Myron D. Fottler, PhD



Learning Objectives

After completing this chapter, the reader should be able to

• define strategic human resources management, • outline key human resources functions, • discuss the significance of human resources management to present and

future healthcare executives, and • describe the organizational and human resources systems that affect

organizational outcomes.


Like most other service industries, the healthcare industry is very labor inten- sive. One reason for healthcare’s reliance on an extensive workforce is that it is not possible to produce a “service” and then store it for later consumption. In healthcare, the production of the service that is purchased and the con- sumption of that service occur simultaneously. Thus, the interaction between healthcare consumers and healthcare providers is an integral part of the deliv- ery of health services. Given the dependence on healthcare professionals to deliver service, the possibility of heterogeneity of service quality must be rec- ognized within an employee (as skills and competencies change over time) and among employees (as different individuals or representatives of various pro- fessions provide a service).

The intensive use of labor for service delivery and the possibility of vari- ability in professional practice require that the attention of leaders in the in- dustry be directed toward managing the performance of the persons involved in the delivery of services. The effective management of people requires that healthcare executives understand the factors that influence the performance of individuals employed in their organizations. These factors include not only the traditional human resources management (HRM) activities (i.e., recruitment

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and selection, training and development, appraisal, compensation, and em- ployee relations) but also the environmental and other organizational aspects that impinge on human resources (HR) activities.

Strategic human resources management (SHRM) refers to the compre- hensive set of managerial activities and tasks related to developing and main- taining a qualified workforce. This workforce, in turn, contributes to organi- zational effectiveness, as defined by the organization’s strategic goals. SHRM occurs in a complex and dynamic milieu of forces within the organizational context. A significant trend that started within the last decade is for HR man- agers to adopt a strategic perspective of their job and to recognize critical link- ages between organizational strategy and HR strategies (Fottler et al. 1990; Greer 2001).

This book explains and illustrates the methods and practices for increas- ing the probability that competent personnel will be available to provide the services delivered by the organization and that these employees will appropri- ately perform the necessary tasks. Implementing these methods and practices means that requirements for positions must be determined, qualified persons must be recruited and selected, employees must be trained and developed to meet future organizational needs, and adequate rewards must be provided to attract and retain top performers. All of these functions must be managed within the legal constraints imposed by society (i.e., legislation, regulation, and court decisions). This chapter emphasizes that HR functions are per- formed within the context of the overall activities of the organization. These functions are influenced or constrained by the environment, the organiza- tional mission and strategies that are being pursued, and the systems indige- nous to the institution.

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