Ignore Your People at Your Own Peril

So I visited my home town (Peterborough, Ontario, Canada) for the weekend. While I was there, I took note of a headline in the local newspaper, by Kennedy Gordon. He wrote an interesting piece entitled Nurses ignored.

The gist is, executive management at Peterborough’s brand spankin’ new hospital made the decision to close 71 beds and eliminate 151.5 FTEs from the payroll to save $26.8 million over the next two years. Nurses made up a full 80% of the cut FTEs. Not surprisingly, nurses weren’t consulted for this decision, and neither was a recognized representative.

Peterborough Regional Health Centre

"Blank Slate" Peterborough Regional Health Centre trashes morale right off the get-go.

The staff and administration from this hospital aren’t new. They transferred over from the older hospital. However, anytime there’s a massive shock of “new”, there’s often an equivalent level of optimism to go along with it. In an environment already plagued with morale problems from a flagging health care system, you’d think management would want to ride that rainbow for as long as possible. Such was not the case.

In my post from Saturday, Interaction at Work: Don’t Game the System, I picked up Mark Phillips comments about the importance of including others in the decision making processes that affect them. Personally, I’m very passionate about the need to include and inform, even during times of tough decisions. An organization is more than the numbers that make up its bottom line: it’s the experiences, skills, knowledge and insights embodied within the people that form it. When presented with a problem, even a difficult one, these very people will tap that vast reservoir of expertise to find a solution.

In Nicole Fink’s article “The High Cost of Low Morale“, she writes, “the Gallup Organization estimates that there are 22 million actively disengaged employees costing the American economy as much as $350 billion dollars pear year in lost productivity including absenteeism, illness, and other problems that result when employees are unhappy at work.” Among other possible causes, she identifies:

  • poor communication,
  • lack of empowerment,
  • distrust of management,
  • departmental layoffs or closures,
  • labor negotiations and contract disputes,
  • unclear expectations and corporate direction;

as reasons for low morale. I must admit based on my reading of Gordon’s article I saw all of the items in the above list.

A surgical team from Wilford Hall Medical Cent...
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The Ontario Nurses’ Association (again, not surprisingly) cites concerns for the care patients will receive. They note that “the incidence of morbidity (complications) and mortality (death) has been shown to increase as patients lose the expertise and skills that RNs bring. Studies have shown a seven per cent rise in patient complications and death for every additional patient added to an average RN’s workload.”

Michael Hurley, of the Ontario Council of Hospital Unions expresses similar concerns, since the hospital’s user base is “an aging population [that] is using its services in greater and greater numbers.”

Both the ONA and OCHU citations above indicate already-present problems may be exacerbated by these cuts. If that’s true, then by not consulting with those who could have worked to find a better solution to the financial problem, hospital management has exposed itself to a worsening of the very problems that prompted the construction of a new hospital in the first place. Of course, since a full 80% of the cuts are nurses (as opposed to other hospital workers, including management overhead), hospital management has shown exactly how much they care about nurses’ input.

Here’s the thing. As usual, I’m not going to comment about the right or wrong of the decision to exclude nurses from identifying a solution. I’m going to look at the consequences.

Expected Results Additional Results
1. (Hopefully) balanced books that incorporate the desired $26.8 million in savings. 1. A public relations mess. (What, the nurses’ union wasn’t going to notice?)

2. Trashed morale among nurses.

3. Increased risks to patient health care as overworked nurses miss important details (that should come as no surprise).

4. Increased risk to patient health care as demotivated nurses performance drops.

 

You can always hold individual nurses accountable for a decline in their personal job performance, but honestly, when management demonstrates a clear lack of interest in creating a positive working environment for the nurses who remain after these cuts, where does the problem really lie? While they may have solved a short-term problem with their most recent accounting project, given the additional consequences they may be facing, were the short-term results worth it?

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I’m a professor of project management at the college where I work. My students continually amaze me with their insights, passion and all-around awesomeness. I figure they deserve access to more answers than I can give them by myself. This site is for them.
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  • Hi Geoff, great to see that you deal with a social issue in your blog. Project Managers do not live in isolation from the general population and PM Blogs need to reflect that (as I have also done recently).

    Also, great to see that (unlike some other blogs) you provide linked references to the points you make. This is the right thing to do and I find it troubling when others make all sorts of assertions without backing them up with clear and verifiable references.

    Cheers, Shim.

  • Heya Shim, thanks so much for the kind words! 🙂 I haven't been blogging for very long compared to some of you and I'm still sort of feeling my way around. This was an experiment to see how people would like it, so I'm very glad to see you did! 😀
    Cheers my friend!

  • Geoff
    I enjoyed your post very much. I'm a hospital CFO and you inspired me to post a brief blog about how a staffing reduction should proceed. I linked to your blog, so please take a look at it, and let me know what you think.
    Regards,
    Arnie

  • blight2010

    Hey Geoff,

    A very thought-provoking issue, and one layered with complexities. Certainly it links to project management at the base level, as handling a layoff requires a lot of planning, co-ordination, preparation and deadlines. It is truly unfortunate that a “successful” conclusion to the project means that people lose jobs.

    I absolutely support you on open communication, and the more the better, but sometimes from a practical standpoint, it is difficult to administer in this case, especially where open communication hasn't been the norm. I worked at a company once where management only called company meetings to announce layoffs, and when I wanted to do something good for the whole team, everyone thought that they were going to be fired and morale tanked until it was explained to the employees… On a more serious note, there are also some laws around notice periods etc that can come into play, and unless procedures are properly followed, can lead to legal issues if ignored or circumvented. As employment laws tend to favor the employee (for obvious reasons), companies are very wary of openning up this communication.

    I applaud your recomendations, but forsee many obstacles to being able to implement them, especially at large organizations. Smaller companies will have to take the lead on this I think.

  • Heya Bob thanks so much for some fantastic thoughts! 🙂

    I sometimes blog about upper management issues a) because I used to be one (before I decided I preferred to keep my stomach lining) and b) through managing risks, project managers are specifically taught to look into the future at the consequences of their actions.

    From my point of view, it's about results. Results, results, results. (Results). There are always valid reasons for the decisions we make when running an organization of any size. Fear of short term consequences is a very popular one. Robbing Peter to pay Paul is another. But when all the dust settles, it's the results we're left with–nobody remembers the reasons.

    I completely understand that stringent employment legislation and threat of employee backlash are valid reasons to prefer not to communicate with employees during layoff decisions. But those reasons don't change the mess you're left with after the decisions are made. I'm not saying that this hospital wouldn't have wound up with a mess if they had consulted the nurses, but it would have been a different mess. The new mess might be more palatable to all parties than the traditional hack-and-slash that large, unionized organizations are notorious for. We'll never know because that decision didn't come to pass.

    One of the things I preach to my clients is that as human beings we have to constantly watch ourselves for a natural tendency to prefer the complex. When running a large organization (which is complex), favouring the simple often seems absurd. We want to dive into the details and untangle the yarn, because we're wired to do so. But here's a simple question: what's the point of spending hundreds of millions of dollars on a brand new hospital to serve an aging baby-boomer population desperate for healthcare, if you're going to promptly sever service delivery through an accounting action? Why build the hospital in the first place?

    I love this discussion, Bob. Thanks for contributing!!

  • Heya Arnold thanks so much for joining the discussion! 🙂 I'm thrilled you felt this article good enough to comment on! I will hop right over to your blog and take a look. In the meantime, feel free to read some of the comments here…I love the discussion that's happening!

  • PatrickRichard

    This one sounds like an episode of the satyrical British sitcom “Yes Minister” except it is not funny…

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