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Catholic Healthcare Leaders Rethink Their Relationship With Employees

Summary

The sea changes that have occurred recently in economics, technology, and social order have profoundly disturbed the relationships between organizations and their workers. The promise of lifelong employment — once the foundation of the "social contract" between employer and employee — has evaporated. The dissolution of this social contract has led managers of Catholic healthcare organizations to ask, If we can no longer guarantee lifelong employment, then what is our relationship with employees?

Participants in two think tanks sponsored by the Catholic Health Association's Center for Leadership Excellence addressed this question. Participants in the first think tank (i.e., one senior executive and several human resources professionals from Catholic healthcare systems) agreed that a new social contract with employees was needed, one of mutual responsibility to replace the paternalistic relationships of the past. To begin constructing such a contract, the group articulated a set of values held by Catholic healthcare regarding employees.

Based on the values they identified, participants in the first think tank drafted the "Social Contract for Turbulent Times." Participants in the follow-up think tank expanded this draft contract in the "Elements of a New Relationship Agreement with Employees."

Seismic shifts in economics, technology, and social order have radically altered the American labor force and the way work is done in the United States. The ubiquitous personal computer and the lightning speed of communications today have changed not only the work, but the need for workers. Job loss — whether it's called "downsizing," "realsizing," or "rightsizing" — is often the result of change.

Since 1983, U.S. businesses have added 25 million computers. Since 1987, 10 million fax machines and 26 million e-mail addresses have been added. In 1993 alone, 12 billion messages were left in voice mailboxes. And, demonstrating the effects of information technology on work roles, since 1987 521,000 secretarial jobs have been eliminated (Rich Tetzeli, "Surviving Information Overload," Fortune, July 11, 1994).

In the aftermath of these sea changes, the relationships between organizations and their workers have been profoundly disturbed. The promise of lifelong employment — once the foundation of the "social contract" between employer and employee — has evaporated.

Healthcare organizations, long thought to provide job security, have not been exempt from pressures that lead to layoffs. The growth of managed care, driving down payments for healthcare services, is a major factor bringing about "reductions in force" throughout the healthcare industry.

For Catholic healthcare organizations, committed to mission-driven ministry shaped by Gospel values, the dissolution of the employer-employee social contract creates tension. Managers are asking, If we can no longer guarantee lifelong employment, then what is our relationship with employees?

Think Tanks
Participants in two think tanks sponsored by the Catholic Health Association's Center for Leadership Excellence addressed this question. Regina M. Clifton, the center's executive director, said the think tanks were convened in response to comments from chief executives officers (CEOs) of Catholic health facilities. "In 1993 we held a series of gatherings with CEOs around the country," said Clifton. "Everyone, it seemed, was concerned about the changing relationship between the institution and its employees. They were experiencing downsizing, and they were looking for a just and compassionate way of treating employees."

The first think tank, convened in spring 1994 in Atlanta, brought together one senior executive and several human resources professionals from Catholic healthcare systems. The second, held a year later in St. Louis, had an expanded participant list with representatives of human resources, mission, and administration from Catholic systems and facilities (see "Think Tank Participants" at the end of this article).

To prepare for the meetings, participants read Healing the Wounds: Overcoming the Trauma of Layoffs and Revitalizing Downsized Organizations (David M. Noer, Jossey-Bass, San Francisco, 1993) and Reengineering Management: The Mandate for New Leadership (James Champy, HarperCollins, New York City, 1995). "Noer's premise is that we in organizations have treated employees like children," said Linda Robin of Accord Limited, a Chicago-based consulting firm. "We've made employees dependent. They are not in a position to take care of themselves."

Robin, who facilitated both think tanks, pointed out that workers treated as children by their employer are less likely to be prepared to look for new work when layoffs occur. "Organizations must start treating people like adults, with honesty," she stated.

Moving toward a New Contract
Participants in the first think tank agreed that a new social contract with employees was needed, one of mutual responsibility to replace the paternalistic relationships of the past. To begin constructing such a contract, the group articulated a set of values held by Catholic healthcare regarding employees. Among these values are:

• Balance between employer paternalism and employee self-reliance
• Inclusion of all people directly affected in decision making
• Recognition of the dignity of each person
• Acknowledgment of the intrinsic motivation of each worker — the desire to do a good job

Participants agreed that employer-employee relationships should be honest, compassionate, respectful, just, fair, and collaborative. In addition, such relationships should demonstrate a valuing of diversity among people.

The group also named a set of values regarding the organization. These included:

• Commitment to excellence and quality
• Determination to act with integrity
• Elimination of internal competition
• Recognition of the importance of education and development.

In addition, participants recognized the need for all employees to have a knowledge of and be guided by the organization's "stories" and cultures and to maintain the heritage of the sponsoring congregations.

But values without action mean nothing, Robin asserted. Therefore a new social contract must describe what the employing organization promises and what it expects from its workers. Based on the values they identified, participants in the first think tank drafted the "Social Contract for Turbulent Times." Participants in the 1995 follow-up think tank expanded this draft contract in the "Elements of a New Relationship Agreement with Employees" (see Elements of New Relationship Agreement with Employees at the end of this article.)

Values
The center's Clifton pointed out that a new relationship agreement with workers can be used as a communication tool for discussing change within an organization and for clarifying that the employer-employee relationship is more than an exchange of money for talent. "Perhaps most important, the new agreement should guide our interactions with employees and the decisions we make that affect them."

"This is a process of codifying your values in actions," Robin said. "It's important that this new contract not be just an activity of human resources, but that it help to shape all leadership thinking. The value comes not just from the document itself, but from the process of developing this new agreement," she continued. "Being a part of the process builds commitment to it."

Once an organization has identified the promises and expectations in its agreement with employees, the next step is to look at policies, procedures, and programs to ensure that they support the agreement, Robin said. "It's important not to send a conflicting message of values versus structure. So, you have to ask questions like: Do your benefits programs make assumptions about lifelong employment? Are your recognition programs based on length of service? Are benefits portable within your healthcare system? How generous are you with training and development?"

Four Steps to a New Agreement
Robin outlined a four-step process to guide organizations in the creation of a new social contract with employees.

"It starts with realizing that what was done in the past won't work in the future. You have to recognize that some kind of new social contract is needed," Robin said.

The second step is to identify how the organization values employees. "Articulate what you want to uphold in the relationship that evolves," Robin advised. She added that there are many ways to name organizational values — from leadership brainstorming to focus groups with employees. She advocated involving employees from all levels of the organization to help identify values. "Make sure it's a realistic assessment. Ask, 'Can we really stand by those values?'"

Once the values have been identified, determine how the values are lived through the actions of the organization and its employees. What does the organization promise going into this agreement? What is asked of employees? This process can be the result of discussion among the organization's leaders, but involving people throughout the organization will build commitment to the new relationship.

Finally, the organization must assess organizational and human resources programs, policies, and procedures for alignment with the new contract. Flexibility is important as an organization revises its relationships with employees, Robin said. Technology has allowed for flexible, nontraditional time schedules and opened possibilities for working at home or job sharing. These are elements that organizations can offer to workers instead of the old promise of lifelong employment.

—Ed Giganti, Senior Associate, Information Services, CHA

For more information on this or any other activities of the Center for Leadership Excellence, contact Carol Tilley at 314-253-3422.