BUPA

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Introduction

BUPA is a global health and care organisation with nearly four million members in 200 countries. It employs 40,000 people in the United Kingdom and offers private medical insurance, critical illness cover and income protection insurance, as well as a full range of treatments in 35 private hospitals. . BUPA has become very successful in the United Kingdom In addition, the private medical industry is being relied on more nowadays. As a result, 17 British provident associations joined together to provide private health care for the general public: the result was The British United Provident Association, or BUPA. However, it is largely the last two decades that have seen an upsurge in the prominence of organisations like BUPA, AXA PPP Healthcare etc.

Even though the demand for private health care from the Arabic countries has dwindled following development of state of art facilities in their own countries, the internal demand for private health care continued to grow. Over fifty years later, BUPA is still the UK's leading independent health and care organisation ‘with over four million members in 190 countries worldwide, around 40,000 members of staff in the UK and 35 BUPA hospitals in the UK.

Performance management

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Performance management is ‘a process for establishing a shared understanding about what it is to be achieved and how it is to be achieved; an approach to managing people that increases the probability of achieving success.' (Armstrong, 2004a) Organisations operate in a fast changing environment and people are the most important asset an organisation could have when achieving or retaining competitive advantage. Performance is the key element which holds the secret to success. Therefore performance must be seen as part of the overall management strategy, part of SHRM and be measured. According to the case study given BUBA Health service highly competitive in global terms and is often characterized by the need to sustain a high level performance through very attractive financial incentives. Anther aim the BUBA build a business which people feel passionate about working in, such as looking after the staff, providing a challenging and dynamic environment, focusing on team work. Creating a fair, sociable and open workplace, The Less involvement of staff in decision-making shows that the company is lacking of teamwork within their department, which is against the company's objective of providing its staff outstanding opportunities in terms of personal career development. There is need staff management co-operation at each every level of decision. To achieve a company ‘goals they need to introduce daily team briefings to the staff by departmental managers. The lower staff should know day-to-day changes in policies. The survey is showing their no culture of staff meetings and training which could leads, the company in to non-difficult situation.

Performance management systems are successful and beneficial only when they are built around a clearly defined managerial purpose. Discussing planning, monitoring and measuring performance the only real purpose and benefit an organisation could expect is to improve performance. Generalized in definition the main benefit is ‘delivering sustained success to Organisations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors' (Armstrong, 2004b). This is the ultimate benefit from performance management process for an organisation.

Identified problems

Introducing performance management system as well as highlighting the achievements, helps in identifying the problems of under performing and focuses manager's attention to the problematic areas or individuals. The most usual cases for underperformance listed by Armstrong (Armstrong, 2004a) are: capability, inappropriate attitudes or behaviours, poor management/clarity of directions, lack of support at the work place, insufficient self-confidence/self-esteem (incl. discrimination, harassment).Implementation of performance management process provides undisputable visibility of the problems. According to the case study Aspect during the 1960`s have problems looking in shortage of hospital beds due to the closure of many nursing homes. BUPA spend a long, long time hand picking key individuals who can bring something else to the company. BUPA have to use its reserves and investment income to help develop Nuffield Hospitals into a national network to provide quality care for private patients.

Open Dialogue

Performance management as part of Human Resource Management is about organisational relationship and therefore helps when creating a foundation for open dialogue. Well designed performance management systems are built on a high-quality coaching relationship between managers, teams and individuals. Coaching could be defined as a list of actions specified on the different organisational levels, which help in achieving a high-performance culture. Performance management process on organisational level means self-managed teams and employee empowerment.

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E.g. one of the most encouraging aspects of BUPA's work in the eighties was the establishment of joint ventures with the HNS, in particular with St Thomas Hospital, London and the National Hospital for Nervous. BUPA began as the British United Provident Association in 1947 to preserve freedom of choice in health care .BUPA has identified the high performance practices expected of its managers to ensure the delivery of results for customers, employees and the business. Performance management includes the idea of employee empowerment and ownership-increasingly advocated by Organisations.

