Modifying Centinela Hospital Clinical Laboratory
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GM 591: Leadership and Organizational Behavior
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10/8/2011

Introduction
Centinela Hospital Clinical Laboratory provides comprehensive twenty four hour coverage of routine and emergency laboratory medicine to staff physicians for diagnosis and treatment of patients. Centinela Hospital is located in Inglewood , California. A 369 bed acute care facility owned by Prime Healthcare a privately owned corporation. In 2007 Prime Healthcare bought the Hospital from Tenet Healthcare. The current census of the hospital averages to about two hundred fifty in house patients daily, with a total of more than 140,000 patients treated per year. The Laboratory has forty five full time employees, ten part-time, and five per diem, for a total of sixty employees with a variety of roles and titles. The Laboratory is licensed by the California State Department of Health Services, Laboratory Field Services and accredited by the Joint Commission and Clinical Laboratory Improvement Act Agency (CLIA).
The full service clinical laboratory provides the following services: Chemistry, Hematology, Microbiology, Blood Banking, Serology and Immunology. I am a Board Licensed Clinical Lab Scientist and there are thirty five of us. The rest of the laboratorians are either Licensed Lab Technicians or Certified Phlebotomy Technicians. My main specialty and concentration is the field of Microbiology. I am the Lead Scientist in the Microbiology Department. My responsibilities include training staff regarding microbiology, maintain and troubleshoot expensive equipment, answer all technical questions pertaining to the department, research new technologies prior to implementation and the acting supervisor when the supervisor is not present. The laboratory is divided into four departments with one Supervisor per department. The entire laboratory has one Manager, one Director, and one Pathologist MD, the highest position.
Organizational Problem
In the last four years we have had three new Directors and currently on our second Manager. We have lost ten Licensed Clinical Lab Scientists and hired eight, we have lost fifteen to twenty Lab Technicians and phlebotomist and have hired ten ever since. Employee turnover in the laboratory is very high. Losing a new Director every year since the takeover has a bad impact on morale. To make matters worse, the Manager who has been with the Laboratory for twenty five years has also left. The Manager was about to retire after all the years of service. She was loyal to the employees and hospital, hard working, very well respected, and loved by the people. The manager took the role of interim director whenever we lose a Director. She basically ran the Lab from top to bottom. Instead of retiring she quit to work for another lab. The morale was a major factor. Upper hospital management’s attention was duly noted and actions had to be taken. The respected people to whom we all looked upon are gone. The vision and mission of the lab was unclear and possibly lost. None of the four supervisors wanted to rise above and take a lead role. Each of them said “it is not worth the headache”.
On May 2011, I spoke with the second outgoing Director on his last day at the job. I asked why he was leaving. His answers were: lack of pay compared to the industry, expensive health plan when it should be free, and upper management did not care. This person had a better offer elsewhere with less responsibilities, from a top notch hospital. Management did not counter offer to keep him, and did not do anything to motivate him to stay.
Clearly, money and health benefits are essential to keep talented leaders, who will motivate the rest of the team. If hospital management does not want to pay now, maybe they will pay later in a different manner, or form. Indeed management did pay in a different manner. We lost so many talented employees who fled when the leaders left. Substandard replacements followed and quality of work is diminished. Hospital Management neither wanted to pay leaders, nor did they do anything to motivate the laboratory employees. Hospital Management never came to the Lab to hold meetings nor did they ever come to speak to the supervisors or any staff at all then and now.
Literature Review
Many managers repress their staff, playing the part of what they think a boss should be like. There is often a degree of paranoia over control. The insecurity leads to secrecy and means that people do not feel included. “Management is key to building motivation among employees. Management needs to communicate passion and enthusiasm about work, challenge employees to reach full potential and help them find something that motivates them in the workplace”. (The Evening Standard, 2011). Hospital management never did anything to motivate the laboratory leaders. They managed without managing. The entire lab staff was kept in the dark.
Most companies’ top management is well aware that quality people, especially quality leaders are the primary key to corporate success. “All the grand strategies are useless if capable management is not in place to execute them. The companies that can hire and retain top-tier managers will lead”. Investing in human capital is a proven way to boost a firm’s market success. It is not as simple as purchasing new equipment or digging for natural resources. Rather, it is an asset that is derived from creativity, innovation, and human expertise (Oliver, 2001).
