Performance management excellence among the Malcolm Baldrige National Quality Award Winners in Health Care.

The Health Care Manager Volume 32, Number 4, pp. 346–358 Copyright # 2013 Wolters Kluwer Health | Lippincott Williams & Wilkins

Performance Management Excellence Among the Malcolm Baldrige National Quality Award Winners in Health Care Neville T. Duarte, PhD; Jane R. Goodson, PhD; Edwin W. Arnold, PhD, SPHR When carefully constructed, performance management systems can help health care organizations direct their efforts toward strategic goals, high performance, and continuous improvement needed to ensure high-quality patient care and cost control. The effective management of performance is an integral component in hospital and health care systems that are recognized for excellence by the Malcolm Baldrige National Quality Award in Health Care. Using the framework in the 2011-2012 Health Care Criteria for Performance Excellence, this article identifies the best practices in performance management demonstrated by 15 Baldrige recipients. The results show that all of the recipients base their performance management systems on strategic goals, outcomes, or competencies that cascade from the organizational to the individual level. At the individual level, each hospital or health system reinforces the strategic direction with performance evaluations of leaders and employees, including the governing board, based on key outcomes and competencies. Leader evaluations consistently include feedback from internal and external stakeholders, creating a culture of information sharing and performance improvement. The hospitals or health care systems also align their reward systems to promote high performance by emphasizing merit and recognition for contributions. Best practices can provide a guide for leaders in other health systems in developing high-performance work systems. Key words: compensation practices, Malcolm Baldrige National Quality Award, performance evaluation, recognition programs, strategic performance management

HE KEY TO the delivery of high-quality health care is the performance of a hospital or health system’s workforce at all levels. As hospitals and health systems face enormous pressure to cut costs and improve patient outcomes while attempting to cope with regulatory constraints, they depend on all employees to do their best to achieve positive organizational outcomes. Hospitals and health systems must adopt a welldefined performance management system (PMS)

T

Author Affiliations: Department of Management, Auburn University at Montgomery, Montgomery, Alabama. The authors report no conflicts of interest. Correspondence: Neville T. Duarte, PhD, Department of Management, Auburn University at Montgomery, P.O. Box 244023, Montgomery, AL 36124 ([email protected]). DOI: 10.1097/HCM.0b013e3182a9d704

to ensure that their employees and leaders are performing at the highest levels. In the human resource management literature, performance management is defined as ‘‘a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization.’’1(p2) McConnell2 points out that performance management involves much more than just the periodic evaluation of performance through the performance appraisal process. It is a comprehensive and continuous process that begins with the strategic goals that cascade from senior leadership throughout the organization. The core components of a PMS involve the linking of organizational goals to the performance goals of managers and employees, the monitoring and measurement of performance, and the

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Management Excellence Among MBNQA Health Care Winners reinforcement of performance using appropriate rewards and punishment.3 Thus, the PMS is at the heart of a high-performance work system affecting organizational outcomes such as quality, safety, and efficiency as well as employee outcomes such as retention, engagement, and well-being.4 THE MALCOLM BALDRIGE NATIONAL QUALITY AWARD APPROACH TO PERFORMANCE MANAGEMENT The purpose of this article was to benchmark best practices in performance management in hospitals and health systems using the framework of the health care Malcolm Baldrige National Quality Award (MBNQA). The MBNQA is a presidential award given each year for performance excellence in 6 categories— manufacturing, service, small business, education, health care, and nonprofit.5 Applicants for the award undergo a rigorous evaluation of their operations against criteria established for the MBNQA. Table 1 lists the health care award winners, their organizational characteristics, and source information.6-20 Award winners are among the best in the field and have a proven record of excellence. The excellence of MBNQA recipients has been validated in a metrics-based national study of hospital outcome measures that compares the performance of MBNQA award winners with other health systems that are part of the Thomson Reuters 100 Top Hospitals.21 It would be instructive to study the performance management practices of these hospitals and health systems that have a proven track record of excellence. The MBNQA approach to performance management is discussed in the 2011-2012 Health Care Criteria for Performance Excellence (HCCPE) published by the National Institute of Standards and Technology (NIST).22 This manual lays out a detailed framework for the analysis of excellence in the main areas of leadership: strategic planning; customer focus; measurement, analysis, and knowledge management; workforce focus; operations focus; and results. The HCCPE framework requires applicants for the award to address performance

