will be
the ones best able to value and manage this diversity.
For five decades employee rights have been an extremely active legal
topic in the federal and state legislatures and thus in the courts. We can
expect this interest in individual rights to continue, probably even to in-
tensify from time to time. The employment environment has changed and
will continue to change. Those who manage within this environment must
either change with it or be left behind.
■ CONCLUSION
The legal aspects of HR have changed dramatically over the past 80 years.
The emphasis on the right of workers to form unions and establishing
basic parameters such as length of a working week and establishing a
Conclusion 61
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Exhibit 3-1 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)
• Health Maintenance Organization (HMO) Act (1973)
• Rehabilitation 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)
2010s
• Patient Protection and Affordable Care Act (2010)
• Health Care and Education Act (2010)
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minimum wage has changed. The emphasis of most recent legislation has
been grounded in social responsibility. As government has compelled em-
ployers to become more socially responsible, the costs of those government-
mandated changes have been shifted to consumers.
American workers can expect equal access to employment and to receive
equal pay for similar jobs. They can expect to work in safe surroundings
without being discriminated against on the basis of age, gender, race, re-
ligion, national origin, or personal preference. Persons with disabilities
must be treated like any other workers. They can expect to work in an
environment that is free of drugs and harassment. American workers can
take time off during a pregnancy or illness. They can expect access to
healthcare benefits after losing their jobs. To a degree, pension rights have
been established. Information related to one’s health is now protected and
considered to be private.
Human resources personnel must be familiar with the requirements of
the legislation discussed in this chapter. This task has made the jobs and
activities of HR employees more complex and challenging. Compliance
with the legal requirements has imposed additional costs on organizations.
Most experts expect that this trend will continue, although the pace of
implementing changes is likely to slow.
Case Study Resolution
Returning to the initial case study, it is reasonably certain that County
Memorial’s request for dismissal of the complaint will be unsuccessful.
The Americans with Disability Act prohibits potential employers from
imposing major limitations on pre-employment physical examinations.
Concerning Susan and her complaint, the potential employer should at-
tempt to negotiate a reasonable agreement and offer her employment in
some capacity, rather than allow the State Division of Human Rights to
conduct a full investigation and run the risk of imposing a costly settlement.
The division might consider Susan to be a handicapped person (anyone
who has a physical or mental impairment that substantially limits one or
more major life activities). If it so rules, the division can then sue County
Memorial Hospital on Susan’s behalf.
Susan’s case is far from cut and dried, however. Different jurisdictions
have rendered varying decisions related to any disability. For example,
a New York state court ruling declared obesity to be a handicap, but a
Pennsylvania decision stated that obesity can be but is not always automati-
cally a handicap. As is often the case with disputes that arise under some
aspect of employment law, clarification of the law in its application is left
to the courts. Courts in different jurisdictions and locations do not always
see the same situation in the same light.
Conclusion 63
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SPOTLIGHT ON CUSTOMER SERVICE
Customer Service, the Law, and Creators of Laws
The legal system, through many pieces of legislation enacted over the past 80
years, makes many demands on human resources departments. Many statu-
tory programs require HR departments to collect money or information or
both. Some HR insiders joke that they have been turned into bill collectors.
Customer service has been exempted from the pieces of legislation that have
affected HR. No statutes outline how customers should be treated. Statutes
do not stipulate that customers should receive any particular treatment.
How customers are treated is determined locally. Often, supervisors of
employees that interact with the public have the responsibility to establish
norms for interaction and treatment. Many managers choose not to exercise
their responsibilities.
A small number of companies have made customer service an organization-
wide priority. The phrase “The customer is always right” was an early attempt
(1909) to establish norms for customer service. Harry Gordon Selfridge is
generally credited with originating the phrase for the London department
store that bears his name. In the United States, F. W. Woolworth adopted the
approach for his company. Today, the Disney Company has a reputation for
training its employees to provide excellent customer service.
The bottom line for the first part of this story is that customer service
cannot be legislated. It must emerge because individuals and organizations
care about their customers.
What about the individuals who actually create the legislation? Many
elected officials claim that they have devoted their lives to public service. An
important question then becomes, “Does a relationship exist between public
service and customer service?”
Maybe.
For most lawmakers, the answer is likely to be determined using the following
logic. Customer service often (usually) requires putting the welfare and satisfaction
of customers first. When discussing lawmakers, constituents can be substituted
for customers. Lawmakers put themselves first, ahead of constituents, because
lawmakers must be reelected if they want to continue their present employment.
Programs that increase taxes or fees provide convenient examples. In order to
curry favor with constituents, most lawmakers are reluctant, often to the point of
refusal, to vote for legislation that openly requires constituents to spend money.
Lawmakers like to claim that they enact legislation that benefits their constitu-
ents without the constituents having to pay increased taxes or fees to the govern-
ment. When affected businesses raise prices to recover additional costs required
to comply with requirements of the new legislation that benefits constituents,
lawmakers can claim that they are not responsible because they did not raise the
prices. Whether money to cover the costs associated with a new program is paid
to a governmental unit or to a company, constituents ultimately bear the costs.
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References
Associated Press. (2002a, April 30). Seniority outweighs disability, court says.
Democrat & Chronicle, Rochester, New York.
Associated Press. (2002b, June 11). Top court disallows dangerous jobs for disabled.
Democrat & Chronicle, Rochester, New York.
Hearst News Service. (2000, October 12). High court scrutinizes Disabilities Act.
Democrat & Chronicle, Rochester, New York.
Newsday. (2002, January 9). High court limits disability law. Democrat &
Chronicle, Rochester, New York.
Skrentny, R. (1987). Immigration reform—What cost to business? Personnel
Journal, 66(10), 53–59.
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 1964
representing the beginning of a steady flow of regulations to follow,
what occurred that constituted a change of direction? Why?
2. Define and describe a contemporary bargaining unit as defined by
the National Labor Relations Act. How, if at all, does it differ from a
bargaining unit in 1935?
3. When and how was the Equal Employment Opportunity Commission
established? What is its purpose?
4. What is a bona fide occupational qualification? Provide at least two
specific 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 some
instances employers were required to provide reasonable accommoda-
tion of the limitations of an employee or applicant. When did this occur,
and what were the conditions under which this requirement applied?
7. What appears to have been the primary intended purpose of the
Employee Retirement Income Security Act? Why was this legislation
deemed to be necessary?
Back to public service and customer service. For individuals willing to
overlook payment realities that are not discussed and the fact that this allows
lawmakers to put their own welfare ahead of their constituents, the answer to
the question is yes, lawmakers do provide customer service. For individuals
that understand the deception of the undiscussed connection, the answer to
the question becomes no, lawmakers do not provide customer service.
Customer service is, or should be, synonymous with openness.
Conclusion 65
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8. What have been the primary effects of the Immigration Reform and
Control Act on businesses?
9. Pose two hypothetical examples of situations in which a healthcare
employer might legally require a polygraph (lie detector) test as a
condition of either initial or continued employment.
