Optimal Performance Managment

By monitoring individual performance at all levels, performance management enhances the profitability of a hospital, observes Nayantara Som

Successful business and profits stem from performance-oriented workers. Top-level executives have now realised that transformations can only come about when an organisation harnesses actively engaged employees who can achieve desired targets and strategies. At the end of the day, it is the employees who run the wheels of the organisation. This is where performance management comes in.

A recent McKinsey Quarterly report titled, 'Organising for successful change management', says that most organisations wanted not just good performance but great performance. It adds that when asked about the mechanisms for a great performance, executives revealed that top performers were those enthusiastic about the overall goals and themes of their organisation. Another McKinsey report, 'Making Talent a Strategic Priority' states that 'companies like to promote the idea that their employees are the biggest source of competitive advantage.' This applies to hospitals as well.

With the increase in the three C's —complexity, competition and corporatisation, the urge for quality performance and excellence has also crept into Indian hospitals. That is where performance management makes logical and business sense.

Meeting Goals

"Performance management of any resource is measuring the output generated from a fixed input of that particular resource" - Dr Aninda Chatterjee Medical Superintendent BM Birla Heart Research Centre Kolkata

"It is a tool to evaluate and enhance the performance of an individual. It aims to enhance the technical and soft skills of a worker" - Shailesh Langi CEO SSL Consulting Mumbai

"It includes goal setting, performance review, performance gap identification, feedback, performance improvement plan and performance development plan" - Rajesh Varma Head, Human Resources Max Healthcare,New Delhi

Performance management is the process of assessing progress toward achieving pre-determined goals. It is building on that process, adding the relevant ommunication and action on the progress. At the end of the day, it is the desired results vis-à-vis the actual goals achieved. "This system includes goal setting, performance review, performance gap identification, feedback, Performance Improvement Plan and Performance Development Plan (PIP and PDP)," says Rajesh Varma, Head, Human Resources, Max Healthcare.

Other experts from the industry agree. "Performance management of any resource is measuring the output generated from a fixed input of that particular resource. Under the influence of certain factors, performance management takes into account both quantum as well as quality of output," says Dr Aninda Chatterjee, Medical Superintendent, BM Birla Heart Research Centre, Kolkata. The basic principle that this concept propounds is that individual excellence is the route to the realisation of business targets and organisational goals. It bases itself on the thrust that a satisfied employee is directly proportional to a satisfied customer (in this case, a patient). To understand an employee through and through is perhaps half the battle won for any HR department. Moreover, with healthcare now an organised sector and viewed as the sunshine industry, expectations, incentives and opportunities have increased, leading to cut-throat competition. "I would term it as a part of talent management which enables organisations to retain talent even with the high attrition rate," opines Rupak Barua, COO, CMRI Hospital, Kolkata.

Measuring Benefits

In a flattening world, horizontal thinking precedes vertical thinking. This is applicable for performance management in hospitals. "Performance management is applicable at all levels of the hierarchy where the output and tasks are measured and set to meet the larger goals of the organisation," says Siddharth Gosain, Manager, Business Excellence, Asian Heart Institute (AHI), Mumbai. Gosain looks at performance management from a three-dimensional perspective. "There are three aspects that performance management looks at simultaneously—the patient benefit, employee benefit and finally the organisation benefit," adds Gosain.

From a consultant's point of view, Sailesh Langi, CEO, SSL Consulting, Mumbai, says, "It is a tool to evaluate and enhance the performance of an individual. It aims to enhance the technical and soft skills of a worker."

Moreover, managers nowadays name the process of performance appraisals or annual reviews as one of their most disliked tasks. Performance management shifts the focus from performance appraisal or annual review and evaluation to the entire spectrum of performance management and improvement strategies. These include employee performance improvement, performance development, training, cross-training, challenging assignments, 360-degree feedback and regular performance feedback.