Most healthcare organizations position base salary at competitive levels, such as the average or median of their competitive market. In addition, it is very common for healthcare organizations to have some type of annual incentive program for their executives and sometimes for all their managers within the organization. Annual incentive plans typically focus on goals that are achieved in 12 months or less. Many types of annual incentive plans exist. Some of the more common types include annual bonus based on overall organization performance, an annual bonus based on individual performance against predetermined goals, and team incentives (Flannery, T. 2002). Rumor states that the Manager and Lab Director do have some kind of annual bonus or incentive plan from the company. The packages that were offered were not enough to make them stay.
Water under the bridge as they say. Let us now flash forward. According to Flannery, author of Executive Compensation (2002), the next recruit with a high price tag is often unable to live up to the expectations of the board, expectations that may or may not be realistic or achievable. One of the trickiest aspects of constructing the compensation package is achieving the right balance between offering too much, so that the candidate starts out in a defensive position in justifying his or her value to the organization, versus offering too little and making the organization vulnerable to poaching by competitors because of inadequate investment in the candidate up front. (Flannery, T. 2002). Flannery has a good point. Much even better for the in-coming candidate who now has to perform to meet expectations, and prove that he was worth the pay. Flannery’s statement is consistent with Vroom’s Expectancy Theory. Motivation = Expectancy x Instrumentality x Valence.
The class textbook summarized Victor Vroom’s Theory. A person is motivated to the degree that he or she believes that: (1) effort will yield acceptable performance (expectancy), (2) performance will be rewarded (instrumentality), and (3) the value of the rewards is highly positive (valence) (Schermerhorn, J. 2010). The in-coming director and manager is motivated to work hard to prove themselves to be worth the high salary. Hopefully good results will be yielded from this expectancy act. Then, further rewards will follow in the form of bonuses once the expectations were met or exceeded (instrumentality). Possibly, high self esteem, fulfillment, personal growth, peer acceptance and mastery will follow in the years to come (valence). In actuality, Centinela Hospital management, a Prime Healthcare Group owned facility needs to take GM 591 and learn about organizational behavior and maybe they will remember how important motivation can be to the success of the overall organization, not just the Laboratory.
Clearly hospital management needs to be competitive in their financial and benefits package to attract and keep talent. In Maslow’s Hierarchy of Needs Theory, physiological, safety and social life are in the lower order. While esteem and self-actualization are at the higher order of needs. Hospital Administration clearly needs to satisfy its officers and workers esteem and self actualization as well. Putting money in ones pocket is not enough, management needs to make one happy psychologically, socially, and allow employees to discover themselves from within.
High rates of turnover can be disastrous to the morale of the employees who stay behind. Remaining employees often have to pick up additional responsibilities for the person who’s left, which can result in decreased productivity, burnout, and resentment. When a long time employee leaves a company, he or she takes along valuable knowledge about the job and company that has accumulated over time. When they leave, they take that information with them to their new positions, leaving the remaining employees to break in someone new. The loss of a long-time employee is expensive to a company, both in time and dollars (Mcgovern, J. 2008).
The costs of repeatedly hiring and rehiring can be staggering for businesses which experience high employee turnover. Respect the staff, show appreciation, invest in staff development and training. Recognize and celebrate performance and team success. “Give awards and rewards for achievement. However, stay away from incentive programs that pit employees against one another as the resulting competition can yield tension and bad faith” (Poon, P. 2010). There will always be employee turnover, but management can do things to prevent a high employee turnover. The following segments suggest more alternatives to prevent high employee turnover and hold on to star employees.
One way to reduce turnover is to foster good relationships between leaders and employees. It is no surprise that people like working for people they like. “Research has long shown benefits of employees who feel like they have good relationships with their leaders. These employees tend to be happier on the job, more motivated, more committed to the organization and less likely to quit”. (Lehman, D. 2011).
What happens when the well liked leader leaves the company? Research suggests that such events can have damaging effects on organizations. “First, employees who had the best relationships with an outgoing leader were least likely to trust their new leader. Second, employees who had the best relationships with an outgoing leader were most likely to quit their jobs and to do it sooner rather than later. The news of a leaders departure triggers especially strong negative emotions among those employees who had held the best relationships with the outgoing leader. These emotional responses triggered anxious thoughts about how unpleasant work life might be after the leader leaves. These responses could lead to organizational losses beyond the output of these employees. Critical knowledge and key communication patterns are also likely to be disrupted as these employees become disengaged and depart. It may take months, if not years, for the group to recover from this loss of human capital” (Lehman, D. 2011). Centinela Hospitals long-time lab manager jumped ship for another hospital lab, few employees went with her, and many fled to other places unknown to the rest of the remaining staff. Star employees as well as bad employees fled and new faces took their place. Some of the new faces have stayed, while some have left as fast as they arrived. Negative emotions as predicted were felt from the people that stayed and plenty did depart or quit. Lehman’s article is so precise with what has happened at Centinela.
