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Weekly UpdatesEXECUTIVE SUMMARY
Numerous challenges confront managers in the healthcare industry, making it increasingly difficult for healthcare organizations to gain and sustain a competitive advantage. Contemporary management challenges in the industry have many different origins (e.g., economic, financial, clinical, and legal), but there is growing recognition that some of management's greatest problems have organizational roots. Thus, healthcare organizations must examine their personnel management strategies to ensure that they are optimized for fostering a highly committed and productive workforce. Drawing on a sample of 2,522 employees spread across 312 departments within a large U.S. healthcare organization, this article examines the impact of a participative management climate on four employee-level outcomes that represent some of the greatest challenges in the healthcare industry: customer service, medical errors, burnout, and turnover intentions.
This study provides clear evidence that employee perceptions of the extent to which their work climate is participative rather than authoritarian have important implications for critical work attitudes and behavior. Specifically, employees in highly participative work climates provided 14 percent better customer service, committed 26 percent fewer clinical errors, demonstrated 79 percent lower burnout, and felt 61 percent lower likelihood of leaving the organization than employees in more authoritarian work climates. These findings suggest that participative management initiatives have a significant impact on the commitment and productivity of individual employees, likely improving the patient care and effectiveness of healthcare organizations as a whole.
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In today's era of rapidly changing technology, an aging and less-insured population, and a fluctuating economy, healthcare organizations face more challenges than ever. A survey indicates that healthcare executives are constrained to do more with fewer resources, which makes it difficult to sustain their organization's viability and mission (Prybil 2003). One industry observer aptly notes that "it would be difficult to conceive of a field that is and will be subject to greater scrutiny, greater demands and greater changes than the American healthcare system" (Litch 2005, 20).
Many factors underlie contemporary challenges in healthcare management, but there is growing awareness among scholars and practitioners that the greatest challenges have organizational, rather than clinical or financial, roots (Ramanujam and Rousseau 2006). For instance, in one study, more than three quarters of CEOs identified "workforce issues" as a primary challenge in managing healthcare organizations (Prybil 2003). Improvements in patient safety, employee performance, and retention of key talent have become more difficult as healthcare personnel confront greater demands and heavier workloads (Ramanujam and Rousseau 2006).
In response to these challenges, healthcare executives must implement management strategies that will enable them to optimize investments in human capital to sustain a competitive advantage. Two archetypal management strategies have been previously identified by organizational scholars (Arthur 1994). First, autocratic (or authoritarian) management strategies endeavor to reduce labor costs by emphasizing control and efficiency through specialized roles and strict rule enforcement. In contrast, participative management strategies endeavor to increase employee productivity by rewarding performance, fostering employee commitment, and decentralizing decision making to give employees more voice in work decisions (Arthur 1994). Two decades' worth of research in the United States and abroad demonstrates that while autocratic management strategies are effective in certain conditions, participative approaches are typically associated with greater long-term corporate performance (Arthur 1994; Delaney and Huselid 1996; Miah and Bird 2007). Yet to date, little participative management research has been conducted in healthcare, and fewer studies have examined the sorts of employee-level outcomes that are indicative of the industry's greatest contemporary challenges.
This growing disconnect between existing empirical research and current problems in healthcare management represents an important gap in the literature. Therefore, the purpose of our study was to examine the impact of participative-management employee perceptions on four critical employee-level outcomes: customer service, medical errors, burnout, and turnover intentions. To that end, the study drew on a large sample of employees spread across more than 300 departments in a large healthcare organization based in the southeastern United States.
PARTICIPATIVE CLIMATE: THE LIKERT ORGANIZATIONAL PROFILE
Participative management practices have existed for more than a century, but they expanded in scope and in practice during the 1970s as organizations recognized the benefits of redesigning manufacturing jobs to minimize repetition and give employees input into matters that influenced their work (Katz, Kochan, and Colvin 2007). As more organizations experimented with participative management, organizational theorists sought to understand the process by which they could improve organizational effectiveness. Subsequent research highlighted two employee perceptions that are fundamental to the success of participative management initiatives (Pierce, Rubenfeld, and Morgan 1991). First, information must flow freely to and from employees in the organization, such that they are given adequate information about their work and that their upward input on work-related matters is given legitimate consideration (Rosen and Quarrey 1987). Second, employees must perceive that they have an adequate degree of control over their work and the decisions that affect their well-being (Pierce, Rubenfeld, and Morgan 1991). When employees feel empowered, they will perform better, be more committed to the organization, and be less likely to leave, all of which collectively influence the effectiveness of the organization (Kanter 1993).
Likert (1967) developed a typology and measurement scale (see Methods section) of organizations based on the authoritarian-participative climate continuum. The Likert Profile of Organizations draws on employee perceptions of six climate dimensions (leadership, motivation, communication, decision making, goal setting, and control) that are aggregated to determine the degree to which an organization is participative in its climate. System 1 organizations are considered to have an exploitive, coercive, and "authoritarian" management style, whereby information flows only from the top down and is viewed with suspicion by employees. System 2 organizations are labeled "benevolent authoritarian," whereby some degree of bottom-up communication is allowed but "only [the information that] the boss wants to hear." System 3 organizations are "consultative" in that they set goals and issue directives after discussing the matter with subordinates. Finally, System 4 organizations are considered "participative," whereby communication is completely open and flows upward and downward and the decision making is shared between employees and management (see Figure 1 for additional description).
Research has demonstrated that employees form distinct participative-climate perceptions and that these perceptions are associated with outcomes that include organizational structure results (Reigle 2001) and corporate performance (Miah and Bird 2007). However, to date, little if any research has linked participative-climate perceptions to employee-level outcomes. In the following section, we examine how participative-climate perceptions affect customer service, medical errors, burn-out, and turnover intentions.
Customer Service
Customer service is central to organizational effectiveness, particularly in healthcare institutions where employees' interactions with patients have a strong effect on patient satisfaction, healthcare quality, and brand loyalty (McManus 2007). Research demonstrates that customer service has a stronger impact on patients' "likelihood of recommending services" than clinical performance (c.f. McManus 2007). Participative-climate perceptions are likely to influence employees' customer service performance in healthcare organizations because employees in participative climates tend to be more engaged in and more satisfied with their jobs (Spreitzer 1995) and thus are more likely to be motivated to go the extra mile for their patients. Moreover, employees in participative climates generally face fewer organizational constraints and personal risks that may prevent them from providing high levels of customer service. Thus, we hypothesized that employees who report higher participative-climate perceptions will have higher customer service ratings by their supervisors.
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Medical Errors
As noted earlier, patient safety has become a key concern among healthcare organizations and is often considered a key performance indicator in organizations (Ramanujam and Rousseau 2006). Poor nurse (and other caregiver) performance has been linked to patient medical complications following surgery, falls from injuries, and death rates (Evans 2008). Estimates suggest that between 44,000 and 98,000 patients in the United States die each year because of treatment errors, costing healthcare organizations between $17 and $29 billion (Kohn, Corrigan, and Donaldson 1999). Participative-climate perceptions are likely to influence medical error rates in healthcare organizations because many medical errors stem from miscommunications (Pepper and Towsley 2007). Indeed, one study indicates that poor employee communication is the most common cause for surgical errors that result in patient injuries and death (Materials Management in Health Care 2007). In more participative work climates, information is more likely to flow among employee groups, thus reducing the probability of medical errors (Zacharatos, Barling, and Iverson 2005). Hence, we hypothesized that employees who report higher participative-climate perceptions will have committed fewer medical errors.
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