v-v‘M'w": A ’ 7 . I - '¢ DEVELOPMENTS OF HOSPITAL EXECUTIVES THESIS FOR THE DEGREE OF M. A. MICHIGAN STATE UNIVERSITY JOSEPH P. POZZA 1962 x' ‘D x O. ' I- 9 . . I . h . . 2 l a I‘ f ‘ u "f. O :. l ’. i‘ ' -‘ . 0‘ I“ a ' - ‘5‘ . , - é. 3 . \I} ’ “o ', ' at, . V1. 9 o ‘ ' ' ° u. _ - a . 'Iz'. - j'r' . . Q “ g 'V q ..... ... .' ‘ Q‘ ‘3 "'9' 9‘.' ‘2 .: ‘0. - '1 ~ . _.- _“ .‘ L. I? - $ : . :" '_"._. E.“ ’ _. ..... ‘ 3 ‘ " ',.f. .1 ’93.;_. '. a v - ‘. . .' Q. 4",- __ l .« ,:..;. ' . °~ an; . Q -- '. i‘- J ’ . o" g. o u o O o -'v‘"‘0: . ' -' . o ‘v . I I I z «u “ '. 'v'Ym. *4 ' I I ".1! ‘. HLSIS ‘J:L_—. _ IIIIIIIIII‘IIllIIIIIIIIIIIIIIIIIIIIIlIIIIIIIIIIIIIII 3 1293 01389 0169 “1' 11‘71'u'x‘ It ' LIBRARI! Michigan State University I .‘.\ a ~\' Ax v/FV‘T-H AHWIIIF‘\ 1 I mV/‘f—anpf WW]\ 1! 1 ‘5 $3.:a-3L ‘{ \J' i'vr‘H. '- I \ _’ wm‘ “’2;, \ m;— PLACE N RETURN BoxmnmmWMMMymm. TO AVOID FINES Mum onorbdonddo duo. DATE DUE '7D'A'rE DUE DATE DUE MSU I. An Affirmative Action/EM Opponunlly Imam W m1 by _ .-. n. I C - 5 II I . I . u u .. o .. I! m . o y . O O O . u a o I a I. kw! . . . . a .. N R . n “4’4”. ._. «91.. 3%.? r yum- - . . . . I I. nut. J. ABSTRACT A STUDY OF RECRUITIVIEIIIT AND DEVEIDPMENT OF HOSPTIAL EXECUTIVES by Joseph P. Pozza The finding and development of competent managerial personnel is a canon problu among all business organizations. Willard E. Bennett states: "If one were called upon to name a management problem common to all business organizations, large and small, a problem so persistent that it has taken on the appearance of a morbid pre- occupation in some quarters, that problem would be finding and developing competent managerial personnel.":L This study scrutinizes how hospitals, as a group, react to management development. Other industries look upon management develoment as an integral part of their industry, and there is no reason why the hospital industry cannot do the same. Would not a thorough program in manage- ment development solve a major portion of problems in hospital operation? A thorough management deve10pment program consists of; recruitment of managerial potential, selection from this body of potentials, individuals for key positions, and a continuing managerial program which will include both in-hospital and out-of-hospital education. Management deve10pment programs utilized by other industries are exemplified. Their programs should serve as a guide as to how other indus- tries value such programs. These programs can be applicable to the hospital industry. A brief study is made of the top executives within individual hospitals. Joseph P. Pozza It was discovered that approximately one-third of our hospitals with 25 beds and more are managed by individuals possessing a technical degree.2 Emperts claim.that more than technical knowledge is needed to perform the duties of a manager, therefore, there is a need to deve10p non-technical lmnagerial skills within these individuals.3 What are hospitals doing to compete with other industries for managerial personnel? Recruitment statistics were Obtained comparing college recruit- ment by hospitals to that of other industries. Comparisons were also made of financial remuneration offered executives. Through study of available information, data relating to the hospitals utilisation of management development is exemplified. Some of the better programs are mentioned. These programs are measured against the writer's concept of a thorough management development program. The writer's concept as to how a thorough management deve10pment program.should be conducted is portrayed in the chapter entitled, "Model 'Training and Development Program”. The validity of the study is questionable because of the spot sampling technique used by the writer. The great number of hospitals needed to be contacted to establish validity would have been too costly and time con- suing. The material presented merely indicates that: 1. Hospitals are not conducting enough thorough and adequately efficient programs in management deve10pment. 2. Hospitals are not recruiting enough individuals possessing managerial potential. Joseph P. Pozza 3. Salaries must be more competitive so as to attract avail- able managerial personnel. 1Willard E. Bennett, Manager Selection, Education and Training, (New York: McGraw-Hill Book Company, Inc., 1959) p. 1. 2"Guide Issue",-Hospitals, August 1, 1960. BBennett, op. cit., p.h0. A STUDY OF RECRUITMENT AND DEVELOPMENT OF HOSPITAL ’ EXECUTIVES by Joseph P. Pozza A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of MASTER.OF ARTS School of Hotel, Restaurant and Institutional Management 1962 CHAPTER II III TABLE OF CONTENTS Page mmmICTION OOOOOOOOOOIOOOOOOOOOOO000.000.00000000000000000000 1 Statement of Problem Hypothesis Methodology TIE NEE) FOR MANAGMNT DEVmJOMTOOOOOOOOOOOOOOOOOOOOOOOOOOOO 5 Establishing the Need Group to be Developed The Dominant Personality Within a Hospital Summary MANAGEMENT DEVEDOHIENT IN INDUSTRY 15 Industry's Evaluation of Management Development Industry‘s Utilisation of University Sponsored Programs Individual Appraisal Summary RERUIWT BY mSPITAI'SOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO. 25 management Audit College Recruitment Hospitals vs Industry Value of a College Education Other Recruitment Summary PDSPITALS' UTILIZATION OF MANAGEMENT DEVELOPMENT . . . . . . . . . . . . . . b2 In-Hospital Education Community and University Education Hospital Sponsored Activities Summary MODEL TRAINING AND DEVELOPMENT PROGRAMOOOOOOO0.000000000000000 w Establishing a Program Objectives of Management Development Conducting a Program Summary 11 TABLE OF CONTENTS - Continued CHAPTER Page m WINGONCIIJSIONSOOOOOOOOOO00.....OOOOOOOOOOOOOOOOOOOO. 73 mmn OOOOOOOOOOOCOOOOOOOOOOOOOOOOOOOOOOOOO0.0.0.00.00...000...... 78 BELIOGRAPMOOOOOOOOOCOOOOOOOOOOOOOOOO0.00.0.0...COOOOOOOOOOOOOOOOOOO 86 iii LIST OF TABLES TABLE Page H Organizational Chart Of a Hospitaleeeeeeeeeeeeeeeeeeeeeeeeeee 8 II List of Colleges and Universities Offering Management Development CWSQSeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee 20 III Did the Men Prefer University or Company/ Association Sponsorship 0f Future PrograJHS? eeeeeeeeeeeeeeeeeeeeeeeeeeoee 23 IV Need for Trained Administrators According to Size or Hospitalv OOOOOOOCOOOOOO0.000000000000000000000000000. 30 V Employment of Inexperienc ed College Men in 1960 and Quotas for 1961, as Report“ by 202 companieseeeeeeeeeeeeeeee 3’4 VI Median Compensation Earned in 1959 by Three Highest Paid Executives in Major Business and Industry............... 36 VII American College of Hospital Administrators Registrations for All Institutes, Conferences, and Sums, 1933 ' 1960 eeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee 58 VIII Overall Plan of Manager Selection, Education and TraininSOOOOOOOOOO0....00......0..00.0.0000...OOOOOOOOOOOOOOO 63 iv CHAPTER I INTRODUCTION The hospital industry is the fifth largest industry in the United States.1 In 1960, there were 6876 hospitals listed by the American Respital Association, and 1,657950 beds in these hospitals. Total ad- missions were 2S,027,152. Total assets for all listed hospitals were $17.1 billion dollars, and total expenses $8.h billion. There were also 1,597,981. full-time workers in listed hospitals.2 STATEMENT OF PROBLEM One would think that such a large industry as the hospital industry would keep pace with other industries of a large magnitude in adopting techniques which will increase their overall effectiveness. It is true the hospital industry is a large industry, but the fact that it consists of approximately 7,000 component parts indicates that it possibly lacks unity; These component parts are, actually, separate entities. One hospital, located in the extreme Northwestern part of the United States, may'have an excellent method of Operation due to highly proficient man- agers, while another hospital, located in the Midwest, may be inef- ficiently operated because of its failure to possess competent managers. To determine if hospitals keep abreast of times, or are keeping 1Association of University Programs in Hospital Administration, University Education for Administration in Hospitals, (Menasha, Wisc.: George Banta Publishing, l95h), p. 3. 2"Hospital Statistics, 1960, "Hcspitals,__Guide Issue, August 1, 1961, pp. 383-390. pace with other industry, the area of management within hospitals is scrutinized. Management is emphasized because, as John G. Glover states: "Capital and skilled labor are usually plentiful regard- less of economic conditions, but competent management is the scarce fundamental in any economy. The proper staffing of an enterprise includes a program of continued development and training of selected individuals to occupy key positions."3 How do hospitals cape with their managerial problems? Do they look upon recruitment of capable managers and.managerial potential, as a major part of proper staffing? Do they try to keep their managers com- petent through programs in continuing deve10pment and training? HEPOTHESIS The hospital industry is faced with many major problems, such as rising costs, shortage of key personnel, and impr0per utilization of its existing facilities. The exact methods needed to solve these problems are not known. However, a question which does come to mind is: “What is tcpdmanagement within hospitals doing to solve these problems? This question, in itself, has prompted the writer to ask more ques- tions concerning management within a hospital. Questions such as: What qualifications do hospital managers have? 