10. Viewing the Family and Medical Leave Act from the perspective of a
working department manager, describe the ways in which this legisla-
tion has affected a supervisor’s ability to manage.
Resources
Books
Buckley, 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.
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.
Periodicals
Edelman, 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). Seventh Circuit ruling allows employers to cap AIDS
benefits. AIDS Policy Law, 14(14), 7–9.
O’Brien, G. V., & Ellengood, C. (2005). The Americans with Disabilities Act: A
decision tree for social services administrators. Social Work, 50(3), 271–279.
Popovich, P. M., Scherbaum, C. A., Scherbaum, K. L., & Polinko, N. (2003). The
assessment 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
Disabilities Act 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 for
health care. British Medical Journal, 328(7450), 1213–1214.
Schiff, M. B. (2004). A primer on case law under the Americans with Disabilities
Act. 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
management: Who supports affirmative action and why? Health Services
Management Research, 16(4), 224–233.
Westreich, L. M. (2002). Addiction and the Americans with Disabilities Act. Journal
of the American Academy of Psychiatry and Law, 30(3), 355–363.
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Human Resource
Activities and
Managers
Chapter Objectives
After reading this chapter, readers will be able to:
• Identify the services that are almost always, often, and occasionally
provided by a human resources department
• Subdivide human resource services according to the major tasks of
acquiring, maintaining, retaining, and discharging or separating
employees
• Identify the activities for which a department manager can expect
contact and involvement with human resources, and the likely
extent of that contact and involvement
• Compare and contrast line management and human resource
management as to background
• Interpret perspective and other characteristics for the purpose of
explaining some of the tensions that develop between the two groups
• Understand and eventually overcome the apparent differences
between human resources personnel and line managers
■ CHAPTER SUMMARY
A human resources (HR) department is involved in a number of ac-
tivities that together compose four major activity groupings: acquiring
employees, maintaining employees, retaining employees, and separating
employees. Within these activities, the specific activities of employment
and recruitment, compensation and benefits administration, and employee
relations are undertaken. Also to be found in many HR departments
C H A P T E R
4
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are labor relations (if unions are present), training and development,
employee health and safety, security, child care, and other employee
services. Generally, all of the activities that may be found within a given
HR department relate in some way to acquiring, maintaining, retaining,
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 over
employees in any of the other departments of a healthcare organization.
As such, HR is oriented toward service. It exists to provide services to
employees at all levels of an organization.
Case Study: Who Has a Recruiting Problem?
Jane Cassidy is 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 recently Jane
had worked in conjunction with HR employment manager Carrie Smith
and had fared reasonably well in keeping her nursing staff up to required
levels in spite of a general shortage of nurses in the local area. The opening
of the new unit, however, has strained the nursing department’s resources
to the extent of leaving the department short several registered nurses.
Community General’s nursing shortage is particularly evident on the
evening shift (3:00 p.m. to 11:30 p.m.). There are more than enough people
willing to work days, and Jane has been fortunate in having a thoroughly
stable crew of nurses who prefer to work nights.
Employment recruiter Carrie has regularly gone out of her way to do ev-
erything possible to locate candidates for nursing positions. Being extra cau-
tious about the possibility of scaring good candidates off before they can be
interviewed, Carrie has been deliberately vague with candidates concerning
available shifts and hours. Unless specifically asked, she has not mentioned
to anyone that new graduates being hired are expected to work day–evening
or day–night rotations.
In response to the long-running recruiting efforts of Jane and Carrie, a
well-qualified registered nurse applies for employment. Both are impressed
with this nurse. She seems energetic and personable and is immediately
available. She is quite willing to take a position on the evening shift.
Unfortunately, although this candidate is willing to work 3:00 p.m. to
11:30 p.m., she stated during her initial screening interview with Carrie
that she cannot work any weekends. She will say only that weekend work
causes severe inconvenience in her family life, and she repeats her will-
ingness to work evenings, straight evenings, but only Monday through
Friday. Nevertheless, Carrie refers this candidate to Jane, quietly suggest-
ing that Jane see if she can talk her into rotating weekends. The applicant
has yet to learn that scheduling practices in Community General’s nursing
department require everyone below the level of day, evening, or night
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supervisor to work every other weekend, although Carrie has become
aware of a few situations that might constitute quiet exceptions to the
scheduling policy.
Considering the critical need for nursing help on evenings as well as
weekends, what can Carrie and Jane tell this applicant? If Jane has to adhere
rigidly to her scheduling policy and the candidate refuses to accept the job,
what problems might Jane face? If Jane alters the scheduling policy and
offers the applicant a Monday through Friday position without requiring
weekends, a position that she accepts, what problems might Jane then face?
How can Carrie, as an HR professional, provide further help to Jane,
a supervisor in nursing services, as she attempts to recruit sufficient staff
for 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
organizations, as are the tasks performed within each functional area
of a healthcare organization. Human resources, however, differs in that
the tasks performed by HR personnel may be quite varied. Only within the
past two to three decades have training programs been created to prepare
people for careers in the field of human resources.
Regardless of the form or operational purview of a particular health-
care organization, whether hospital, long-term care facility, free-standing
clinic, urgent care center, physicians’ group practice, or other entity, all
HR departments have similar goals and pursue similar overall missions.
These working groups exist to provide service to an organization and its
employees. Not all HR departments are organized in the same fashion,
however, and not all provide the same services or perform exactly the same
tasks or activities. Under some organizational structures, activities that are
often associated with HR may be performed by other departments or may
even be separate departments in their own right.
In the sections that follow, the activities of HR are subdivided into three
categories or levels. The first encompasses activities that are commonly
associated with HR and usually part of the HR department. The second
includes tasks that are often but not always performed by people from an
HR department. The third discusses activities that are occasionally associ-
ated with HR or sometimes found outside of an HR department structure.
Category I: Typical HR Activities
Of the four groups of activities that follow, the first three are invariably
components of HR. The fourth is usually part of HR if a union is present
in an organization.
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Employment or Recruitment
This activity addresses the original function of what was previously described
as the employment office. Different names may survive from the past, but
employment or recruitment or some variant of either word is usually part
of the organizational designation for this activity. The heart of this activity
is concerned with finding or identifying prospective employees, screening
them, and arranging for them to be interviewed by supervisors and managers
throughout the larger organization. The same employees extend official of-
fers of employment and perform a number of other tasks that are necessary
to bring new hires into an organization.
With a diminishing number of exceptions, employment for an entire
healthcare organization is centralized in HR. The few exceptions that may
still be encountered, especially in hospitals of medium to large size, typically
involve nursing departments that continue to conduct their own recruit-
ing. In the past, this was a much more common practice than at present,
although some nursing departments maintain a designated nurse recruiter
who frequently works closely with HR. Physician recruiting is often co-
ordinated by an institution’s medical director although the paperwork is
usually delegated to HR.
