EMPLOYEE LAYOFFS AT ST.

MARY'S HOSPITAL

Presented By:

Aniket Sharma Somya Bhatnagar Tarun Shrivastava Trapti Patiyal

Q1. IDENTIFY THE MAJOR PROBLEM OR PROBLEMS AND THEIR CAUSES ?

St. Mary's was operating with occupancy rates between 76 and 82 percent but the occupancy rate at has fallen to 57 percent due to reimbursement policies, new emphasis on outpatient services, and increasing competition. The institution was forced to operate on a deficit for the first time because till date the only reaction to the deficit has been making requirements for equipment and supply purchases more stringent. Sister Mary Josephine considered the hospital's employees as "family" and therefore find it extremely difficult to initiate the lay off process.

Was also concerned that the layoffs themselves might be costly in terms of lost Investment in some of the laid-off employees, lost efficiency, potential lawsuits, and lower morale.

Q2. WHAT ARE SOME ALTERNATIVES FOR DEALING WITH THESE PROBLEMS ? FOR EXAMPLE, IS IT POSSIBLE TO AVOID LAYOFFS THROUGH THE USE OF ATTRITION ?

Strategy plays an important role when considering downsizing decisions. The decision to implement a layoff policy is difficult because of the burden it places on workers, their families, the surrounding community, and additionally equates to the organization losing a portion of its intangible assets.

The Management must understand how the decision to downsize will affect the organization's mission and strategy will it be weakened or strengthened.

Downsizing will most likely diminish organizational capabilities to some degree. Without the workers, functions are left unoccupied and a void is created, which will have to be distributed among the remaining workers. Despite the reduction of organizational capabilities it is important to remember the downsizing was necessary to maintain a competitive advantage in the industry.

THERE ARE SOME ALTERNATIVES OF DOWNSIZING AT ST. MARY'S:

Reduction in work hours during the week. Pay cuts Telework for those performing clerical and secretarial duties.

Q3.DEVELOP A PLAN FOR IMPLEMENTING EMPLOYEE LAYOFFS OVER THE NEXT YEAR WHICH WILL GENERATE $3 MILLION IN SAVINGS ?

Sound Human Resource Management practices would justify first laying-off those employees that received the lowest evaluation ratings, in this case, unsatisfactory. A total of 60 employees were found to be unsatisfactory. This equates to approximately 5 percent of St. Mary's total staff performing at the lowest level, and therefore this 5 percent will be targeted for the layoff, well under the Board's maximum of 10 percent. 5 percent of employees together earn a combined $1,522,000 per year, this amount is just over half of the $3 million that needs to be cut from the budget.

Implementing a universal pay cut of a fixed percent for the remaining hospital staff because, the majority of staff received satisfactory or above performance ratings. This would help to minimize any detrimental effects, as a result of the staff shortage, on the hospital's daily functions.

Additionally it would be in the best interest of the employees, overall hospital morale, and the community.