'What methods are used to re- cruit managerial potential? What steps are taken to keep hospital man— agers competent? ‘7' 3John G. Glover, Eundamentals of Professional.Management, (New York: Simmons Boardman Publishing Corp., 1958), pp. 137-lhh. If blame is to be placed for existing problems, it should fall upon top-management's shoulders. It is from here that control stems, so logi- cally this also should be the starting point of inquiry as to why these prdblems exist. To accomplish this, management, itself, should be scruti- nixed. Other major industries have seemed to look upon the recruitment and developent of managers as an integral part of their industry. Have hospitals done the same? The hypothesis the writer makes is this: "If hospitals were to adopt a thorough program in.management development, consisting of recruit- ment of managerial potential, selection from this body of potentials the best qualified individuals for key positions, and a continuing educational program for all.managerial personnel, they could solve a major portion of problems in hospital operation". To accomplish this, hospitals must com- pete with other industries for personnel possessing good managerial potential. HarmDOLocI The importance placed upon management development by other industries, and executives within these industries, is exemplified. This information was gathered through selected readings of books, managerial periodicals, and reports. Recruitment and.managerial compensation are discussed because they are considered necessary to accomplish proper staffing of a hospital. Information for this phase of the study was obtained through selected readings and both written and verbal communications with universities, hospitals and employment offices. Through reading of hospital literature, information was gathered as to hospitals' utilization of programs in management development. This approach was selected because the great sample needed to establish va- lidity through a questionnaire type of survey would have been too costly and time consuming. It was the feeling of the writer, that if hospitals were active in the area of management development, they would publicize their programs in hospital Journals. Spot samples were obtained regarding hospitals' utiliz aticn of university and commity educ aticn in the management area. _ To obtain information of previous investigations on this and closely related subjects, the American Hospital Association was contacted. This institution forwarded material on the subject. Several graduate study projects required by Schools of Hospital Administration related to the subject, also were procured. From the material gathered on the subject of management developnent within hospitals, it has been determined by the writer that a study of this nature has never been conducted in the hospital field. Although general in nature, the material presented should astound the reader. CHAPTER II THE NEED FOR MANAGEMENT DEV EIDPMENT ESTABIISHING THE NEED The definition of management indicates its complexity. There are many definitions. Webster defines management as "the act, art, or manner of managing, or handling, controlling, directing, etc.,".1 Glover desig- nates it as "that intellect and personal experiential discretion which motivates persons to perform assigned work with a will,"2 and Dale Ioder says that the term "refers to the processes of planning, direction and control."3 It requires great skill to perform the functions of a manager. Management is responsible for the accomplishment of its own goals, which are attained only through knowledgeable planning, organizing, directing, coordinating, and controlling. Harold Leavitt has this to sq about the managerial job: "We can partially differentiate managerial from other jobs by mphasizing the change quality of managerial problems as against the relatively static quality of tasks at lower levels. The manager deals with unknowns stead of knowns. He is a solver of unprogrammed problems . " It would be possible to go on indefinitely listing quotes which justify the need for management deve10pment. Instead, one, Willard 1Websters New World Dictio Colle e Editig, (New York: The world Mafia-g Coupsny, ESE), p.690. 2John G. Glover, Fundamentals of Professional Management, p.96 ale Ioder Personnel Hana ement and Industrial Relations (hth ed. I"Harold J. Leavitt, Hana erial Psycholom (Chicago: University of Chicago Pass, 1958), p.536. Bennett's, was selected because it portrays the feelings of many experts. "If one were called upon to name a.management problem common to all business organizations, large and small, a problem so per- sistent that it has taken on the appearance of a morbid preoccupation in some quarters, that problem would be finding and deveIOping capetent management personnel. Management seems to have concluded that the answer to most management prOblems lies with management itself; that the degree of success of a business enterprise equates directly with the quality and.perfcrmance of its management - at every level."5 Despite the classification and type of control by which a hospital is governed, hospitals still should be run as economically and efficiently as any other business. The hospitals should take all the precautionary steps taken by other industries in striving for efficiency; Management developuent seems to be an intrinsic part of management in most industries. If hospitals wish to compete with industry they should adopt such a pro- gram. This would be a major step in giving the public what it justly deserves. GROUP TO BE DEVELOPED The participants in this program of management development should include all department heads and their assistants, plus all members of the administrative staff. Supervisors and their subordinates also should par- ticipate in training, but will not be considered for purposes of this study. If a department head is well-trained his subordinates should be directed by the knowledge he possesses. This group was selected because it is felt its members make up the nucleus of the managerial team respon- sible for the successful completion of objectives. This group consists SWillard E. Bennett, Manager Selection, Education,gand Training, (New York: McGraw-Hill Boo cmpeny, no. , 9). 13.1. of individuals technicale trained for specific fields and those who should possess managerial ability. Table I indicates the rec amended participants for this program. If a department head has an assistant, he, too, will participate. According to new experts, a technically trained person is found to be lscung in the non-technical managerial skills, in which he should be trained if he is to perform the dtties of a manager. Past and present cases have indicated evidence of deserving uployees promoted to manag- erial positions solely as a reward for professional contributions. Little. or no thought is given to their managerial qualifications. They are advanced on what is, perhaps, the least important of all managerial selective criteria - technical ability.6 Two noteworthy cments on this subject are: . ”Maw problcs in hospital administration can be traced to poor human relations which, in turn, result from weakness in supervision. Hospital supervisors are well educated and trained, but often th have little training in the art and skills of managmnt." "Failure to think in broad terms is present to sue degree in every labor of your management team. Many men have risen to top jobs through their specialties and have never altogether broken tge "habit of thinking within the limits of those specialties." The authors of The Give and Take in Hospitals, when discussing how nurses and doctors despise paper work, have this to stats about nursing personnel: 6Ibid, p.10. 7Keith 0. Taylor, "Supervisory Development," Hogpital Management, (August. 1958): P0 1210 BT-ple Burl , 1mm: x. Lents, and Robert N. Wilson, The Give and Take in Hospitals, New York: or. Putnam's Sons, 1956), pp. v-vi. 8 Table I Organizational Chart of a Hospital (a) Board of Trustees Hospital dministrator Assistant Assistant Administrator Administrator-J [g ] Medical (b) Ccmptroller Business ’//’ - J Director '—[Eutchaainz_A¢ant__l Dietary \\\\. 8 it and Collection% Director cer _ _ Personnel Nursing Director Director Housekeeping Social Service Director Director ngineering and Psychology Maintenance Director Director I ‘ Laundry Diagnostic and Director reatment Director(c) (a) This hospital has a psychiatric unit. Medical Staff (b) The Medical Director has authority over Interns, Residents, and the Medical Staff. (c) This department consists of: Radiology, Cardiology, Electroencephalogram, Laboratories, Physical Therapy, Recreational, Occupational and Music Therapy, Pharmacy, Dental Service, etc. "These workeminded, deskeminded supervisors suffer mainly from lack of proper training for their work. If they had been given confidence in their own abilities through adequate pre- paration, they might have relaxed and done a better job of supervision."9 Although Mr. TaYlor and the authors of The Give and Take in Hospi- 'E§l§,'use the term "supervisor" instead of "manager", the material still is applicable to this study. It is possible that they do not separate supervisory from managerial training. Exactly to whom they refer when they use term "Supervisor" does not matter, because it is usually from supervisory groups that individuals are promoted to manage- rial positions. 'we should be aware that this condition exists in hospi- tal‘managament. Personnel already trained in the arts and skills of management also should be participants in.this training and deve10pment program. A refresher course in many areas of management would prove beneficial, as many in this field become rusty in their jobs. An illustrative ex- ample of this would be an individual's second reading of a book. He usually obtains new ideas and information from this second reading. It is also important to keep abreast of times, and this can be accomplished only by keeping informed of new developments and techniques through con- tinuing education, one of the constituents of a thorough.management development program. This continuing education also is used as a safe- guard against stagnation in thinking. "This training assignment is never finished. No man is ever com- pletely trained, and no one course will produce a good manager."10 9Joseph Dean Edwards, Executives: ‘Making Them Click, (New York: Uni- versity Books, 1956), p.9. 10A.S. Alston, Office Executive, (March, 1959), p. 22. 10 "Men.in.management posts are not thinking outside the con- fines of their day-to-day operations. One of the most serious shortcomings of management peOple is their increasingltendency as they rise in executive circles, to ' stand pat'." THE IDMINANT PERSONALITY WITHIN A HOSPITAL There is such a thing as the personality of a hospital. It is discernible in every area of the institution. This individuality, this intangible entity, be it good or bad, strong or weak, is felt by patients, by visitors, by hospital personnel. It even is reflected throughout the community. Inanimate object though it may be, the hospital develops the charac— teristics exemplified‘by its employees. This personality should stem from some central area which could be the managerial team or the most influential personality within the hospital. It is haped that this most influential or dominant personality would be that of the hospital administrator. Theoretically according to a hospital organizational chart (Table I) this is from where authority or power should stem. This may not always be true but for purposes of this study it will be assumed to be true. Although in.many instances the administrator is responsible to the governing board of a hospital, his thinking nevertheless, should influence that board. His day-to-day contact with the hospital and his knowledge of the field should.make himlmore aware of hospital problems. For this reason it is felt that the administrator is the key factor in develOping the hospital's personality. 11Edwards, 32. cit., pp. 9 &.l9. 