Study on Human Resource Management Practices in Hospitals and its

Impact on Employee Satisfaction

Introduction
In terms of the growth rate, the healthcare industry in India is moving ahead neck to neck with
the pharmaceutical industry and the software industry. Till date, approximately 12% of the scope
offered by the healthcare industry in India has been tapped. The healthcare industry in India is
reckoned to be the engine of the economy in the years to come. Growing at an enviable rate of
15% every year, the healthcare industry in India is estimated to be a $40 million by 2012. There
are vast differences in medical expenses in western countries and that of India; India has become
one of the favorites for healthcare treatments. Due to the progressive nature of the healthcare
sector in India, several foreign companies are intending to invest in the country.
Existing healthcare organizations are expanding by opening hospitals in new service areas and
new
organizations entering with state of art equipments, latest technology and marketing strategies.
Consequently, competition in the healthcare sector is on the rise. Increased incomes and
awareness
levels are driving the customers to seek quality healthcare.
The providers in turn need to be more innovative in their approach and offer quality services at
competitive price. All this necessitates the systematic Human resource Management by trained
and professional managers and administrators.
Human resource management refers to the practices and policies needed to carry out the
personnel aspects of management. These include:

Analyzing jobs;
Planning manpower needs and recruiting competent people;
Selecting best people;
Appraising performance and potential on ongoing basis;
Socializing, training and developing people;
Managing compensation;
Communicating;
Building employee commitment and so on so forth.

A commitment HRM bundle includes diverse practices such as training, sharing information,
employment security, performance based compensation, employee participation, and ensuring
employees well-being (Chang, 2005). If every manager is good at managing HR along within
his or her own functional area he or she can avoid:
Hiring the wrong person for the right job.
Experiencing high employee turn over.
Finding people not contributing their best.
Poor time management.
Having company taken to court because of discriminatory practices
Having dissatisfied employees who always think about their salaries and perceive them to
be unfair and inequitable relative to others in the organizations.
Failure to provide job related training which will eventually undermine the department's
effectiveness.
Indulging in favoritism and nepotism at the cost of organizational effectiveness.
Today human resources occupy, more than ever, the center stage of all economic activities. It is
alarming time for all those organizations that wish to be successful in global markets to gear up
and implement desired shift in their prevailing human resource management practices and
leverage their human resources along with the other resources. Also to become more flexible and
innovative organizations need to adopt new ways of attracting, retaining and motivating
employees who are keen to learn and can contribute to the growth and development of the
organization. In an increasingly competitive market, survival and prosperity of business will
depend critically on the ways an organization manages its resources especially the human
resources. In the words of Clatfelter - 1997, The HRM functions to be streamlined, the HRM
activities to be handled more efficiently, or delivered in a more cost-effective manner. Lee and
Heard, 1998, suggested, An HRM audit is an analytical tool that systematically and
comprehensively assesses a firm's HRM policies and practices against the firm's business
objectives.

Types of Hospitals
(i) General hospital: All establishments permanently staffed by at least two or more medical
officers, which can offer in-patient accommodation and provide active medical and nursing care
for more than one category of medical discipline (e.g. general medicine, general surgery,
obstetrics).
(ii) Rural hospital: Hospitals located in rural areas (classified by the Registrar General of India)
permanently staffed by at least one or more physicians, which offer in-patient accommodation
and provide medical and nursing care for more than one category of medical discipline (e.g.
general medicine, general surgery and obstetrics).
iii) Specialized hospital: Hospitals providing medical and nursing care primarily for only one
discipline or specific diseases (e.g. tuberculosis, ENT, eyes, leprosy, orthopedic, pediatrics,
gynecological, cardiac, mental, cancer, infectious disease, and venereal diseases). The
specialized departments, administratively attached to a general hospital and sometimes located
in an annex or separate ward, may be excluded and their beds should not be considered in this
category of specialized hospitals.
(iv) Teaching hospital: A hospital to which a college is attached for medical/dental education.
(v) Isolation hospital: This is a hospital for the care of persons suffering from infectious diseases
requiring isolation of the patients.
(vi) Tertiary hospital: States and Central Governments set up tertiary hospitals in their capitals
where referred patients are treated such as AIIMS, New Delhi, P.G.I. Chandigarh, Sanjay
Gandhi, P.G.I., Lucknow, etc.
Literature Review
HRM, Employee Satisfaction & Healthcare Industry