Compensation and Benefits Administration
Historically, administration of benefits was the second significant area of
responsibility to be assigned to HR. Depending on an organization’s size
and mode of operation, compensation and benefits may be combined as a
single activity or may be pursued separately by individuals who specialize
in each. This latter situation (separation of the activities) is often the case
in larger organizations.
The activities associated with benefits administration ordinarily include
explaining benefits and the policies that govern them to employees and
answering questions related to benefits. These people assist employees
in accessing their benefits. They maintain relationships with benefits
providers such as insurance carriers and pension overseers. These HR
employees must stay current with regulations that concern benefits and
must maintain employee benefits records. They participate in periodic
assessments of the appropriateness of benefits. When necessary, they
become involved in designing and implementing changes to benefits pro-
grams and packages.
Compensation activity is, by definition, concerned with wages and
salaries. Primarily, this includes recommending starting pay for new hires
consistent with their education and experience as well as taking into ac-
count the compensation of existing employees. Compensation encompasses
answering questions related to wage and salary issues and recommending
corrective action when necessary. Specialists in compensation monitor an
organization’s wage structure to ensure that pay equity exists throughout
an organization. They recommend changes in the wage structure that are
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consistent with pay changes in the local community, industry, and indi-
vidual occupations as necessary.
Employee Relations
Some may refer to an activity such as employee relations as being on the soft
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 relative ease with
which matters can be quantified. Hard issues generally refer to compensation
and benefits that can be quantified using dollars and cents or other numerical
measures. Soft issues encompass relations with people. An employee relations
practitioner is likely to be involved, for example, in advising supervisors
and managers on how to proceed in addressing selected employee problems
or monitoring applications of the organizational disciplinary process. They
may listen to troubled employees and refer them to sources of assistance as
needed. Experts in employee relations counsel individual employees as needs
arise and serve as employee advocates when necessary. They may represent
the organization in relations or negotiations with external advocacy agen-
cies such as the State Division of Human Rights. Names of agencies are not
uniform and vary from state to state.
Labor Relations
Labor relations exists as a separately identified entity in larger organi-
zations, but only when some or all of an organization’s nonmanagerial
employees are unionized. The emphasis is on larger organizations because
in a smaller setting, even with a union present, there may not be enough
continuing activity to justify having a specialist in labor relations. When
this is the case, labor relations activities become part of another HR prac-
titioner’s job. For example, an employee relations specialist or the HR
director may take on labor relations activities when this becomes necessary.
The scope of labor relations includes continuing contact and ongoing
relations with elected officials of one or more unions representing some or
all of an organization’s eligible employees. A majority of labor relations
activities consist of hearing and resolving complaints. A collective bargain-
ing agreement defines steps for processing grievances. A labor relations
specialist represents the employer in related matters such as arbitration
hearings and other formal processes. Many organizations have personnel
who are actively involved in promoting labor relations or trying to prevent
unionization when additional union organizing occurs. After a union is
formed, specialists in labor relations participate in contract negotiations
and other related activities when necessary.
Category II: Frequent HR Activities
Depending on the size of a particular institution, the way in which it is
organized, and how its activities are distributed, some of the following
may exist as separate departments. Others may be housed within HR.
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Some may not require an individual that is solely dedicated to the task,
so the few duties are incorporated into the job descriptions of other HR
practitioners.
Employee Health and Safety
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 may
be contained within other organizational units. Employee health is often
found within one of the organization’s medical divisions. However, such a
reporting arrangement can create problems with confidentiality of records.
The arrangements can become confusing. In theory, employee health should
be a subsidiary component of HR, with the director of employee health
reporting directly to the chief of HR. The rationale for such an arrange-
ment is that employee health renders service to employees by performing
pre-employment physical examinations. This activity is clearly related to
HR’s employment section. Because physicians render the services, however,
they should report to an institution’s medical director or chief of medicine.
This is just as clearly not a section of HR.
Training and Development
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 healthcare settings, training and development is often a component of a
nursing department or an equivalent group with a more broadly encompass-
ing name, such as patient care services. Many nursing departments have
developed and maintained educational capabilities. These evolved long
before spreading to other disciplines because activities of long-standing
continuing education (in-service) requirements that were developed by the
nursing profession. As a result, in some quarters training and development
has long been the province of nursing alone. When educational needs of
other professions emerged, nursing simply attended to them. Thus, in many
healthcare organizations, this remains the norm: education originates in
nursing and is provided by nurses but easily crosses departmental boundar-
ies. Sometimes training and development are split. Clinically oriented edu-
cation remains in the nursing department, originating and being presented
by nurses. Other training that is not clinically based often originates and
is presented by personnel from HR.
Security
The security department is typically self-contained. The exception occurs
in small organizations where it may have a reporting relationship to plant
maintenance or building services. A distinctly separate security department
with a manager of its own may report to the head of HR. Equally likely
is a reporting relationship within the plant facilities chain of command or
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directly to the administrator who oversees general services for an entire
organization.
Child Care
If a healthcare organization operates a child-care center or child-care pro-
gram, it is equally likely that the individual who manages child care will
report either to the chief human resource officer or to another person
such as the administrator for general services. Because a child-care center
is subject to unique state licensing arrangements that govern staffing and
facilities, it usually appears as a distinct and separate entity. The rationale
for attaching it to HR is the service to employees aspect of the activity.
There are differences in how healthcare organizations having child-care
programs define their scope of services. Some limit themselves exclusively to
an employee clientele, but many are open to any member of the community.
Often, child-care programs give priority to employees, but after meeting
employees’ needs, they fill the remaining capacity from other persons in
the community.
Award and Recognition Programs
Responsibility for award and recognition programs will ordinarily be part
of some department or group’s assigned duties rather than being a separate
entity. Exceptions occur in extremely large organizational settings. The
most common exception is a large teaching institution that is an element
of a university and thus served by the parent organization’s award and
recognition group. In smaller healthcare organizations, awards are often
coordinated by a member of a public relations or community relations
department or, occasionally, by an administrative assistant. For the major-
ity of healthcare organizations, award and recognition programs are the
responsibility of HR and often fall to an employee relations practitioner.
Equal Employment Opportunity/Affirmative Action
If separate offices for Equal Employment Opportunity (EEO) or Affirmative
Action (AA) exist within an organization, then they will usually, although
not always, be found within the HR department. A person who is desig-
nated to be responsible for compliance with EEO regulations is frequently
an employee relations practitioner or HR executive. This person has the
primary responsibility for monitoring the organization’s compliance with
all applicable antidiscrimination laws. The individual in this position will
be charged with some of the responsibilities that were described within the
realm of employee relations, particularly those that relate to external advo-
cacy agencies such as a state Division of Human Rights and the local branch
of the federal Equal Employment Opportunity Commission (EEOC).
