The organization which has been chosen for analysis is Northwestern Memorial Hospital (NMH), located in Chicago, Illinois. It belongs to the U.S. health care system. It is a privately owned academic medical center, which provides all types of inpatient and ambulatory treatment and serves as an educational facility for Feinberg School of Medicine, Northwestern University. It is a medium-sized hospital with 894 beds. NMH has a standard functional organizational structure, which consists of the following sub-structures: therapeutic services, diagnostic services, research and trials, human resource management, finances, IT, and support services. The hospital’s mission is to improve the health of the community by delivering high-quality individualized medical services to its patients regardless of their ability to pay. The hospital’s main objective is to become the number one hospital in the region. In order to achieve this objective, the organization pursues the following goals: to maximize patient satisfaction, to maintain a team of the best physicians, to excel in research, and to ensure cost-efficiency of its activities.

The activity of NMH is highly affected by the economic, demographic and social factors, as well as by competition in the industry. One of the most important trends is ageing of the nation which leads to increase in demand for healthcare services. The economic situation in the country has an unequivocal effect on the hospital’s functioning. On the one hand, due to the economic downturn, many people are inclined to restrain from buying medical insurance, undermining cost-efficiency of NMH, which promises to provide medical care to all patients with or without medical insurance. On the other hand, easily available loans and reduced funding to public sector make private hospital services more popular. In the social sphere, the main influencing force is people’s growing concern about and demand for high-quality medical services, which stimulates hospitals to improve their performance. The competitive situation in the industry is rather intense. There are many hospitals in the region, each of which strives to improve its services and provide the best possible care to its patients. Therefore, in the next three years the influence of such factors as reputation and history is predicted to be rather high, especially in the light of the other tendency – increased the cost of treatment. This is a challenge for human resource management, which is to ensure that all the medical personnel are high-qualified, experienced and caring. Due to increase in the tempo of life, people will demand rapid delivery of the full range of medical services at one location. Therefore, NMH should strive to gain expertise in as many fields of medicine as possible and establish single patient information management system with other medical institutions.

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The hospital’s strategy is developed in accordance with its mission statement and each tactical step is designed to achieve a particular organizational goal, derived from the primary objective. Strategic planning process encompasses the following aspects of the hospital’s activity: selection and retention of knowledgeable and experienced professionals, provision of the hospital with advanced equipment and drugs, managerial facilitation, financial efficiency, marketing and reputation management, research and education, and efficient cooperation with partnering organizations. One of the most valuable resources of the hospital is its medical personnel. In order to stay competitive and achieve its strategic goals, the hospital needs to make sure that its services are delivered by high-class professionals. It is a task of human resource management to select and retain such professionals, without whom all other strategic goals will be unachievable. Therefore, human resource department actively participates in the strategy implementation process.

Human resource management function at NMH is performed by the Human Resource Department, which consists of the Head of the Department, six managers, and an office assistant. The responsibility for HR strategic planning process is placed upon the Head of the Department. The Head develops long-term plans for the department and revises them twice a year. He also supervises work of other HR managers. Other managers perform the following functions: develop short-term plans, keep track of the employee records, issue performance measurement standards and employee manuals, conduct hiring process (the final decision on hiring as well as dismissing is made by the Head), and inform employees about work-related issues or changes. HR managers are accountable to the Head of the HR Department, who in his turn is accountable to the hospital’s director. The quality of medical personnel being the main focus of the hospital’s strategy, human resource function occupies an important place in the strategic planning process. HR managers who work with medical personnel are instructed by the hospital’s top managers to conduct a thorough selection of candidates for respective positions, to monitor employee behavior and customer satisfaction with medical services, and to report any deviations from the hospital’s service standards or any other troubling signs. Human resource management programs at the NMH are aimed at creation and sustention of a team of high-class professionals – one of the aspects of the hospital’s strategic plan.

The current human resource programs at the NMH are consistent with its mission and objectives, but still, there is much to be improved. Effective HR management involves two main aspects: transactional and strategic (Armstrong, 2008). At the NMH transactional function is carried out thoroughly, while the strategic function is underappreciated. Ulrich (1997) introduced a concept of a strategic partner and argued that this should be a prime function of a human resource practitioner. Implementation of this concept in the setting of the NMH would mean that in addition to its current functions, HR managers will have to guide the work of each department of the hospital and take part in the strategic planning process. Dessler (2003) states that HR management can participate in strategic decision making by giving advice on the internal strengths and weaknesses of the organization, which it is well familiar with. That would require an increase in expenditures on maintenance of the HR department, at the same time improving the performance of the organization as a whole.

While human resource management, in general, is claimed to affect an organization’s performance, the HRM in hospital settings is much more important, since it helps reduce patient mortality (West et al., 2006). According to the study, the most important factors, which determine the quality of health care services are appraisal, teamwork, training, performance measurement, focus on high performance, employee security, and employee retention (West et al., 2006). Current programs of the NMH’s Human Resource Department lack focus on appraisal, motivation, and long-term employee retention. As a result, the employees feel insecure about their positions and do not feel involved. The reason why this happens is that the Head of the HR department does not have direct contact with employees and is unaware of their needs and concerns. In order to resolve this issue, he should actively co-operate with senior medical specialists while planning incentives and careers of the medical personnel. Consistent with the HR best practices incentive pay should be established to compensate both medical personnel and HR managers (Bloom and Reenen, 2010). Career planning will cause redirection in the need for human resources since most of the high-skilled job openings will be filled from inner sources, while candidates for low-skilled jobs will be searched for outside the organization. This suggestion has some drawbacks since the inner source of human resources is very limited. However, the Hospital will be able to obtain committed employees, which is very important for maintenance of high service standards.


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Having analyzed the current situation regarding human resource management at Northwestern Memorial Hospital, there could be provided the following recommendations:

  1. Decentralization of the HR department so that decisions are made collaboratively. In such a way decisions will be consistent with the hospital’s strategy, on the one hand, and with the employees’ needs, on the other. This reorganization does not require significant investments, but it requires understanding, commitment and willingness to take responsibility on the part of HR managers. This change should be implemented as soon as possible and prior to any other changes.
  2. Change in the functions of the Head of the HR department. Decentralization of the department exempts the Head from some of his/her responsibilities, which will be replaced by the new ones, which arise from his/her participation in the strategic planning process. This decision needs to be approved at the upper organizational level. These new functions will require skills, which the current Head might not possess, therefore, other candidates should be considered as well.
  3. Creation of training and career planning programs. Once an employee is hired, his/her skills and potential should be tested and he/she should be made aware of perspectives which anticipate him/her. Since the hospital cooperates with the educational institution, there will be no lack of promising candidates. Training of young specialists will require greater expenses, than the hiring of the experienced ones, but young specialists will be more loyal to the hospital and more motivated to produce outstanding results. Introduction of such programs is a time consuming and challenging task; therefore, it should be a part of the hospital’s long-term plan.
  4. Introduction of a new employee motivation plan. Financial compensation is not the only motivating factor for medical personnel. They need to feel engaged and appreciated. This can be done by providing special benefits to the best employees (additional vacations, free medical insurance, reserved parking space, prepaid cellular phone service, private office, and other privileges). The motivation plan should be carefully designed by HR managers with opinions of the employees taken into account. Such aspects as who, under what conditions, and how exactly is to be granted benefits need to be specified in order to ensure that the program is honest and transparent.
  5. Creation of the unified information system, which will facilitate administrative and strategic functions of human resource management.

Implementation of the given recommendations should proceed according to their priority outlined above in the course of the following three years so that the hospital can achieve its objectives in the light of the changing environmental conditions.

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