11 Ray K. Bolinger, in an article entitled "Develop Ibur Hospitals Personality", states that no one group is responsible for developing the hospital's personality.12 This writer disagrees with this statement and feels the administrative team is very much responsible. The ob- jectives and attitudes of top-management should.mo1d this personality; A department head usually hires the employees within his own department, and through personal contacts and departmental meetings should be influ- ential in instilling the hospital's personality within his department. .Mr. Bolinger possibly makes this assumption because of the presence of individual differences within employees, but these differences can be controlled.by prOper direction. Goals and objectives of management, if preperly comunicated, should spread through the hospital. Through group effort and centralized control a uniform personality should result. This personality will be reflected by an employee's work habits, courtesy, and many other tangible and intangible qualities. The position of hospital administrator shall be scrutinized.because he is the person responsible for all activity within the hospital. His attitudes, objectives and managerial philosophy is usually responsible for the hospital's dominant personality. Other reasons why his position is one of the most important are: a. He must coordinate, control, direct, organize and plan for the entire hospital. b. His centralized authority should result in: 1. Unity of action 2. Uniform.hospital Objectives and philosophy. 3. Coordination of all departments resulting in harmony and not chaos. ’ 12RayK. Bolinger, "Develop Your Hospital's Personality," Hospital Adminis- trative Review, (September, 19h9): PP. 19-25. 12 A study of hospital administrators listed in the August 1, 1960, Guide Issue of Hespitals, reveals that 967 nurses and 1230 doctors are the administrative heads of hospitals. * Just what managerial training these administrators possess is unknown. BUT, the question should be asked: "were they promoted to these positions because of their technical ability?". All persons responsible for the hiring of these hospital administrators should ask themselves this question. Let us assume that these doctors and nurses are responsible for the dominant personality that exists in their hospitals. Let us also assume they were promoted because of what Mr. Bennett states is perhaps the least important of all managerial selective criteria - technical ability. It would then seem that these hospitals would have very good nursing or ‘medical staffs because the administrator was trained in this technical ability. BUT, what about managerial qualifications? If a person is a good doctor or nurse, this is no indication he is a good.manager. If managerial.posit10ns are filled with technically trained individuals there is much reason to doubt if competent management exists. These as- sumptions could very well indicate the reasons hospitals are faced with major problems. Promotion of a person possessing only technical ability to the position of hospital administrator is not the sole contribution to the problem. Political appointees to the position is another source respon- sible for hospital inefficiency. This situation is predominant in city, county, and state hospitals. Charles LeTourneau states: *Does not include proprietary hospitals and hospitals under 25 beds. 13 "The appointment of bank clerks, drug salesmen, retired business executives, and other untrained persons to the t0p executive positions in hospita1.management still occurs with altogether too much frequency."13 Mr. Edwards has this comment to make: "Occasionally, men rise through inheritance, marriage, or judicious and skillful 'apple polishing' despite inferior manage- rial skills. 'Whatever the reason, the result is the same; a.man is in a management post which he is incapable of handling properly."1h We cannot conclude that 5.1 of the above mentioned are unqualified to fill managerial posts, but we can question it. Undoubtedly, there are ease with innate or acquired qualities of leadership and management; but possession of such qualities does not rule out a program in manage- ment development. The administrator cannot manage a hospital alone. It takes many diversified skills to perform every duty a hospital is called upon to perform. Many departments are responsible for specialised technical skills. The administrator must rely on the heads of these departments for information of a technical nature. A thorough knowledge of all departments would be practically impossible. Authority must be delegated. Along with delegated authority should go confidence in the indi- vidual; confidence that this individual will do a complete job, both technically and managerially. To insure the employer that the indi- vidual will do a complete job it is necessary to see that he is helped to develop managerially. The administrator should know each department head's technical ability but it is difficult to evaluate their managerial 13Charles U. LeTourneau, M.D., "The Profession of Hospital Administration," Hospital Administration Review, (Autumn, 1956), p. 8. 11‘Edwards, g. cit., p. 18. 1h ability. A management development program should be the answer to pro- tection against this risk. It is like buying insurance to protect both manager and managerial team. SUMMARY The late Doctor MacEachern, past Director of Northwestern University's program in Hospital Administration, stated: "The director (administrator) should be interested in edu- cational activities of the personnel. There are certain fixed courses in several departments but, in addition, general educational facilities may be made available for all classeg of employees, usually under the leadership of the director."1 Doctor John McGibony, former Director of the University of Pitts- burgh's Hospital Administration program states: "The success of any hospital probably is more dependent upon the competency and attitudes of its personnel than any other factor. Competent supervision at all levels is the soundest of investments in the improvement of management, financial stability and better patient care."16 Training and development should be established on a continuous basis. When an individual is promoted to a top management position, his training and deve10pment should not be curtailed. Steps should be taken to keep management competent through a continuing program in manage- ment development . 1'5 Malcolm T. MacEachern, Hospital Organization and Management, (Chicago: Physicians' Record 00., 1951), p. 88. 1611.11. Boyd, "Selecting Department Heads for the Small Hospital," Hospital Management, (October, 1959), P. 6. CHAPTER III MANAGEMENT DEVELOPMENT IN INDUSTRY Hospitals today well might look to other industries for innovations which are applicable to them. So-called "big business" spends a great deal of money seeking out new and better methods and systems. ‘Management development has been tested and now seems to be an integral part of indus- try. Industry has utilized it for the last 20 to 30 years. The vast majority of programs - four out of five, in fact - have been set up since 'World War II, and half of the programs are eight years old or less.1 INDUSTRI'S EVALUATION OF MANAGEMENT DEVELOPMENT There is a diversity of Opinion concerning the value of management development in industry. The Opinions can be grouped into three classi- fications: (1) those in favor of it, (2) those not in favor, and (3) those undecided. Most companies are for the program, but many still are against it. The American Management Association completed an exhaustive two- year study of management development in l95h and disclosed the fact that there is no standard procedure for developing management personnel. This study also revealed that 90 percent of American corporations hold manage- ment meetings. Seventy percent have leadership and development programs of one kind or another.2 One conclusion drawn from the American Management Association survey was that the mortality rate of training programs is high, results 1The Presidents Panel, "Does Management Training Pay Off?", Dun's Review and Modern Industry, (November, 1959), p. h2. 2Bennett, 0 . cit., p. 5. 15 16 disappointing and disillusiorment frequent.3 There are many possible reasons for this. Many industrial concerns are disappointed and disil- lusioned because they joined the bandwagon without thoroughly understand- ing management development. Some felt that it was an individual thing, while others thought of it as a short term program, an attendance at a college sminar, a period of job rotation, or an appraisal and counseling procedure. They went about setting up their programs haphazardly and then expect“ shortterm results. There also was noted resistance by members of management towards management develoment. Many utilized it as a cover-up for a poor select- ion of individuals into the managerial ranks . "Everyone involved must realize that worthwhile developnent comes slowly. Small results may appear in a few months, but important ones probably will not be evident for three to five yoarsflh . _ But then, let us look at the Opposite side of the ledger, companies . which believe in management development. Dun' 3 Review and Modern Industry surveyed presidents of 106 leading United States industrial corporations. Most of these men still are sold solidly on management development. In fact, generally, they favor further expansion of this activity.5 Company courses, university courses, and seminars conducted by uni- versities and other groups are all papular. The titles of subjects covered by company courses reveal, as might be expected, a strong emphasis 3Bennett, cp.cit., p. 8. hJ. Thomas Freeston, Earl G. Plenty, Devel in Hana ement Ability, (New York: The Roland Press Company, 195).; , p. 170. 