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Management in health
XIX/3/2015; pp. 20-25


Prof. Preethi PRADHAN1,

Chitkara Chandigarh University, India


The purpose of this study is to examine the relationship between human

resource practices and employee satisfaction, and to examine the impact of
both on patient satisfaction.
This study examines the mediating role of employee satisfaction on the
indirect relationship between human resource practices and patient
Data for this study was collected from employees, and patients of
secondary eye hospitals. Hierarchical regression modelling with a two-step
approach was utilized to empirically test the proposed hypotheses and the
relationships between the constructs. Findings suggest that employees
satisfaction fully mediate the relationship between six human resource
practices and patient satisfaction except employee perception of the HR
practice, team orientation.
This result has significant implication for healthcare as it strongly
demonstrates the vital role a well coordinated healthcare human resource has
in ensuring patient satisfaction.

Considerable efforts must be made by health care

organizations in developing jobs, work systems,
individual knowledge and skills and interpersonal
skills for employees to deliver safe, affordable, and
high quality patient care (Goldstein, 2003). The human factor is central to healthcare yet its proper
Keywords: patient satisfaction, human resources, India.
management has remained beyond most healthcare
This paper attempts to delve into the three concepts: huorganizations. Patients are demanding and opting, where
man resource practices, employee satisfaction and patient
there is a choice, for facilities which are patient friendly.
satisfaction and study the relationship between them parDespite, all the recent medical advancements, health care
ticularly whether employees satisfaction mediated the relaemployees remain the most vital link for ensuring
tionship between employee perception of human resource
healthcare organisations continue to provide patient fopractices and patient satisfaction.
cussed health care.
Traditionally the human resource function has been viewed
as primarily administrative, focused on the level of the
individual employee, the individual job and the individual
practice (Becker, Huselid and Ulrich, 2001) with the basic
premise that improvements in the individual employee
would automatically enhance organizational performance.
Both researchers and practitioners began to recognize the
impact of aligning HR practices with the organizational
strategy. HR has emerged as a strategic paradigm in which
individual HR functions, such as recruitment, selection,
training compensation and performance appraisal are
aligned with each other and also with the overall strategy
of the organization.
The importance of various stakeholders for delivering care
has been understood. Patients, the consumers of healthcare
are recognised to be a very critical part of the overall
healthcare system. From being mere recipients of
healthcare, today, they are in the forefront voicing their
opinion and perceptions of healthcare and demanding for
better quality care. Patient satisfaction is a critical measure
of the quality of healthcare from the patient perception.
Employees, who provide the care, their perception of satisfaction with workplace is measured through employee satisfaction. Employee satisfaction is strongly connected to
human resource practices in place in the organisation. The
employees perception of the human resource practices in
their organisation is a good measure of the reality of actual
implementation of these human resource practices.



Patients perception of care they receive at a facility

has a positive correlation with that of employees of the
facility. Organisations with patients who are likely to recommend it for care have employees who are likely to
make that same recommendation (Lindberg, Kimerlain,
2008). They also found employees who are proud to work
at a place provides excellent care that patients want to
receive. Research conducted by Press Gainey shows a
strong link between employee satisfaction and patient
satisfaction and that a failure with one is directly related
to a failure with other (Lebbin, 2007). The patient can tell
if the employee likes or hates their job. Patients need to
know we care about them and employees need to know
they are cared about as well (Lathren as told to Larson
Rondeau and Wagar (2002) found that hospitals that had
adopted more progressive
(human resource management) HRM practices reported
improved efficiency, better fiscal health, increased flexibility and greater reputation than did hospitals without
such practices. Khatri et al (2006) argue that traditional
HRM practices adversely affect medical errors and quality
of care by fomenting a culture of blame and demoralising
the workforce. Strategic HRM on the other hand improves
organizational learning and employee morale

Management in health
XIX/3/2015; pp. 20-25


that in turn boost quality of care and reduce medical errors.

A study of 61 acute care hospitals in England revealed
strong relationships between HR practices and patient mortality.

Research journals have linked poor physician satisfaction

to higher rates of patient noncompliance (DiMatteo, Sherbourne, Hays, et al. 1993) and patient dissatisfaction (Linn
et al. 1985).

The study reported that the extent and sophistication of

performance appraisal in the hospital were strongly related
to patient mortality but also that there were links with the
sophistication of training for staff and with the percentage
of staff working in teams (West et al, 2006).