Identified and developed employees with potential

Development is another way to achieve excellent performance from individuals by bringing personal meaning and value to their contribution. ‘Learning for life' is a new European educational theory model. The Learning and Development in the organisation reflects the new century idea of ‘adults learning'. Individuals in the organisation take responsibility for developing themselves, using the internal and external sources. Organisation takes responsibility for developing a highly trained and educated workforce (talent management agenda). Again this needs to be coordinated with the individual and organisational needs. Performance management process serves the coordination purpose for the organisation. According to BUPA case study the organisation manager sees everything being important, and teamwork is defined at the enterprise level. Firstly, they have bespoke training content specific to Pupa's own operation and market conditions. Secondly, they contain specific soft skills e.g. customer focus and culture on performance.

SWOT Analysis

This method will provide an insight into both the internal and external environments. This type of analysis is highly subjective and is mainly used as a guideline. A SWOT analysis should be used together with other tools to give a better view of the state of the company.

STRENGTHS

• BUPA is the UK's leading independent healthcare organisation, and the largest private health insurer. The company is also the UK's largest operator of care homes and home care.
• The BUPA brand is a strong asset of the company and the BUPA name is well known by consumers in the UK, a factor that will become increasingly important as new players seek to enter the market. The company's strong geographical spread serving members in over 200 countries, also it strengthens the company reducing risk and enhancing brand image.
• Able to reinvest any money that it earns. As a provident association, the company has no shareholders to pay and BUPA reinvests any money it makes in improving its services. In recent years the company has invested in reconfiguring its facilities including opening five MRI and two spiral CT scanning facilities.

WEAKNESSES

• Accused of overcharging for work for the NHS.
• BUPA has been accused of overcharging for work that it has undertaken for the NHS. The GMB claims that BUPA's standard prices are at least 50% higher than the average for NHS treatment.
• Rising costs for employing nursing and care staff.
• The extra cost for employing nursing and care staff as a result of a shortage in qualifies nurses and carers, as well as the increase in the national minimum wage, are problems affecting the whole of the healthcare industry. The recruitment of medical staff from foreign countries will provide one possible solution to this problem.

OPPORTUNITIES

• Aging of population will lead to expansion in care homes and home care market
• Rise of private health provisions internationally.
• By 2031, over one million people will need continuous long-term care, an increase of 68% on today's figure, so BUPA is looking to expand into this market.
• BUPA hospitals have seen cosmetic surgery becoming more popular in recent times especially among the 25-35 year age range. In 2003, BUPA Hospitals experiences the fastest growth in recent years in cosmetic surgery with a 20% boom in procedures performed across its 34 hospitals. Demand for cosmetic surreys is increasing as the years go on, by all age groups, male or female. This gives a large amount of opportunity for BUPA to grow in the future.

THREATS

• The care home industry as a whole faces pressure on costs. The increase in the national minimum wage, shortages of nurses and carers resulting in the use of higher-cost agency staff, increased costs of regulation and inadequate funding. Local authority fee increases continue to stay well below the level of staff cost inflation.

PESTEL for BUPA

POLITICAL

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• A full provision for deferred taxation has to be made as required by Financial Reporting Standards (FRS). The government expects the company to provide access to disabled people.

ECONOMIC

• During inflation, people have less money to spend on leisure activity.
Higher interest rates will also mean people spend less. Only the top 30% of households by income spend more than £2 a week, on average, on medical insurance. The highest earners are also the most likely to receive medical insurance as part of their remuneration package, while few employers provide this benefit for casual or low-paid permanent staff.

SOCIAL - CULTURAL

More and more people are becoming ill everyday either serious or minor, and NHS waiting lists are always huge. They are encouraged to join private hospitals and health cares so they can recover better and get a good service.

TECHNOLOGICAL

Any new information will be displayed on the Internet for fast and easy access. There are also advanced equipments, technologies that make assessing patients an easy comfort, BUPA Hospital clinical and service quality will be available online.

ENVIRONMENTAL

If inflation climbs upwards the resulting job losses would mean higher state benefit payments and lower tax revenues, so commitments to BUPA would have to be reviewed.

LEGAL

Employment, health and safety laws are observed. All the machines and medical equipments have met the safety standards.

Link between pay and performance

Strong and direct links between performance and pay should be made in well designed reward systems to support performance improvements. Many studies found that the strongest relationship item is appraisal result and salary increases. This statement contradicts with recent performance management trends, where pay is seen only as an element of the total reward system. As mentioned above in Timpson business, non-financial rewards such as recognition, objective feedback, personal development and career opportunities have a much more beneficial effect in an organisation in ‘encouraging engagement and productive discretionary behaviour' (Armstrong, 2004c).

