MANAGING PEOPLE IN NETWORKED ORGANISATIONS: IDENTIFYING THE CHALLENGES FOR HEALTHCARE AND SOCIAL CARE Professor Damian Grimshaw and Professor Jill Rubery European Work and Employment Research Centre (EWERC), Manchester Business School, The University of Manchester
23
Embed
MANAGING PEOPLE IN NETWORKED … PEOPLE IN NETWORKED ORGANISATIONS: IDENTIFYING THE CHALLENGES FOR HEALTHCARE AND SOCIAL CARE Professor Damian Grimshaw and Professor Jill Rubery European
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
MANAGING PEOPLE IN NETWORKED ORGANISATIONS: IDENTIFYING THE CHALLENGES FOR HEALTHCARE AND SOCIAL CARE
Professor Damian Grimshaw and Professor Jill Rubery
European Work and Employment Research Centre (EWERC), Manchester Business School, The University of Manchester 31.03.11
Managing people in networked organisations: Identifying the challenges for healthcare and social care
At the heart of the government’s vision for the NHS, as set out in its 2010 White Paper and the 2011 Health and Social Care Bill, is the notion that healthcare and social care services would be delivered more effectively by extending the variety of provider organisations. In line with the wider government position that the state ought not to exercise a monopoly over public services (BBC news 21/02/113), reforms are likely to allow for the establishment of new GP consortia that will commission services from ‘any willing provider’, whether public or private sector, voluntary, charity or social enterprise organisation.
In part, we are witnessing the evolution of already existing practices. The observation in the White Paper that the NHS ‘works better across boundaries, including with local authorities and between hospitals and practices’ (p9) picks up on reforms initiated by New Labour that sought to establish a collaborative approach among organisations in many areas of public services delivery. The core principles were set out in the 1999 White Paper, ‘Modernising Government’. Public-private partnerships were encouraged, ranging from Independent Sector Treatment Centres to the hundreds of Private Finance Initiatives. So too were public-public partnerships, with the aim of ‘joined-up’ services delivery - for example by integrating local authority and NHS provision of health and social care.4
However, it was under previous Conservative governments that the real foundations were laid for the making of markets for public services. The 1989 White Paper, ‘Caring for People’, required local authorities to promote and develop a ‘flourishing independent sector’ for elderly care. Also, reforms through the 1980s and 1990s promoted compulsory competitive tendering of public services. The principle of increasing choice by extending the market therefore reflects a continuation of policy direction marked out since the early 1980s, albeit marking a radical change of pace.
These new reforms are nevertheless in danger of failing to learn from mistakes already made. One fundamental lesson is that the making of markets does not involve the simple shift from a bureaucratic form of organisation to a competitive form of market organisation. There is no international evidence of competitive markets (as defined in economics textbooks) for public services as far as we are aware. Instead, when markets for public services are established we typically observe the development of hybrid forms, or network models, of services delivery. In these network models, we are more likely to find that large bureaucratic organisations, whether public sector organisations or large private sector multinationals, are able to flourish than small competitive private or voluntary sector enterprises.. Also, because of their importance to the overall well-being of a society, there is often a great deal of expenditure on the regulation of services quality. This considerably complicates the functioning of a
Managing people in networked organisations: Identifying the challenges for healthcare and social care
competitive market since it means that price can not be the over-riding mechanism for allocating contracts.
The research evidence on network forms of organisation highlights two important variables. The first is trust. Strong trust between organisations can reduce the risk that one partner acts opportunistically to the disadvantage of another. The second is power. Where differences between organisations in their financial resources and expertise are small, there is greater chance for sustaining a coordinated approach to delivery of networked services.5 Table 1 sets out the key issues.
Table 1. Trust and power in network forms of organisation6
TRUST
Strong
Strong trust supports those partners that seek to bring potentially complementary areas of specialist expertise to co-produced public services
Weak
Weak trust can foster an overly formalised approach to contract performance discipline. This requires a high commitment of time and resources and reduces efficiencies
POWER
Equal
Equal power relations often require external support either from other divisions in the organisation or from regulatory bodies. Both forms of support serve to balance unequal power relations and enhance prospects for sustainability
Unequal
Unequal power relations take different forms. Weak public sector expertise in contract design undermines performance gains from network forms. Weak private sector HRM expertise can make it difficult to sustain cooperative employment relations. Too much power exercised by a public sector purchaser can undermine efforts by providers to improve conditions.
What are the lessons for current policy proposals? The expanded role of the regulatory body, Monitor, is intended to enable it to promote competitive markets and where necessary to set ‘efficient prices’.7 However, it is not clear what resources or institutions are envisaged to create and sustain what we might refer to as ‘the right kinds of contracting forms’, which sit at the heart of the new market for healthcare and social care services. Questions for the policy and practitioner audience include:
What types of collaborations among organisations are anticipated?
Are partner organisations expected to establish strong trusting relations, or will arms-length relations be as effective?
What measures are in place to prevent exploitative power relations between partners - that is, to prevent unfair displacement of risk and financial gains?
Managing people in networked organisations: Identifying the challenges for healthcare and social care
2 BRINGING THE EMPLOYER BACK IN: AN OVERVIEW OF THE ISSUES
There is by now a great deal of empirical evidence that employment issues are at the centre of efforts to establish and sustain networks of organisations.8 The challenges for HRM in a networked organisation are quite different to those in a single organisation where the employment relationship – defined as the contract between an employer and one or more employees – is widely understood. In networked organisations, many new issues arise. Workers may spend most of their working days not at the workplace of their legal employer but at that of a client or partner organisation. Lines of authority and accountability become disordered as workers have to balance the requirements of managers in client organisations with line managers in their employing organisation. Commercial contracts governing the collaboration between client and provider organisations complicate HR practices and in some situations the wishes of clients can influence the provider’s approach to staffing, pay and skill development.