How to improve HR practices so as to make them compatible to global standards is a question

that needs a great deal of research and analysis. Many scholars and experts have contributed their
ideas and views in terms of articles, research papers, etc. Some of the works reviewed are
mentioned hereunder:
1. Happock (1935), according to whom job satisfaction is any combination of
psychological, physiological and environment circumstances that causes a person
truthfully to say: I am satisfied with my job.
2. 2.The importance of the recruitment process remains as one of the most important,
yet under researched areas in human resources management. While the utilization
of recruitment sources is documented from both employer (Malm, 1954).
3. V.S. R. Subramanium (1975) Concluded different Performance Appraisal is needed
for optimal motivation of different sectors of manpower in an organization, and
hence one grand performance Appraisal system should be avoided.
4. C S Weisman, C S Alexander, and G A Chase (1980) collected Data from a twowave panel study of staff nurses in two hospitals are used to assess the relative
importance of several types of independent variables as determinants of job
satisfaction. Both organizational and non-organizational determinants are
examined, with the formed including both perceptual and structural measures.
5. V V. Manerikar (1980) discussed on Job satisfaction and Performance. For better
performance there is need of required abilities and skills to fulfill managerial role.
The study further discussed on selection strategies with well developed battery of
psychological tests and interviews, As well as the role of Sensitivity training and
Transactional Analysis to understand the forces of behavior for job satisfaction.
6. 4. Arvind Mishra, (1998), concluded that Performance appraisal can make a major
contribution to individual and organization success by creating an atmosphere of
openness and trust.
7. 5.John T. Delaney and Mark A. Huselid (1996), In 590 for-profit and nonprofit
firms from the National Organizations Survey, we found positive associations
between human resource management (HRM) practices, such as training and
staffing selectivity, and perceptual firm performance measures. Results also
suggest methodological issues for consideration in examinations of the relationship
between HRM systems and firm performance.
8. Junaid Siddiqui, Brian H. Kleiner (1998) concluded from this research, that the
health care industry should adapt the latest methods to compete and survive, such
as use more marketing tools to attract human resource management personnel from

other industries, promote diversity at the work place, promote from within the
company, and cross-train personnel whenever possible. Health care industry has
generally lagged behind other industries in securing high-performance individuals
and marketing personnel; however, with the development of health maintenance
organizations, this trend is changing.
9. Galen Conant, (1998) addresses each of these key issues with the following
examples. A new nursing paradigm that was implemented at a hospital has
significantly increased job satisfaction. This paper also takes a look at ways to
manage cultural conflict in a diversified workforce.
10. Shay S. Tzafrir & Amit B. A. Gur, (2000) have undertaken the study within an
Israeli Health Care Organization to examine the relationship between HRM
practices, and Service Quality as well as the mediating role of trust in
management. Human Resources Management (HRM) plays a central role in the
exchange relationships between the organizations management and its employees.
11. Stefane M Kabene, Carole Orchard, John M Howard, Mark A Soriano, Raymond
Leduc (2000) addresses the health care system from a global perspective and it
studied Challenges in the health care systems in Canada, the United States of
America and various developing countries are examined, with suggestions for
ways to overcome these problems through the proper implementation of human
resources management practices. Finally he concluded that Proper management of
human resources is critical inproviding a high quality of health care.
12. Hoon, Lee Soo (2000), The HRM audit provides a means for managers to evaluate
their firms' HRM practices and to assess how these HRM activities are
contributing to their organizational objectives. The results obtained serves to
encourage managers to develop a strategic approach to managing human resources
as well as in measuring the performance of HRM activities.