Affirmative Action programs are no longer actively mandated for the
organizations to which they formerly applied. As a result, HR personnel
who had responsibility for Affirmative Action programs have frequently
been assigned to other duties. Affirmative Action required organizations
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holding government contracts to demonstrate that positive efforts were
being made to align the composition of an organization’s workforce with
the demographic characteristics of those living within the organization’s
labor market area. In other words, the goal of an Affirmative Action pro-
gram was to achieve a workforce in which the percentages of women and
minorities mirrored those of women and minorities in the labor market
area. Most of the compliance requirements have been reassigned and are
now included in EEO mandates. EEO monitoring of workforce composi-
tion and compliance with regulations continues.
Category III: Infrequent, Occasional, or Outsourced HR Activities
The following activities are sometimes found within the structure of an
HR organization.
Risk Management
Risk management is present in most healthcare organizations—indeed,
in most organizations of any size or type. Interests of risk management
include monitoring malpractice and liability actions brought against the
organization while overseeing and constantly evaluating forms of insurance
coverage. Risk managers study loss trends such as costs associated with
Workers’ Compensation. The goal of these activities is to manage risk in
an effort to achieve an appropriate balance between costs of doing business
and potential exposure to a variety of legal risks.
Although formerly a component of HR in some organizations, risk
management is currently found elsewhere in the administrative structure.
With its increasingly significant legal implications, risk management is
frequently coordinated by a person that reports to the organization’s legal
counsel. Increasingly, if risk-management duties are assigned to more than
one person, then risk management may become a separate department and
its manager often has a legal background.
Executive Compensation Administration
This activity is rarely left to persons in HR. More commonly, it is taken
care 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 confidential
payroll service. Such an arrangement is quite uncommon in healthcare
organizations; it is far more likely to be encountered in other businesses.
Executive compensation is almost certain to be externally administered if
an organization’s top executives are under individual contracts or their
salary arrangements include incentive compensation.
Organizational Development
Organizational development encompasses a wide variety of tasks. In some
organizations, it is little more than management development under a
different name. True organizational development, however, goes beyond
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simply providing the continuing education necessary to keep managers
current with developments in health care as well as to helping them cope
with the changing times. Organizational development encompasses the
changing requirements of an entire organization. It asks an ongoing ques-
tion: How should this organization be changing its philosophy, mission,
and vision, and its organizational structure, to meet the demands brought
on by changing social and economic environments and the changing health-
care delivery milieu? In many organizations, organizational development
is considered to be a luxury. It is often among the first departments to be
cut when budgetary limitations arise or other economic hard times occur.
A comprehensive approach to organizational development needs should
include succession planning. Succession planning complements manage-
ment development and expands upon it by preparing managers and other
individuals at all levels not only to keep current but also potentially to
advance within the organization. This facet of organizational development
emphasizes the internal development of managerial talent. A comprehensive
approach to organizational development usually includes some means of
identifying and educating potential supervisors and managers from among
the employees who do not hold management positions.
Organizational development exists as a separately identified activity
in a minority of healthcare organizations. The work is typically coordi-
nated by a person reporting directly to the director of HR. Organizational
development activities are often conducted in parallel with employment,
compensation and benefits, and other HR work. In rare situations, typically
in very large healthcare provider entities, organizational development may
be found as a separate office parallel to HR. In such a situation, its head
reports to the same executive as the director of HR.
Employee Assistance Program
An employee assistance program (EAP) is intended to assist employees in
addressing 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 individuals to
identify and focus on their own needs and problems. Employee assistance
programs help to secure professional referrals for troubled employees. A
capably functioning EAP can help control absenteeism, tardiness, and other
circumstances that can affect job performance. Addressing such personal
problems usually contributes to improvements in quality and productivity.
Employee assistance programs commonly address alcohol and drug abuse,
family and marital difficulties, legal and financial problems, compulsive
gambling, and other personal problems and issues.
A majority of healthcare organizations have EAPs. The initial refer-
ral point within a healthcare organization is usually an office located in
HR or in employee health. The latter may itself be a component of HR.
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The professionals that provide assistance to workers are often employed
by an outside entity and provide their services on a contract or retainer
basis. Employees may use EAP resources with the assurance that no one
within their organization has to know about their personal problems. This
improves confidentiality and reduces the opportunities for embarrassing
situations to develop in the workplace. The HR role is limited to simply
putting an employee who expresses a need in touch with the external EAP
coordinator.
Outplacement Services
Outplacement involves assisting displaced employees in finding new em-
ployment. Outplacement services are offered and provided in instances of
reductions in the workforce or elimination of specific management posi-
tions. Occasionally, they are offered to individuals as part of a severance
or termination package. Because outplacement is costly and not needed
on an ongoing basis, outplacement usually does not exist as a permanent
component of HR or any other organizational element. However, some-
thing that may resemble formal outplacement occasionally occurs when
someone in HR or elsewhere in an organization is able to assist a displaced
employee in finding a position with another employer.
Payroll
The activities of payroll were once a common adjunct to the employment
activities of early personnel departments in many organizations. Both of
these basic needs impact all employees. Before benefits became common,
the only activities required for all employees were hiring them and paying
them. There was a compelling logic in having these two activities located in
adjoining offices and coordinating their activities. As time passed, payroll
requirements became increasingly more complicated.
Financial activities have become increasingly more sophisticated. As a
result, payroll has been 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
declining. Today, most payroll activities are performed in one of two lo-
cations. In the majority of organizations that process their own payrolls,
this activity is part of the finance department. Another department, such
as data processing or information systems, which may or may not be part
of finance, will make electronic transfers or actually print and distribute
checks and reports. A growing number of organizations, especially those of
small to medium size, utilize external contractors that specialize in payroll
services. When outside payroll services are used, the input information from
which they work is usually submitted to them by the finance department.
Only occasionally is such information supplied by HR.
The foregoing activities are summarized in Exhibit 4-1.
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Exhibit 4-1 Human Resource Department Organizational Areas or
Activities
Category I: Typical HR Activities
• Employment or recruitment
• Compensation and benefits administration
• Employee relations
• Labor relations (if one or more unions are present)
Category II: Frequent HR Activities
• Employee health and safety
• Training and development
• Security
• Child care
• Award and recognition programs
• Equal Employment Opportunity/Affirmative Action
Category III: Infrequent, Occasional, or Outsourced Activities
• Risk management
• Executive compensation administration
• Organizational development
• Employee assistance programs
• Outplacement services
• Payroll
Outsourcing
Outsourcing is the business term that is currently used to describe the
practice of having services that were once performed by organizational
employees supplied by outside parties or vendors. Outsourcing sometimes
becomes necessary because of changes in organizational structure, reduc-
tion in number of employees, or mergers. Reengineering encompasses these
circumstances. Reengineering is not the only reason that organizations seek
outsiders to perform needed services. A business or organization might con-
sider outsourcing for any of several reasons. The services to be performed
may require special skills or expertise. The demand for such services may
not be sufficient to justify hiring one or more skilled persons to supply them.
A convenient example is managing pension fund investments.
Outsourcing is often the solution when a given task requires expensive
equipment but there is insufficient work to justify purchasing the equipment.
