Examining the corporate culture of ABC

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This case examines the culture of ABC and the relevance of HR practices in sustaining ABC's culture and Patient Model of Care. It exemplifies how basic HR practices, when implemented effectively, can be of significant value. So what makes HR at ABC effective? While ABC does not try to be extravagant, it focuses on ensuring it excels at all of the basic strategies that mean the most to employees.

At the core of all of its strategies are the efforts to maintain and strengthen the culture to support the ABC Model of Patient Care. This is a powerful model that is accepted across the organization and strengthened through staffing, performance management, compensation, and other management strategies. ABC uses a lot of data in its decision making process and relies less on instincts. Decisions are typically on the utilitarian philosophy where teams are the focus and not the individual effort. The utilitarian principle refers to creating good for the greatest number of people.

This case study examines the core components of HRM at ABC and details the respective HR strategies used to sustain ABC's highly touted culture. The case describes how this complex service organization fosters a culture and practices that exceeds customer expectations and earns deep loyalty from both customers and employees.

Currently, the HR team at ABC is a major player in helping to maintain and build a culture of teamwork. Workforce planning, employee recruitment and selection, training and development, compensation and benefits, and performance management are key areas in which HR strategies are used to develop and reinforce ABC's Model of Patient Care.


The founders of ABC have established the mission to "provide the best care to every patient every day through integrated clinical practice, education and research." It therefore supports a comprehensive research department to "bring the bench to the bedside" and the ABC College of Medicine to teach and prepare tomorrow's medical professionals. In doing so, the premise of teamwork has been at the root of the culture, and subsequently human resource management (HRM) strategies have been designed to maintain these values.

The role of human resource management (HRM) in organizations continues to be of stronger importance and relevance. Like other progressive organizations, ABC Clinic has created a unique organization and continues to thrive even in a challenging economy and increasing costs of providing healthcare.

ABC's mission is to "provide the best care to every patient every day through integrated clinical practice, education and research." It therefore supports a comprehensive research department to "bring the bench to the bedside" and the ABC College of Medicine to teach and prepare tomorrow's medical professionals.

ABC has accumulated many achievements over its history. Indeed, a major component of its strategies has been the workforce management. The HR function of ABC has been a leader in helping to deliver the ABC Model of Care. Given the trends facing the healthcare industry and the need to create and maintain high performance organizations such as ABC, the role of the workforce and HR becomes even more critical.

The human factor is central to healthcare, yet its proper management has remained beyond the reach of healthcare organizations (Khatri, Wells, McKune, & Brewer, 2006). A central tenet of high performance organizations is the measurement of the impact of HR practices and policies on organizational performance (Godard, 2004). A major problem in the healthcare sector is the contentious nature of the measurement of performance, with international studies attempting to link people management practices to patient mortality in acute hospitals (Bartram, Stanton, Leggat, Casimir, & Fraser, 2007). The need to always identify and implement HR practices to the mission of the organization is absolutely critical. ABC's strategic plan identifies the workforce as the key to success. Therefore, the HR function which is responsible for the hiring, rewarding, and retaining the employees becomes a core role of the strategic plan. Critical outcomes include patient satisfaction, employee satisfaction and commitment, and operational efficiency at ABC Clinic.

Focus On Quality

Quality can be defined and measured in many ways. At ABC Clinic, quality is not just a simple measure. Quality is a comprehensive look at all aspects of a patient's experience. ABC's patients seek excellence in care, the best medical knowledge and experience, the best technology available and the kindness and hope offered by the staff. Quality can be measured in the outcomes achieved such as mortality rates and surgical infections; in the compliance with evidence-based processes known to enhance care; in the volume of patients successfully treated who have complex diagnoses and procedures; and in the safety record of the institution. Quality and service can also be measured in other ways such as the amount of time spent with each patient; making sure each patient is treated with respect, kindness and dignity by every member of the ABC team; making sure appointments are on time and that all test results and other patient information are available to every doctor whenever it is needed. Quality at ABC Clinic involves the totality of a patient's experience - from the first phone call to the last appointment.

ABC's HR function continues to work diligently towards helping the organization to meet its mission. Following are some of HR's core strategies and priorities:

Developing Teams and a Culture of Teamwork

Employee Recruitment and Selection

Promoting Teamwork through Strategic Rewards

Building and Maintaining a Highly Committed Workforce

Developing Teams and a Culture of Teamwork

Quick (1992) explained that cultural values become the platform for specific and concrete actions designed to meet difficulty and challenge. Culture becomes the vehicle through which problems and challenges become addressed, defined, reframed, and ultimately solved. When cultural values do not work in this fashion, they must be modified or jettisoned. The culture is not the end or goal but rather the means.

In the ABC system, you're expected to try to get along and/or you're someone who has been identified as a person who can get along with the rest of the team. ABC has fostered an atmosphere of cooperation and working together with minimal squabbling. Yet again, one of the factors that help to make this happen is a salaried system without incentives. It eliminates competition among employees, while fostering a deeper cooperation for the greater good of all stakeholders.

Today, ABC enjoys and benefits from a workforce where teamwork is the absolute norm. Typical of the ABC Clinic is its century-old team approach to treating patients. Physicians work in teams, with each team driven by the medical problems involved in a case and by the patient's preferences. Occasionally, a team will be expanded or even taken apart and reassembled. ABC has incorporated collaborative methods into everything that it does -- from diagnosis and surgery to policy making, strategic planning, and leadership.

Employee Recruitment and Selection

Attraction and retention of employees is an increasingly significant aspect of building organizational capabilities to ensure sustained competitiveness. As practiced at ABC, one of the most important aspects of the HR function is to select the "right" employee for every opening. ABC uses value-based hiring, looking for team players who have the ability to advance within the organization, demonstrate empathy for others, and can handle ambiguity. Employees must be flexible, but firm when necessary. Employees must not be rules-driven and must adhere to the utilitarian principle of the greatest good.