5The Presidents Panel, 92. cit. l7 on.pe0p1e. About one-fourth of all courses named have to do with moti- vations and management of personnel. The members of the panel interviewed.by Dun's Review agreed that the ability to promote from within is the greatest benefit derived from a program.in.management development. The program has resulted in improved perfomance by trainees and the company as a whole. INDUSTRI'S UTILIZATION OF UNIVERSITY SPONSORED PROGRAMS Inpcompany'courses are of great importance in any development program. Individual companies must stress their goals and objectives in formulating the philosophies they wish exemplified by their management teams. This is, possibly, the primary purpose of inpcompany courses. BUT, industry also relies upon the universities to help them develop their managerial personnel. HOw does a university help to deveIOp them? Surely there are many ways, as, for instance: a. Re-education - An individual who has been schooled in the arts and skills of management cannot possibly retain all he has learned, so refresher courses are needed. b. Continuing education - An individual is never totally trained and can always further his knowledge by being introduced to new subject matter. c. To keep abreast with the changing management philosophy - An individual should keep abreast with current thinking and should be made aware of changes which may affect his basic philosophy. d. Association with other business executives - Mere presence brings an individual into contact with executives from other businesses, which results in an interchange of ideas. Included in section "b" on continuing education, is the concept of trying to develOp the "whole" man. The Bell Telephone Company of 18 Pennsylvania has established, at the University of Pennsylvania, an Institute of Humanistic Studies for Executives, which is a very good exaple of this concept. The curricula of the Institute includes 10 different courses which are specifically designed for the program: Practical Logic, History and Aesthetics of Music, World Art, Literature, Ethics, History and Meaning of Science, Political Science and International Relations, and American Civilization. Classroom work covers 550 hours a year and includes extensive reading as well as preparation of special reports on tOpics assigned (to individual students.6 The approach used by the Bell Telephone Company is looked upon as a total educational experience, in which association with each other, and the advantages of the rich cultural resources of Philadelphia, play an important part. Attendance at outside acitvities are related to the curriculum and specific courses. Philadelphia Orchestra concerts are experiences in music; the opening of the annual exhibit at the Pennsylvania Institute of Fine Arts is related to World Art; and the spring meeting of the American Acadelv of Political and Social Science is as related to politics as the United Nations is to world peace. This program is described to provide the reader with a better under- standing of what management development encompasses. Harvard University conducted a survey of all universities and colleges sponsoring executive development programs. This survey was conducted to 65. Digby Batzell, "Bell Telephone's Experiment in Education," ngr's, (March. 1955), pp. 73-77. 19 show the individual participant's reaction to such programs. Thirty-nine universities and colleges have had 10,290 participants in.their programs since the start of the program.at Harvard in 19h3. (Table II) Harvard leads all the other universities and colleges in the total number of participants. Since Harvard is the leader in this pro- cedure the university was contacted for specific information about its program. _Harvard conducts two schools in management development. One is called WManagement Development", and is conducted at the Harvard Business School. The other is the "Advanced.Management Program", and is conducted by the Graduate School of Business Administration. Both of the programs were started in the same year, but the Advanced Management Program has had a better attendance. Attendance through the 39th session, pnding in May, 1961, has exceeded 5,000,(7) while attendance of the other program has been approximately'2,700. Let us take a look at the Advanced.Manage- ment Program at Harvard. , Classes are limited to approximately 1140 students. Companies normally'are restricted to one applicant for each session. This appli- cant must be between the ages of 36-50 and either must occupy a tap- management position or have demonstrated clearly a potential for a tap- management position. The program fee for the 13 - week course is $2,750,which includes 7Pamphlet announcing the hOth and hlst sessions of the Advanced.Manage- ment Program at Harvard University Graduate School of Business Adminis- tration. List of Colleges and Universities offering 20 TABLE II Management Development Courses Length Year in Total College or University Founded Weeks Attendance G '1 9-13 weeks Harvard UHversIty 191:3 13 2,707 Massachusetts Institute of Technology 1956 10 101 Cunegie Institute of Technology 1951: 9 129 G II 8 weeks far—tee. ns itute of— Technology 1956 8 129 Pittsburgh, University of 19149 8 921 Stanford University 1952 8 310 «Grou III 6 weeks We as. 1952 a 1.27 Columbia University 1952 6 609 Cornell University 1953 6 2014 Hawaii, University of 195).: 6 210 Houston, University of 1953 6 229 Indiana University 1951 6 271 Southern, California, University of 1952 6 78 Washington, University of 1952 6 1b).; Grorup IV h-E weeks an 0 er c 001 19514 5 206 Colorado, University of 1958 h 18 Georgia, University of 1953 l: 132 Illinois, University of 1957 h 17 Kansas, University of 1955 5 7O McGill University 1951 h S 8 MichiganState University 1955 h 67 Michigan, University of 19% h 192 North Carolina, University of 195 3 5 lhh Northwestern University 1951 h 619 Ohio State University 1955 b 89 Ohio University 1955 h 100 Oklahaua, University of 1957 5 1:8 Pennsylvania State University 1956 h 163 21 TABLE II (Continued) Length Year in Total College or University Founded weeks Attendance Group IV' h-5 weeks Tbxas, University of 1955 5 95 ‘Hestern Ontario, University of l9h9 5 881 Gr V 2-3 weeks §E§¥§IO, UniversIty of 1953 101 3 California, University of Los Angeles 1958 3 38 Oklahoma State University- 195k 3 63 Oregon, University of 1958 3 18 Pennsylvania, University of 1950 2 279 Richmond, University of 1955 3 10h Texas A&M College 1952 3 162 Utah, University of 1957 2 53 ‘Washington University l95h 2 115 Total 10,290 Source: Harvard Business Review, "Reaction to University Development Programs", (May-June, 1961) pp. 116 8: 1314. Title and caption over last column are that of the writer. tuition, all books and materials, medical and other fees, and room rent. Sponsors assume the responsibility for tuition, expense, and continuation of salary during the program. This indicates some industries spend a considerable amount of money on individual development of their managers, through university programs. The program.places great emphasis upon the responsibilities of business management, not only in the economic field, but also in the po- litical and social areas covering (1) competence in the management of 22 business activity, (2) develoment and application of social skills so as to nabs the business enterprise a good society, and (3) the willing- ness to participate constructively in the broadening affairs of the com- mity and nation. The formal study program is divided about equally among the follow- ing subjects:8 Administrative Practices Cost and Pinamial Administration Problems in Labor Relations Business and the World Society Harketing Administration Business Policy Undoubtedly, all other programs have been patterned somewhat after that of the Advanced Managmeent Progran at Harvard. The information on this propel will enlighten the reader as to what takes place in such programs. It is assumed that all ccmipanies pay a student's salary, tuition, and expenses to am university program attended. Together with the cost of maintaining an in-ccnpany developent progam, companies spend a ,con- siderable amount of money on managelent development . Half of the cm- panies interviewed by Dan's Review and Modern Industry spend $35,000 a year or more.9 One of the questions asked the participants of these programs was if they preferred university to company sponsored programs. Seventy-two per cent of the individuals answering this question preferred universities. (Table III) This indicates the tremendous part colleges and universities play in developing managerial personnel for industry. 31pm. 9The Presidents Panel, op. cit. 23 TABLE III Did the Men Prefer.'University or Company/ Association Sponsorship of Future Programs? University Company/Association No Preference Group Number Per Cent Number Per Cent Number Per Cent 1 1196 75% 203 13% 193 12% II 568 72 129 16 95 12 III 863 70 225 18 11:3 12 IV 1065 73 206 1).; 196 13 v 290 65 8h 19 7o 16 All. 3982 72 8117 15 697 13 Source: Harvard Business Review, (May-June, 1961), p. 127. The results of the Harvard study led the university to make the following statuent: "Our findings duonstrate - to an extent making exhaustive inquiry unnecessary again - that the pragmatic, serious, and experienced group of executives who have attended broad coverage university development courses have found them valuable." 10 INDIVIDUAL APPRAISAL The cements made by a top executive in a leading company exemplify how individual development helps industry. Mr. Philip B. Hofmann, vice chairman of the board of Johnson 8: Johnson states: "Our fabulous growth is, by and large, the result of the dynamic leadership of the industrial coulunity - a leadership 10Kenneth R. Andrews, "Reaction to University DevelOpment Programs" , Harvard Business Review, (May-June, 1961), p. 1311. 211 that has come to express itself in efforts to improve people at all levels of our business operations. Most good managements strive to improve continually their own performance and the per- formance of all who work with them. Today it is recognised that growth of the individual maebers of an organisation leads to compaw progress and prosperity."11 swim The statistical data presented by the studies of the American Kane‘s-eat Association, Dun's Review and Modern Industry, and Harvard Business Review, indicates, despite the pros and cons of management development, that industry definitely favors management development. Seventy per cent of American Corporations have leadership and develop- ment programs. The majority of the 106 leading industrial corporations are still solidly sold on management develonent. These facts, plus industries' utilisations of university sponsored developsent programs, are strong indications that management development definitely is accepted by industry. : uFreeston a Plenty, op. cit., p. v. CHAPTER IV RECRUITMENT BY I-DSPITAIS Discussion of this phase of management deve10pment is necessary because personnel to be developed should possess basic qualifications and abilities. If the group to be developed is found to be lacking in these qualifications and abilities, there would be no value in attempt- ing to develop them managerially; it then would be necessary to recruit for talent. A method of measuring managerial ability must be initiated to determine whether or not recruitment is necessary. Recruitment of technically trained individuals is not the subject of this chapter. It is the non-technical managerial person who is to be scrutinized. A technically trained individual is selected primarily for his specialised ability; his development managerially is of lesser importance. MANAGEMENT AUDIT The purpose of this audit is to determine if managerial personnel mubers are qualified for their positions and to recognize individuals with managerial potential. The results of this audit will determine the weahesses of managerial personnel which will, in turn, determine if recrui‘hent should take place. A management audit consists of: l. A review of the individuals performance as compared against established goals and standards. 2. A review of his qualifications in terms of education, experience, and personal characteristics, for his current job and for jobs to which 25 26 he may be praaoted or transferred. 