For example, an organization may want to have its annual report printed on
special multicolored paper. If owned, the printing equipment would be un-
used during the rest of the year. By virtue of specialization or sophistication,
an outside supplier may be able to perform a task more economically than
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could company employees. This is one reason why outplacement services for
displaced executives are provided on a contract basis by an external entity.
Reductions in staff sometimes create a need for tasks that must be completed
for which no time is available among employees who are not discharged.
Such necessary organizational requirements are sometimes referred to as
orphans or orphan functions. A particular necessary task may occur irregu-
larly and require insufficient time to justify training and retaining someone
to do it. Preparing, publishing, and printing an employee newsletter provides
a relatively common example. Finally, some work is of a sufficiently sensi-
tive nature that confidentiality is best served by having it performed by an
outside vendor. Employee assistance programs and executive compensation
programs are two examples of sensitive programs.
The decision to outsource any particular task will ordinarily involve
considerations of cost, capability, and confidentiality. Many outplacement
decisions are driven by staff reductions brought about by reengineering
or organizational downsizing. Often when a decision is made to eliminate
a position, many of the responsibilities associated with that job may be
eliminated, modified, or transferred to other persons. Remaining essentials
may 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
understandable because it is a specialized activity that is only occasionally
required. The next most likely activity to be outsourced is an EAP. This is
done to maintain employee privacy and confidentiality. Other commonly
outsourced HR services are pension plan administration and Workers’
Compensation and disability programs administration.
External vendors (outsourcing) are being used for two other important
services: payroll and legal services. Increases in complexity of compensation
programs, changes in tax withholding requirements, concern for security,
and the desire to achieve economic savings are driving the trend to use out-
side vendors for processing payroll. Finally, most healthcare organizations
are not sufficiently large to justify employing a full-time attorney, so legal
services are most commonly provided by a law firm engaged on a retainer.
■ HUMAN RESOURCES FROM A DIFFERENT PERSPECTIVE
The earlier discussion of HR analyzed the services by categories. Each
category included services on the basis of their likelihood of being included
in a typical HR department. Alternatively, the services supplied to an or-
ganization by HR can be discussed by dividing them into groups on the
basis of how they relate to an organization’s employees. These generalized
activities include employee acquisition, support or maintenance, retention,
and separation (see Exhibit 4-2). This section reflects such organizational
groupings.
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Exhibit 4-2 Major Activities of the HR Department
Employee Acquisition
• Employment and recruitment activities (representing the
organization at job fairs and professional meetings, placing job
advertisements, etc.)
• Pre-employment testing
• Checking and verifying of references
• 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
• Workers’ 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
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Employee Acquisition
This category of activities includes everything that is undertaken to
find employees and bring them into an organization. In most healthcare
organizations, this means all employment or recruitment activities.
Human resources personnel may attend job fairs at local colleges and
training facilities or travel to regional or professional meetings to recruit
prospective employees. Placement of advertisements for employees is
coordinated by HR, although other persons in the organization may
provide input on the copy or text of such ads. Pre-employment testing
is usually coordinated by HR even if the actual services are provided
by persons elsewhere in the organization or external to it. A critical
HR activity is checking references and verifying credentials. All new
employees are given the same initial organizational employee orienta-
tion by HR. In general, HR coordinates or supplies any activities that
are undertaken, from locating employees to successfully situating them
in their positions within the organization.
Employee Support or Maintenance
Many HR activities are intended to support or maintain employees by
addressing needs that arise relative to their employment. These activities
include administering compensation and benefit programs, enforcing per-
sonnel policies and procedures for the entire organization, and coordinating
disciplinary and other corrective processes as needed. In unionized environ-
ments, the latter includes formal grievance procedures as outlined in the
collective bargaining agreement. Human resources maintains or coordinates
personnel record keeping. This includes ensuring that employee records are
maintained in a secure location for long periods of time. Human resources
may administer Workers’ Compensation and disability programs or coor-
dinate them if the services of an external vendor are used. Other ongoing
activities related to employees that are often provided or coordinated by HR
include employee assistance programs, labor relations activities, security
and parking, communications to large groups of employees, and any other
services that may be provided for the purpose of supporting or maintaining
employees as effective producers. Services that are sometimes coordinated
by HR include operating an employee health clinic, maintaining a cafeteria
for employees and members of the general public, and coordinating savings
and investment programs.
Employee Retention
Significant overlap can exist between the tasks of maintaining and retaining
employees. Compensation and benefits administration provides a conve-
nient example. If compensation for a particular position is not perceived as
being fair or equitable when compared with other positions or with com-
munity standards, then compensation alone will provide little incentive to
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retain employees in the organization. Likewise, if the contents of a benefit
package are clearly less than other employers are providing, then benefits
will have minimal to no effect in retaining employees. The importance of
compensation and benefits in retaining employees is embodied in the need
to keep them competitive so that valued employees will be encouraged to
remain loyal to the organization.
Immediate monetary compensation, such as pay and benefits, are not
sufficient to motivate good employees. Numerous other incentives, ac-
tivities, or perquisites are offered to help retain employees. The variety
of such incentives is limited only by the imaginations of organizations
offering them or employees requesting them. However, some are fairly
common. These include retirement plans, performance appraisal and per-
formance management programs, and award and recognition programs.
Other non-cash incentives that organizations may offer include oppor-
tunities for training and development, tuition assistance programs, and
career development and succession planning programs. Some programs
may appeal to a relatively small cadre of employees. For those who need
them, however, employee assistance programs and child-care assistance
are highly appreciated. These are important in both maintaining and
retaining employees. All employees not only appreciate but have come
to expect physical safety and security in all organizational facilities and
reasonable parking accommodations.
Succession planning is critical to the success of any organization. Many
in healthcare plan only for the succession of the top few executives and then
only when an employee is leaving. Employees appreciate the chance to have
input into their careers and welcome the assistance that is often provided
by HR. Some relatively large organizations are able to provide opportuni-
ties for career development. Promising employees are identified and offered
positions on task forces, committees, or other temporary teams. In very large
organizations, career ladders and parallel path progressions are possible.
Employee Separation
This category includes all activities involved in separating employees from an
organization regardless of the reasons for separation. Some paperwork and
filing always accompanies any separation. When an employee is discharged
for cause, all disciplinary actions must be documented. Activities after dis-
charge may involve external agencies. Employees who are laid off must be
reported to the state so that they may receive unemployment compensation.
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 flow of financial
benefits. Occasionally, HR coordinates or arranges retirement celebrations.
Every voluntary separation should include an exit interview. Most separa-
tions from an organization involve cessation of benefits. An interview or
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some other contact with HR is required to complete the necessary paperwork.
When selected benefits are to be continued (for example, health benefits under
COBRA legislation), HR usually completes alternative paperwork to ensure
that services continue to be provided without interruption.
■ WHERE DEPARTMENT MANAGERS AND HUMAN
RESOURCES PERSONNEL MEET
This section will initially identify the points at which a department manager
can expect to come into regular contact with employees from HR or with
the programs and activities that HR coordinates. A department manager
will benefit by learning how to optimally utilize the services offered by HR
to the fullest extent possible.