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management by identifying how they accomplish the work of the organization, capitalize on the organization’s core competencies; reinforce a patient, stakeholder, and health care focus; exceed performance expectations; and address the organization’s strategic challenges and action plans. Furthermore, applicants have to answer the following question and provide supporting documentation: How does your workforce PMS achieve the following: support high-performance work and workforce engagement; consider workforce compensation, reward, recognition, and incentive practices; and reinforce a patient, stakeholder, and health care focus and achievement of your action plans?23 The theoretical underpinnings of performance management in the HCCPE are consistent with other approaches within the health care field, in particular, and the broader organizational literature, in general.1 This present analysis uses a combined approach to assess performance management excellence in hospitals and health systems. ANALYSIS OF BEST PRACTICES IN PERFORMANCE MANAGEMENT Drawing from the HCCPE guidelines and other organizational models, a list of topics was created for assessing performance management in the areas of strategic planning of performance management, employee and leader evaluation, and the motivation of high-performance work. Using the list, the Award Application Summary documents that are posted at the NIST Baldrige Web site were analyzed. Each Award Application Summary contains detailed information and data submitted by Baldrige applicants to NIST. Baldrige examiners score application components against the established criteria and thoroughly validate the information and data, including site visits when necessary. Because the evaluation process is very detailed and rigorous, one can be confident of the reliability of the information or data provided in the Award Application Summary documents. The information for each award recipient was updated by accessing its


SSM Healthcare (SSMHC) (2002); www.ssmhc.com Baptist Hospital, Inc (BHI)7 (2003); http://www.ebaptisthealthcare.org/Homepage/ Saint Luke’s Hospital of Kansas City (SLH)8 (2003); https://www.saintlukeshealthsystem.org/ Robert Wood Johnson University Hospital at Hamilton (RWJUHH9) (2004); http://www.rwjhamilton.org/ Pages/about_Main.aspx Bronson Methodist Hospital (BMH)10 (2005); http://www.bronsonhealth.com/ North Mississippi Medical Center (NMMC)11 (2006); http://www.nmhs.net/ Mercy Health System (MHS)12 (2007); http://www.mercyhealthsystem.org/ Sharp Health Care (SHC)13 (2007); http://www.sharp.com/index.cfm Poudre Valley Health System (PVHS)14 (2008); http://pvhs.org/ AtlantiCare (AC)15 (2009); http://www.atlanticare.org/ Heartland Health (HH) (200916 http://www.heartland-health.com/ Advocate Good Samaritan Hospital (GSAM)17 (2010); http://www.advocatehealth.com/gsam/default.cfm?id=1 Henry Ford Health Systems (HFHS)18 (2011); http://www.henryford.com/ Schneck Medical System (SMC)19 (2011); http://schneckmed.org SouthCentral Foundation (SCF)20 (2011); https://www.scf.cc/index.ak?CFID=1568187&CFTOKEN=11927707

6

Hospital or Healthcare System (Abbreviation) (Award Year); Web Site

Table 1. Malcolm Baldrige Healthcare Award Winners

Locations

Indiana Arkansas

1500

3182 3875 4000 14 000 4200 5100 3200 2727 24 332 800 1487

Private, not for profit

Private, not for profit Private, not for profit Private, not for profit Private, not for profit Private, not for profit Private, not for profit Private, not for profit Faith based, not for profit Private, not for profit Government—local, not for profit Alaska Native owned, not for profit