Competitive Demand

Like any other service sector, customer satisfaction and revenue generation have today become top priority labels for hospital administrative departments. Hence, now corporate and other 'for profit' hospitals have joined the bandwagon and are putting great emphasis on performance management. Says Varma, "Hospitals work as organisations, where all functions are interdependent and the performance of each function is important for customer satisfaction, revenue generation and for effective hospital functioning." Langi concurs, "The scenario has now changed for hospitals; they are increasingly converting into top corporate or five-star hotels. Every one of them is aiming to give the best services to their patients and to survive in the competitive world. The process of managing and empowering people has already started in hospitals as the HR professionals are arranging soft skill/ behavioural training to their staff to enhance their skills and technical knowledge."

Patients today are extremely choosy, there is soaring demand for qualitative services, and this can be achieved only when hospital employees are instilled with the enthusiasm to perform. "The ultimate goal for hospitals today is providing world class healthcare at best value for money and the concept of customer satisfaction has been replaced with customer delight. Hospitals today carefully manage the performance of all resources like infrastructure, human resource and capital investment," says Dr Chatterjee. Varma agrees, "Today healthcare is facing serious competition and the customer is more aware of service and medical quality; in such a scenario maintaining service and medical excellence is of prime importance for any hospital, which is possible only with robust performance management."

Leading Factors

Myriad factors are cited as having a pivotal role in the performance management of hospitals. Primary among these are employee commitment, appraiser maturity and space for personal growth and career development. Even important aspects like monetary rewards and incentives play a potent role in raising employee performance.

The parameters, however, differ from hospital to hospital. From a consultant point of view, Langi believes, "Compensation and rewards, job role, organisational environment, policies and procedures, immediate manager / superior, top management, corporate culture are some of the major influential factors in deciding the performance of an employee."

The most important factor, industry experts opine, is the potential and competency of a leader. A McKinsey quarterly report, 'Organising for successful change management' revealed that the most successful transformations occur when executives mobilise and sustain energy within their organisation and communicate their objectives clearly and creatively to its employees." It is a leader alone who can bring about awareness for performance. Another McKinsey Quarterly titled, 'The people problem in talent management' expressed the concern that leaders at the senior level failed to align talent management strategies with business strategies.

The research for this report which included in-depth interviews with 50 CEOs, business heads and HR professionals from all over the world found that 52 per cent of the respondents suggested that there was an absolute non-commitment on the part of managers and leaders to develop talent while 45 per cent felt that managers failed to deal with chronic underperformance of employees. Hospitals now being under the purview of a corporate set-up, the role of a leader is of core importance. "It is a leader alone who can boost the morale, performance and create awareness about the milestones of performance management," adds Gosain.

Quantifiable Measures

Given its complexity, what should be the best practices of performance management in hospitals? Apart from the usual appraisal system for evaluating performance, there are numerous practices implemented in a few hospitals but expected to have a revolutionary impact on hospital systems.

Performance management processes are usually applicable at all levels and departments though some, like CMRI, Kolkata prefer to apply it in departments which are measurable. "We have for the moment introduced it in departments like marketing and front office, and departments where we fix targets," adds Barua.

Performance management is applicable for people who are in touch with the customer in any form like administrative departments, doctors and nurses. "This will help hospitals to make doctors and nurses accountable for what they are doing. Doctors can enhance their technical skills and those who have interpersonal problems can learn where to improve," says Langi.

Constant Review

However, there are instances where the usual appraisal processes and annual reviews have been modified. At AHI, Mumbai, for instance, there are two cycles involved— a monthly reviewing process with a mid-year review culminating in the annual appraisal. "The 12 monthly reviews plus the mid-term reviews give a lucid picture of an employee's performance when the HR department finally sits down for the annual review. So be it a ward boy or an executive, every employee is kept under close scrutiny," adds Gosain. Also in this case, the HR department reviews not just whether the employee has met the requirements and criteria laid down by the organisation but also reviews the means and ways by which a person managed to accomplish the target. "Thus for a performing employee we give them a pat in the shoulder and ask them to keep up the pace and not slacken, and a wake-up call for those who under perform," adds Gosain.