A typical department manager can expect to have frequent contact and
considerable involvement in activities involving employment, employee
relations, and labor relations (if there are unions present). Depending on
the nature of a manager’s supervisory responsibilities, periods of active
involvement with training and development may be the norm. A manager
should expect to have some involvement with activities involving com-
pensation, benefits, safety, employee health, and payroll. The degree of
involvement will depend on how such services are organized and provided
as well as on the rate of turnover of departmental employees. The same
manager should expect minimal involvement with HR personnel related
to security, parking, child care, risk management, and other HR concerns.
Contact with these services usually occurs when individual employees enter
or leave a department’s workforce.
The background, education, and experience of most department manag-
ers in healthcare organizations are usually based on their basic education
or on their technical or professional specialties. A few have some general
business knowledge, but the majority are not overly familiar with HR
processes and requirements. Some basic HR knowledge and involvement
with HR is necessary for individuals who want to supervise and coordinate
their department’s employees in an effective manner.
Employment
A successful manager must remain involved in recruitment and employment
processes as a normal part of department activities. The intensity of this
activity will depend on the turnover rate in the department and on how
much employment activity is necessary.
When a manager finds it necessary to acquire a new employee, the initial
step is to create or update (as necessary) a job description. A personnel
requisition must usually be secured from higher management before HR
can be contacted.
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In some instances, a manager may be able to submit a personnel requi-
sition directly to HR if the need is for a direct replacement of a departing
employee. The requirement for such approval depends on the personnel
practices of the organization. If the requisition seeks an additional em-
ployee, however, it usually requires thorough justification and subsequent
approval by one or more managers in higher positions in the organization.
This requirement intensifies when budgets are tight.
When a personnel requisition is received by HR, it is typically assigned
to an employment recruiter who identifies an appropriate number of can-
didates. A department manager’s next involvement is usually when HR
sends a file containing several applications or résumés of applicants who
meet the stated minimum requirements of the job. The manager then re-
views these documents and advises the HR recruiter which ones should be
called for interviews.
An HR recruiter will conduct screening interviews. As long as the can-
didates remain appropriate after being reviewed by others for compliance
with EEOC, the Americans with Disabilities Act (ADA), and other legal
requirements and with organizational hiring guidelines, HR will arrange
interviews for them with the department manager. Following the interviews,
the manager compiles a list that ranks the candidates. This list is sent to
the HR recruiter, who contacts the selected candidates. Depending on the
size of an organization, the recruiter or a senior administrator or executive
negotiates with the candidate and reaches an agreement on starting pay
and other relevant details. One of these people extends a formal job offer
and sets the desired starting date for 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 most man-
agers focus on providing services or producing products or information, but
HR personnel are people professionals. Some senior executives may extend
offers of employment should that be the norm for a given organization.
Direct supervisors should not negotiate salaries with candidates because
of the potential for ill feelings (if a particular salary request is not granted)
after the job has been accepted. An offer is ordinarily made contingent upon
positive reference checks and having the applicant pass a pre-employment
physical examination. Once an applicant has been completely cleared and
begins to work, it is a department manager’s responsibility to ensure that
the new employee is oriented to the department and properly started on
the job in all other respects.
Benefits
A department manager should have no active role in administering em-
ployee benefits. However, the department manager is ordinarily an indi-
vidual employee’s primary source of information about the organization
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as well as the job (or is at least perceived as such by most employees). For
this reason, managers can expect to receive regular questions about benefits
from their employees. This suggests that a manager should become familiar
with or have a reasonable working knowledge of commonly used benefits,
such as paid time off (vacation, sick time, personal time, and holidays).
Answers to routine questions will save time and allow HR personnel to
concentrate on questions concerning more serious or complex problems.
When large numbers of managers reply to all questions related to benefits
with “I don’t know, go ask HR,” HR appears to be lax in sharing informa-
tion. This impression does not support HR in the short term. Over a longer
period, an organization will suffer.
Most managers will benefit by having two levels of knowledge about HR.
The first is knowing how the organizational benefits structure personally
affects a manager. This knowledge will enable a supervisor to answer many
common questions that employees might ask. The second is knowing from
whom in HR employees should seek answers to more complex 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, where
departmental employees are relative to the scales, and the relative position
of each employee. Information about relative positions is needed to answer
questions that are related to others who perform similar tasks and have
similar lengths of employment but who might be paid at different rates. A
manager should have sufficient knowledge of the compensation structure
to recognize when inequities have crept into the department’s pay rates
and to raise questions about these inequities to HR.
The best information about how a job is performed resides with the person
who does the job and the manager who directs that individual in doing the
job. The department manager and an individual employee on the job are the
primary repositories of knowledge of how a particular job is or should be
performed. A manager must be able to apply this knowledge when creating,
reviewing, or revising job descriptions. An accurate, up-to-date job descrip-
tion is an absolute necessity when determining the pay grade and salary range
for any particular job. Thus, this essential component of compensation ad-
ministration is largely the responsibility of a departmental manager. Human
resources ordinarily participates in writing and updating job descriptions but
cannot create quality job descriptions without departmental input.
Employee Relations
Each time a problem arises concerning an employee, the potential exists
for a department manager to interact with HR. This involvement can
come about because of complaints about employees. These may be made
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by organization employees or by persons from the outside. They may be
informal or formal, such as a grievance. Complaints may be filed with
agencies such as Human Rights or the Equal Employment Opportunity
Commission. They may originate as lawsuits or disciplinary actions. They
may be brought by a department manager or other person.
One employee-related activity that requires a manager’s direct inter-
action with HR on a regular and recurring basis is compiling and filing
performance appraisals. Human resources will ordinarily administer the
appraisal system, keep the system up to date, provide training in the system’s
use, and follow up on appraisal completion. A manager’s role is to perform
the appraisals of employees who are directly supervised according to the
guidelines established by HR and in accordance with timetables established
by the organization.
Personnel Records
Human resources maintains an organization’s personnel records.
Department managers have a few regular areas or points of contact with
personnel records. Much of the information that is filed comes to HR from
department managers. Performance appraisals and disciplinary actions
are the most common of these items. Managers occasionally have a need
to review some fact or element of a subordinate’s personnel record. Such
requests often pertain to the work record and qualifications of someone
who wishes to transfer into the department. Organizations create their own
guidelines regarding access to personnel records. In general, information
contained in personnel records is highly confidential and should not be
available to any supervisor without a valid reason for access. Requested
information should be provided by an employee from HR. Personnel
records should be kept in a secure location, with access restricted to as few
people as possible. Competent legal counsel should determine the param-
eters governing the long-term storage and retention 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 orga-
nizations or professions. Often these differences simply slow down the
normal flow of business. Occasionally, however, the differences develop
into overt antagonism that can significantly interfere with the efficient
conduct of business.
