A wise and seasoned, if not a little cynical CEO I know, once described the payroll process at a former hospital as “distributing cash to zombies” or “paying people for something we are not getting.” In other words, paying employees just to show up.
He also described that hospital’s payroll and benefit plan as the biggest “entitlement and giveaway program in healthcare. These employees are not engaged in any shape, form or fashion. They do not care and the quality, service, satisfaction and financial performance is proof positive.”
He was not normally that cynical or outraged but when he uttered this biting assessment of his workforce, he was in week six of a massive operational/financial turnaround. This hospital was as bad as it could get without collapsing into default, bankruptcy and liquidation.
While his assessment was spot-on – I was brought in to conduct several executive searches – there was a reason that the morale/engagement/performance was in the trashcan, top to bottom:
- A series of previous CEOs did not view their employees as an important strategic resource. Instead, they were considered an expense that had to be controlled. One CEO was described as the phantom since few employees never saw him.
- A startlingly large number of employees had never received a performance review, at least not in five or six years.
- There had not been a merit pay increase in more than five years.
- If there was an employee performance review completed on time, I couldn’t find the evidence, including the board’s review of the most recent CEO.
- Most of the top performing employees (and physicians) had long since left the building. No surprise there. The remaining A and B employees had to be among the most optimistic, hopeful people on the earth.
- Filling the vacancies was the number one, all-consuming priority for the internal recruiters.
I think the one thing the organization did well – well, passable – was skating through the regulatory surveys, always with exceptions that required arduous correction plans and always promises to improve.
Five years later, the hospital is still open and operating, sometimes in spite of itself, but the tide was turned. That turnaround CEO was successful and on his last day he reported that he repeatedly said, “Never again. Never, ever again,” as he walked to his car.
How did he do it? He quickly rebuilt the senior leadership team. The departed leaders had lost their way, their self-confidence and their credibility. Then he began to work on the hard stuff beginning with employee engagement. There was no magic bullet there, no sexy expensive program that would somehow woo the mediocre and poor performers to get back in the game. It took backbreaking work, seven days a week at first, then a relentless, sometimes noisy effort, to communicate and enforce the new core values. The team put in long days reviewing and improving processes, and focusing on performance improvement from housekeeping to patient care.
It was this CEO who coined the phrase for me, “traveling evangelist” to describe what his job became. “It is one of the hardest things in the world to get people to care again.”
While this hospital was a worst-case example, there are many hospitals and other businesses in America where employee engagement is not just bad but shockingly abysmal.
Overall, 70 percent of the workforce is not reaching their full potential or are actively disengaged, according to a Gallup survey. That is a lot of waste, waste that healthcare providers cannot afford in a post-reform economy.
That fact is also why we continue to struggle in healthcare with quality and safety.