13. Simply introducing HRM practices or programmes, in the absence of an

appropriately supportive workplace climate, will be insufficient to attain optimal
organizational performance. K V Rondeau, T H Wagar (2001) examines the
relationship between HRM practices, workplace climate and perceptions of
organizational performance, in a large sample of Canadian nursing homes. Results
derived from analysis suggest that nursing homes in our sample which had
implemented more 'progressive' HRM practices and which reported a workplace
climate that strongly values employee participation, empowerment and

accountability tended to be perceived to generally perform better on a number of

valued organizational outcomes.
14. Jayaram (2001) suggested recruitment is a specialized function and should be
proceeded with, in a methodical manner. Today, there are many recruitment
agencies which are ably fulfilling the needs of various industries. However, our
healthcare sector lacks such services.
15. Ram Nath Prasad (2001) discussed that it is easy for a smaller hospital to develop
personal rapport with each of its staff compared to a big hospital with huge number
of employees. Therefore an attempt can be made to go into the depth of a personal
problem of the employee and help him to sort out the same. Some monetary help
would also provide great relief to him. Such gestures would make the employees
more committed to the organization and also help them perform at their optimum
level.
16. Productivity and quality of service in an organization entirely depends on its ability
to manage the human resource. How to get 'people' involved and motivated for
excellence at work? The key to effective work performance is in understanding of
Human Motivation based on needs. S.M. Garg, N.K. Parmar, Rajvir Bhalwar,
Kalpana Srivastava (2001)
17. HR practitioners ought to be able to forecast what type of work, pay and benefits,
promotion system and recognition an employee would desire and sculpt these
around him. A good indicator of these desires would be their career anchor, Dr. R.
K. Premarajan, (2003)
18. Due to increase in number of service providers, hospitals are focusing more on
cost containment and quality services and therefore it becomes more important that
absenteeism and turnover are dealt with continuous monitoring to reduce cost of
manpower to hospital. Absenteeism and turnover are types of withdrawal
behavior that an employee exhibits when he encounters personal and professional
problems and the relative importance of a particular problem is more then the other
job factors in his life by Ankush Gupta (2002).
19. Andrew (2004), discussed on, Triumphant Companies have recognized the role of
HR in appropriate selection of Employees. World economy has shifted from
manufacturing to service and knowledge. The new role of HR is to determine the
perfect skill essential for the employees to accomplish the organizations strategy.
20. 10.Al Kudhat Mohammed (2004), with his study entitled, " one of the main
findings of this study is the existence of a positive relationship between the
personality traits of those who have been recruited and technology employed in the
hospital.

21. Michael K. Mount (2005) has given evidence that employees perceive certain
aspects of the appraisal system in a global way, whereas managers differentiate
among various components and see them as distinct entities. Second, the relative
importance of the factors differs between the two groups. The largest portion of
variance accounted for in the employee sample pertained to general satisfaction
with the system whereas for managers it pertained to the types of ratings made on
the appraisal form.
22. Hsin-Chih Kuo (2005), his study applies both resourcebased view and strategic
human management theory to explore two kinds of fit in strategic human resource
management for Taiwanese hospitals. The strategic human resource management
can be divided into two kinds of fit: vertical and horizontal.

23.Job-related training showed no relation with job satisfaction, but a clear relation
with
client satisfaction, while leadership style of their manager had a significant relation with job
satisfaction, and a more limited one with client satisfaction. Regular performance reviews are
important for job satisfaction and client satisfaction. Employee and client satisfaction can also
conflict: more regular schedules increase employee satisfaction, but decrease client satisfaction,
Marlies Ott, Prismant, Utrecht, Han van Dijk, Prismant, Utrecht (2005).

24.Turning the corner on healthcare human resource challenges requires nothing short of cultural
transformation. Just as in other industries, the transformational journey is step-by-step. The goal:
building a high-trust culture that encourages innovation and supports employees to deliver the
highest-quality patient care and community services. Graham S.Lowe (2005).

25.The human factor is central to healthcare, yet its proper management has remained beyond the
reach of healthcare organizations. Khatri, Naresh; Wells, Jack; McKune, Jeff; Brewer, Mary
(2005) qualitative studyexamines strategic human resource management (HRM) issues in a
university and a community hospital. The findings indicate that the hospitals lacked a clear
understanding of their strategic intent and objectives; as a result, their human resource (HR)
practices lacked coherence and direction.

26.Management has been using the traditional tools which are basically coercive in nature (such
as, punishment, suspension, degradation and discharge) to control the employees but it is to be
realized that these coercive measures are never productive. To control the staff effectively,

modern management tools are to be adopted and coercive measures are to be replaced by
persuasive ones. Ram Nath Prasad (2005)
27.Ching-Chow Yang (2005), study confirms that HRM significantly affects TQM practices. It
also positively affected employees' quality awareness and corporate image. The quality
performances were also significantly affected by the implementation of TQM.