“Line managers and staff human resource professionals spend a great
deal of time talking at each other and often past each other and privately
questioning each other’s views about what goals and values are important”
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(Leskin, 1986). Why do such differences between HR and department man-
agers exist? An examination of the differences between line management
and HR may help to develop an understanding of why there is sometimes
a credibility gap between the two.
Background and Qualifications
The backgrounds of HR practitioners are often varied. Some, a relative
few but increasing in numbers over the past 15 years, have received specific
training in HR. Despite the increase of people with specialized training, there
are individuals working in HR who are educated in a number of different
academic backgrounds, including business, psychology, sociology, organi-
zational behavior, industrial relations, and education. People who started
their careers in clinical or technical specialties have assumed management
positions throughout healthcare organizations, but they are not commonly
encountered in HR.
Supervisors and department managers in healthcare organizations tend
to be trained in specific technical or professional occupations, invariably the
operational areas that they manage. On average an HR practitioner’s educa-
tion has been liberal and nonspecifically focused. In terms of scientific training,
personnel from HR are likely to have training in a so-called soft science such
as those already mentioned. In contrast, other supervisors and managers in
healthcare organizations are likely to have training in so-called hard sciences
such as biology, chemistry, or physics. The educational focus of persons with
hard science training tends to be narrower than their colleagues with softer
science training. The particular educational backgrounds are relatively un-
important; they are simply different. However, people’s initial training often
sets a tone for their later outlook on organizational values and influences
how they embrace concepts and facts or how they view theory and practice.
Staff Managers
Line managers frequently have to supervise and coordinate a variety of
people who bring a mix of values into their jobs. Some of these people
will require close, nearly constant supervision, while some are capable of
independent work. A manager’s working group may include individuals
with an extremely broad mix of skills and educational backgrounds, of-
ten from within a single discipline. Consider, for example, a nursing man-
ager who may supervise a group including nurse practitioners who have
training at the masters level as well as a variety of other nursing person-
nel with training that ranges from a bachelor’s degree (registered nurses)
to an associate’s degree (some registered nurses, licensed practical nurses),
to nursing assistants who may have attended certificate programs, and
to persons with a high school education (clerical personnel). Such a diversity
of educational preparation often poses managerial challenges. Human re-
sources departments, in contrast, are usually considerably smaller than most
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line departments. They tend to be relatively cohesive groups composed of
people who share similar values and have a common occupational outlook.
Management Style and Approach
The supervisor of a line department will ordinarily tend to manage with a
downward orientation. Many decisions and supervisory interventions are ac-
complished on a one-to-one basis. The downward orientation clearly marks
the subordinates of such a manager as being subordinates in the overall scheme
of operations. A manager may sometimes have to perform the duties of a
practitioner, but depending on department size and workload, such instances
tend to be relatively minor components of a manager’s responsibilities.
With the exception of clerical support staff, HR employees (HR practi-
tioners) are more likely to view themselves as colleagues who are compa-
rable with each other rather than as part of a hierarchical structure. With
the exception of the largest healthcare organizations (multisite systems,
teaching hospitals, and the like), in most healthcare settings the chief HR
officer is likely to have some practitioner duties in addition to supervisory
responsibilities. Because of this mix of duties, people throughout the HR de-
partment regard these managers and practitioners as organizational equals.
Expectations
The positional goals and expectations placed on line managers are usually
relatively clear and easy to define. Line managers are expected to perform
their assigned job duties to ensure consistency of quality and output. They
are simultaneously expected to adhere to policies and procedures of the
organization. Furthermore, they are expected to remain faithful to the
mission, vision, goals, and objectives of the organization.
The expectations of an HR department may not be nearly as clear or
recognizable as those placed on line departments. The expectations associ-
ated with HR will influence the manner in which line departments regard
HR. Human resources may be perceived as being expected to control the
affairs of other departments, retain the status quo, avoid making waves, or
innovate. These perceptions will influence whether line departments regard
HR with apprehension, indifference, contempt, or caution, or embrace
HR as a helpful or useful organizational ally. As long as the expectations
of HR and the line departments differ noticeably from each other, there is
likely to be a degree of tension among 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 most
important factor. Put differently, line managers feel that selecting the right
person for a job is the most important factor related to accomplishing
the task. Human resources practitioners, in contrast, tend to believe that
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development is the most important factor. With proper development, any
of several people have the potential to complete a given job. This sometimes
leads to sharp differences between line management and HR in the area
of recruiting. Human resources may supply several candidates, all having
the potential to execute a particular job as expected if they are properly
developed. However, none of the candidates may appear to have the exact
qualifications or experiences or be precisely the right person for the job.
This perception develops because line managers, knowingly or otherwise,
often hold out for an ideal fit between candidate and position.
Participation
Line managers frequently exhibit a tendency to believe that the notion of
employee participation in decision making is no more than a theoretical
abstraction, one that complicates matters by slowing things down and
generally failing to contribute to departmental success. Human resources
practitioners have a different view of employee participation in decision
making. Human resources proponents generally feel that when partici-
pation is properly implemented it can generate improved organizational
performance and increased employee satisfaction.
Employee Empowerment
The highest priority for line managers in a healthcare organization is taking
care of patients and delivering services. As a result, they are often hesitant to
delegate important tasks. More frequently, they adopt an approach reflect-
ing the belief that managers or supervisors have the ultimate responsibility to
provide needed services. In the extreme, they (the managers) will often provide
the required services themselves. The philosophy and priorities of HR are dif-
ferent. The highest HR priority is performing a particular job or supplying a
needed service. They often advocate employee empowerment as a vehicle for
individual growth and development. This approach is taken because of 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 control
protects a department’s staff and enhances an organization’s ability to
deliver care, programs, and services in a timely and cost-efficient manner.
The human resources view, however, is that a controlling manager stifles
creativity, discourages employee participation, and impedes employee
growth and development.
Staff Performance
Line managers, especially in departments having a considerable mix of staff
skills, qualifications, and educational levels, will ordinarily have to integrate
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or cope with varying levels of individual performance. As a consequence,
managers must occasionally provide counseling, criticism, disciplinary
action, and termination. Such people problems can consume a consider-
able portion of a line manager’s time. In contrast, an HR manager usually
supervises professionals and a few support personnel having comparable
skills. As a result, their people problems are fewer, and they are far less
likely to have to take corrective actions.
Reward Assumptions
Line managers often tend to believe that compensation is the most effective
means of influencing performance and that their staff members are primarily
motivated by the promise of material rewards. Human resources practitioners
tend to place organizational culture, supportive management, employee
participation, and opportunities for personal development above monetary
compensation as providing motivation for employees over the longer run.
Regarding Change
The belief system that line managers seem to hold is that effective change
occurs slowly over time and that as a consequence, true organizational
change is always slow and incremental. The HR view is generally that
genuine organizational change is achievable and can occur over a short
term if it is driven and supported by top management.