Competitive advantage

Companies who introduce performance management programs outperform companies without such programs on a wide range of financial and productivity measures and show significant improvement in their business results. Example on 26 July 2007 top satisfaction ratings from patients, consultants and staff have helped BUPA North Cheshire Hospital earn a place in the finals of the forthcoming national customer service Awards. Has a ranking of the top performers and there is also a yearly award event that formally recognises the yearly award event that formally recognises the top performers. These practices have instilled a sense of informal competition within the organisation.

Performance management process captures information throughout the performance cycle. Performance feedback and information could be used from managers to monitor the progress and gain a better impression of the performance as a whole. The data collected could be also used from the managers to improve their coaching; facilitating and advocating skills in order to bring the best out of high-potential staff manage underperformance and motivate the vast majority of staff rated towards the middle of the performance spectrum. Organisations need performance information to direct their training and development resources to individuals who can gain the most of it and contribute the most. They need performance information to assess performance problems, to amend already in use unrealistic goals, ineffective performance competitions, ranking and rating systems etc. Performance management is capable of analyzing performance data in order to identify trends in relation to: performance differentiation, pay differentiation, development needs etc. Performance management needs to be introduced and measured as part of the overall organisational strategy The main purpose of improving performance could include many sub purposes: ”planning, decision making, modifying programs, setting performance targets, recognizing good performance, comparing performance, informing stakeholders, performance contractions, performance accountability” (Behn,2003). Performance is the key element which holds the secret to success in every company. Continuously improving performance could be achieved when company establishes performance management process. There are various asserted benefits for an organisation of an either implemented or monitored process. The discussed above benefits could be summarized as followed: identified and developed employees with potential, identified problems, realized business objectives, obtained competitive advantage, achieved clear link between pay and performance, open dialogue created, captured information throughout the businesses circle etc. Improved performance means added value. Organisations who introduce performance management programs outperform organisation without on a wide range of measures: financial, production, market and public value, contribution etc. Delivering sustained success to organisation by improving the overall performance is the ultimate benefit from introducing performance management process.

Achieved business objectives

Seen trough an overall organisational perspective performance management process brings the benefit of achieved business objectives. Performance Management reflects company's mission and values and advocates it trough its systems. It cascades the business values and objectives to the individuals. Performance Management is the key to through harmonizing employees' personal objectives with those of the organisation' (Armstrong, 2004c). The organisational strategy is clear and achieving the objectives is more systematic. Introduction of performance management systems linked with a total reward system helps the organisation to create high performance, highly engaged workforce, highly motivated staff willing to go “the extra-mile”. Performance management with an emphasis on personal development helps the organisation building winners as part of talent management progress. This is achieved with performance system, which should be able to identify, reward and retain the talented individuals who play an important role in creating organisational value. Performance appraisals have the potential to influence career progressions within the organizations, organisational training and development, retention and other human capital investment programs. E.g. BUPA think that the company have to have the top flight researchers, the IT technology to implement it, and dealing team people who have the knowledge to place order in the market efficiently. Simon sheard, BUPA's group marketing director said, we are delighted to have been selected as a super brand for the third year running. Sees everything being important, and teamwork is defined at the enterprise level. The market is growing fairly rapidly which in turn means that the market share of the ‘individual suppliers' like BUPA is growing as well. However, the individual market share is growing at a rate slower than the overall increase in the market because of the increasing competition and lower entry barriers in the market. The investors can see them performance out there, and this is a very performance-driven industry, as far as hard financial results are concerned. You have to pay people well in order to get the most excellent people in the company.

Corporate

Refers to private health cover arranged by an employer for the benefit of their employees. BUPA may be a free (though taxable) company benefit or be offered as a subsidised scheme to a UK employee. Company-paid BUPA accounts for just over two-thirds of all policies purchased and the rapid growth in the corporate sector can be attributed to the following reasons:-

• Employers have realised the benefits of having a system in place that can help ‘reduce losses incurred through employee illnesses.
• A relatively ‘strong economy' has allowed the multinational companies to invest in employee health, rather than place their trust in the NHS
• While the cost of maintaining the subscription and premiums has continued to rise in both private and corporate BUPA, the per capita basis the cost of a company-based scheme is still much lower than a policy purchased by an individual. Hence, corporate schemes ‘comparatively appear to be good value for money.
• BUPA has become an ‘integral part' of a corporate remuneration package in the new millennium. It is a benefit ‘many employees have come to expect, and companies have responded by factoring these packages into their remuneration budgets'.