On the one hand, doctors and nurses need motivational

environment for working with full involvement, and on the
other, patients, rich or poor, crave for a more sympathetic
and friendly treatment, reassuring atmosphere, and a certain degree of compassionate and caring attitude from
health care providers (Shah and Dhar 2007). These authors

The role of HR is critical in building an adaptive, learning

culture by creating right values and behaviours in
healthcare workers (Anson 2000, Vestal, Fralicxn and
Spreier 1997). Empirical studies examining the relationship between HRM and service quality are also proliferating (Gelade and Ivery 2003; Manring and Brailsford
2001). Manring and Brailsford found that encounters of
patients with employees are an important driver of perceived service quality and patient satisfaction.
Khatri 2006 in his study found that in the hospital the role
of the HR function was evolving from a hiring and firing
mentality to a hiring, training and development point of
view. Khatri also stated that hospitals need to crystallize
their strategic objectives and identify HR practices that
would support those objectives. He also opined that hospitals need to articulate values they want to infuse in employees and formulate HR practices that would achieve
those values in their employees. HR can play a critical role
in service organizations and HR in its new role is more
complex than finance or accounting (Khatri 2003).
The lack of advanced job specific skills in HR professionals in the healthcare industry is one of the major reasons
for limited change or scope of HR in healthcare organizations (Khatri et al 2006; Lawler and Mohrman 2003).
Healthcare organizations must clearly identify what employee behaviours improve service encounters with their
customers and then institute HR practices and systems that
encourage and reinforce behaviours enhancing those encounters (Goldstein 2003; West et al.2002).
Grindle 1997 characterized high performing health facilities by

A strong sense of mission and sense of commitment to

that mission by the staff.

A relatively high level of prestige and social status

accorded to those who work in the organization.

A culture oriented towards results both individually

and organizationally.
All members of the group are evaluated against performance objectives regularly and are expected both by
managers and by co-workers to pull their weight; and
the organization itself constantly evaluated its performance against external objectives and benchmarks.

Lines of feedback from the end users are open and

actively used to improve service delivery.

Shah and Dhar further state that this is particularly so because health care is basically a service that has 90 percent
human interface on and across the counter and in the process of delivery, whereas only 10 per cent is equipmentsupported human interface.
This calls for sound grasp and implementation of HRD
principles and practices (Drake 2002). The need for synchronising the professional approach of health care providers and the humanitarian interests of the recipients is being
increasingly felt (Shah and Dhar 2007). The literature also
stresses that some autonomy in personnel matters is an
essential facilitative condition for developing the organizational performance culture. A review of high performing
public organizations in developing countries found that
they enjoyed autonomy to identify positions, advertise for
candidates, establish routines for hiring people to fill positions, promote people on the basis of organizationally defined standards and priorities, and punish those who did
not meet these standards (Grindle 1997).
However, the majority of studies that have explored the
HRMperformance link
(including those in the health sector) do not claim to
demonstrate a causal association
(Guest et al, 2002; West et al, 2002). How and in what
circumstances HRM is linked to better outcomes has yet to
be elaborated. Research in the field of organisational psychology indicates that the link between HRM and performance is mediated by employee attitudes and behaviours.
That is, HR practices trigger attitudes and responses in
individuals and encourage them to behave in ways that are
consistent with the organisations overall performance
aims (West et al, 2002; Guest et al, 2002; Purcell et al,
Employee perception is commonly gauged through employee opinion surveys which are widely used for gathering and assimilating HR-related data in companies and
agencies of all sizes across the world (Kraut, 1996).


Literature had already shown that employee satisfaction and patient satisfaction were strongly correlated. Literature also revealed that human resource practices were definitely connected to employee satisfaction. The questions
then remained What is the connection between



human resource practices and patient satisfaction? How does
employee satisfaction fit in this relationship? Is it a mediating
one? To answer these questions a research study was
The objective of the study was to test the mediation effect
of employee satisfaction on employee perception of human
resource practices and patient satisfaction in a cross sectional sample of Indian eye hospitals.
This study focused on finding the relationship between
human resource practices and patient satisfaction and the
influence of employee satisfaction on this relationship.
Specifically it sought to test whether employee satisfaction
mediates the relationship between employee perception of
human resource practices and patient satisfaction.


A cross-sectional survey of eye hospital staff namely

ophthalmologists, ophthalmic assistants, and support staff
using a self-administered questionnaire was carried out in
India to measure employee satisfaction as well as employee perception of human resource practices. Patient satisfaction was also measured by a questionnaire from the cataract patients when they had been discharged from the hospital. The study was carried out in 33 secondary eye hospitals located within India.
Reliable and validated questionnaire was used.


