Human Resource Management and Performance in NHS - Essay Example

Running Head: HUMAN RESOURCE MANAGEMENT AND PERFORMANCE IN NHS Human Resource Management and Performance in NHS s Human Resource Management and Performance in NHS Introduction Healthcare delivery relies upon the ability of healthcare organisations to train and develop, then deploy, manage and engage their workforce. Challenges to healthcare managers are demonstrated through difficulties involved in getting good staff to provide high quality services as efficiently as possible. These challenges remain critical to healthcare management as significant staff shortages are predicted, exacerbated by increasing demand for services. Managers around the world, therefore, share a common desire to manage people in ways that enable the workforce to perform at their best. There is a range of approaches to managing the healthcare workforce for high(er) performance. In the UK, two streams of activity are evident: the first focuses on making the NHS a ‘good employer’ thereby recruiting and retaining ‘good staff’, which could be called human resource (HR) management; the second approach concerns rethinking how to provide ‘high quality services’ as ‘efficiently’ as possible, which could be called ‘different ways of working’. Such approaches are often referred to as ‘modernisation’ (see Bach 2002). However, Seifert and Sibley’s argument that ‘modernisation’ is not a neutral step forward but a highly coloured version of progress rooted in market-style efficiency’ (2005: 226) indicates the contentious nature of such terminology. ‘Different ways of working’ is an attempt to avoid value judgements on the process and outcome of the different ways of working for employees, employers and service users. Given that the UK NHS is the third largest employer in the world, employing 1.3 million staff in 2004, it provides a useful case study to illustrate the processes, outcomes and questions raised by both streams of work. The paper begins by outlining characteristics of the healthcare workforce in the UK and the challenges raised for managers. Against this background, the paper reviews the rationales put forward for HR management and different ways of working, providing recent UK examples of both types of initiatives. We use the Changing Workforce Programme as an example to provide an illustration of some issues which should be of particular concern to managers endeavouring to get the best from their healthcare workforce. Characteristics of the UK healthcare workforce Healthcare organisations are characteristically made up of a large proportion (around 50%) of professionally qualified staff providing frontline services to recipients of healthcare. This type of organisational arrangement has been called a ‘professional bureaucracy’ (Daft 1992). Such organisations are characterised by having high proportions of professionally qualified staff organised around clients or services. Decision making takes place around the operating core (professional frontline staff) and management and administration take place by mutual agreement. Healthcare is a rapidly growing industry sector. A combination of rapid expansion, high staff turnover and an increasingly ageing workforce has contributed to significant projected staff shortfalls of registered professionals and other skilled staff in countries such as the USA, UK and Australia (Wanless 2002; National Center for Workforce Analysis 2004; Australian Government Productivity Commission 2005). The NHS workforce has experienced an annual staff growth rate in the UK of around 3.5% per year since 1997 (DH 2005a). Doctors and other professionals traditionally work long hours and absence rates in the NHS are high. The average time lost per year in the health service is around 5%, compared to 3.1% elsewhere. Furthermore, management style, poor communication, poor working conditions and stress are cited as reasons for nurse exit or intention to leave (Levell and Jones 1996; Cangelosi et al. 1998; Newman and Maylor 2002). Successful recruitment has been hampered by poor public perceptions of the NHS as an employer because of poor pay, lack of flexible hours and pressures associated with low staff numbers (Arnold 2004). In this context, healthcare managers face particular challenges not only of recruitment but also of improving working conditions in order that absenteeism reduces and staff retention improves. Managers are challenged with overcoming skills shortages and reducing labour costs. A frequent panacea offered up to address such challenges is workforce ‘modernisation’. This can refer to a range of changes to working practices, but within the health service attention has often been focused on challenging professional demarcations. Professional staff groups have distinctive characteristics which include a commitment to a distinct body of knowledge, restrictive entry and peer group evaluation, control and promotion (Dawson 1992). The NHS Plan (DH 2000a) and subsequent materials imply that there is a greater scope for overlapping responsibilities, flexibility, multi-skilling and generic work none of which fits easily with the aforementioned characteristics of professionals. The UK is involved in two streams of activity with the healthcare workforce HR management and different ways of working. Why HR management There is a substantial body of work supporting the claim that HR management contributes significantly to improved organisational performance (Guest and Peccei 1994; Huselid 1995; Pfeffer 1998; Ulrich 1998). For example, within the UK, a link has been reported between human resource management (HRM) and patient mortality (West et al. 2002) and within the US health sector research has shown that hospitals able to attract and retain good nursing staff (Magnet Hospitals) demonstrate lower mortality rates (Aiken et al. 1994). The exact nature of this HR performance relationship, however, remains unclear. Common sense suggests that there must be a link between good employment practices and improved performance, but some authors claim that more practices are better; others