3. A determination of any areas of weakness which require strength- ening to meet the requirunents of the man's present job or of other jobs for thich he is under consideration.1 A list, or organizational chart, is made of managerial positions considered important for the proper business operation of a hospital. These positions would be possibly the: Administrator Assistant Administrators Business Manager Comptroller or Chief Accountant Credit Manager Personnel Manager Purchasing Agent The size of a hospital will determine how many positions to consider. The above list would apply to a hospital with over 200 beds. Assistants to sac of these positions and other individuals with managerial potential should also be considered. A personal file is accumulated for each of these individuals. Management specifications are prepared for each position; specifications pertaining to education, experience, and personal characteristics. For exuple, specifications for the position of hospital administrator would be: Educational: Master's degree in Hospital Administration or Business Administration. Experience: Minimum of three years experience as administrator, assistant administrator or department he ad. Such ex- perience with any other organization also will be con- sidered. lCarl Heyel, A rais Executive Performance (New York : American Management Assoc at on, 1 , pp. 8: . 27 Personal Characteristics: Ability to plan, organize, control, co-ordinate, and direct Interest in self-deve10pment Ability to delegate authority Attention to costs (This list could be very lengthy and will differ with each position. Individual hospital requirements probably also would differ.) . . After specifications are drawn for all positions, a review or audit is made of each individual against established goals and standards. If a person does not meet all the requirements, attempts should be made to strengthen his weaknesses. This is accomplished by coaching by his im- mediate supervisors and a formal managauent developnent program, if one exists. When this audit again is taken, attention is given to those individuals who did not meet the requirements to discover if they have improved. If the strengthening of an individual's weaknesses is virtu- ally an impossibility, it then would be wise to recruit for a replace- ment. Possibly this replacement cm 1d be found within the hospital; if not, recruitment should be accomplished through outside sources. Perhaps the individual being replaced would be qualified for some other position within the hospital; if not, there is no reason why he should be retained as an employee. This is one step in striving for the sought objective of having the most qualified individual in each position. This audit should be taken yearly and by that level of management which is one step above the level being audited. For example, the hospi- tal administrator would be audited by the board of trustees, the assistant administrators and the department heads by the administrator, and the 28 assistant department heads by the department heads . Results of such managerial audits have not been obtained and it is doubtful if many hospitals utilise them. This writer has yet to read an article in any hospital journal on the subject, and feels that if such audits were conducted they would reveal many managerial personnel not meetingthe requirements. There could be many reasons as to why this condition exists. Salaries offered to managerial personnel are not cmpetitive and hospitals have the tendency, as many corporations do, to retain mediocrity. Many of these individuals are possibly persons more interested in devotion to mankind than monetary return. It is fine to have this type of person, but devotion alone is not a sufficient criterion to warrant a managerial position. "The company that does not have sufficient potential is not firing enough people. In some companies, if a man does not rape the stenographers 05 rob the till, he is kept on, although he should be let loose." The hospitals my defend themselves against this accusation by replying that even though their managerial personnel do not measure up to specifications, their years of experience in such a technical setting compensate for weakriesses. True, experience is a fine teacher - if gained in the proper setting. If not, as Thomas Nelson states: "Experience in a variety of technical specializations does not guarantee that a man will learn to plan, organize, motivate, coordinate and control. . . .Experience doesn't necessarily edu- ‘cate. Experience is usually over-rated as a teacher. Mere ex- perience is one of the slowest ways lmown to change behavior. . . aAnon", What Makes an Executive? (New York: Columbia University Press, 1955): Pm. 29 Finally, often - much too often - experience teaches the old, the out-of-date, the wrong ways of behavior rather than the newer or better ways."3 COLLIER REERUIMENT This type of recruitment would be the most effective means in establishing a core of managerial competency within the hospital. Hospitals have difficulties in attracting individuals from other industries who have proven themselves as managers, because salaries offered, in most )4 cases, are non-competitive. Hospitals are doing ease recruiting to fill managerial positions, but. the question is, "Are they doing enough?" Their main source of re- cruitment is through universities with a program in hospital adminis- tration. Letters of inquiry to universities with such schools (nine of thirteen responded) revealed: 1. All the universities with a program in hospital administration, with the exception of Washington University in St. Louis, Missouri, are swuped with applications for admission and must turn away many each year. 2. Most students are present because of self-interest. Very few students are reimbursed for their education by hospitals. (This indicates that hospitals spend little money on this phase of management developent.) Schools of Hospital Administration presently graduate approximately 200 students yearly, and in the past two decades have graduated more than 1,000 students. wv 3Thomas R. Nelson, "Opportunities in the '60's' for Management Develop- ment, "Advanced Hana ment,(Hay, 1960), p. 25. nterview with Carl Thielman, Administrative Assistant, Toledo Hospital, Toledo, Ohio, May 10, 1961. 30 This certainly is not an abundant amount considering that this program.has been in existence since its formal inception at the Uni- versity of Chicago in.193h. According to Doctor Charles LeTourneau there is a definite shortage of academically trained administrators. Table IV indicates the number of administrators, Doctor LeTourneau feels are needed.by hospitals. Although this need probably only exists on paper, it represents the fact that recruitment is needed desperately. (Hospitals nmy'argue that dais need does not exist.) If these trained administrators were to sift into all managerial positions considered important for the proper business Operation of a hospital, the need would be much greater than that shown by Dr. LeTourneau. TABLE IV Need For Trained Administrators According to Size of Hospital Number of Total Total No. of Total Administrators Beds Hbspitals Administrators Needed 25-99 3187 X 1 - 3187 100-199 1278 X 2 . 2556 200-299 555 x 3 - 1665 BOO-h99 hlh X h a 1656 500 + 537 X 5 - 2685 TOTAL 5971 11,719 Source: -har es LeTourneau, Hosp tal Administration Review, (North- ‘Hestern'University, Autumn, 1957). p. 15. 31 It is obvious that schools of hospital administration cannot fill this need shown by Doctor LeTourneau. Are hospitals going to other colleges and universities to compensate for this shortage? A brief sampling indicates that they are not. Surely some hospitals are recruiting for managerial personnel, but to contact the great number necessary for a valid sample would have been an extremely tedious task. Instead, four universities were contacted to determine whether or not hospitals were coming to them to recruit for managerial talent. These universities were selected because they do not have a program in hospi- tal administration. ‘Michigan State had such a program, but on a very small scale. The results of these contacts were: Number of Hospital Interviews In 1950 In 1960 Michigan State University 0 1 Ohio State University 0 0 Toledo University no record 0 University of Wisconsin 0 0 I'DSPITALS VS INDUSTRY Hospitals must compete with other industries if they wish to upgrade their mmnagement level. Brief sampling points out they are not doing so. Doctor Morris Kresger, former director of Michael Reese Hospital in Chicago, feels that salaries are below what industry pays and that it is difficult for hospitals to compete with industry.5 Michigan State'University revealed that while hospitals were doing SLucy Freeman, Hospital in Action, (Chicago: Rand.McNally'& Company, 1956) 9 P0 20h. 32 practically no recruiting, approximately 100 industrial concerns con- ducted interviews in 1950 and 7M; interviewed in 1960. Ohio State University, which Operates decentralized placement facilities, revealed that in its College of Comerce ani Administration 180 interviews were conducted between July 1, 1950, and June 30, 1951 and 373 between July 1, 1959, and June 30, 1960. Ohio State mentioned receiving requests from hospitals to recommend alumni or students for specific jobs. This method sens to be ineffective and inexpensive. It is a weak means of recruit- ment. Salaries offered to managerial personnel within hospitals do not compete with salaries paid by other industries. There may be some except- ions to this assumption, but these exceptions are few. In 1961, the Toledo Hospital Council conducted a wage survey of most of the positions ousting in a hospital. Twanty-three hospitals participated, but most did not furnish all the information requested. The reasons for failure to respond are not known, but it is suspected that hospitals possibly re- gard this information as secret and confidential. They compete with other hospitals for the same personnel. For data pertaining to this study, only eight of the 23 reporting hospitals, furnished information. Below is a list of average monthly starting salaries for the follow- ing positions as reported by the Toledo Hospital Council Wage Survey. Chief Accountant or Comptroller $1402 Business Manager or Office Supervisor 38h Personnel Director 36? Purchasing Agent 358 Credit Manager 3514 33 Further analysis of industrial recruitment will reveal the gap which exists between hospitals and industry. A survey conducted by Frank Endicott, Placement Director at Northwestern University, indi- cated the trends of other business and industrial concerns in employing college and.university graduates. Reports are from 210 well-known business and industrial concerns located in 2h states. There was an average of hS college contacts per company. All but a few are large or mediumpsized corporations. Table V indicates the number of college men hired in 1960 and the number desired in 1961 in specified fields. 0f extreme interest are the salaries paid individuals just out of college. The average starting salaries for specified fields and the number of companies reporting (in parenthesis) are: Accounting (13h) $h58 Sales (100) 1451 General Business Trainees (119) h39 These salaries range from.