A Healthy Balance

In healthcare the best practice so far, as unanimously opined, is the Balance Score Card (BSC) which the industry believes improves the overall mechanism of a hospital. A technique widespread in the corporate industry, the BSC has now gradually penetrated to Indian hospitals. And why not? A mechanism which translates a business unit's mission and strategies into tangible outcomes to bring about harmony between functions is a life-saving drug for hospitals which until recently were forced to work within a disorganised framework. The focus of a hospital on training and development of staff will work towards an efficient and effective business process. Surely, usage of such a tool will lead to a motivated workforce and also delight patients and their relatives. And last, but not the least, financial objectives too are met, with a healthy top and bottom line. Mumbai's AHI introduced it last year. "Here each employee is evaluated according to their contribution in achieving the long term goals of the organisation. Every activity is measurable," adds Gosain. In the process, the failure modes are also identified. Kolkata's CMRI hospital for instance applies this concept. Says Barua, "Here we fix a target whether it is in the field of finance or customer services and then gauge the overall impact on the profitability of the hospital."

Holistic Feedback

A 360-degree feedback is another method popular in most hospitals. This is a tool which gives each employee the opportunity to receive performance feedback from his or her supervisor and four to eight peers, reporting staff members, co-workers and customers. "I think the best practice would be 360-degree performance management. This gives a holistic approach for development," says Langi. Each individual also responds to most 360-degree feedback tools in a self-assessment. This allows each individual to understand how others view his effectiveness as an employee, co-worker or staff member. The most effective 360-degree feedback processes provide feedback that is based on behaviours that other employees can see. The feedback provides insight about the skills and behaviours desired in the organisation to accomplish the mission, vision, and goals and live the values. The feedback is firmly planted in behaviours needed to exceed customer expectations.

The purpose of the 360-degree feedback is to assist each individual to understand his or her strengths and weaknesses, and to contribute insights into aspects of his or her work needing professional development. "Though this system is not easy to implement, once accepted by the top management it can work miracles. It will make top management think about micro and macro issues related to the hospital which sometimes they neglect or overlook,” says Langi.

With quality being the buzzword in industry circles, care is taken to raise the quality levels in hospitals, which ultimately comes within the purview of performance management. Dr Chatterjee mentions, "Concepts measuring deviation from normal like Six-Sigma and Total Quality Management help in the quality process."

What happens in the case of a gap between the desired result and the actual result? Hospitals should chalk out a PIP or a PDP to be prepared for a situation where the desired targets cannot be met. "The first step is the performance gap identification. To bridge the gap between actual and desired results, reasons for performance gap are identified and a PIP is designed," says Varma. At Max Healthcare, performance gaps are reduced by holding coaching programmes, counselling, training and development programmes, target review, change in job profile as per employee's skills, interest and strength.

However at this point, hospitals should be fully prepared to face reluctance and resistance from employees towards change. This can be eradicated only by bringing about awareness. This is in the form of workshops, seminars, leadership and performance oriented programmes. "Certainly, we are going to see the performance gap for some people and need to address that immediately. Some will also have resistance to change, but we need to educate them to understand that it will benefit them in the immediate future."

Dr Chatterjee suggests an EPDCA helix which takes care of the need-gap analysis and implementation. "E— Evaluate the situation and define objectives, P— Plan to achieve those objectives fully, D— Do implement the plans, C— Check results and A— Amend, if there is a deviation from desired values," he adds.

Performance management is a concept which can add new flavour to the system. Hospitals should realise that no department is a watertight compartment but all are interconnected to each other, where one's performance will have ripple effects on the other. Performance alone can take a hospital to better heights.

healthcare@expressindia.com