Carrots and Sticks Don’t Work: Build a Culture of Employee Engagement with the Principles of Respect. A book by Paul Marciano (2010). This book states that traditional rewards and recognition are not enough. “It will most likely reinforce only those employees who are already the most engaging and productive. At the same time it may decrease motivation for some employees who present the greatest opportunity to increase human capital”. Organizations spend valuable resources and investments and provide no return on their investments and are most likely to produce a negative return on capital. This book fosters a belief on Recognition, Empowerment, Supportive Feedback, Partnering, Consideration, Trust and Respect. Very similar to the Needs Theories of Motivation by Maslow, McClelland, and Alderfers’s. Self esteem and self actualization are more important than money.
In summary, there’s an abundance of data and literature on how companies need to treat their employees as assets. Compensation, benefits, salaries, awards, recognition, trust respect, personal sense of competence, empowerment are all motivational factors that needs to be combined concurrently and simultaneously.
Analysis
Leaders need to realize that they can be morale boosters and make sure that their employees need to feel appreciated, recognized and compensated. A vital message for managers is that recognizing and rewarding employees for good work goes a long, long way in maintaining morale and keeping workers happy and productive. Employees want more than anything to be recognized for good work by their managers. Centinela Hospital administration has not practiced these theories as shown by extremely high turnover rates. The new lab manager and new directors that come and go do not know a thing about appreciation, recognition, or motivation theories. Sadly, they never receive recognition or a simple thank you from their superiors either, therefore they do not know how to pass it along it to the rest of employees. That is the culture of Centinela Hospital Laboratory.
The bad economy is a great excuse for not financially compensating talented managers and leaders. The Obama health plan will take us to the unknown land, for no one really knows how it will domino effect into every hospital, doctor, and hospital employees bottom line. Thus, another excuse for the hospital management to be frugal and save their cash. Both are valid and acceptable reasons for eliminating salaries and benefit package as motivational elements for employees. Every person in the work force understands and accepts these realities.
Centinela Hospital management must remember that the best things in life are free. Maslow’s Hierarchy of needs places money at the bottom and self- actualization at the top. McClelland’s Acquired Needs Theory speaks of achievement, affiliation, and power, and nothing about salaries and benefits. A simple thank you, recognition, consideration and respect from the administration might have lowered the high turnover rates. And in return they might have saved a lot more cash by retaining employees according to the literatures. Lastly, hospital administration is faced with economic instability, technological instability and internal administration instability. Economic instability sets fear in every business, household and individual. Administration must save every dollar it can to poise themselves for the impending doom of a recession that is present. Laboratory leaders asking for more money for their own economic survival might as well speak to a brick wall. Maybe, if they were truly great leaders that were really productive, motivational, charismatic, committed, resourceful, knowledgeable, highly educated, very smart, and exceptional they would get a measly raise or competitive package. Next, the field of laboratory science is loaded with technological advancements or instability. Money is needed to keep up with medical advances and laboratory instrument changes. Lastly, the hospital was just purchased in 2007. Hospital administration is probably still feeling their way amongst themselves. They are subjected to the five stages of team development as well. Forming, storming, norming, performing and adjourning. Which means administration is lost in their own world.
Solutions
Retention is the best way to benefit financially from employees that have been recruited, hired and trained. Identifying, interviewing and hiring the right employees are critical steps, but retaining those employees is every bit as important. Satisfied employees provide tremendous advantages to the companies they work for. One of the keys to lower turnover is to keep employees engaged and interested in their jobs and to create some incentives for them to want to stay.
Patient illness is confirmed and diagnosed by laboratory results. The laboratory is an essential part of any hospital. Hospital management needs to pay competitive salaries compared to the surrounding hospitals and laboratories. Research needs to be conducted to attain salary numbers that allows the organization to remain competitive. It is common sense to realize that a good salary will attract talented pool of workers in any industry. Common employees theorized that maybe management did not see the current lab leaders to be competent, talented, or effective at their jobs. Thus, were willing to let them leave and not even offer them better, competitive salaries. A second part to the theory was that when management hires the next Lab Director and happens to be well liked, effective, productive, experienced, and very talented, then and only then a competitive compensation plan will be presented.