$37.00 to $10h.00 more than salaries offered.by reporting hospitals. The shocking point, however, is that these individuals, drawing a larger salary, are just out of college and not in positions such as those occupied by personnel from reporting hospitals. These figures are a sure indication that hospitals are not carpeting with other business and industry in recruitment of , or salaries offered to, college graduates. (Again it should be noted that the writer is speaking of the majority'of hospitals and not all.) Juvenal L. Angel, in a publication entitled, Careers in Hospital Administration, supports the assumption that hospitals are not competing 3h TABLE V hployment of Inexperienced College Men in 1960 and Quotas for 1961, As Reported By 202 Companies $292 .129 No. of No. of No. of No. of 2323-3 Companies Men Hired Companies Men Desired Accounting 113 1655 109 1619 Advertising 2).; 165 18 11:8 Economics 32 88 15 68 Finance 26 111; 23 10h General Business Trainees 8h 23?? 79 22M. Market Research 28 S6 21 50 Marketing 25 236 22 2h? Merchandising 11 1:39 11 h89 Office Management 10 69 8 65 Personnel 37 132 29 89 Production Management 39 1105 3h M9 Sales . 78 23h? 73 2210 Time and Motion Study 15 5h 11; 28 TOTAL 522 8137 166 7810 Source: Frank S. Endicott, Trends intfihuployment of College and University Graduates in Business and Industry, (Northwestern University: 1961f, p. 2 35 with industry by stating: "The Controller's salary is probably the only one in the hospital organization which must meet competition of private industry, because a well trained and able controller is always in demand."6 The salary of the Hospital Administrator surely does not meet the cmpetition offered by industry. Comparison is made between tte median salaries paid the three highest salaried executives in major business and industry groups (Table VI) and the salaries paid graduates of the University of Minnesota's and Northwestern's programs in hospital ad- ministration. Ithe University of Minnesota, in a survey of its graduates, found that the~median salary of all its graduates now in hospital work as administrators, assistant abinistrators, administrative assistants, and deparhent heads was $8,500.7 Salary brackets of 1155 graduates of Northwestern University' s School of Hospital Administration are as follows:8 Under $5000 - ’4 $5000 to $10,000 - 193 $10,000 to $15,000 - 168 $15,000 to $20,000 - 61; $20,000 and over - 26 6Juvenal L. Angel, Careers in Hospital Achninistration, (New York: World Trade Academy Pross,Tnc., 19557, p. 20. 7John A. Lapp, Careers in Ho ital Hana ement and Administration, (Chicago: The Institute of fisearch, 15595, p. 19. 8Eva H. Erickson, (ed), Northwestern Alumni Newsletter, (May, 1961). 0f the 69h graduates of the program at Northwestern through 1960, 36 h23 occupy the following positions: Administrator Assistant Administrator Administrative Assistant Department Heads TABLE VI 239 129 35 20 Median Compensation Earned in 1959 By Three Highest Paid Executives in Major Business and Industry * Industgz. Retail Trade Ifianufacturing Finance ' Rail and Air Transportation Gas and Electric Utilities Mining Highest Paid $93,000 $92,000 $75,000 $75,000 $68,000 $63,000 Second Highest $70,000 $6h.000 $h35000 $h3,000 $h5.000 $hh,000 Third Highest $60,000 $529000 $35,000 $37,000 $33,000 $39,000 *Survey includes 999 companies, all of whom are listed on the New Ibrk Stock Exchange. Source: Policy, No. 179, p. 6. For those who do not see any correlation between the comparisons, a further explanation is justifiable. 0f the 999 reporting companies of National Industrial Conference Board, Studies in Personnel 37 business and industry, approximately 39 had annual sales of less than $10 million dollars and approximately 500 had sales between $10 million and $119 million. Approximately 181 hospitals have patient incane of between $5 million and $10 million and hundreds have incomes of between $1 million and $5 million. There are approximately to hospitals with patient income in excess of $10 million.9 Hospital endowments are not included in the above mentioned figures. This information indicates that there are many hospitals which have incomes comparable to those received by major industry and business. Although most hospitals are non-profit organizations and the in- dustries with which they are compared are strictly profit making organi- sations, many hospitals can be classified as "big Business". It takes just as much ability to manage a hospital as it does to run any other business or industry. The fact that hospitals provide a service for the calmunity and, in some cases, have been built by the canmunity, should have no bearing on limiting a hospital executive's salary. The finest materials are used to construct most hospitals and the most competent individuals also should be used to manage them. Monetary remuneration is one of the necessary factors in attracting competent managers. Doctor Morris Kresger implies that it is douth if hospitals can raise their executive's salary to meet the competition of other industry."LO Efforts should be made though, to close the wide gap which now exists. 9Hos itals, "Guide Issue," Survey conducted of statistics of listed HBESltEIEI (August 1, 1960). loIaucy Freeman, op. cit. 38 Exactly what criteria are necessary for hospital executives to command a higher salary is not certain, but the size of a hospital and the gross amount of annual income should be of major importance. Would not this rise in salaries cause hospitals to increase costs to patients? This is a question, which undoubtedly many persons would ask. It is hoped that this writer's answer to this question justifies the supposition that a salary increase is needed. It is questionable just what lures an individual into any given profession. Awareness of a profession at an early age is probably one factor; status of the profession is another, and, surely lucrativeness of the profession ranks high amongst the factors. Publicity of a pro- fession or field is needed, but the reputation of this profession must go hand and hand with publicity. In other words, even though the hospital field would be well publicized, if it is known as a low paying field, it will not attract the caliber of person needed to raise the level of managerial competence. If the lucrativeness of the field compares with other businesses and industry groups the individuals possessing managerial ability would be attracted to the field just as they would be attracted to any other field. The increase of costs to the patient would be negligible. Through more competent management, costs would possibly be lowered instead of raised. A more effective utilization of personnel and equipment, which is presently direly needed within the hospitals, would result. With application of up-to—date management principles and techniques, manage- ment is sure to compensate for the $30,000 to $50,000 increase in salaries. 39 VAIHE OF A COLLEGE EDUCATION College recruitment is emphasized because this is the most effective means of attracting the large number of potential managers needed. It is difficult to attract proven individuals into the field. The business and industries for which they now work would be hesitant in teminating the mloyment of a competent manager. Even though college recruitment is stressed it should be known that there are new successful men without much formal education. Eaployees already within the hospital may make good managers, but it is difficult to discover such men. If they have the initiative, their presence will be made known through exhibited drive, ability, and intelligence. Education is one quick means of preliminary screening and because there are so many college degrees, it takes an advanced degree to really stand out.11 Prank Pace Jr., former Secretary of the Army, Detlev Bronk, Presi- dent of the Rockerfeller Institute, and George C0ppers , President of the National Biscuit Compazv, members of thy Round Table discussing the value of a college education, agreed with other members, that a college degree provides an initial point of division between those more trained and those less trained; those better motivated and those less motivated; those with more social emerience and those with less.12 They also stated: "We do not look for the campus big shots, but to those who have tried to support themiglves or do something similar while they went through college . 11What Makes and Executive?, 22. cit., pp.39 & 1:5. 121b1d, p. 6b. 131.222. p. 1:3. ho Joseph Dean Edwards has this to say concerning the value Of a college degree: "The possession of a college degree is considered in many companies virtualiz'a.must for holders of middle or top-level management jobs . " To sum.up expert Opinion on the value of a college education, Doctor Adrian McDonough's statements are used. "The broadest type of information coming to the individual is that associated with his formal education. . . . . . All experience and further education builds upon this core of know- ledge stored in the mind of the individual. The individual' actions are guided by his particular educational exposure."lg OTm RESRUITMENT Other forms of recruitment media used by hospitals are not con- sidered important and will be mentioned only'briefly. Some recruitment is done through medical employment agencies, such as the Woodward Medi- cal Personnel Bureau in Chicago. The effectiveness of this method is questionable. It is doubtful if new talent is attracted into the field by this method. This seems to be more of a re-locating device than a recruitment one. Local and State Employment agencies and newspaper ad- vertisements are other forms of recruitment media. Ott and.Forni, one of the leading employment agencies in the Toledo, Ohio, area stated hospitals seldom call upon them for managerial personnel, but when they do, the only potential employee they look for is the hospital adminis— trator. SUMMARY Brief sampling indicates that hospitals are not doing enough lhEdwards, gp. cit., p. 150 15Adrian.M.'McDonough, "Information - Raw Material for the Supervisor," Hospitals, (July 16, 1957). pp. 55-56. bl recruiting of managerial personnel. It is not known where most hospitals have acquired their existing managerial personnel, but it is known that hospitals with which this investigator has acne in contact have few managerial personnel who possess a college degree. To test the competency of their present managers, hospitals should conduct magmt audits. The results of these audits should determine how much recruitment is necessary. The most logical place to recruit the supposedly large number of managerial personnel needed, is through colleges and universities. It is one expert's opinion that approximately 6,000 acaduically trained administrators, alone, are needed. To obtain the great numbers needed, hospitals must compete with other business and industry for their share of the college graduates who possess managerial potential. In order for them to cmpete, hospitals should conduct formal interviews at colleges and universities, and raise starting salaries to compete with salaries offered by other businesses and industries. Surveys similar to that conducted by Frank Endicott may serve as a guide to determine how much competitors are paying to attract college graduates. College recruitment is emphasized because of other business and industrial utilisation of this method of recruitment. . "Business places considerable reliance on colleges and universities, not only for the initial education and training of its executive personnel, but also for further training after they begin to advance.