Michigan

Illinois

Nebraska, Colorado, Wyoming New Jersey Missouri, Kansas, Nebraska, Iowa

California

Wisconsin, Illinois

Mississippi

Michigan

New Jersey

Missouri

3186

Faith based, not for profit

Missouri, Illinois, Wisconsin, Oklahoma Florida

24 060 2270

No. Employees

Faith based, not for profit Private, not for profit

Type

348 THE HEALTH CARE MANAGER/OCTOBER–DECEMBER 2013


Management Excellence Among MBNQA Health Care Winners Web site and searching for additional information that may not have been included in its Baldrige application document. The data gathering and analysis yielded a profile of performance management for each award winner. After data were compiled for all Baldrige winners, the research team validated the relevance of the information contained in the Award Application Summary documents and online information to ensure consistency and completeness in the analysis. The content of the tables represents information from the award winners’ Award Application Summary documents or Web sites and has been edited for consistency in presentation. The article depicts the best practices in performance management of the award winners to provide a guide for senior leadership of hospitals and health systems. STRATEGIC PLANNING OF PERFORMANCE MANAGEMENT Strategic planning is a comprehensive process through which an organization assesses its SWOT (strengths (core competencies), weaknesses, opportunities, and threats). The analysis is used to determine critical success factors (pillars), goals, objectives, and action plans for the future.23 To achieve positive organizational outcomes, each individual should be engaged in work performance activities that are consistent with the overall strategic plan of the organization.3,24,25 Aguinis1 presents a process that depicts the link from the organization’s strategic plan to individual/team performance via the unit’s goals and appropriate job descriptions. The alignment of an individual’s performance with organizational strategy is achieved through cascading goals at each level of the organization. All MBNQA winners address performance management in various parts of their strategic planning activities as shown in Table 2. Most of the hospitals and health systems clearly adopt the cascading of goals from the strategic to the individual level.6,9,10,12,13,15-18 For some of the hospitals, performance management derives from a major strategic goal or pillar.7,12,17,19 Other winners identify their organizational core competencies or critical success factors and

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ensure that the PMS is consistent with these competencies or success factors.18,11,14,20 Using the balanced scorecard system,26 AtlantiCare,15 Bronson Methodist Hospital,10 Henry Ford Health System,18 and Poudre Valley Health System14 adopt a common framework that aligns strategic planning with performance management. PERFORMANCE EVALUATION When the strategic goals of the organization are translated into the individual plans of employees, an effective performance appraisal system must be in place to ensure that goals are being accomplished. According to Aguinis,1 performance appraisal systems should include an evaluation of employees’ performance in their primary areas of responsibility (key accountabilities) or their key behaviors or competencies. Furthermore, the system should ensure that employees have a full understanding of the expectations in these areas. Table 3 shows that employees in award-winning health care systems engage in both results-oriented and behavioral evaluations, at least on an annual basis. Several hospitals rely on competency and behavioral assessments to accompany the appraisal of their employees,10,14,15 whereas others use outcome measurement.7,16,20 Most of the hospitals measure competencies and outcomes related to customer service/satisfaction, employee engagement, and employee empowerment. Some also specifically review team performance,7,12,18 which may include feedback from customers, coworkers, or other stakeholders about the department or team.7,11,12 These areas of emphasis are consistent with the strategic direction of the organization, as well as a focus on patient-centered health care. As suggested by Cascardo,27 annual evaluations are sufficient unless employees are new to the system. In that case, a year is too long to wait to determine that performance expectations are being met. Whereas all Baldrige winners have at least an annual review, some address this issue by conducting 90-day appraisals for new employees7,11,12,17 or quarterly13 or midyear reviews for all employees.10,11,18 Beyond the frequency of evaluation, the ability of the


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Table 2. Alignment of Performance Management With Strategic Planninga H/HS AC