Mediation analysis was used to test the mediation

effect of employee satisfaction in
determining the relation between human resource practices
and patient satisfaction. The
history of mediation analysis is quite long and significant
in the area of behavioral research (Alwin and Hauser,
1975; West and Wicklund, 1980). For this study, mediation analysis followed the guidelines proposed by the relevant literature in this area (Baron and Kenny, 1986;
MacKinnon, Warsi, and Dwyer, 1995). With the aim of
placing employee satisfaction as the mediator variable, the
following two conditions were taken into account:
(i) Whether the direct path from the antecedent (human
resource practices) to the consequents (patient satisfaction)
were greater than the paths under the condition of mediation
(ii) Whether the direct path from the predictors to the criteria under the mediated condition was significant?
Mediated regression was selected in particular because it
was hypothesized that the
relationship between the independent (human resource
practices) and dependent (patient satisfaction) variables in
22 this study may be mediated by a third variable

Management in health
XIX/3/2015; pp. 20-25

(employee satisfaction). It was determined by review of

previous research that perception of human resource practices may account for all or some of the relationship between the independent and dependent variables. In addition, this procedure allowed full and partial mediation to
be tested for this model. These relationships are explained
as the model is explained below.
In an intervening variable model, variable X (human resource practices) is postulated to exert an effect on an outcome variable Y (patient satisfaction) through one or more
intervening variables, sometimes called mediators
employee satisfaction (Hayes, 2009). Although there are
many methods available for testing hypotheses about intervening variable effects, the most widely-used method is
the causal steps approach popularized by Baron and Kenny (1986). This approach requires the researcher to estimate each of the paths in the model and then ascertain
whether a variable functions as a mediator by seeing if
certain statistical criteria are met (Hayes, 2009). To perform mediated hierarchical regression, each dependent
variable underwent a series of steps to determine if mediation existed and if that mediation was partial or full. Research by Hair et al. (1984), Bates and Khasawneh (2005),
and Baron and Kenny (1986) were applied.
In order to do this, the hospital was taken as the sampling
unit. The average score of the
employees within the hospital was taken for each factor in
employee satisfaction and human resource practice. The
number of employees in each hospital varied from 9 - 12.
For the patients also the average score of the patients was
taken for each factor of patient satisfaction.
The number of patients varied from 9-11.
Sobel test was also carried out to test the indirect effect of
mediation. Sobel estimates the total, direct, and indirect
effects of causal variable human resource practices on
outcome variable, patient satisfaction through a proposed
mediator variable employee satisfaction. It also calculates
the Sobel test for the indirect effect as well as a percentilebased bootstrap confidence interval for estimating the indirect effect, as described in Preacher and Hayes (2004).
Result of testing the mediation of employee satisfaction on
the relationship between
employee perception of human resource practices and patient satisfaction.
The test of mediation was done as mentioned earlier using
the steps advised by Baron and Kenny.
Medation Analysis
Employee satisfaction mediates the relationship between
employee perception of HR practices and patient satisfaction for all factors of HR practices except employee perception of the HR practice, team orientation. This has immense significance as a key area to concentrate on in the
eye hospital sector.

Management in health
XIX/3/2015; pp. 20-25


Mediation Analysis

of the
Mediated Model


Career Development



Leadership Practices








Supervisory Consideration



Pay and Benefits



Team orientation



Independent Variables

Job Design




Patient Satisfaction

**p<.01 level of significance (full mediation),

*p<.05 level of significance (partial mediation)
NS-not significant (no mediation)

The result of Sobel test offered further evidence for the full
mediating effect of employee satisfaction to the employee
perception of HR practices patient satisfaction association
for six factors of employee perception of HR practices.
However the result of the Sobel test established there was
no mediating effect of employee satisfaction to the congenial working environment patient satisfaction association.
Discussion of results of employee satisfaction mediating
the relationship between
employee perception of HR practices and patient satisfaction
The above results highlight that employee satisfaction fully
mediates the relationship between HR practices such as
career development practices, supervisory consideration,
pay and benefits, leadership management, job design and
staffing and patient satisfaction. The results also bring out
that team orientation is not mediated by employee satisfaction to influence patient satisfaction. Conversely, it means
that team orientation will directly influence patient satisfaction.
When one reflects on this result, it is apparent that the six
HR practices considered: career development practices,
supervisory consideration, pay and benefits, leadership
management, job design and staffing all relate to aspects
which the patient cannot visibly experience or understand.
23 Whereas team orientation is an HR practice which