that specific bundles of practices are more effective and others that the link between HR management and performance is indirect and that there are no clearly identifiable bundles of effective HR practice. Since linkages between HR management and performance were identified, much has been written about the form HR management should take. These can be broadly categorised into three approaches: ‘best practice’, ‘resource based’, and ‘best fit’. Each approach implies different means of improving organisational performance through the management of the workforce. For competitive advantage HR practices also aim to improve employee attitudes such as motivation and commitment. Hutchinson and Purcell (2003) illustrate the vital role that frontline managers play in converting HR policies to meaningful action for staff. The following commentary on these three approaches is derived from Boxall and Purcell 2003; Marchington and Wilkinson 2005; Hyde et al. 2006; McBride et al. 2006. Best practice HR management Best practice HR management is a universalistic view that the adoption of sets (or bundles) of HR practices will improve performance and benefit organisations and employees. This approach suggests that the closer an organisation gets to applying best practice HR and the more they apply, the better their performance will be. Advocates of this approach stress the importance of mutual goals, a climate of respect, ability of employees to influence decisions, adequate reward structures and shared responsibility. Although the ‘best practice’ HR management literature unquestionably flags up key priorities in areas of HR management activity and draws attention to areas where synergy or complementarity between HR management practices are likely to be important in influencing organisational performance, there is no universally accepted list of best practices. Some models involve four or five key practices while others have a dozen or more (Boxall and Purcell 2003: 62). The constituent organisations that make up healthcare systems will have their own priorities which may constrain implementation of broader policy objectives, and failure to appreciate potentially divergent interests of management and employees could prove costly. Resource-based HR management A second approach to HR management is the ‘resource-based view’ (RBV). This model derives from ideas of ‘sustained competitive advantage’; such advantage arising from ‘firm resources that are valuable, rare, imperfectly imitable and non-substitutable’ (Barney 1991: 116). This model emphasises the role of managers in generating competitive advantage through the development of human capital (see Colbert 2004). Under the RBV, ‘core competencies’ form the focus as sources of unique competitive advantage, with a priority placed on knowledge within the organisation and developing a focus on ‘knowledge management’ in order to build on these competencies (Boxall and Purcell 2003: 82). The emphasis here is on competition, with a focus on external factors in determining which resources have value and are worth developing. This approach assumes a competitive environment so would not be suitable for the NHS in its current form. The universal nature of provision that NHS organisations are obliged to provide make it impossible for them to focus only on what they are ‘good’ at. This approach may, however, be useful to organisations in other countries that do need to develop competitive advantage in the healthcare market place. Contingency HR management Contingency or best-fit models (from here referred to as contingency models) offer an alternative model. These approaches advocate the tailoring of HR practices based on contingent factors and the principle that such practices must also complement one another. Boxall and Purcell (2003) identify two main groupings of factors affecting management choices of HR strategy. The first grouping consists of economic and technological factors including sector and competitive strategy, the nature of the dominant technology, size and structure of the firm and stage in the industry life cycle, whether the organisation is well funded or under-capitalised, and general economic conditions. The second grouping of factors is social and political, including labour scarcity, expectations and power of employees, including union strategies, managerial capabilities and politics, labour laws and social norms and general education levels and vocational training systems. There is a risk that this model is too complex and that at least the ‘best practice’ model suggests a clear policy focus. However, this approach is more pragmatic and contextually based than the ‘one size fits all’ approach of the best practice model, in that it considers the range of external and internal factors affecting an organisation when deciding which HR policies to implement. This creates a very flexible framework for analysis that can be applied by managers in any organisational circumstances. Why Different Ways of Working There is a growing trend across the globe towards changes in workforce configuration and skill mix in healthcare that has been driven by a range of environmental pressures and challenges (Davies 2003). These drivers include: the need to respond to skills shortages; pressure for better management of labour costs (which account for much of overall healthcare cost); a desire to enhance organisational effectiveness; and changes in professional regulation (Adams et al. 2000; Sibbald et al. 2004). Central to such initiatives have been ideas borrowed from two overlapping traditions: first, business process re-engineering, which includes emphasis on worker responsibility, multi-skilling and job variety (Leverment et al. 1998; McNulty and Ferlie 2002); second, role redesign, which focuses on skill variety, task identity and significance, autonomy and feedback (Parker and Wall 1998). Role redesign ‘concerns the way jobs are designed or configured within the overall organization of production’ (Bélanger et al. 2002: 17) and dates back to the 1960s. Such initiatives took place against a background