Hospital business must be very complicated and has many aspects that are unknown to me in a financial sense. Therefore, speculating for more wages and benefits is much easier said than done. Because I am a business student, it will make more sense to see the balance sheet, income statement, cash flow statement, and retained earnings statement. And even then I still will not be able to judge the liquidity and solvency that relates to the salaries, expenses and earnings of the laboratory as compared to the ultimate profit and loss for the entire hospital. As a laboratorian, I will be unfairly biased to always ask for gains for my peers. Simply stated, pay the lab employees more.
Before we pay anybody more money, I would design a better performance appraisal form to use in judging who deserves more and how much more. Such a form already exist, but it needs to be changed and redone for the better. Peer review by individual department supervisors who work hand in hand with everyone should be a part of this performance appraisal. A specific detailed appraisal depending on job duty and department should be included together with a general standard form. This new method should produce better performance appraisal that is fair and detailed.
Start a reward and recognition program. It will encourage and reinforce positive behaviors among employees. It will create an atmosphere of appreciation and job satisfaction. It will encourage employees to take pride in their work and maybe promote empowerment among employees with one another. It may even create loyalty and build self esteem. Employee of the month, perhaps. This will take another piece of the budget pie, obviously.
Due to the high turnover rate of lab managers and lab directors, no leader stayed long enough to lead, guide and motivate the common people. And according to my literature reviews theoretically, productivity and profitability is affected negatively. If I was hospital management, I would look to the department supervisors to motivate their individual peers. I strongly believe that constant communication with the department supervisors will foster professional and friendly relationships that may help them in keeping things together and prevent more mass migrations.
These department supervisors are the key to the success of the laboratory. They work hands on, day in and day out with patient specimens, high tech instruments as well as the common employees. They know what is happening from top to bottom in their respective fields. They know who is happy, sad, satisfied, productive, and social loafing. I will converse with them about intrinsic and extrinsic rewards for motivation. Realistically, I will not even talk about Maslow, Herzberg, McClelland or Vroom. I will simply discuss without being authoritative about respect, trust, consideration, empowerment, engaging, and recognition. During this time, the main goal is to motivate the supervisors who will in return motivate the rest of the employees. Play the game of politics is definitely a must, to which I have not seen at all by and from the upper management.
Reflection
Hospital administration and or management do not communicate with department supervisors as much as they should. On a bad day these department supervisors walk around the lab with a main mission of “doing their time” and “get the heck out of dodge”. On a good day they really care and you really see it in their performance, body language, and speech. They are leaders of the people and they really worked hard for themselves and for the people under them. But I don’t think they worked hard for the hospital owners and upper management. In truth, everyone in the lab believes that upper management does not care.
Upper management should play politics and allow people to get to know them and present a level of respect. I strongly believe that as the level of respect grows do does our level of engagement as employees. It is difficult to feel a sense of commitment to a person, team or organization that one disrespects. It is the responsibility of upper management to earn that respect from the employees. The morale is low and that is the culture here.
The vast baby boom generation will reach retirement age and is succeeded by less populated X-generation workers in the field of laboratory science. There is an overall shortage in this field and a much lesser group aspire to be leaders. There will be a war for top talented leaders, one in which the competition to attract a star may take compensation elements to new highs, hopefully. I am preparing hard for the inevitable. Hopefully by the time I become a supervisor and lab director I will know how to negotiate for a better package and more importantly be a great leader in my field.

References
Schermerhorn, J., Hunt, J., Osborn, R., and Uhl-Bien, M. (2010) Organizational Behavior, 11th Edition. Wiley.
Flannery,T. (2002) Recruiting Healthcare Executives. Citation.
McGovern, J. and Shelly, S. (2008) The Happy Employee: 101 Ways For Managers To Attract, Retain, & Inspire The Best and Brightest. Citation.
Lehman, D. June 27, 2011 The Straits Times Singapore “How to retain talent when a popular boss quits”, from http://www.lexisnexis.com.proxy.devry.edu/
Poon, P. November 13, 2010 The Advertiser (Australia) “Keeping Staff Happy” from http://www.lexixnexis.com.proxy.devry.edu/
The Evening Standard June 9, 2011 “A Wake-up call for UK workers” from http://www.lexixnexis.com.proxy.devry.edu/
Marciano, P. (2010) Carrots and Sticks Don’t Work. Mcgraw Hill Oliver, R. (2001) The Return on Human Capital. The Journal of Business Strategy