BHI BMH

GSAM

HFHS

HH

MHS

NMMC PVHS

RWJUHH

SCF

SHC SLH

SMC

SSMHC

a

Strategic Planning Component Organizational goals, based on the 5B (best people and workplace, best quality, best customer service, best financial performance, best growth) strategic objectives, cascade to the BUs (business units), the performance management process, and BU scorecards BHI’s pillars, values, and standards of performance provide the foundation for the design of work Multistep process in the Strategic Management Model: (1) strategic plans translated into performance requirements, (2) deployed through the Staff Performance Management System, (3) job standards and minimum working requirements derived from the planning process, (4) leader goals aligned with the strategic objectives and scorecard/organizational performance indicator measures Performance expectations established from the cascaded goals of the strategic planning process. Performance Management System (PMS) reviewed annually in the associate satisfaction pillar SWOT (strengths (core competencies), weaknesses, opportunities, and threats) during the strategic planning process. Accountability for annual goal achievement and the demonstration of behaviors aligned with mission vision philosophy, standards of behavior, and leadership competencies Aligning and cascading goals through the performance management process. Capitalize on core competency of care coordination by ensuring that employees exceed performance expectations routinely. Address strategic challenges through organizational performance and dashboard reviews People Plan aligns with Employer of Choice strategy, and Mission Vision Values and strategic framework the performance management process: organizational inputs, setting expectations, supporting performance, and acknowledging performance. Performance expectations identified and sustained through identified scope of service, core competencies, individual goals and measures, and job descriptions Work design and goals cascade from MHS’s Culture of Excellence, the Four Pillars (promoting commitment to high quality care, customer focus, partner cooperation and innovation, and cost consciousness) Performance management system (EXCEL) appraises each employee’s contribution to critical success factor targets Core competencies. PVHS organizes and manages the workforce to capitalize on the organization’s core competencies strategic challenges and action plans. Through the Global Path to Success model, the balanced scorecard process and PMS align the organization toward accomplishing the strategic plan RWJUHH’s Staff Performance Management System: clear set of standards and expectations for each position derived from the strategic planning process and set annually as part of the HR Plan within the Strategic Positioning Plan Workforce competencies: (1) customer care and relationships (reinforce C-O/stakeholder focus), (2) communications and teamwork, (3) improvement and innovation, and (4) workforce development skills and abilities (reinforce health care focus) align with its overall core and are integrated into all HR functions, starting with the interview process Four competencies integrated into performance development plans. Individual action plans defined to support each competency, including metrics to evaluate performance and deadlines for completion of the performance standards that are linked to annual compensation changes Leadership system leverages the sharp experience for point-of-service patient care translated by entity leaders to individual action plans The performance management process defines the 4 core values of the organization and delineates the shared expectations, position-specific competencies required, and the employees’ personal commitments needed for each core value to meet the organizational, department, or unit goals and to ensure alignment of individual employee performance with the organizational measurement system Performance goals in the 4 pillars of the Culture of Excellence define excellence that is linked to the mission, vision, and strategic direction of the hospital and influence selection of indicators development and deployment of organizational, divisional, departmental, and individual goals Passport program requires employees to identify personal goals that are linked to organizational goals and are then evaluated on their performance in achieving these goals.

Source: Malcolm Baldrige National Quality Program Applications of Award Winners, 2002-2011.


HH

HFHS

GSAM

BMH

BHI

AC

H/HS

Annual appraisal, midyear review 90-d action plans, competency assessments, ongoing process/coaching, career progression part of process, results reported to board and hospital Annual performance review, annual performance conversation, 90-d evaluation, ongoing process/coaching, employee engagement and customer service/satisfaction focus Annual performance review, midyear review, ongoing process, team performance/system goals measured, employee engagement and customer service/satisfaction focus Scope of service, outcome measurement, customer service focus

Individual performance assessment, competency assessment, ongoing process, employee engagement and customer service focus Standards of performance assessment 90-d and annual appraisal, team performance reviewed, ongoing process/coaching, feedback from stakeholders

Employee Evaluation

Evaluated twice annually by board; Conducts self-appraisal

Evaluated annually by board and key stakeholders

Evaluated annually by Advocate Health Care Senior Leaders (AHC SL) and Governing Council

Employee, patient, and physician satisfaction results, input from employee forums, Baldrige feedback reports, 360 feedback surveys Evaluated by board against organizational scorecard

Evaluated by system board

Chief Executive Officer (CEO) Evaluation

Table 3. Employee and Leadership Performance Evaluationa

Leadership competencies using Baldrige categories, 360 feedback competencies, business unit, departmental, or individual goals; leadership system evaluation includes team member standards and physician leaders Self-assessment and peer input; tied to strategies; leadership system evaluation

Internal and external sources including workforce and culture surveys, development/learning goals; key stakeholders provide ongoing feedback; leadership system evaluation

Evaluated against organizational scorecard, employee opinion survey, leadership system evaluation

360 Feedback surveys, physician leaders have physician leadership development plan, executive coaching and group sharing, leadership system evaluation Evaluations aligned with strategies 360 feedback surveys, Baldrige feedback reports, leadership system evaluation

