Attorneys

• John E. Lyncheski

Related Practices

• Healthcare Business
• Labor and Employment

Executives of healthcare organizations are jumping on the re-engineering bandwagon.  They’re rolling up their sleeves, bringing in the consultants and developing what seem to be sure-fire plans for streamlining operations and enhancing service – all to fortify their competitive position.

If administrators are not considering employee reactions to their plans, though, they could be in for a rude awakening when it’s time to announce and implement the re-engineering plan.

The last few years have seen U.S. businesses, nonprofits and health care organizations rush headlong into re-engineering to make their workforce more flexible and productive, and better able to respond quickly to the changing needs of their customers.  The advent of managed care, PPS and the Balanced Budget Act have forced healthcare employers to streamline their operations and their workforces.

But "re-engineering" has become a dirty word to employees.  Executives and re-engineering consultants may have become so enamored of the logistics of the re-engineering process that they haven't been sufficiently sensitive to the concerns of employees who actually experience the consequences.

Part of the problem stems from the fact that many organizations use re-engineering as a euphemism for a reduction in force, thinking that they’re cushioning the blow.  A genuine re-engineering effort typically reallocates the workforce creatively rather than just through layoffs.  But because of the predisposition to view re-engineering as merely a euphemism, the excitement that management feels over re-engineering is oftentimes met by the opposite reaction among employees.

A goal common to most re-engineering, regardless of the industry, is to break down the walls between departments, regions and divisions by examining common processes and streamlining them to best serve customers.  Re-engineering, therefore, often involves retraining employees or redefining their job responsibilities.  For a long-term employee who may have been doing the same job for years, re-engineering can cause stress and uncertainty, even if it does not lead to a layoff.

Make Employees a Part of It
If employees are moved around an organizational chart like pawns, they will act like pawns.  Employees want and deserve straight talk.  Employee perceptions are their reality, and must be taken seriously.  The key to making a re-engineering plan work as well in reality as it does on paper is to involve employees.  Talk with them.  A surprising number of fears will dissipate when management not only communicates, but genuinely listens and responds.  Employees will feel better by venting some steam, and out of that venting will come significant employee concerns, many of which the employer can address beforehand and diffuse an otherwise volatile environment.

In short, employers must marry employee perceptions to reality before they can expect unfounded employee fears to go away.  Cursory memos and pep rallies about change will be dismissed as patronizing.  Focusing only on the benefits of re-engineering to the business will lead to resentment and distrust.  Employers should be prepared to show, not just tell, how re-engineering will benefit employees and to illustrate each benefit.  In particular, employers must illustrate how re-engineering will fortify rather than jeopardize job security.

Employee fear of job loss can paralyze operations and kill morale if managers are ineffective in convincing them that the re-engineering process does not jeopardize their jobs.

Avoid Union/Unionization Conflicts
It’s also highly possible that employee fears about job security and re-engineering could increase union activity and/or incumbent union militancy which could present a new set of challenges to consider in the re-engineering scheme.  For example, union contract stipulations could affect the organization’s ability to deploy workers with maximum flexibility, particularly when attempting to combine into a single job tasks associated with separate bargaining units.  Managers could encounter obstacles in attempting to use covered employees to perform “nonbargaining unit work” and of “nonbargaining unit” employees to perform bargaining unit work.

Labor contract restrictions also may hinder staffing flexibility if the organization must use multiple employees to perform the work, which runs counter to basic re-engineering themes of having one employee wear many hats.  Implementing job-sharing programs and transferring employees from one bargaining unit to another could have administrators facing constraints from outdated or ill-advised contract provisions.

A negative employee or union attitude could result in the workplace redesign being challenged at every step.  Even if the employer ultimately prevails in legal proceedings initiated to impede the re-engineering program, the result is additional cost and a demoralized workplace.

Finally, employers must recognize that the employee insecurity often associated with re-engineering efforts frequently drives employees to seek out unionization in the mistaken belief that it will provide short-term job protection.  Employers that fail to pay heed to employee perceptions and fears about re-engineering virtually invite such outside intervention.

Pay Close Attention
Looking at re-engineering from the employee point of view is essential for management to understand why employees react so negatively to something managers view in a positive light.  To ignore the inevitable employee reaction to re-engineering is to close the door to employee support while inviting in dissention.

Employers planning to re-engineer their organization will avoid short-term, and possibly long-term, complications by paying close attention to the concerns and fears of their employees.  Remember that from the employees’ perspective, re-engineering is fast becoming a dirty word.  Don’t underestimate the need for effective two-way communication when implementing a change; it can diffuse unwarranted employee insecurity and mistrust, ensuring low-risk redesign of your business.

This article previously appeared in Assisted Living Success.

John E. Lyncheski chairs the Healthcare Practice Group and is a senior director in Labor and Employment at Cohen & Grigsby, P.C., a full-service national law firm headquartered in Pittsburgh.  He can be reached at jlyncheski@cohenlaw.com.