Data Management Issues and Ethics – St Mary’s Hospital Case Study Analysis

Data Management Issues and Ethics – St Mary’s Hospital Case Study Analysis

Introduction and Background

Established in the year 1908, St. Mary’s Hospital is one of the largest hospitals in North-Western City. The hospital has a capacity of 400 beds and 1150 employees. The hospital has developed over the years, becoming the third-largest hospital in the city. The employees of the hospital are not members of any union, and the hospital has never experienced any layoff. Between 1990 and the year 2002, the occupancy rates of the hospital were between 76% and 82%, but since then, the rate reduced to 57% (Nkomo, Fottler & McAfee, 2010). The decline in occupancy rates has been due to various factors such as financial meltdown, changing policies, and increased competition, among others. These factors have made the hospital experience financial challenges, with a deficit of $ 3865000 in the coming financial year. To deal with the financial challenge, the board has recommended a 10% layoff to save $3 million. The employee layoff plan may have a serious impact on the hospital, and therefore, the Human resource manager and the chief executive officer are concerned.

The Major Problem(s)

The major problem in the organization is the human resource problem, where the hospital does not have an effective and efficient plan for employee layoff. This is the first time the hospital has opted to lay off its staff to deal with a financial crisis. Being the first time to lay off its employees, the hospital does not have any elaborate layoff criteria or procedures. If employee lay-off is done in the wrong way, human resources will be negatively affected. A poor employee layoff plan can lead to a decline in employee morale, especially those who are remaining, and a decline in competitive advantage. The financial crisis is another problem that the organization is experiencing, leading to the major human resource problem of laying off employees. The CEO and the human resource manager are aware that the major challenge is the plan of laying off staff without negative impacts on the organization.

The Causes of the problem(s)

One of the causes of the problem is that the hospital has an ineffective performance appraisal system. There is inadequate appraisal due to poor performance appraisal. The hospital uses a traditional system which is a checklist rating scale that has a summary rating (Nkomo, Fottler & McAfee, 2010). This traditional system has a lot of gaps in rating the performance of employees in the hospital across the departments and, therefore not reliable to be used for employee layoff. If the organization had a well-established performance appraisal system, then the process of employee layoff would have been easy (Nkomo, Fottler & McAfee, 2010). Poor performance of the latest employees who joined the hospital and better performance of those employees who had worked in the hospital for more than 7 years cannot be used to lay off staff since it is not an accurate measure of employee performance.

Apart from a poor performance appraisal system, the other cause of the problem is poor strategic planning. The manager of the organization should have strategic planning based on emerging events. The strategic plan should then be circulated in every department so that every employee knows what to do and what to expect. Since the hospital has never had employees laid off, the manager is afraid of laying off the employees (Nkomo, Fottler & McAfee, 2010). had the hospital had effective and good strategic planning in the past, it could have considered employee layoffs earlier or used other strategies, such as reducing the cost of production to avoid the financial crisis. A well-developed strategic plan would also have helped in identifying gaps, such as the lack of an effective performance appraisal system, which should have been addressed earlier.

Alternatives to dealing with the problem

The organization needs to save $3 million within one year. This period is short, and the alternatives are limited. One of the alternatives to the problem is laying off employees. The layoff is to be confined to the departments in the hospital with the highest turnover rate, such as the nursing department. Laying off about 200 staff will help the hospital reach its intended saving of $ 3 million in a year. Employee layoff would lead to a shortage of workers, which would, in turn, reduce the quantity and quality of services. Employee performance might also be reduced due to low morale caused by the layoff.

The other alternative is to rely on employee attrition alone. The retiring staff and those who resign should not be replaced. However, the hospital cannot rely on employee attrition alone due to the short period. It could take over two years for the organization to realize the savings if it relied on attrition alone since very few workers resign or retire in one year. Combining attrition and employee layoff is another solution that may work better. About 100 employees can be laid off to save half of the intended savings and the other half saved through attrition.

Other cost-saving ideas can be used to realize the intended savings. The expenses and operational costs should be reduced with no employee layoff. For example, the money spent on expenses such as employee vacations should be reduced. The use of modern technology such as M-health will reduce transport costs. Cheap suppliers should be identified. The hospital should also focus on more marketing to attract more customers, which will increase returns. A hospital focusing on services with high demand, such as dialysis, will help increase revenue and realize the intended savings.

An implementation plan that will save $ 7 million in annual saving

There should be a fair procedure for identifying employees to be laid off. The best method is to use multiple criteria to identify the employees to lay off. Merit-based and seniority-based selection are used for multiple selection criteria. The method is effective and fair since it considers both performance and experience and will involve all departments. In terms of merit, the department with the highest satisfactory percentage or rate will have less turnover (Mujtaba & Senathip, 2020). However, other factors, such as the turnover rate, will be considered. The department with the highest turnover rate will have more employees being laid off. The ratio of senior employees to junior employees to be laid off will be equal.

The seniors should be separated from juniors, and their performance should be measured differently to identify those to be laid off in each department. Employees with unsatisfactory performance should be laid off first. The department with a high turnover rate should have the lowest percentage of employees being laid off. Laying off 70 nurses will save about 4 million annually. Laying off 30 employees in the allied health department will save about $1.5 million. The other departments have a low annual payroll per year, and therefore, laying off 100 employees in the departments will save $1.5 million. The total plan will save $ 7 million. The performance and the turnover rate in each department help in identifying the number of employees to be laid off in the department. After identifying the employees to be laid off, they should be informed in advance two months earlier to avoid legal issues. Written notice should be given to the employees in advance. There should be career consultation, training, and education of the remaining employees to prevent negative effects such as reduced morale.