Figure 1 illustrates the cross-cutting lines of collaboration and coordination among both managers and workers from two networked organisations, A and B. Our argument here is that whatever forms of trust and power prevail among networked organisations, each organisation faces considerable challenges in resolving differences of approach towards HRM.
Figure 1. Managing HRM in networked organisations9
Organization B
Managers
Workers
Organization A
Managers
Workers
Managing people in networked organisations: Identifying the challenges for healthcare and social care
All the different areas of HRM face challenges. Table 2 provides a summary of issues for three selected areas. Recruitment and selection can often benefit from tighter network relationships, providing an accessible pool of potentially valuable skills and capabilities from partner organisations. Also, new contracts to deliver outsourced services are often accompanied by transfers of experienced staff with the expertise to ensure a seamless transition of services as a new provider takes over the contract.
However, staff transfer is a constraint on workers’ freedom to choose their employer; it typically increases job insecurity and it may not match workers’ expectations about pay and career advancement. As such it carries a high industrial relations risk. For this reason, most governments have developed an appropriate framework of employment regulation to maximise the benefits from staff transfer (although see box 1). In addition, better outcomes are associated with investment by client and supplier organisations in extensive joint preparations and comprehensive engagement with relevant trade unions and professional bodies.
Table 2. New challenges for HRM in networked organisations10
Recruitment - External links with other organisations provide a new pool of possible recruits
- Client organisations can influence selection and transfer
- Limited freedom of choice for transferring workers strengthens industrial relations effects
Also, job design may be constrained by the need to specify a narrow bundle of
job tasks to meet contractual requirements13. Contracts based on strict
performance evaluation may inhibit innovation in the design of jobs to allow
workers’ to develop their skills and knowledge and to have the discretion to build
on their knowledge to improve services. The fact that contracts may only last a
short period can fuel uncertainty over decisions to fund training programmes for
particular skill-sets.14 This is further complicated by the difficulty of establishing a
shared vision among organisations about the quality of skill standards required
both in the provision of services to a client and among employees who work in
joint teams.15
Box 1. Why abolishing the Two-Tier Code is bad news for managing staff transfer
The Two-Tier Code was introduced following a long-running trade union campaign to protect low-paid workers employed on outsourced government contracts (typically cleaning hospitals and council buildings, or providing catering services or social care services). The aim of the Code introduced by the Labour government in 2003 was to prevent the development of two tiers of employment conditions among workers at the private firms providing outsourced public services. It required employers to provide new recruits with broadly similar employment conditions to those for workers transferred from the public sector whose terms and conditions are protected under the TUPE (Transfer of Undertakings Protection of Employment) transfer regulations.
The code provided valuable protection for low-wage workers. Moreover, EWERC research suggests the principle enshrined in the code of providing ‘employment on fair and reasonable terms and conditions … no less favourable than those of transferred employees’ was widely accepted by all the main organisations - including the NHS Employers’ Federation and the private sector providers.
But the Code as applied to healthcare services was abolished in December 2010 with very little justification or explanation. Francis Maude, on behalf of the Cabinet Office, stated, ‘The code did little to protect staff, while deterring responsible employers from delivering public service contracts. ... We should not be making it more difficult for small businesses and voluntary organisations to succeed in the public service market.’ This conflicts with the OECD’s evaluation of the Two-Tier code in 2008, which states that the UK was a positive example for other countries of regulations that ‘ensure fair job transitions for public employees affected by public private partnerships’ (2008: 121).
Job security is a third area of HRM that requires renewed scrutiny in a network
context. Network forms in principle shift worker expectations away from a
continuous open-ended employment contract with a single organisation to a new
norm of multiple transitions between employers. In particular, the notion of job
Managing people in networked organisations: Identifying the challenges for healthcare and social care
The Centre for Workforce Intelligence (CFWI) is an independent agency working on specific projects for the Department of Health and is an operating unit within Mouchel Management Consulting Limited (MMC).
This report is prepared solely for the Department of Health by MMC, in its role as operator of the CFWI, for the purpose identified in the report. It may not be used or relied on by any other person, or by the Department of Health in relation to any other matters not covered specifically by the scope of this report.
MMC has exercised reasonable skill, care and diligence in the compilation of the report and MMC's only liability shall be to the Department of Health and only to the extent that it has failed to exercise reasonable skill, care and diligence. Any publication or public dissemination of this report, including the publication of the report on the CFWI website or otherwise, is for information purposes only and cannot be relied upon by any other person.
In producing the report, MMC obtains and uses information and data from third party sources and cannot guarantee the accuracy of such data. The report also contains projections, which are subjective in nature and constitute MMC's opinion as to likely future trends or events based on i) the information known to MMC at the time the report was prepared; and ii) the data that it has collected from third parties.
Other than exercising reasonable skill, care and diligence in the preparation of this report, MMC does not provide any other warranty whatsoever in relation to the report, whether express or implied, including in relation to the accuracy of any third party data used by MMC in the report and in relation to the accuracy, completeness or fitness for any particular purposes of any projections contained within the report.
MMC shall not be liable to any person in contract, tort (including negligence), or otherwise for any damage or loss whatsoever which may arise either directly or indirectly, including in relation to any errors in forecasts, speculations or analyses, or in relation to the use of third party information or data in this report. For the avoidance of doubt, nothing in this disclaimer shall be construed so as to exclude MMC's liability for fraud or fraudulent misrepresentation.
www.cfwi.org.uk
The Centre for Workforce Intelligence produces quality intelligence to inform better workforce planning that improves people’s lives