of trade union activism and labour shortages and were part of an attempt to deal with rising absenteeism and high staff turnover often linked with Taylorist production systems (Payne and Keep 2003). Role redesign initiatives were claimed to improve outcomes by increasing the meaningfulness of work whilst encouraging employees to experience responsibility for outcomes and to have active knowledge of the results of work activities. Moderating factors included knowledge and skills of the workers and motivation to adapt the role (Parker and Wall 1998). In the 1980s with labour surpluses and declining union power, role redesign was focused on improving organisational performance. Kelly (1992) proposed that role redesign led to improved performance through: employees negotiating changes in content (and increased output) in exchange for increased pay; employees perceiving closer links between effort, performance and valued rewards; increased goal setting motivating better performance; and improved efficiency of work methods leading to performance improvements. However, improved efficiency can come at a price. Within the NHS, work by Thornley (1996: 165) illustrates how ‘the state was able to play on the nebulous character of ‘skill’ in nursing’ and substitute cheaper labour for more expensive grades in a process that Thornley calls ‘grade dilution’. The UK Policy Context In recent years government policy has moved away from restructuring and reorganising health services towards modernising working practices in particular, and systems and processes of care generally. These policies ‘ aimed at tackling skills shortages and reducing labour costs ‘ originated with The NHS Plan which presented a ten-year plan of investment in the NHS (DH 2000a). Furthermore, it laid out two objectives for the workforce: first, specified increases in staff numbers; second, major redesign of roles for NHS staff. Although emanating from the same policy document, in effect these have become two streams of activity. The HR Management Approach The policy document HR in the NHS Plan underpins much of the HR management activity in the NHS. Officially launched in 2003, it set out ‘a comprehensive strategy for growing and developing the NHS workforce to meet the challenges in the NHS Plan’ (DH 2002). The strategy involved four ‘pillars’ of activity with associated measures to enable staff to redesign jobs around the patient: 1. Making the NHS a model employer by creating an environment conducive to healthy work’ life balance, a diverse workforce, job security, fair pay, lifelong learning and staff involvement and partnership working. Measured through a national target called Improving Working Lives. 2. Providing model careers through the ‘skills escalator’, pay modernisation, learning and personal development, professional regulation and workforce planning. 3. Improving staff morale, recognising that staff attitudes and behaviours impact on patient care. 4. Building people management skills through leadership development programmes and national HR networks. Development of the strategy as a whole has been underpinned by a national HR in the NHS conference, and the development of leadership development programmes and national HR networks. Progress is measured against annual national targets, for example, Improving Working Lives, which contributed to the overall performance rating of each NHS organisation. Against each practice is an example of an NHS HR policy initiative, which demonstrates the comprehensive nature of the NHS HR approach. Whilst some policy initiatives have multiple aims, for example, the HR in the NHS Plan focuses on HR as a whole, others, like Agenda for Change, focus on pay. This example of a ‘best practice’ approach managing the workforce, with the NHS endeavouring to become a good employer, was an explicit attempt to address labour market challenge and overcome negative attitudes to working in the NHS noted above. However, this approach has been criticised as its emphasis on national, short-term targets preclude longer term, locally adapted developments. It is therefore possible to see the downside of a best practice approach, which assumes one approach fits all organisational circumstances. National policies and targets have been criticised for diverting manager’s attention away from local (rather than national) priorities onto short-term (rather than long-term) developments (Bach 2004). In addition, McBride and Shephard (2006) note that the HR in the NHS Plan neglects to focus on the development of line managers, which they note is a serious omission, given the raft of policies they are required to implement and the need to involve line managers in implementing policies (Procter and Currie 1999; Hutchinson and Purcell 2003). Although the HR in the NHS Plan emphasised ‘more people, working differently’, which infers different ways of working, the HR approach has tended to dominate. Indeed, New Ways of Working was a separate stream of activity developed under the Modernisation Agency. Different ways of working the policy document A Health Service of all the Talents (DH 2000b) underpins much of the NHS work encouraging different ways of working. It argues for an emphasis on ‘maximising the contribution of all staff to patient care, doing away with barriers which say only doctors or nurses can provide particular types of care’ (original italics; DH 2000b: 5). In particular, professional staff groups are being challenged to change traditional roles, conventional team structures and hierarchies and existing care processes. The example given in the following section examines one attempt to introduce different ways of working. Economic and Technical Factors Attention to this set of factors means looking at the economic position of the organisation and making decisions based on its organisational strategy and where it stands within the sector/ industry. As noted above, a number of roles were not funded beyond the testing stage. This was despite the roles being effective, addressing patient needs and giving staff high levels of job satisfaction and greater