Dealing with the survivor syndrome

Downsizing will reduce the morale of the remaining employees by increasing the workload and firing their colleagues. The remaining employees will also have a fear of being fired since job security will be reduced. The turnover rate may be high due to increased workload and reduced job security. Therefore, the performance, productivity, and quality of work may be reduced (Nkomo, Fottler & McAfee, 2010). To address these negative effects, the remaining employees should be engaged to reduce frustrations and help them adapt to the changes. The reasons for change should be explained to the workers and asked for cooperation. The employees should be encouraged to work together to achieve a common goal. Honesty, transparency, and effective communication are key in dealing with survivor syndrome (Nkomo, Fottler & McAfee, 2010). The frequent meetings will also help communicate the reasons for change and the best strategies to deal with the situation. Education and training of the employees will help in filling the gaps left by other employees.

Long term Solutions

One of the long-term solutions for the organization is to come up with a strategic plan. A strategic plan communicates the organization’s goals and the actions needed to achieve the goals. The plan will help the organization to identify critical elements needed in the organization, such as the need to update traditional systems to modern systems. The strategic plan will help the organization to track its progress towards achieving its goals hence avoiding problems such as financial challenges early (George, Walker & Monster, 2019). The other solution long-term solution is for the hospital to adopt the use of modern systems and technology such as Electronic Health Records. Information technology systems such as MHealth will reduce the costs of production and help track the performance of employees. Modern systems will also help in marketing the organization and predicting future outcomes. The organization should come up with a modern performance appraisal system and update the system based on emerging needs and trends.

Limitations in using performance data as a criterion for downsizing

One of the limitations of using performance is that it is difficult to measure the actual performance of a person. There are many dimensions or aspects of performance therefore making it difficult to measure (Bellé, Cantarelli & Belardinelli, 2017). An employee may be good in one aspect of performance and poor in another, making it hard to rely on performance when downsizing. Meeting work goals may not indicate better performance. Performance appraisal errors such as Recency errors and similarity errors may lead to the hospital laying off employees with high value (Bellé, Cantarelli & Belardinelli, 2017). Other factors, such as illness and stress, may affect the performance of employees in the short term. The performance of employees who have been in the organization for a long period differs from those who have been recently employed. Therefore, performance data may not be the best criterion for downsizing.

References

Bellé, N., Cantarelli, P., & Belardinelli, P. (2017). Cognitive biases in performance appraisal: Experimental evidence on anchoring and halo effects with public sector managers and employees. Review of Public Personnel Administration, 37(3), 275-294.

Downsizing, a. A., got, t. W., often, t. K. T. J. A., less, f., & guess, h. T. Y. M. Dealing with” survivor syndrome.”

George, B., Walker, R. M., & Monster, J. (2019). Does strategic planning improve organizational performance? A meta‐analysis. Public Administration Review, 79(6), 810-819.

Mujtaba, B. G., & Senathip, T. (2020). Layoffs and downsizing implications for the leadership role of human resources. Journal of Service Science and Management, 13(02), 209.

Nkomo, S. M., Fottler, M. D., & McAfee, R. B. (2010). Human resource management applications: cases, exercises, incidents, and skill builders. Cengage Learning.

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In order to create metrics, you need to have a credible, relevant, and complete data set to work with because unreliable data can affect your results. Raw data that is incomplete, irrelevant, or duplicated can limit the insights that come with HR analysis. Company time and money can be wasted by looking at a good research area and having good formulas but using the wrong information. As an HR professional, it is important to ensure your data is complete and accurate to ensure you are making sound strategic decisions.

In this Assignment, you will analyze a business case and employ best practices of data collection and data management to address a hospital’s financial and HR concerns related to employee layoffs.

To complete this Assignment, review Exercise 25: Employee Layoffs at St. Mary’s Hospital on pages 83–85 of Nkomo, Fottler & McAfee (2011), Exhibit 2.1 Excel document and Exhibit 2.2 Excel document. Then, using the Excel documents, the Learning Resources for this week, and other resources you have found online, respond to the following bullet points in a 4- to 6-page paper:

Identify the major problem or problems at St. Mary’s Hospital and the causes.
What are some alternatives for dealing with these problems?
How many months would it take to realize the savings if St. Mary’s relied on attrition (turnover) only?
What other cost savings ideas might be implemented to realize the target savings?
Develop a downsizing plan for implementation that will generate $7 million in annual savings. Give specific details concerning departments affected, the number of employees affected in each department as well as the savings by department. Also, discuss the use of seniority versus merit, the amount of notice, and out-placement activities. Provide a rationale for each recommendation, together with reasons why other alternatives were not chosen.
What might be the effects of a downsizing plan on ‘‘survivors’’ in terms of morale, job security, quality, turnover, and productivity? How could you avoid or minimize any potential problems in these areas? (For this question, cite at least one resource found in the course readings)
Identify two possible long-term solutions for St. Mary’s Hospital once it gets its cash flow problems under control and eliminates its deficit. Consider trends in the medical field to support your recommended solutions.
What limitations exist in using performance data as a criterion for downsizing? How can such limitations be overcome? (For this question, cite at least one resource found in the course readings)