Senior Leadership Evaluation

Annual self-evaluation

(continues)

Biennial self-evaluation using Governance Institute data; board educated on quality and patient safety



Biennial self-evaluation

Board of Directors Evaluation

Management Excellence Among MBNQA Health Care Winners 351


SLH

SHC

SCF

RWJUHH

PVHS

Performance evaluation system, employee engagement focus Performance management process plans, annual formal coaching session, customer service/satisfaction focus

Annual performance evaluation, 90-d evaluation, team performance/ system goals measured, ongoing process/coaching, employee engagement, employee empowerment and customer service/satisfaction focus Annual performance review, 90-d and midcycle review, individual performance plan, ongoing review/coaching, feedback from customers and coworkers, employee empowerment and customer service/satisfaction focus Annual performance review, managers and peers use behavior standards in evaluation, ongoing review/coaching (wear goals on badge), employee engagement and customer service/satisfaction focus Individual performance evaluation, ongoing review/coaching, results reported to board, employee engagement and customer service/satisfaction focus Annual evaluation, individual metrics established, performance development plan, customer service/satisfaction focus

MHS

NMMC

Employee Evaluation

H/HS

Evaluated annually by board Performance evaluation based on BSC

360 Feedback and BSC results

Evaluated annually by board

Evaluated annually by board using EXCEL system

Evaluated annually by Board

Chief Executive Officer (CEO) Evaluation


Performance evaluation based on BSC opinion survey, employee forums, and monthly Employee Feedback Group, overall organization performance as well as patient and other customer surveys; leadership system evaluation

360-Degree review and feedback from the CEO, vice presidents, and direct reports; Baldrige assessments, customer satisfaction surveys, and employee opinion surveys; Society for Organizational Learning processes Peers provide input

Use 8 Servant Leadership attributes, self-assessment, 360-degree survey, the Employee Opinion Survey, the medical staff opinion survey; senior leaders use score card; physician leaders have 5-phase leadership program; leadership system evaluation CEO reviews goals at midyear and uses BSC performance data and annual survey on senior leadership effectiveness; internal and external feedback, including culture and satisfaction surveys; leadership system evaluation Reviewed in the ETS Leadership System; feedback from employees; continuous organizational learning and benchmarking; leadership system evaluation

Personal leadership effectiveness; partner feedback of best practices; leadership system evaluation

Table 3. Employee and Leadership Performance Evaluationa, Continued

(continues)

Self-evaluation includes patient and other customer surveys

Self-assessment using national comparative data, benchmarks; Baldrige recipients and Governance Institute tools and resources Self-evaluation

Self-assessment with the Governance Institute




352 THE HEALTH CARE MANAGER/OCTOBER–DECEMBER 2013


a

360-Degree evaluation Annual staff performance evaluation, ongoing review/coaching, employee empowerment focus SSMHC


Self-evaluation of individual and overall group performance by the Governance Institute Based on shared goals for organization performance and individual goals; development plans address professional growth and development; leadership attributes; leadership system (team) evaluation SSM values and 7 management practices; patient, employee, and medical staff surveys and performance reports, annual Baldrige feedback, 360-degree evaluation results, performance results, and satisfaction results; leadership system evaluation Executive committee of board evaluates CEO’s performance annually Quarterly and annual performance review, employee engagement and customer service/satisfaction focus SMC