commitment to the organisation. McBride et al. (2005) argue that this is explained by the competing logics within the NHS that are geared around the needs of the customer at the same time as being geared around the need for rationality and efficiency. These logics are frequently in contradiction such that a nurse (taking over a task from the junior doctor and thereby saving 20 hours per week) may wish to spend (more) time taking consent from a patient commensurate with patient need, not productivity concerns. If this additional time cannot be absorbed into the overall workforce plan, or become part of a new ‘premium fee’ business strategy, then such role redesign will not proceed past the testing stage. As noted by one interviewee, ‘Directorates are very good at saying they want more, but not that good at saying we are going to fund it by stopping doing Y’ (Hyde et al. 2004: 66). Attention to the interface between the economic status of the organisation, organisational strategy, workforce planning and workplace development would be one way of counteracting the tensions between providing patient-centred care and being as efficient as possible. Social and Political Factors Peck observes that power is an underplayed theme in discussions about leadership. Power is also an underplayed theme in discussions about HR and different ways of working and certainly an important feature of the nurse doctor relationship (Wicks 1998). As noted earlier, CWP was explicitly attempting to challenge profession role demarcations, conventional team structures and hierarchies and established health/ social care divides. Parker and Wall (1998) stress the need to involve stakeholders. In complex healthcare organisations there are many to consult: senior managers, line managers, professional groups, unions, users/ carer groups. A number of CWP roles redesigns required agreement from a number of different stakeholders to a transfer or delegation of duties, and gaining this agreement often took considerable time and expertise. It is suggested that clear routes for management and accountability should be established prior to the introduction of new roles as failure to provide clear systems can amplify existing professional tensions (Parker and Wall 1998). Generally, within CWP, there were fewer problems of management and accountability when redesigned roles could draw upon existing lines of control. Where organisational or professional boundaries were crossed, responsibility often remained with the delegating professional group who needed to be convinced that appropriate clinical governance procedures were followed. Links between HR approach and different ways of working Hyde et al. (2004) indicate important issues for the manager of the healthcare workforce by illustrating the inextricable links between HR management and different ways of working. Remuneration provides one such illustration. A large number of redesigned roles were staffed through extensions of existing staff roles (53%). This testing of extended roles through existing staff raised concerns about future recognition and remuneration. For example, one role redesign was delayed because the staff group ‘wouldn’t do it without remuneration’. Settling pay in advance was an important factor. Not discussing pay in advance of role development led to limitations in the numbers involved (Hyde et al. 2005). Difficulties were also found in roles that crossed professional boundaries where there were existing pay disparities. One example of this was the emergency care worker who could be a paramedic or a nurse who were performing the same new role but who received substantially different remuneration. Difficulties in determining pay settlements faced by healthcare organisations are not unique to this programme (see Bach 1998) and the importance of pay for successful policy implementation has already been noted (Sibbald et al. 2004: 34). Parker and Wall (1998) argued that remuneration should be settled prior to implementation of role redesign and some pilot sites managed this whilst others did not. Increased pay has been linked to increased performance, especially where the employee is involved in negotiating changes of role (Kelly 1992). Where the links between HR management and different ways of working operate successfully, new practices may become embedded in the organisation. Successful role redesign, whilst developed at a service delivery level, was successful only where strong, explicit support of senior managers was obtained along with associated funding. This meant that roles that had been redesigned by the frontline staff providing the service could be examined at a higher level in the organisation for sustainability by addressing a series of key questions: Could the role be financed if expanded to include other workers? What arrangements were needed for managerial accountability of roles that crossed traditional boundaries? Would it be possible to offer the necessary training and development to a wider group of staff? Would the role fit with organisational strategy? Each of these questions involves an HR management approach in understanding different ways of working. CWP roles that did not continue beyond the testing phase were often impractical in terms of one of the questions above and had proceeded without explicit involvement or commitment of senior managers. Although not stated explicitly, Hyde et al. imply that lack of HR involvement made it more likely that role redesigns would be singular examples, for one or two people, and that they would not be fully funded on a permanent basis. However, Bach (2004) noted that HR management already has numerous and conflicting objectives. Conclusion We would argue that HR managers stand in a good position to link HR management to different ways of working as illustrated in successful CWP role redesigns. Indeed, at the time of writing the Department of Health appear to be aligning these two streams of activity by indicating job and service redesign as one of their recommended high impact HR changes. 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