Hiring and Motivating For Optimal Performance
Atlantic Health System, one of the largest nonprofit health care systems in New Jersey, had been operating a shared services organization since the merger of Mountainside, Overlook, and Morristown Memorial Hospitals in 1996. Not surprisingly, the hospitals shared a duplication of many services that could be consolidated under one corporate organization. Human Resources and shared services were reorganized and consolidated under the leadership of Andrew L. Kovach, Chief Administrative Officer. Operating as part of an industry which is traditionally hugely paper-intensive (multiple reports filed per patient), protective of its knowledge (information is power), and concerned not to make mistakes (dangerous to patients and costly), the shared services center reflected the inefficiencies of the sector as a whole: lack of trust between it and its customers, insufficient awareness of customer needs and vice versa, and outdated processes. Unsurprisingly, management saw scope for improvement in the administration of the support services.
At the same time, the healthcare industry found itself in trouble. Dwindling payments from payors and intense cost pressures placed a tight squeeze on the bottom line. To not just survive but succeed, the challenge to shared services was to become more productive. The question was thus: how to do more with fewer overall resources, namely:
- fewer people
- fewer policies
- fewer processes
- fewer programs
- fewer info systems
The AHS shared services organization set itself the goal of becoming a truly excellent organization. This required a certain amount of ‘reinvention.’ One guide we used was Tom Peters’ book "In Search of Excellence,’ which lists the following eight shared characteristics of excellent organizations as:
- a bias for action
- close to the customer
- autonomy and entrepreneurship
- productivity through people
- hands-on values driven
- stick to the knitting
- simple form
- lean staff
Two issues stood out as priorities, for AHS’s shared services: first, cultural change was a necessity; and second, we would need to rethink our entire staffing process. What had developed within our shared services group – in common with many support services throughout the healthcare industry at the time – was an ‘entitlement’ mentality. Staff were used to being in back rooms, they did not perceive their job as being customer-oriented, the concept of ‘service’ hardly featured, and with little emphasis on training, there was no perceived need to change work patterns.
Additionally, and as a result of past inefficiencies, work-around mini-departments had emerged whereby customers would simply circumvent the central support facility if they had problems with a particular person there; instead, for example, relying on an informed colleague.
What AHS took on, therefore, represented nothing less than a wholesale cultural change program - in which training and development were to take center stage.
How Do You Change the Culture?
Effecting cultural change is a painful progress for anyone who has gone through it. The main challenges AHS set itself were:
‘Entitlement’ to ‘enlightenment’
The entitlement mentality that had developed within support services did not support a productive customer relationship. It would need to be transformed into an enlightened approach, whereby staff understood the behaviors necessary to satisfy their customers, and cared enough to make them happen.
Shared service as service!
Shared services and the various support functions were not perceived as ‘service’- oriented departments. Changing this was crucial to the new approach.
Mission and Vision
In order to help staff understand what we were setting out to do, we decided to establish Mission and Vision statements which would encourage a constant focus on the desired deliverables.
Connection to what we do
If the transformation was done properly, staff would understand the consequence of their behavior, and see the connection between their actions and the rest of the business’s performance.
Establishing Mission and Vision Statements
The following statements were developed, to reflect both how AHS wanted to be perceived, and how to get there.
Vision: A leadership position in healthcare shared service organizations through the creative use of training and development, strategic partnerships, emerging technology, automation and decision-support to enhance the total cost of ownership. Our employees will be a source of competitive advantage. We will raise the standards and value of the organization to drive financial results to the bottom line. We will expect as much from our vendors as we expect from ourselves.
Mission: To ensure that all areas of the Atlantic Health System have the most cost-effective products and services delivered to the right places, at the right times, in order to provide the highest standard of care for our patients.
Focus on Change – Starting With Our People
As a first step in the change journey, we realized we had to start with our own people. We decided to tackle the entire employment aspect - starting with recruitment and ending with on the job training. Thus, our key steps were:
- Competency inventory
- Rewrite job descriptions
- Develop hire-right program
- Incentivizing employees
- Training for development and reinforcement
The first thing we did was work with our own Organization Development group within Human Resources to define the necessary competencies required for each position. By using the tools provided by Lominger Limited, we produced a comprehensive list of required competencies for each job category. However, we went a step further, realizing that competencies reflected not just ‘technical’ (teachable) skills, but also less tangible, ‘behavioral’ skills. Behavioral competencies, moreover, included customer focus as well as work management aspects. These were the things that were not easily taught (how do you teach a sense of humor when interacting with customers, if it is not already there?) and which we would, therefore, have to focus on in the recruitment process. We arrived at the following examples:
- Responsible for receiving items at loading dock from vendor
- Enters Receiving data into PMM system
- Manages stock inventory count and value
- Verifies accuracy of actual inventory count versus PMM inventory count
- Answers telephone and acts as primary interface for all customers.
- Monitors management schedules and helps coordinate meetings.
- Maintains department reports and records, collects statistical data for administrative and regulatory purposes.
- Responsible for accurate filing.