Chief Executive Officer (CEO) Evaluation Employee Evaluation H/HS

Table 3. Employee and Leadership Performance Evaluationa, Continued



Management Excellence Among MBNQA Health Care Winners

353

appraisal system to move performance in the desired direction and correct performance deficiencies in a timely fashion depends on the communication between supervisors and employees.1 Most of the hospitals and health care systems explicitly recognize that performance appraisal is an ongoing process that includes continuous planning and coaching for high performance, performance improvement, and employee development. Leaders at all levels in Baldrige-winning health care systems are evaluated not only on bottom-line performance measured against performance indicators such as organizational score cards or system goals or strategies but also on the demonstration and development of leadership skills and competencies. Schleeter28 suggests that the board of the hospital or health care system should be responsible for the evaluation of the chief executive officer (CEO) or president, even though this task is often overlooked because of its difficulty. As shown in Table 3, the Baldrige winners obviously are committed to the board’s involvement in the leadership process. Typically, the hospital or health care system’s board provides an annual performance evaluation of the president or CEO based on the balanced scorecard, strategic goals, or competencies; the president or CEO, in turn, evaluates each of the senior leaders on similar performance measures/competencies. Most senior leaders, including the CEO, receive input from internal and external sources on their leadership competencies and skills. Table 3 indicates a widespread use of 360 feedback systems, as well as other tools such as employee opinion and patient satisfaction surveys, to assist leaders in the development of improvement plans. Health care systems such as AtlantiCare, Henry Ford Health System, and North Mississippi Medical Center include the evaluation and development of physician leaders in the process. North Mississippi Medical Center, for example, has a 5-phase program for physician leaders, and they must be evaluated for engagement and performance at each level before they can advance to the next level. AtlantiCare similarly focuses on both leadership skills and knowledge in their Physician Leadership Development Plan.


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In addition to individual evaluation, Table 3 shows that most of the Baldrige recipients specifically address the effectiveness of the entire leadership system, using the various feedback sources to generate improvement plans for the leadership team as a whole. The use of feedback from external and internal stakeholders is consistent with the view that health care organizations should focus more on input from key stakeholders.29 By emphasizing the leadership system, team evaluation, learning, and development become part of the organization’s culture. As recognized by Aguinis,1 systems such as 360 feedback ‘‘work best in organizations that have cultures that support open and honest feedback.’’1(p211) The Baldrige winners maximize the effectiveness of their feedback systems by creating a culture conducive to information exchange and system progress. The governing boards of the award-winning hospitals also are actively engaged in the process of evaluation and improvement. Table 3 shows that most of the boards of these health care organizations are required to conduct self-evaluations of the effectiveness of individual members or of the board as a whole. Several of the systems14,18-20 use the Governance Institute to assess performance and benchmark the leadership and performance of peer boards. Two of the boards have received recognition for their effectiveness: Bronson

Methodist Hospital was recognized by the American Governance and Leadership Group for a best practice in new member orientation and education, and Henry Ford Health System was recognized by the Institute for Healthcare Improvement for a best practice in Board of Trustee Education. PERFORMANCE PAY AND EMPLOYEE RECOGNITION The MBNQA winners achieve performance excellence by aligning their compensation practices with organizational values and business strategies to foster the achievement of objectives. They use a variety of performance-oriented pay practices and highly visible recognition awards to create high-performance organizations. Pay practices Pay practices are an important component of the performance management plans of the MBNQA winners in the health care industry. Many of these organizations report that their reward systems support high performance and the development of a patient-oriented culture. They use a variety of pay practices including merit pay, incentive pay and bonuses, and gain sharing for some segment of the workforce. Table 4 includes a summary of the important pay practices implemented by the MBNQA

Table 4. Pay Practicesa

H/HS AC BHI BMH GSAM HFHS HH MHS NMMC PVHS RWJUHH SCF SHC SLH SMC SSMHC

Merit Pay

Incentive/Bonus Pay

Gain Sharing

Educational Assistance

Employee Assistance/ Wellness Programs

X X X X X X X X X X X X X X X


X



X

a



Management Excellence Among MBNQA Health Care Winners winners. These award-winning health care systems clearly focus upon developing highperformance organizations because they use merit pay and some form of incentive or bonus pay for employees at various levels in their organizations. In addition, 2 organizations, AtlantiCare and Bronson Methodist Hospital, have gain-sharing programs. AlantiCare’s gain-sharing program, piloted in 2008, is called Share the Success. It ‘‘links distribution of the annual staff bonus to specific annual accomplishments in accordance with our strategic objectives.’’15 Bronson Methodist Hospital reports that its ‘‘gain-share program financially rewards staff for achievement of organizational and department-specific objectives,’’ and the program reinforces service excellence behavior.10 To further support employee development, the MBNQA winners provide educational assistance for employees to develop and prepare themselves for higher-level positions. Also, as noted in Table 4, management in these award-winning health care systems demonstrates its concern about the overall well-being of employees by offering employee assistance programs or wellness centers. These investments can pay significant dividends in the form of higher employee commitment and productivity with lower operating costs. To create a high-performance organization and foster a patient-oriented culture, it is important to consider how employees perceive pay practices and how well they are managed. Pay can be administered to establish equity among employees in the same job and to allocate rewards commensurate with performance. Job evaluation and analysis of market pay rates can be used to create appropriate differentials in pay rates among jobs and improve employee perceptions of equity. To foster employee commitment and lower the probability of turnover, it is important for employees to believe their pay is competitive with the labor market. Several of the MBNQA award winners report that they analyze survey data regularly to ensure their pay practices are aligned with the market and competitive. Pay practices are managed effectively when managers ensure that pay remains current and well aligned with

