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A Rude Awakening

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Any hospital ranked among the top five in its category by U.S. News & World Report has plenty to brag about. Especially if the hospital added 2,600 new employees in a year, completed a $300 million building program, garnered a 97 percent score from The Joint Commission and positioned itself to earn “magnet” status from the American Nurses Credentialing Center.

Such was the case at Texas Children’s Hospital, where top executives felt pretty darn good in 2002 as they strolled through “Gallery A,” a brightly lit room decorated to highlight the facility’s many successes. But when they were escorted into another room, “Gallery B,” their mood took a turn.

The floor was strewn with the names of 3,500 former employees who had left in the previous three years. The walls were lined with comments from their exit interviews. A telephone kept ringing in the background.

“I said to them, ‘Ignore the phone, that’s the 8,000 people calling human resources asking for help in the past year,’” says Linda Aldred, senior vice president of human resources and organizational development at the internationally known Houston hospital. “‘Just come on in and step right over these people. These are just the people who don’t want to work here anymore.’”

As the executives struggled to understand the two aspects of their organization, Aldred offered them some perspective—and a challenge. “I said, ‘Every organization, every single one, has a Gallery A and Gallery B. Are you interested in closing the gap between those two galleries at Texas Children’s?’”

It is difficult for chief executive officers in any industry to stay in touch with their workers. Indeed, two recent Opinion Research Corp. surveys—one of CEOs and one of adults who are employed full-time—found a significant disconnect between what CEOs thought their employees valued and what the employees actually thought.

“There is no CEO I know who does not want to do things that create an engaged and energized work force,” says Jeffrey T. Resnick, Opinion Research’s executive vice president. “But on many issues we found one point of view from the top of the house and a different point of view from the employees.”

Opinion Research’s surveys encompassed all industries; in healthcare, where CEOs must focus on falling reimbursement rates, predatory competitors and the burden of uninsured patients, losing track of what matters to employees is especially easy. At Texas Children’s, Aldred says getting the CEO engaged was not an issue; in fact, President and CEO Mark A. Wallace asked her to overhaul the HR system when she was promoted to lead the department. Aldred’s “gallery” exercise was merely a first step in making the entire top management team aware of the challenge they faced.

Sweeping changes—creating guiding principles for individual and organizational behavior, conducting employee surveys, eliminating the old performance management system—ensued. Leadership development became a top priority. Implementing a new performance tracking system that ties each employee’s job to the organization’s big-picture organizational goals took several years, but the work has paid off:
  • Turnover decreased from about 17 percent a year before the changes to 11 percent. Aldred takes special pride in decreasing turnover in the first three years of a worker’s employment.
  • Employee requests for HR interventions fell by 60 percent, reducing manpower costs and improving worker productivity.
  • Leadership issues—historically one of the primary reasons that people left Texas Children’s—slipped out of the top three reasons given for leaving the hospital.
The payoff will build in the years ahead. By the end of 2010, Texas Children’s plans to add another 3,000 employees, including at least 200 leaders, to its staff.

“We have a lot of confidence in being able to accomplish that because we have a great foundation for leadership development and a really integrated HR system,” Aldred says.

—Lola Butcher