Health Care: Case Study

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Health Care: Case Study

Response to question A

Inadequate employee motivation

Although the data on appraisal indicates a percentage of the staffs in the departments indicated that the appraisal system meets the norms, there is a significant percentage of those who feel that the appraisal systems are not substantial. Therefore, a poor appraisal mechanism is one of the challenges that is making the employees provide services that do not retain patients. Motivation plays a vital role in influencing employees’ performance towards the achievement of the organizational goals. Although the decline in the occupancy rates has been experienced across the industry, the hospital can upscale its motivation policies, for example, better reimbursement in order to ensure that its employees provide efficient and effective services to the patients to enable them to have a competitive advantage in the increasingly competitive environment.

Poor budgetary allocations

The hospital is also spending a significant share of its revenue in financing central administration and medical staff departments, yet their turn over rates are very low. For instance, the housekeeping department with a lower payroll has higher turnover rates as compared to the medical staff which has higher pay. These statistics demonstrate that the hospital is missing out in payment of its salaries. It is alarming and the reasons for the challenges that they are experiencing. It is also indicated that the hospital’s emphasis on outpatient is one of the reasons for reduced revenues. Therefore, the hospital should invest more in the nursing department and aim at reducing the turnover rates that are being experienced. This is because the department plays a primary role in enhancing inpatient activities.



The data employee on turnover rates and the appraisal mechanism indicates that the other problem that it is facing is competition from other hospitals within the industry. The hospital might be paying below the standard rates, and it’s the reason for the increased turnover rates that are being witnessed. Moreover, employees demonstrate discomfort on the type of appraisal in any organization depends on how their colleagues in other hospitals are being treated. Competition has made most of the patients to move to other hospitals which guarantee better services. The key to remaining competitive in any industry is when quality services are provided. Therefore, the reason the hospital has suffered from the competition is due to low-quality services that have not met those in other hospitals.

Response to question B


Attrition helps any organization gauge its normal turnover rates, and this can help the organization plan on how the remaining employees can perform the responsibilities left by the employees. Although it enabled the hospital to increase its revenue through a reduction in the operation costs, it has long-term effects on the employees’ performances. Attrition implies that remain employees will be performing more responsibilities for the same salaries they were paid. This will result in low job satisfaction and consequently high turnover rates.



Conducting appraisal based on employee competencies

The challenges can be addressed by enhancing an organizational culture where there is performance appraisal is done on the basis of the employees’ competencies. When the employees are reimbursed, or through the use of any appraisal mechanism depending on their effective fulfillment of the tasks assigned, it will ensure that they attend to their patients well and this will make the hospital maintain a competitive edge in the industry. Moreover, employee motivation results in job satisfaction and effective performance of the assigned tasks. As a result, it will not have to lay off its workers, but the hospital can as well improve their revenue by ensuring that their services are improved to enhance an advantage over the other existing hospitals in the industry. The higher turnover rates are because there are other hospitals with better remunerations and thus, most of the employees are going for those opportunities.

Directing resources to services with high returns

The problem of reduced revenue can be addressed by directing more resources to departments that can lead to higher returns. For instance, emphasis on outpatient activities is one of the major reason the hospital is revenue is low. Moreover, the industry has resulted in higher competition because most hospitals have directed more resources toward outpatient. This reason enough for the hospital to significant on inpatient activities and lead more resources to the nursing department so that this becomes its major service to ensure that it is not affected by the heightened competition. Concentration on this segment will make the hospital be better placed with the others concentrating in outpatient services.



Reduction in non-medical spending

The other possible way to increase revenue without the implementation of layoff is the reduced spending in non-medical activities. For instance, it has spent a lot of money in the payment of central administration and maintenance staffs’ yet more funds should be directed in departments such as medical staff. The hospital should make correct decisions regarding overhead costs. This will require looking for cheaper ways to provide non-medical services. The best provision for such services should be outsourced for more affordable services. Although they also contribute to revenues expected, if more resources are directed for this course, then it results in higher operational cost which in turn makes the revenues expected to be low.

Response to question C

One non-essential department is the central administration. Considering the number of employees in the hospital. The number of administrative employees is high and can even result in the delayed implementation of certain critical decisions. Moreover, the services provided by the central administration do not directly relate to patient services. Essential services that enhance increased revenue are those directly related to patient services, and therefore given a few numbers of administrative employees and a higher number of skilled nurses it can guarantee better services and high revenue as opposed to a case where the number of central administration workers is high. Furthermore, given a high number of administrators might also result in problems in the chain of command.

The other department is housekeeping and maintenance. Although they are part of helping the organization achieve its objectives, they often result in increased overhead costs. They are needed to enhance economies of scale through cutting on their running costs. This can be done through ensuring the number in this department is reduced.  Few numbers of these employees will not result in adverse effects on service delivery. Therefore, in case of workers are to be laid off, then these employees can be reduced without much impacts on the overall performance of the organization.

Response to question D

Their specific legal implications that are associated with laying off workers. The established laws for laying off workers are meant to enable the workers going to be affected to find alternative jobs. They further restrict any organization from conducting layoffs based on factors such as disability and race. Therefore, as part of the strategic plan with regards to layoffs, workers need to be notified to avoid any possible lawsuits. The amount of notice for dismissal depends on whether the workers have been employed on a temporal or permanent basis. Hospitals are increasingly using the merit technique while conducting retrenchment because they reduced the likelihood of possible lawsuits due to claims of discrimination.

The hospital is aiming at improving its revenue, and as such, it should conduct lay off through merit as opposed to seniority. New employees bring in new ideas that can spearhead the achievement of the hospitals’ goals. Moreover, the senior employee earns higher salaries as compared to junior employees.  Thus, to save on costs and enhance high revenues eliminating the junior employees will not be a solution. Going by the payroll of the central administration department, its employees earn an average of $44800 if they initiate the laying off four workers every month depending on merit. They will be able to save an average of $ 2 million in one year. If they do the same in the allied health department by laying off four workers each month, they will save an average of $ 1million totaling to $3 million in one year. The additional information that will be needed in order to effect the retrenchment, is the information regarding the workers’ salaries should be provided so that the correct number of employees that need to be fired is known.

There should also be an outplacement activity to ensure that affected workers can find jobs in other organizations. The most relevant outplacement activity for this scenario is providing the workers with information on where to look for jobs that best fit their skills. This kind of outplacement will not result in additional costs for the hospital, and will also enable the leaving workers to be confident of finding jobs elsewhere.

The reason why other alternative approaches such offering training as part of the outplacement activity was not adopted, is that it results in extra costs which the hospital is avoiding. Exercise will imply that additional resources are directed towards this practice thus resulting in additional operational costs.  The other avoided recommendation is the use of seniority in conducting lay off. Although it is also essential, it will not be applicable in this hospital situation keeping in mind that the hospital needed to raise improve its revenue. Retaining senior employees will mean that the hospital maintains high earning employees thus leading to more overhead costs hence low income.