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achievement of objectives. This alignment supports a high-performance culture for strategy implementation and facilitates high-quality patient care, cost reduction, and continuous improvement. Recognition awards The MBNQA winners use recognition awards extensively to provide intrinsic motivation and maintain employee commitment. Table 5 includes the wide variety of employee recognition awards reported by the MBNQA winners. Employee recognition is very important in the health care industry because of the significant shortage of qualified people.30 Recognition awards foster higher employee commitment and retention to improve performance while lowering turnover costs. Each organization invests a significant amount of time and money to reward employees for their outstanding contributions. By implementing high-performance economic rewards via pay practices and reinforcing them with highly visible recognition awards, managers in the award-winning health care organizations are able to create a very positive climate for sustained high performance. The results speak for themselves in the achievement of the Malcolm Baldrige Award. Employee recognition awards vary widely in timing and how they are rendered. Some are granted daily, weekly, monthly, or annually. Personal recognition awards such as thank-you notes are given to employees by supervisors in a one-on-one setting on a daily basis as circumstances warrant. Other recognition awards such as ‘‘employee of the month’’ are often awarded at formal banquets and in other elaborate settings with high visibility for winners. Employees whose behavior and performance exemplify important values of the organization are likely candidates for significant recognition awards with high visibility. In summary, the MBNQA winners use economic and noneconomic rewards to support a performance-oriented culture and to develop a sustainable high-performance organization. Their reward systems support the performance evaluation process and foster


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Table 5. Recognition Awardsa H/HS AC