28.Rivers, Patrick A. (2006) discussed uses the popular Balanced Scorecard approach to align its
measures of HR performance to the organization's strategic plan. Only by aligning HR with the
organizational strategy will HR leaders truly get a seat at the leadership table. HR professionals
can overcome impediments and gain a seat at the table by learning the language of business and
the ways in which organizational leaders use data to drive their decisions.
29.12.Teseema & Soeters (2006) have examined the relationship between employee performance
and eight human resource practices. These practices were: recruitment and selection practices,
training practices, placement practices, employee performance evaluation, compensation
practices, promotion practices, pension or social security and grievance procedure.
30. James Buchan (2006) clearly indicated that it is not only the organizational context that
differentiates the health sector from many other sectors, in terms of HRM. Many of the measures
of organizational performance in health are also unique. As noted in the discussion,
"performance" in the health sector can be fully assessed only with indicators that are sectorspecific.
31. Michael A. Campion, K. Brown (2006), A highly structured employment interviewing
technique is proposed, which includes the following steps: (1) develop questions based
on a job analysis, (2) ask the same questions of each candidate, (3) anchor the rating
scales for scoring answers with examples and illustrations, (4) have an interview panel
record and rate answers. Potential explanations for the effectiveness of this structured
interviewing technique are discussed.
32. 14.Shrinivas Kandula (2006) in his book emphasizes the need to follow a systematic
training strategy and process for real results out of training implementation. However,
efficacy of training programmes is a big question everywhere when it comes to
behavioral training. The paper identifies 10 factors that contribute to ineffective training
intervention. These are:

No necessity based training

No training strategy
No resource commitment
No assessment of organizational and employee training needs
No identification and classification of competencies

No grading of competencies
No faculty! coaching development efforts
No curriculum and methodology development
No individual team development plan
No training audit

33.Employee satisfaction serves as a stimulus for the organizational quality and productivity.
Hina Sohrab Kiani, Omama Khurshid (2006), provides support for some key factors serving as
stimulators for employee satisfaction. These factors are pay, job interest, leadership
(encouragement, feedback, and performance appraisal), and career growth, working
environment, broadly defined job responsibility, organizational objectives and trainings. These
factors if not provided, result in dissatisfaction of employees.
34.From Electronic Thesis (2006) it is found that there is positive and significant impact of HRM
practices on service climate and job satisfaction. It has also been found that HRM practices are
negatively related to turnover intention of the employees.
35.HR staff must be specialists with strategic HR functions and not generalists who are confined
to playing a restricted and bureaucratic role. Ummuro Adano (2008) described the quality and
integrity of the public health sector can be improved only through professionalizing HRM,
reformulating and consolidating the currently fragmented HR functions, and bringing all the
pieces together under the authority and influence of HR departments and units with expanded
scopes.
36.Dr Charulata Pamnani (2008) focuses on HR aspects should address key practices like
creating and maintaining a high performance work culture to enable the staff to adapt to change.
A peculiar challenge for healthcare organizations is the breadth of staff relationships. This is true
even for a laboratory, the variety of people contributing to the delivery of services range from
doctors, quality managers, technicians, students and boys.
37.Shrinivas Kandula (2006) find out challenges in handling interview technique as a part of
selection is discussed in this paper.

Training of interviewers
Formatting interview
Understanding purpose/context
Interviewer to be honest and straight forward
Interviewers keeping self in high pedestal
Warming up
Advance briefing to interviewee
Trap of symbol and artifacts
Making generalizations
See-off candidate with a positive mind

38. HRM Practices affects on Job satisfaction found by Alina Ileana, Petrescu, and Rob
Simmons (2008). The purpose of this paper is to investigate the relationship between
human resource management (HRM) practices and workers' overall job satisfaction and
their satisfaction with pay.
39. Sunil Maheshwari, Ramesh Bhat & Somen Saha (2008), attempted to analyze the
commitment of state health officials and its implications for human resource practices in
Gujarat. Following initiatives were identified to foster a development climate among the
health officials: providing opportunities for training, professional competency
development, developing healthy relationship between superiors and subordinates,
providing useful performance feedback, and recognizing and rewarding performance.
40. Jyoti Budhraja (2008) discusses the latest and emerging trends in HR practices in the
contemporary scenario with a focus on Indian context. It also explores the role of HR as an
enabler in the ever-increasing business challenges.
41. Typically, Talent Management has focused on attracting, developing and retaining talented
people. But that is not enough for the future. Organizations will need next generation talent
management. William J Rothwell (2008).

