Bulletin

Issue: January/February 2006

Research in action

Health Care: Good people management means good results

Victorian hospitals focusing on good people management have more cost effective outcomes

However, there is often a discrepancy between the importance that CEOs say they attach to good people management and its translation into organisational practice.

These facts came to light in a major survey of Victorian health care organisations by La Trobe University in conjunction with the Victorian Hospitals Industrial Association (VHIA).

Led by Dr Pauline Stanton, an Associate Professor in La Trobe’s Graduate School of Management, and Dr Timothy Bartram from the School of Business, the research team comprised La Trobe staff members Professor Raymond Harbridge, Ms Terese Garreffa, and Dr Sandra Leggat (School of Public Health) and Mr Benjamin Fraser (School of Business).

Dr Stanton said: ‘The survey has convinced us that there are opportunities for better approaches to people management within the sector but these opportunities are being missed.’

The project was supported by an advisory group of human resource directors from the major tertiary hospitals and funded by La Trobe University and VHIA.

In 2004, questionnaires about people management practices and initiatives were sent to chief executive officers, human resource directors and senior managers in more than 130 Victorian health care facilities.

These included strategic human resource management, workforce planning, recruitment and selection, occupational health and safety, managing diversity, employee participation and empowerment, performance management, equal employment opportunity, learning and development, staff support, industrial relations, human resource outcomes and performance indicators.

Dr Stanton said the aim was to explore the use of strategic human resource management practices in the Victorian public health care sector.

‘We defined strategic human resource management as the alignment of human resource functions to the strategic goals of the organisation. A key objective was to explore the link between human resource management and organisational performance by surveying organisational practice across the sector,’ Dr Stanton said.

‘The project found that human resource management was often under emphasised and under resourced, focusing largely on transactional functions such as payroll, leave administration, dispute resolution and recruitment.

‘This means that strategic issues such as the integration of people management practices with organisational strategy, and the impact on organisational performance were given a lower priority.

‘Because of this, improved performance potential is not realised. Even when hospitals do measure their people manage-ment outcomes, they rarely report it back to their decision making bodies and act on any findings.’

Dr Stanton said health care system depended on their people. How they are managed strongly influences the costs incurred, the quality of service delivery and patient outcomes.

She said that despite continuing shortages of many health care professionals, the study suggested that while CEOs and the human resource directors stressed a strategic human resource management package, operational level managers took a narrower view, directing efforts towards the recruitment of new staff rather than on the retention of existing staff.

The study found that human resources was a largely under resourced function across all divisions of health care organisations. Three quarters of responses suggested that the major barriers to effectively practicing strategic human resource management in their organisation were inadequate funding, limited resources, and inadequate human resource management specialist staff.