Behavioral Competency: Customer Focus
- Understands the importance of behaving courteously and effectively.
- Puts customer first during "Moments of Truth" when customers have an opportunity to form an impression about quality of service. Overlook the emotions.
- Practices empathy and shows support by recognizing customers’ feelings and points of view.
- Makes an effort to constantly gain technical/clinical knowledge to ensure that internal customers’ requirements are met.
- Gains understanding of internal customer’s critical needs and is able to prioritize demands to ensure that urgent patient care is met.
- Meets the needs and expectations of internal customers while abiding by Department policies and procedures.
- Listens and responds to internal customer requests in a timely, effective, and professional manner to build relationships of trust and respect.
Behavioral Competency: Work Management
- Drives to complete tasks, assignments and projects in a timely, accurate and efficient manner.
- Sets high performance expectations for self, and strives to achieve those expectations.
- Remains positive and focused despite obstacles and adversity.
- Achieves goals and objectives, and is viewed as a top performer by peers, clients and manager.
- Seeks guidance when working on multiple activities, goals and objectives.
- Assists in prioritizing goals and objectives.
- Seeks assistance in eliminating roadblocks and obstacles when completing work.
- Sizes up complexity of goals and objectives and communicates when it is beyond their proficiency.
Hire Right! Putting the New Job Descriptions to Work
Hiring right was the next step in reinventing ourselves. We were now able to assemble a portfolio of the technical as well as behavioral competencies required for each job category in our shared services, and rewrote job descriptions to reflect both. We added to these educational and experiential requirements.
Armed with these new job descriptions, we set out to restaff our shared services. All staff were invited to reapply for their roles - albeit roles now redefined by required skill sets and competencies. Based on these desired characteristics, we developed a template of interview questions. All interviewers used the same template, and focused their questions on specific competencies. Thus three different interviewers might cover a question relating to work management, but from different angles.
In the event, 80 percent of our 230 staff were rehired, with 20 percent fallout. These 20 percent were recruited new. By not adding to the total headcount, we were able to drive incentives through our group to improve productivity.
Benchmarking: You Can’t Manage What You Can’t Measure
To ensure we were hitting the targets we had set ourselves, consultants were brought in to build process maps for each of the services we provided in our departments. All activities are now linked to best practice benchmarks: lines/hour, pieces moved, calls/hours, inventory turns, etc. Also linked in are factors relating to absenteeism, tardiness, overtime monies, etc.
We developed targets and timeframes for each process, and measured ourselves against these regularly. This focus on hitting targets helped with another aspect we were keen to encourage: team effort, as opposed to individual effort. To support performance improvement we also introduced incentives, both cash and non-cash. Although incentives, and their impact on performance, are widely disputed, we have seen an improvement in overall performance. Recognition of individual, and group, performance has been key.
Cash incentives include spot awards (by manager), outstanding contribution awards ($100), ace awards ($25) which anyone can give to anyone else, and catch of the day awards ($5 redeemable in the cafeteria). Interestingly, after an initial flurry of activity these ‘staff-initiated’ awards have dwindled to very few a month - reflecting the high expectations team members have of each other’s contributions.
This incentive approach was used effectively to deal with an overtime cost problem we were experiencing. By introducing a bonus compensation plan paying up to 10 percent of monthly wages per employee (based on four productivity categories: lines/hour; monies spent on overtime; picking accuracy; and total lines moved), we set benchmarks and targets, and posted the results weekly. Most importantly: we paid promptly.
This initiative brought our overtime costs down and had the added effect of ensuring that teams kept an eye on colleagues who might be in need of support.
Finally, we communicate results regularly and frequently, and update our staff constantly with any news that impacts upon their jobs. The trust that has developed (which was fairly non-existent before) has been one of the greatest advantages of this initiative. With open and honest communication wherever possible, our staff feel that they are involved in the business and have all the information they need to service customers to the best of their ability.
Training: Investment in People
AHS has committed itself to staff training as part of our cultural transformation We offer a maximum of 32 hours of training a year, per employee - equivalent to four working days.
Training is often the one line in the budget that is not taken up in full. Managers frequently undervalue its effect, particularly when faced with empty chairs in the office. However, in our experience it is the one aspect of our reorganization which we would not do without. We promote training for every listed competency we require. In fact, we have set minimum training standards and ensure Managers stick to them! This shows staff that we not only care about their development, but are willing to invest significant funds in them. We also encourage staff to train as a group, to promote team building.
About the Author
Joseph A. DiPaolo
Director, Corporate Materials
Management and Chief Sourcing
Atlantic Health System
Joe DiPaolo joined AHS in 2000 as the Corporate Director and Chief Sourcing Officer. Atlantic Health System is a three hospital IDN in New Jersey, comprised of the Mountainside, Overlook, and Morristown Memorial Hospitals. Joe has responsibility for all Materials Management, Strategic Sourcing, and other shared services functions. Prior to joining AHS, Joe spent nine years with Cardinal Health, a major manufacturer and distributor of Medical, Surgical, Laboratory, and Pharmaceutical products ranked 17 on the Fortune 500 list of companies.