42.Adwan (2008) with his study entitled "The Reality of workforce planning in the nongovernmental health sector in the provinces of Gaza", showed that institutions do not engage
workers in the planning processes of the workforce sufficiently, and that the influential
considerations of administrative structure regulatory in the process of workforce planning is
characterized by lack of clarity, as well as the professional experience in manpower planning and
top management support for the process of workforce planning was ineffective.

43.Sonal Shukla (2008) discovers in her Article that, Hospitals in India aiming for accreditation
are increasingly adopting credentialing and privileging to ensure that the physician or nurse in
charge of the patient's treatment has adequate education and training. Credentialing and
privileging are seen as means that allow a hospital to optimize the utility of its most crucial
resources the specialists and provideefficient and quality patient care. The concept, which is
still in its infancy in India, is slowly gaining momentum with the dawn of corporate healthcare
and increasing numbers of hospitals choosing different quality standards.

44.Sreekumar P. (2008) analyzes and compares certain critical HRM strategies with respect to
the management of knowledge workers and how the knowledge workers and those who manage

them can understand their roles better and contribute to the up gradation of human capital of their
firm.
45. Performance management has started receiving its long-overdue attention from the
businesses across the world. This is a direct consequence of the realization that employees are
the key to better organizational performance. Rashmi Joshi (2008), looks at various critical
components of Performance Management System (PMS) and how it can be successfully
implemented, taking a cue from the current trends and best practices followed.

46.T. Kiran Kumar (2008) suggested that A Performance Management (PM) system enables the
business to measure, manage and optimize its performance and profitability by relating the
employees' pay to competency and contribution. It ensures a conducive business environmentenabled healthy performance and brings all the employees under a single strategic umbrella.
Integrating the components of PM and managing it effectively isn't easy. In reality, companies
have realized that it requires a high level of coordination between information-sharing and timely
review.

47.Manishankar Chakraborty (2009). explains the actual need for training and its relationship
with the development of an organization, both monetarily and non-monetarily. Training has taken
center-stage and is often related to the developmental aspect of an organization.

48. Evaluating a Training Development Program (TDP) can provide the management with
abundant information on the extent to which learning has bridged the gap between intended and
actual output accrued through the application of learning, the short falls of the training, etc.
Itishree Mohanty (2009) discussed the importance of the evaluation phase of a TDP which many
companies ignore. It also cites a few evaluation models that companies have adopted to
understand the benefits reaped out of their TDP's.
49.Wilfred J. Zerbe , Dawn Dobni, GEdaliahu H. Harel (2004) shed light on the relationship
between satisfaction with human resource management (HRM) practices and employee
performance. We examined the proposition that employee perceptions of HRM practices predict
their behavior toward customers. Previous writers have based such hypotheses on theory
formulated at the level of individualemployees, but have used analyses at organizational or
aggregate levels.

50.Nahid Dehghan Nayeri, Ali Akbar Nazari (2009) explored nurses' perceptions and
experiences of productivity and human resource factors improving or impeding it.Participants
maintained that satisfactory human resources can improve nurses' productivity and the quality of
care they provide; thereby fulfilling the core objective of the health care system.

51.Rubin Pillay, (2009), highlighted the overall dissatisfaction among South African nurses and
confirmed the disparity between the levels of job satisfaction between the public and private
sectors. Health managers should address those factors that affect job satisfaction, and therefore
retention, of nurses in South Africa.The human factor is central to healthcare, yet its proper
management has remained beyond the reach of

Objective of the study

To examine the trends of HR practices in selected hospitals.

To find out the satisfaction levels of employees as a consequence of the HR Practices of

the Hospital.
To establish Relationship between HRM practices and satisfaction levels.
To make recommendations to these selected hospitals in order to increase the efficiency
and effectiveness of its Human Resources.