“-6 16What makes and Executive?, gp.cit., p. 160. CHAPTER V I-DSPITALS' UTILIZATION OF MANAGEMENT DEVELOPMENT What are hospitals doing to develop managerial personnel? This is a difficult question to determine because of the great number of hospi- tals and their geographical locations. Comparatively little information was Obtained through reading hospital literature. Contact with the American Hospital Association revealed that manage- ment development-within hospitals is solely up to the individual hospi- tal. Undoubtedly, there are some hospitals who are very active in this area, but information about their programs has not been published in periodicals with nationwide coverage. Certainly recruitment and select- ion of personnel into the managerial ranks takes place in all hospitals but their methods of carrying out these phases of management deve10pment are questionable as far as effectiveness is concerned. During the past few decades, there has been a vast growth in hospi- tals, both in.the number Of such institutions and in their size and added facilities. The concepts of modern.management and business prac- tices have not kept pace with this rapid growth.1 Competent management seems to be one of the essential ingredients missing within our hospital systems. This is an assumption the writer is using to develop this topic. DeveIOpment of managerial personnel through continuing education is the tapic of discussion in this chapter. The chapter will establish the accusation that hospitals are not doing enough to develop good managers. 1David P. Mayer, "A.Manpower Development Program Guide" (unpublished Magt3r's dissertation, Institute of Business Services, Xavier University, 19 9 , p. 6. h2 h3 IN-HDSPITAL EDUCATION Managerial courses Offered within the confines of a hospital, circulation of magazines and books on.management, and recommended reading lists, are methods that can be utilized by hospitals for pur- poses of management development. Surely most hospitals do circulate ‘magazines among their departments, but this contributes little when compared to all that is needed in deveIOping managers. Of primary importance are the formal management development courses conducted within hospitals. Other industries place great importance on an activity of this nature and there is no reason why hospitals should not do the same. This is the ideal place for the dominant personality within a hospital, (mentioned in Chapter 2) to mold his staff into a competent managerial team. The type of material to be presented in a program is entirely up to the individual hospital. Needs within each hospital are certain to vary and problems in one hospital are not necessarily problems in another. Material presented in industrial management deve10pment programs could be applicable to hospitals. Quite an extensive list of subjects can be Offered, but beginning courses should consist Of material on management principles and functions. The State of Ohio's Department Of Mental Hygiene and Correction's De- velopment Program, described in pages 115 through 119, is a good example of the way in which a program should progress. The basics should be stressed so that personnel become aware Of what is expected of them as managers. COurses can.be offered indefinitely, as there is a.wea1th of information to be acquired. No person, particularly a manager ever should stOp hh learning. By analyzing the weaknesses of the managerial staff,- common errors can be discovered and methods should be initiated to help strengthen these wealmesses. If there comes a time when it is thought all has been covered that possibly can be covered, courses previously given can be repeated as refresher courses. The exact number of hospitals having management develomnt pro- gress is not known. There) seems to be quite a bit of activity in super- visory developent, in which managerial personnel sometimes participate 3 but programs devised specifically for top management seal to be practi- cally non-existent. A few hospitals which have management developent progrns are Altoona Hospital in Altoona, Pennsylvania 3 Baptist Hospital in Pensa- cola, Ilorida; and the State of Ohio's Mental Hospitals. Each program will be described briefly. Tap management did participate in the training program at Altoona Hospital, but the program seemed to be designed with the supervisor in mind. They do not separate managerial from supervisory personnel. Many favorable results were noticed after this training program and the sub- jects included: _ Organisation stucw Work distribution analysis Methods improvement Work simplification Flaming Coordinating and controlling work Instructing new workers Disciplining Problem solving 2 Supervisory responsibilities 23d. O'Meara, "These Supervisors Have Learned How to Think", The Modern Ho ital, January, 1957. p. 82. I45 The only criticism which can be leveled against this program is that it was of short term duration instead of being set up as a con- tinuous project. Pat H. Groner, administrator of Baptist Hospital, Pensacola, Florida, in a speech at the American Hospital Association meeting in 1961, en— titled "Talce a Tip from Industry" , acknowledged the help of industrial techniques in a training program for department heads at his hospital. His program has utilised the services of a consulting firm in the field of management developent . A probing evaluation of all department he ads preceded the training program for them, in order to suit the training program to their specific and individual needs. In addition to training conducted in the hospital, the program included institutes and university courses for the trainees.3 The program at this hospital exemplifies how an individual hospital utilises. industrial techniques to fit the needs for developnent of its managerial personnel . The State of Ohio's Department of Mental Hygiene and Correction set up its training program with both the supervisor and manager in mind. Through studies, the department discovered that many of its supervisors and managers, were qualified to carry out the technical side of their Jobs, but they were found lacldng in the non-technical managerial side. This non-technical managerial side consists of areas such as management functions, comunications, htnean relationships, leadership, and scientific management.h 3Anon, "The 1961 Annual Meeting in Review", Hospitals, October 1, 1961, p. 69. 1’Lynn R. Timons, "The Need, Information pertaining to the Department of Mental Hygiene and Corrections' Training Program, 1960. h6 Because of this investigator's familiarity with this program, it will be a tapic of further discussion. Management and Supervisory Training is a segment of the training policy spelled out by the Department of Mental Hygiene and Correction in its Department Directive Number 66. The key objectives for this department's training of management and supervisory personnel are: 1. To promote a better understanding of management principles and functions, as they relate to institutional.management. 2. To sharpen leadership skills and to improve capacities of self-expression. 3. To drive home the need for, and the understanding of, team- work and the responsibilities of each manager and supervisor as a.member of the team. h. To promote a greater understanding of human relationships as they apply to good management. The Directive further states: "To carry out the training Objectives, certain procedures will be necessary." 1. All training shall be under the direction of a Unit Training Officer, appointed by the Institution Superintendent, (top- official within a hospital) who will conduct the programs in the name of the Superintendent and in c00peration with the depart- ment training staff. 2. Management and supervisory personnel shall be given sufficient training through group conferences to enable them to carry out h? their responsibilities adequately. 3. All training shall be conducted in accordance with written job descriptions, outlines, course procedures, handbooks, or manuals as recommended‘by the training staff. To carry out the policies and procedures set forth in Directive 66, unit training officers were appointed.by each institution and they attended a pilot program conducted by the departmental training staff. This pilot program defined procedures by which unit training officers were to conduct their'programs. This program, as explained thus far, may sound as though it were extremely autocratic. Actually it is not so in every aspect. In a department as large as that of the Department of.Menta1 Hygiene and Correction (h9 institutions), central.authority is necessary. Provisions were made to enable institutions to resolve any problems encountered in their training program by bringing them to the attention of the members of the department training staff, and together they would try to come up with a solution. Upon completing certain sessions of pilot programs within each institution, evaluation reports were submitted to the departmental training officer. This means was devised as a method of determination of the progress of the program. Since the program's inception in May, 1960, the following material has been presented by institutions: I. A look at the manager's 36b A. The technical knowledge a person is assumed to possess. B. 148 The non-technical knowledge which a good manager needs to develop. II . Managuent principles A. B. C. D. E. F. G. What management "Is" and "Does" Controlling Coordination Direction Types of organisation Purpose and principles of organisation Planning 1. The scape of planning 2. Types of plans 3 . The "How" of planning III. ConeIIunications A. B. C. D. E. F. Introduction to coeeuunications Camunications in management The ABC ' s of good coemmications The "C" qualities of written cmnication Oral presentations The conference method IV. The use of role-plaing This training progrmn conducted by the Department of Mental Hygiene and Correction should set an exaple for other hospitals as to the feaeibility of such a program. This certainly is not a thorough program in menagnent developmt, but it does have extremely high merits, for the in-hospital education phase of management development. The writer's h9 concept of a thorough program will be presented in the next chapter. The Departmental Training Program has been in effect for approxi- mately one year and thus far noticeable results have not been obtained. Results are expected to be forthcoming