HR leaders have stated that, in hiring new employees, loyalty, a strong work ethic, and the ability to be an outstanding team player are among the criteria ABC seeks. ABC has subsequently benefited from incredibly low turnover rates and the ability to retain employees who possess the expertise, passion, and empathy to deliver the best patient care to all patients.

ABC's HR team explained that effective recruiting is vital to achieving ABC's strategic plan and reported that 6000 allied health positions were filled in 2007. Furthermore, its quality initiative within the department resulted in a reduction in time to fill a job from a median of 35 days to 29 days.

Diversity is another area of high importance in ABC's recruitment strategy. In 2007, 12% of the employees hired were minorities.

As ABC deals with the current industry trends and economic challenges, HR is faced with the continuing challenge of recruiting and retaining skilled employees.

Promoting Teamwork through Strategic Rewards

ABC emphasizes compensation strategies to foster the attitudes and behaviors that fit with the ABC Model of Patient Care.

ABC prides itself in hiring long-term employees who are team players. Supporting this compensation philosophy, ABC does not employ a performance-based compensation system. ABC argues that a standard of excellence is expected of everyone. Typically, employees are paid at the 60th percentile of the market range. In addition, employees are given a comprehensive benefits program that includes medical, dental, tuition reimbursement, defined benefit pension plan, and other retirement options.

Over the years, HR compensation professionals at ABC have:

Created a framework for titling management jobs and reviewed options for changing the management job salary structure

Conducted a comprehensive market review of Administrator positions and made recommendations to leadership

Designed leadership development programs for leadership transitions

Focused on reviewing jobs to ensure everyone is paid at the desired levels

Conducted internal surveys to ensure employees are satisfied with their pay

While ABC has historically provided an outstanding example of compensation strategies aligned to business strategies to achieve a standard of excellence, the question arises as to whether this philosophy would be relevant in hiring more employees where fewer qualified candidates are available. Furthermore, as opportunities become available with greater frequencies, ABC's HR function questions if employees are likely to leave for the opportunity to earn more through incentive based compensation.

Building and Maintaining a Highly Committed Workforce

Through deliberate efforts such as teamwork, focus on employee well-being, minimal incentive-based compensation, and providing a great work environment, ABC has benefited from incredibly low turnover rates and the ability to retain employees who are the ones possessing the expertise, passion, and empathy necessary to deliver the best patient care to all patients. ABC's turnover is approximately 5% annually.

The HR staff at ABC works diligently to support recruitment efforts through various retention strategies. The focus continues on ensuring employee satisfaction. Frequent employee surveys, meetings with employees, and observations help to gauge employee satisfaction.

As a specific means to attracting and retaining employees, ABC has defined a Total Rewards program that is quite attractive to most. The rewards program is based on the principle that no one is big enough to be independent of others and is comprised of:

Paid time off

Work life balance

Competitive total compensation

Comprehensive benefit plans at a relatively low cost

Retirement funded by ABC

Income protection

Professional development

Regular salary increases

ABC has identified the personal attributes that best fit its culture and philosophy. In particular, it looks for people who are committed to high-quality care and service; convey a positive attitude; are enthusiastic, resourceful, and honest; have a strong work ethic unconnected to extrinsic rewards; demonstrate understanding of cultural diversity; and aspire to collaborative work. ABC invests in a time-consuming, collaborative hiring process to find staff that will thrive in the ABC system. It is through these hiring practices, its culture, and total rewards that have proven to be critical in helping to have such stellar retention rates over its history.

Challenges Facing the Healthcare Industry

There is no shortage of reports about the rising costs of healthcare. As the healthcare industry continues to grow and as more focus is placed on healthcare costs, there will be a need for more strategic models for management of hospitals, clinics, and practice groups

The challenges facing the healthcare industry are:

Increase in demand for services and shortage of specialists

Increasing workforce diversity

Need to adopt process improvement techniques to achieve operational efficiency

Challenges Faced By ABC

As HR professionals, the ABC HR team is entrusted with the responsibility of managing the organizational culture. ABC's core values, beliefs, and norms have long been a pride of medical excellence and have become further strengthened across generations of employees. Given the challenges the country faces, such as the current economic recession, decline of available medical professionals, aging population, and a need to utilize specific performance improvement measures, making rapid changes becomes difficult.

The prestigious reputation of ABC will potentially result in excess demand for specialized treatment. ABC is currently operating at or near capacity so the question remains as to whether an increase in patients will allow ABC to continue providing the highest quality of service to its patients.

Hospitals and clinics, such as ABC, are more frequently using performance improvement methods introduced in the manufacturing industry. These interventions are now the norm and include Lean Operations and Six Sigma. Performance improvement methods are a means to hoped-for improvements in patient access, cost reductions and improved quality of patient care.

ABC's culture will have to change to adapt to these new methods quickly. The resistance argument, in some quarters, is that ABC has been successful with its historic practices. So why are these changes necessary? HR will have to play a key role in championing these planned changes to improve performance.


While historically, HR at ABC has been relatively effective and it has been viewed as a business partner, but with the many challenges facing organizations, the question as to how HR can have even greater utility must be examined.

Recently writers have highlighted the need for better people management practices in health care that directly support other goals such as providing a quality and safe service and hence improving healthcare performance and patient outcome.

Given all of the external challenges, including financial instability, HR executives at ABC have been asked by senior management to evaluate the effectiveness of HR practices and to determine the level of alignment between HR practices and organizational outcomes and hence the effectiveness of strategic human resource management.