BUPA Private Healthcare market is therefore growing at a much rapid rate than the individual Private Health care market which has been heralded as the ‘under-performing sector'. Nevertheless, since the growth in the corporate sector is rather new and still in the incubatory stages in the product life cycle, individual BUPA still accounts for over half of the total private healthcare premiums earned at this point in time.

Feedback

People develop in an open dialogue environment. Performance management is not about passive measuring of set business objectives, but incorporates the idea of a feedback -‘information about you have done or made which tells you how good or successful it is' (http://www.cipd.co.uk/subjects/perfmangmt/general/perfman.htm). Individuals can develop and improve their performance when they are given feedback about their strengths and weaknesses ‘areas of improvement'. Performance management is a system which provides constant feedback through monitoring and reviewing the process. Constructive feedback generates positive organisational culture and has a stimulating, motivating, monitoring effect on personal performance as long as it is objective. Organisations nowadays seek to achieve objectiveness trough introducing different feedbacks - upward feedback, peer group review, team performance management process and 360 degree feedback model (manager, peers, internal customers, direct reports). Performance management is not much of a help if it seen as a once a year event- annual appraisal, most of the time perceived as bureaucratic (Armstrong, 2004a). For example BUPA Hospital means that innovation often occurs in the day-to-day work environment. For Alison da Silva, the hospitals general manager said: first and foremost running a hospital means keeping people safe from harm and helping them to get better The focus on competency framework, individual performance should be sharpened with strong links to personal development planning.

Conclusion

BUPA to continue to compete in their market, as they state, they should strive to continue: “To grow a profitable Health care, where people love to work.”

In order for BUPA to maintain to be a key player in the market, they need to focus more on building the existing goals that they have, as well as keep up with the Health advances.

The advantages and disadvantages of the company and that strategically it is important for BUPA to not lose the competitive hold that they have as a Health care, as big as they are, they cannot disregard the potential market that they are currently in. There are numerous healthcare products which are frequently purchased instead of Private Medical Insurance policies by the UK population. However, these health care products are ideally not designed as replacements, but are intended as complementary solutions. These products provide a reasonable level of return in the event of needing medical treatment but are not as ‘comprehensive' as health care insurance. They are gaining popularity mainly on the grounds that they are not as expensive.

Establishing performance management process is a serious undertaking. First and foremost the system has to fit with the already existing culture or desired culture. The process must take into consideration the already existing values, symbols, meanings and reward accordingly. Successfully working performance management embeds the organisational culture and rewards according to the individual values. It should have a clear meaning and value to each individual.

Introducing performance management could benefit an orgnisation when implementing cultural change, even more it is now seen as a key process in driving it. In cases, when an organisation is trying to create a team spirit culture, team based performance rewards could serve that purpose, BUPA trying to emphasise on the team effort, to introduce performance management system, which compares branch or department achievement and reward the best performers. This would increase the team spirit, create competitive atmosphere between the shops, bring clear understanding of ‘where we are now' and ‘where we are aiming to be' and improve the overall company performance. Another example could be transformation from command-and-control culture to empowering, learning culture, when performance management system measures and rewards personal involvement like sharing information and knowledge, innovative ideas etc. as a result of both technical and cultural requirement for example, the introduction of online data service engraving has improved the quality and consistency of engraving products.

References

Armstrong, M. and Merles, H. (2004a), Reward Management, 5th Edition, p.233- p274,
Armstrong, M. and Baron, A. (2004b), Performance Management, Action and
Armstrong, M. and Baron, A. (2004c) - ‘Get into line”, People Management, 2004, 2p
Ben, R. (2003) - ‘Why Measure Performance? Different purposes Require Different Measures', Business Source Premier, Public Administration Review, 2003, , p586-606, 21 p,

Journals

Mintel Report - Private Medical Insurance - UK - September 2008
Mintel Report - Private Medical Insurance - UK - September 2008
September 2003

Internet Sources

http://www-306.ibm.com/software/success/cssdb.nsf/CS/DNSD-5UZH27?OpenDocument&Site=default
http://www.bupa.co.uk/about/
http://www.bupa.co.uk/about/asp/history/index.asp
http://www.cipd.co.uk/subjects/perfmangmt/general/perfman.htm