shortly, as the program has been established on a continuous basis. There is one criticism of this program, which should be mentioned. It is questionable whether supervisory and managerial personnel should be trained together. These two groups are bound to differ in educational background and experience, which is sure to hamper training conditions. A supervisor with a limited educational background, in most cases, will not understand the basics which a group of this sort is assumed to possess. This will result either in slowing down the progress of the group, or in confusing those who do not understand and are afraid to admit their lack of knowledge. It is this writer's opinion that members of tap manage- ment should be subject to more intense training than their subordinates - the supervisors. Another'means of in-hospital education is the residency program required by schools of hospital administration. This residency familiar- ises individuals with the problems involved in hospital administration and, if gained in the proper setting, it is a valuable means of educating. On-the-Job training is also a means of development and it can be valuable if the person doing the training is qualified to do so. Job rotation fits hand in hand with this'type of training. Although management development does not seem to be an integral part of the hospital industry, same concept of the magnitude of the educational assignment of hospitals can be seen when they'are compared 50 with the other institutions of higher learning in this country. During the past year, there were approximately 295» million full-time students enrolled in all colleges and universities in the United States. At the same time, approxtmately unequarter million full-time students were in formal educational programs in American hospitals. The net educational cost to the hospitals for all students can be estimated safely to exceed $200 million annually.5 This is a considerable amount of money, and if the money spent on ‘management deve10pment in all hospitals were to be added to this amount, it hardly would be noticeable. Surely hospitals must spend money to train technical personnel, but why must they neglect management develop- ment? This should.play as important a role in the educational assignment of the hospital as the technical training offered. The quality of patient care and competency of the business operation of a hospital are dependent on each other. The ability of the institution to render the best possible patient care hinges upon the utilization of available ‘money and this is a.function of the managerial staff. COMMUNITY AND UNIVERSITY EDUCATION The great number of hospitals and their geographic location again proves a handicap in conducting a valid survey. Information was gathered through reading of hospital literature and spot inquiries. It can be stated, however, that through this type of investigation, the hypothesis can be made that, generally speaking hospitals seldom utilize community SRay E. Brown, "Evaluating Hospital Administration", Hospitals, October 1, 1961, pe 156a 51 or university education to develOp managerial personnel. Known except- ions to this lupothesis will be discussed. Contact with schools of hospital administration revealed that few hospitals sponsor or pay the expenses of students. In fact, the number of students sponsored by hospitals is negligible. It should be noted, though, that State Departments of Health and Offices of the Armed Forces are frequent sponsors. Wittenberg University, in cooperation with the Ohio Hospital Associ- ation, offers yearly a hospital oriented management deve10pment program. The purpose of this program is to enable technically competent profes- sional and a Administrative Assistant at Toledo Hospital, sent notices of the clinic 8Robert F. Scates, "Educational Assistance-An Investment in People", Ho itals a, July 16, 1961, pp. 39-h0. 5h to 27 hospitals in the Northwest District of the Ohio Hospital Association. Toledo Hospital, was the only hospital represented at the clinic.9 IDSPITAL SPONSORED ACTIVITIES Figures are not available on attendance at various Hospital Associ- ation meetings, but this year's Ohio Hospital Association meeting was attended by this investigator. The meeting was well-attended. If re- sponse to all such meetings is equal to that shown at the Ohio Hospital Association meeting, hospitals are utilizing this phase of management development very well. This ’ seems to be the only type of media which is being utilized well by hospitals. While this type can be considered beneficial, it should be known that this medium, alone, will not -develop good managers. It takes much more effort than just this one activity. Local hospital" councils prove beneficial in helping to develop managers. The investigator is a non-participating member of the Toledo Hospital Council and has this opinion on the effectiveness of such a council: . It is an excellent means for interchanging of ideas and creat- ing an awareness of what is being done at other hospitals. It serves as an official liaison between member hospitals and the Ohio Hospital Associ- ation. Hospitals cooperate with one another as much as they can; but, in essence, they compete with each other for the same labor force ani for their share of patients that will enable them to Operate more efficiently. Members seem to divulge only that infomation which will not endanger their competitive abilities . 9Interview with Carl Thielman, Administrative Assistant, Toledo Hospital, Toledo, Ohio, May 10, 1961. 55 The last assumption is based upon the members' cooperation in participating in the Salary and wage Survey mentioned in Chapter h. One actually cannot blame a hospital for keeping information of a competi- tive nature from other hospitals because it possibly can do more harm than good. Larger hospitals, with more available money and better physical facilities, could make it extremely'difficult for the small hospitals. Statistics are available on the American College of Hospital Admini- nistrators meetings (Table VI). The total of the figures, representing the members' attendance of these meetings, seems impressive. Actually they are not very impressive, considering that there are approximately 7,000 hospitals in the United States. The American College of Hospital Administrators presently has approximately h,OOO members. Men and women engaged in hospital adminis- tration as a career in the United States, Canada, and other countries may request mmmbership in the College. The candidate must be in a responsi- ble position, either as the administrator, assistant administrator, ad- ministrative assistant, or in a post of comparable responsibility; (A.position where two or more departments are under his supervision.)lo Considering the number of hospitals in the United States the member- ship in this organization should be considerably higher than it is. 'Wilson Benfer, member of the Board of Regents of the College, said that the College is aware that more participation is needed by hospitals and 10Interview with Wilson Benfer, Administrator, Toledo Hospital, Member of the Board of Regents, American College of HOspital Administrators, November 7, 1961. 56 added that the College is taking steps to help increase its manbership. This College‘was established solely for members of topemanagement within hospitals. Dues to the College are rather high and this could be one of the reasons why more potential members have not applied forzmems bership.4 This reason should not exist. Either the individual hospital should assume the responsibility of paying its employees' dues, or the individual employee should be adequately compensated so that he can afford to pay the dues. In.essence the College is the ultimate in management development for the extreme tap-level managers within a hospital. A look at some of the College's bylaws under "Section 1. Program”, will indicate why. In furtherance of the objects for which the College was formed, its program shall be to: 1. Improve the efficiency of hospital administration. 2. Publish an educational journal. 3. Establish a criterion of competency for hospital administrators. h. Held an annual meeting at which topics of interest to the membership shall be presented and opportunities provided for discussion by the membership of subjects relating to hospital administration and furtherance of the education of hospital administrators. 5. Provide, through the conferring of Fellowships, for recog- nition of individuals who have done or are doing noteworthy service in the field of hospital administration. 6. Familiarize hospital trustees and the public with the fact that the administration of hospitals necessitates the employb ment of executives who have had special training and experi- ence in hospital administration. 7. Promote the prOperdeveIOpment of professional education in ‘ hospital administration. 8. Sponsor and conduct programs of continuing education in hospi- tal administration. 57 9. Provide Opportunities for enlarging knowledge in the pro- fession Of hospital administration to individuals who desire to follow careers in this field. 10. Initiate and encourage studies and investigations in hospi- tal administration and make the results available to the membership. ll. Promote and undertake such activities as will tend to in- crease the quality of hospital administration. 12. Coordinate the activities of the College with those of related groups and professions. 13. Bring the College, its Objectives, and progr to the at- tention Of all concerned with hospital care. SUMMARY Ray_E. Brown, in his article, "Evaluating Hespital Administration", stresses the educational assignment of hospitals. ‘Without a doubt, hospitals are a key factor in educating the populace. This educational assignment is vitally needed. Throughout this study'OOmparisons have been made with other business and industries. It is fitting, therefore, to make another analogy to summarize this chapter. Harvey Schoenfield, in an article entitled, "Factors of Production in Hospital Management", compares four "Mls" necessary in the hospital Operation -- men, material, machines, and management -- with the econo- mists' four fundamental factors of production -- land, labor, capital, and enterprise.12 Labor or men are needed in any business or industry to accomplish the goals for which the respective enterprises have been created. 11"Bylaws", American College of HOspitl Administrators, Chicago, Sept- mber, 1957, Pp. 14's. 12Harvey Schoenfeld, "Factors Of Production in Hbspital Management", HiospitaliManagementz October, 1959, p. 39. .Heme .NN ooze .eeooooeeeoeeea Heeaoeom «o omeHHoo oeoaeoea .moapfifipg Hmoowpmogum mom poucmfia pqumamma. .950 .3 @0035 hp ponmwfia dogma—Luca "monsom New.ee was was mew ewe. meo.e Noe.m masses eNH.H Noe as emm ca emm coma Hem Nee me New ems com emme emm :HH mm emH gum 4H: mmmH Hem mos mam pee «mm amma oeH.H Noe am ”mm mm mom emma mam. 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