BY: DIANE FASSEL, PhD
Dr. Fassel is president, Newmeasures, Boulder, CO.
Do those ubiquitous value statements hanging on plaques in
every hospital lobby have any effect on how the hospital carries
out its mission? Are values-driven hospitals better places to
work, more productive, more successful, better at retaining
employees?
More than 10 years of organizational literature on the topic of values would
lead one to believe that core values are a hallmark of great and enduring organizations.
Consequently, most organizations have created, embraced, and publicized their
mission, vision, and values. In Catholic hospitals, core values are sometimes
perceived primarily as a function of mission rather than as integral to the
operating success of the business. Thus, they are considered to be more on the
"soft" side of the organization. Although anecdotal information regarding the
importance of values abounds, until now there have been little hard or scientific
data regarding the impact of values on organizations.
Analyzing the "Soft Side"
On an annual basis from 1998 to 2001, the survey firm Newmeasures
conducted employee satisfaction surveys of approximately 130
Catholic hospitals and long-term care facilities. These surveys
included assessment of the core values of the facility. A typical
statement regarding values on an employee survey would be: "People
at ABC Hospital respect the value and worth each person possesses
as a member of the human family. (Dignity)" Each of the particular
organization's values was stated in similar form, with employees
responding as agreeing or disagreeing on a scale of 1 to 5 (1
= strongly disagree and 5 = strongly agree). These employee
satisfaction surveys were filled out every six months and garnered
an average return of 60%. By 2001, our database included 228,000
employees of Catholic hospitals and facilities — a statistically
large sample ensuring stable numbers for study. Over time, we
were able to discern statistically and scientifically just how
significant the commitment to core values is in the life of
individual hospitals. We were able to measure the effect of
core values on a number of organizational factors using a statistical
process called regression analysis. Regression analysis enabled
Newmeasures to determine which items on the employee survey
had the greatest impact on the outcome measure (organizational
effectiveness). Over the four-year period, core values had the
greatest impact on organizational effectiveness of any items
on the survey. And with each succeeding year, that relationship
grew stronger.
Concrete Results
The results of our data analysis are unequivocal. These 228,000
employees of 130 Catholic health care facilities stated time
after time that when a facility has stated values and operates
from a position of living its values, the employees themselves
feelmore valued and more willing to stay with the organization.
They also judge the hospital as a more effective organization.
The impact of values on these organizations is powerful, significant,
and compelling.
Let's analyze these findings further. How do employees view
values? Are employees really in a position to judge how effective
an organization is? Do values have any effect on morale and,
ultimately, retention?
How Employees View Values
One of the first things Newmeasures learned after analyzing the data was that
employee ratings of a hospital's commitment to core values formed an internally
consistent, or reliable, scale. A scale means that employee ratings of one value
correlate highly with their ratings of other values. Thus, commitment to core
values was linked into a single, meaningful scale.
Employees seem to be saying that they see commitment to values as an integral
part of a values-driven workplace when that commitment permeates all levels
of organizational functioning. Although sponsors and boards have labored mightily
to come up with three to five well-worded meaningful values, employees are generally
not as concerned with individual values as they are with a pervasive sense that
values direct action and decisions. When employees perceive values as a dynamic
process and not simply a public relations technique, they trust management and
they feel part of a larger team pulling in the same direction. Our surveys clearly
show that employees can judge when a hospital is operating out of its values
base and when it is not.
Values Drive Organizational Effectiveness
Values are important, but do core values have any impact on organizational
effectiveness? This question is at the heart of our efforts to measure — in a
scientific way — employee satisfaction, corporate culture, and values. Here again
the survey data are compelling. According to our survey results, commitment
to core values is an important factor in organizational effectiveness, if not
the most important factor. In other words, employees who rate the hospital high
on commitment to values also rate it high on organizational effectiveness. In
addition, employees who rate their hospital high on commitment to values also
say that they feel valued as members of the organization.
The Box below shows correlation between commitment to values and two key measures:
organizational effectiveness and workers feeling valued as employees (a measure
of job satisfaction). Some may question whether an individual hospital employee
is in a position to know whether his or her facility is "effective." Effectiveness
refers not only to accomplishing the mission but also to meeting financial goals
and remaining viable as an institution. Perhaps a hospital is doing great with
its customers but is about to go under financially. How could employees know
or rate that?
To address the issue of employees' ability to accurately determine organizational
effectiveness, we ranked all the hospitals in one health care system from highest
to lowest based on the score they had received on organizational effectiveness.
(The survey statement for response reads: "Overall, this is an effective organization.")
When we took that ranking to the system administrators and asked them to describe
what was happening at the top 15 hospitals versus the bottom 15 hospitals, they
described the top 15 hospitals as places that had fewer malpractice lawsuits,
fewer strikes, and less turnover and were meeting their financial goals. This
characterization was in marked contrast to the bottom 15 hospitals, which were
beset with problems and not considered viable. Although one can argue that it
is not scientific simply to interview hospital system administrators, their
information was corroborated by the employee satisfaction surveys. Hospitals
that were less effective, according to the system administrators, also had lower
scores on the employee surveys on almost all questions.
Values Are Good for Morale and Retention
Employees who rate a hospital highly on values feel more valued themselves;
they are also more willing to stay with the organization than those who rate
a hospital low on values. This finding is the more personal side of the equation.
Although many value statements would seem to refer to how the facility wants
to act toward its customers — for example, with dignity, excellence, and justice — employees
tend to apply the values to themselves as well. They judge the extent to which
they are being treated with dignity and justice when they answer survey questions
about values. Feeling valued as an employee is our indicator of job satisfaction,
and research has shown that feeling valued (and being satisfied with one's job)
results in high employee retention and workers stating that they are proud to
work for their organization.
Values are Key
Again, the data show that all these items — feeling valued, willingness to stay
in a job, and organizational values — are linked with one another. The most highly
performing organizations reveal a dynamic interplay of all these factors. Employees
believe they are valued because they are treated in ways that are congruent
with stated organizational core values. They see values in action every day
in relationships to customers and to themselves. Thus, they feel more satisfied
at work, and ultimately, they judge the organization to be effective.
Values are anything but "fluffy" and soft in organizations. Our research supports
the conclusion that values are central to efficient functioning of organizations
at all levels. In every instance values are good for business. Consequently,
values should be essential to any strategic plan and have a central place in
every management meeting and organizational initiative. The vision and mission
statement point a hospital in the direction it wants to go; values determine
how it will get there. Without the principles inherent in values, the ship is
rudderless. With values, employees feel grounded and more eager to commit to
a common goal.
Statistics
Workers who rate their organization as more committed to its stated values
are two times less likely to say that they intend to leave the organization
in the next year.
Workers who rate their organization as more committed to their stated values
are 16 times more likely to say that they are proud to work for their organization.
Definition: Correlation
The impact of values on organizational effectiveness reported in this article
is based on correlation. A correlation is a statistical technique that measures
relationships between two variables. Variables are simply things, such as items
on a survey questionnaire. So, correlation measures how one variable or thing
changes with another. Correlation can range from 0.00 (no correlation) to ±1.00.
A perfect correlation of 1.00 (positive or negative) means that as one variable
changes, the other changes in precisely the same manner. A correlation of 0.00
means that there is no relationship between changes in one variable and another.
Correlation closer to 1.00 indicates stronger relationships between the two
variables. Generally speaking, a correlation 0.60 or above is considered strong,
and one below 0.40 is considered weak; correlation in between is considered
moderate.
Commitment to values ---------> Organizational effectiveness
Correlation = 0.66
Commitment to values ---------> Employees feeling valued
Correlation = 0.60