BHI

BMH

GSAM

HFHS

HH MHS

NMMC

PVHS

RWJUHH

SCF

SLH

Recognition Awards Managers have ‘‘Recognition Kits’’ including thank-you cards, starfish notes, Wawa gift cards, and funds for group recognition; managers must give at least 3 recognitions per month; monthly or quarterly customer service award recipients featured in biweekly newsletter; preferred parking; picture publicity and honored at annual awards dinner Annual Awards Celebration for length of service, customer service, and PDCA (plan, do, check, act) team accomplishments Senior leaders send personal notes to staff to recognize great performance; unit leaders submit to the BHI president each week a name and description of something specific accomplished by a staff person where special recognition is warranted; personal note sent to employee’s home; WOW Award on recommendation of peer, patient, family member, or leader when staff member performs act exceeding expectations, demonstrates organizational value in an extraordinary manner, or takes action to inspire staff; 5 WOW Awards can be exchanged for a gift; if WOW Awards seem inadequate, employee can be recognized as a champion and presented at the Monthly Department Head Meetings and at monthly Board of Directors meeting; legends are selected from among champions and recognized at annual Board of Directors retreat; their story published in Legend’s booklet; employees receive You Made It Happen certificate when considered a driving force in community programs; teams receive trophies when a nursing unit achieves 99th percentile patient satisfaction scores; Bright Ideas program where senior leaders host monthly celebrations to honor implemented ideas; other awards include Employee of the Month and Year, Nurse of the Year, LPN of the Year, and Nurse Manager of the Year Thank-you notes; On-the-Spot Recognition; Leader Recognition Toolbox; celebrations for goal achievement and prizes; Hospital Week; Nurses’ Week; Employee Appreciation; Annual Employee Picnic; Holiday Banquet; Children’s Holiday Party; Service Awards and Annual Recognition Banquet; Nursing Excellence Awards; President’s Team Awards Recognition awards daily, monthly, quarterly, and annually from peers, ET, patients and stakeholders; examples: service awards, PL Super bowl, Good Samaritan of the Year, Associate/Volunteer/Doctor Appreciation Weeks, Nurses/Doctors’ Week, Holiday Celebrations/Gifts, Impact Awards for New Hires, MVP Nomination Awards, Nurse of Year Pillar Leader Awards, Life Saver Awards, Physician Recognition Wall, Thank-You Notes, Above and Beyond, and Standards of Behavior Awards Noncompensation rewards and recognition drive workforce engagement and foster better service to patients and other stakeholders; Recognition awards include Focus on People, Service Awards, Shadow of a Leader Award, Shadow of Influence Award, Volunteer Appreciation Week, Employee of the Month Award, Spirit Awards, Thank-You Notes, Celebration of Performance Milestones, Employee Appreciation Picnic, Employee Summer Events, Online PMP Feedback Notes, Appreciation ‘‘Bucket’’ Drops, and Quality Expo Awards Increased use of recognition awards is major focus; MVP Award, Service Awards, Model Leader Award, Award of Excellence, Outstanding Performance Award, and Cheerful Change Culture of Excellence recognition incentives; Above and Beyond the Call of Duty Program; Partner recognition dinner; Quest for the Best; Baskets for Champions; Partner Idea Program; Someone to Admire and Respect Program Recognition party for attendance; service pin and certificate for tenure; recognition for working safely, stars online receive letter from chief executive officer, star and t-shirt, letter from administrator for ideas accepted; Employee of the Month and Year Employees of the year awards; hospital week and nurses week celebrations; summer picnics and holiday parties/gifts; Founder’s Day; employees of year; volunteer week celebration; physician thank-you dinner; spotlight volunteers and traveling thank-you cart; special meals in physician lounge; service awards; theme days; birthday certificates; thank-you notes Managing Up employee recognition program with employees nominated weekly by management team to receive handwritten note from senior leadership team/executive management team; celebrations, professional recognition Three-part employee recognition program including Living Our Values, Honoring Our Successes, and Expressing Our Thanks to award individual and team achievements; employees may reward each other with small gifts and personal appreciation notes Employee of the month and year; employee suggestion program; volunteer recognition award; angel for an angel award; team quality award; clinical excellence awards; spot recognition awards for customer service and for teamwork (continues)


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Table 5. Recognition Awardsa, Continued H/HS SHC

SMC SSMHC

Recognition Awards Leaders send personal thank-you notes to employees’ homes to acknowledge great effort; senior leaders identify and award individuals, department, and teams that exemplify the Sharp Experience by Pillar with Center of Recognized Excellence Awards Work-life balance supported with flextime, weekend options, and job sharing; on-site pharmacy; annual recognition dinner regarding customer service; physician of the year Formal recognition process to recognize years of service, team contributions, and continuous quality improvement; annual showcase for sharing conference for formal and informal recognition of individuals and teams; teams effective in continuous quality improvement eligible to receive a plaque from the Quality Resource Center

a


successful strategic planning for performance management. CONCLUSION Winners of the Baldrige award are actively involved in performance management using a variety of best practices as is evident from our integrative case study. Our analysis shows that all Baldrige winners utilize a comprehensive approach to performance management, which begins with systematic ties to the strategic planning process of the hospital/health system. Cascading goals drive performance at the unit and individual levels through a variety of performance appraisal tools and procedures. Award winners place a strong emphasis on the performance evaluation of the CEO or president, senior leaders, and the board of directors, seeking input from many stakeholders, including patients and physicians. To sustain motivation for high-performance work, the

Baldrige winners adopt cutting-edge pay practices and drive intrinsic motivation by strong recognition programs. The article clearly demonstrates the critical role of performance management in helping these hospitals or health systems achieve high levels of excellence. Although each hospital or health system does not use all available best practices, each does make performance management a core of its organizational functioning. It must be pointed out that no attempt was made to study performance management in hospitals across the entire health care spectrum but rather restricted benchmarking to the Baldrige winners alone. Researchers can extend this study by discovering other best practices at other renowned health systems. It is hoped that this analysis will be useful to hospitals and health systems in developing strategically based PMSs that promote both excellence and cost efficiency. We also hope that it will be helpful to those applying for the health care MBNQA.

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