(Full Mediation)
(Full Mediation)
(Full Mediation)
(Full Mediation)
(Full Mediation)
Partially Supported
(Partial Mediation)
Not Supported
(No Mediation)

even the patients can make a judgement on based on their

individual experience of interaction with the different staff
as well as experience of the coordination between them.
The communication between different health care professionals providing care to the patients is one that patients
can interpret to be good and well-co-ordinated or with absence of coordination between staff.
This is a very significant finding as it brings to the forefront the high value for staff in healthcare to work together
collaboratively as a team to provide better patient care.
The six other factors are related directly to the employees
well being and these six HR practices are seen to impact
the employees like behaviour of their supervisors and leadership, factors related to fairness in the policies like their
entry into the system, pay and benefits, and their involvement in job design as well their growth within the organisation. It is not possible for patients to gauge during the
patient care experience how the employees perceive these
six factors. Whether there is a team orientation is something that even the patients can perceive as they interact
with different staff for their patient care. This result is
aligned to the WHO report 2006 Working Together for
Health. Two of the four recommendations in the report
for bringing out the best in the existing health workforce
relate to ensuring they have a congenial work environment. The point related to critical support systems and
ensure lifelong learning are related to making their work
environment more conducive to do work. Research has
shown that supportive aspects of the work environment
have a positive influence on job satisfaction (Boles and
Babin, 1996).


A study of the Veterans Administration hospitals found
that the teamwork culture was positively associated with
inpatient satisfaction and the rule-based, bureaucratic culture was negatively associated with it. The positive relationship between teamwork and inpatient satisfaction was
mediated by more effective coordination and greater cohesion among employees working towards the same goal.
Similarly, a study of 283 Canadian nursing homes found
that nursing homes that had implemented more
progressive HR practices, and that reported a workplace
climate that strongly valued employee participation and
accountability, performed better on a number of clinical
outcomes. (Rondeau and Wagar, 2001).
Recent research from Press Gainey which provides health
care satisfaction measurement and improvement services
shows that the area of work experience with which health
care employees are most dissatisfied is participation. Participation is defined by employees as feelings of connectivity to the decision making process and the solicitation of
their opinion before the changes are made. Involving employees in service and quality improvement is an excellent
way to improve patient and employee satisfaction
(Lindberg, Kimerlain, 2008). This again highlighted the
important role that team orientation can play.
Khatri opined that one of the reasons for the slow development of HR in healthcare organisations maybe the clinical
culture prevalent. While clinical culture enhances patient
care by enhancing the commitment of health professional,
an unintended but powerful effect of strong clinical culture
is the perpetuation of the old industrial model resulting in
management deficit in the health care organizations.
Khatri 2006 has observed that the management approach
affects HR management practices. In the second level, HR
management practices affect employee behaviors that in
turn determine clinical outcomes. The basic management
philosophy imposing control on employees or eliciting
commitment from them affects clinical outcomes significantly. It does so in two ways: by affecting the detection
and reporting of errors (the learning effect); and by affecting the motivation, satisfaction, morale, and effort put
forth by employees (the motivational effect). In the past,
health care organizations lacked management practices and
systems and relied predominantly on the clinical culture
for delivering patient care. Most of them are moving toward more standardization, systematization, and formalization in their management systems and processes. In other
words, they are making a transition from a craft system to
the industrial model.
A professional culture enables sustained action by providing members with a similarity of approach, outlook, and
priorities. Yet these shared values, norms, and assumptions
in health care organizations have blinded health care professionals to vital management issues affecting their performance because they lie outside the bounds of their perceptions (Weick and Sutcliffe 2003). Great doctors and
nurses, not great organization or management, have been

Management in health
XIX/3/2015; pp. 20-25

seen as the means for ensuring that patients receive quality

care (Hornblow, 1997). Such a mindset sets in motion an
important organizational and psychological dynamic that
inhibits system change and creates a dysfunctional relationship between management and clinical staff.
Partly as a result of strong professional cultures, the health
care industry has lagged behind other industries in management innovations. In the last ten to fifteen years, progressive human resource practices have become commonplace in several industries. However, because of the management deficit or vacuum, there has been little progress
made in implementing strategic human resource management practices in health care organizations.


As an outcome of the findings from this study it is

imperative that one steps back and analyses how key HR
practice like teamwork which can influence patient satisfaction so much can be fostered. Teamwork can be
strengthened first by changing the curriculum to incorporate principles of teamwork into the curriculum.








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