Outlook
The orientation of line managers ordinarily views success or failure as
occurring 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 and
HR, the following are useful. Line managers believe that HR departments
impede progress by frequently obstructing what an operational department
manager wants or needs to do. Furthermore, they view HR as being largely
obstructionist and commonly citing laws to support their positions on why
particular actions cannot be taken. In contrast, HR personnel feel that line
department managers regularly try to evade laws and policies and gener-
ally insist on making decisions and taking actions that have the potential
to cause legal problems for the organization.
What Can Be Done
Many rank-and-file employees, along with some department managers, do
not trust HR. This often exists to the extent that some employees never go
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to HR with their needs because they feel that doing so will endanger their
employment. As a result, these employees never utilize the HR processes
and services that are available to them. Many employees apparently do
not perceive HR as a resource for them. Rather, they view HR as a depart-
ment that relates primarily with their managers and thus mainly serves the
corporate hierarchy.
Department managers and HR personnel can both improve their situa-
tions by giving each other the benefit of the doubt concerning their motives.
Translated, this means that HR’s mission in life is not to obstruct and frustrate
department managers and that department managers should not pour their
energies into finding ways around HR. Rather, each should try to use every
instance of disagreement as an opportunity to know more about the other.
A top priority of HR should be communicating how HR can be an
important resource for all employees. This must be demonstrated to rank-
and-file employees as well as managers. If HR is not communicating this
critical information, then department managers and administration person-
nel should take steps to ensure that this does occur. The HR department
should never forget why it exists. Human resources represents employees
and is an advocate for them. Human resources must ensure that managers
are aware of employee needs and are motivating them to perform; HR
must continually propose and champion programs and services that appear
to be most needed by the employees of the organization that they serve.
Senior management must never allow HR to forget why it exists and that
it is needed by all in the organization.
■ CONCLUSION
The activities of HR are reviewed from different perspectives. Most HR
departments provide three basic services: employment or recruitment,
compensation and benefits administration, and employee relations. When
unions are present, HR frequently coordinates labor relations. Human
resources provides other services in some but not all healthcare settings
and may also coordinate employee health and safety activities, training and
development, security, child care, award and recognition programs, and
Equal Employment Opportunity and Affirmative Action responsibilities.
The following activities are occasionally coordinated by HR: risk manage-
ment, executive compensation administration, organizational develop-
ment, 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 be
grouped in an alternative manner. The groupings include employee acquisi-
tion, employee support or maintenance, employee retention, and employee
separation. Line managers throughout an organization and personnel from
HR interact most commonly on issues involving a small number of basic
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concepts 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 expe-
riences of most line managers and HR managers are different. As a result,
the expectations of people in these two groups are often different.
Case Study Resolution
Concerning the nurse recruiting situation at Community General Hospital,
one might question the degree to which nursing director Jane Cassidy and
employment manager Carrie Smith are actually working together. Carrie
seems to be putting forth a fair amount of effort to locate candidates.
However, she is deliberately vague about hours and shifts. Although she
is appropriately sensitive about scaring off good candidates before they
can be interviewed, she creates extra work for nursing staff and herself by
not being open about hours and shifts and other scheduling requirements.
When talking to new graduates, her hesitation in discussing the nursing
department’s rotation practices is unfounded because many new nurses
seeking hospital employment expect to rotate shifts.
Jane might be considered luckier than many other nursing directors
because of the availability of a group of nurses who prefer working steady
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 should
quickly review their scheduling situation and current practices. If Jane
continually has to adhere rigidly to her scheduling policy and the candidate
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 time
of shortage, even if doing so requires some compromise among existing
employees and the internal movement of personnel to lessen the impact of
any remaining schedule restrictions.
The nursing department and HR’s recruiting personnel should consider
closer collaboration. A key component of any new collaboration should
include assembling a group of persons from both departments to review
all of the nursing department’s scheduling practices and searching for
creative alternatives to replace the apparently rigid practices now used
when scheduling nurses. The policies and practices governing nurse sched-
uling must be revised to reflect the reality of the nursing marketplace. Jane
and Carrie must both be involved in this effort. With creative scheduling
practices in place, no acceptable reason should exist to reject a qualified
nurse applicant during a time of shortage. Considering the fact that quiet
exceptions already exist, creative scheduling is already being practiced.
This should ease the difficulty of the task.
Conclusion 91
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SPOTLIGHT ON CUSTOMER SERVICE
Human Resource Activities, Managers, and Customer Service
In a manner similar to that of healthcare providers, human resource profes-
sionals often speak of practicing their craft. Over time, they improve their
proficiency. This increases the efficiency with which they work while simul-
taneously increasing their value to the organizations that employ them.
Most managers become more proficient as their careers progress. They
benefit from repetition. However, improved proficiency may be overlooked as
managers focus on attaining their next promotions. This is due to changes in
the nature of the tasks and responsibilities associated with their new positions.
Human resources provides services to an organization. When talking
among themselves, managers often grumble about having to “support” hu-
man resources because that department generates no revenue. Such a view
may be myopic to an extreme.
Human resource employees spend considerable portions of their working
hours explaining regulations and other statutory requirements to employees.
Many human resource employees become excellent teachers.
“That is nice,” whisper managers, “but they (human resources) still do
not contribute to the organization’s bottom line.”
The contribution to an organization’s bottom line is indirect. One obvi-
ous reason should be teaching employees about the importance of customer
service. Satisfied customers not only return to purchase additional services
but also help to increase their organization’s goodwill. When viewed from the
opposite direction, dissatisfied customers rarely return. This reduces, rather
than increases the organization’s revenue.
Reference
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 narrow-
ing a credibility gap that might exist between an organization’s HR
department and its department managers.
2. Advance an argument either for or against having the employee health
and safety clinic located within an HR department.
3. Describe the objectives and activities of risk management. Is risk man-
agement essential in a contemporary healthcare organization? Why,
or why not?
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4. Why is it a common practice to outsource an organization’s employee
assistance program?
5. List several elements of a hypothetical organizational development
program. Explain how and why such a program differs from manage-
ment development.
6. Why is it preferable for a department manager to respond directly to
the majority of employees’ HR-related questions, rather than simply
telling employees to “go ask human resources”?
7. What are screening interviews? Where and why are they ordinarily
conducted?
8. Provide several reasons why a department manager should be familiar
with the organization’s compensation scales even though the manager
is not expected to make specific salary quotations or negotiate salaries
with prospective employees.
9. List three or four differing academic backgrounds that might be found
among HR practitioners. What are the advantages or disadvantages
of 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 external
vendor.
Resources
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John Wiley.
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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
Outsourcing Survey Report: A Study by the Society for Human Resource
Management. Alexandria, VA: Society for Human Resource Management.
Sutherland, J., & Canwell, D. (2004). Key Concepts in Human Resource
Management. New York: Palgrave Macmillan.
Weinberg, R. B. (2005). HRCI Certification Guide (9th ed.). Alexandria, VA:
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Bowman, B., & Stilson, M. E. (2005). Meeting the nursing shortage: A nursing
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512–514.
Conclusion 93
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