Health Care Human Resource Management

14 Jun Health Care Human Resource Management

DQ1:

Disciplinary Actions” Please respond to the following:

· Compare and contrast two differences between employee dismissal and employee discharge. Provide specific examples to support your rationale.

· Evaluate two exceptions to employment-at-will doctrines in terms of the effect these exceptions will have on employee termination in the health care field.

DQ2:

“Handling Workplace Disputes” Please respond to the following:

· Assess two different dispute resolution methods, in terms of their suitability for use within health care organizations.

· Evaluate two factors that contribute to the importance of the employee handbook in terms their relevance in handling workplace disputes in the health care field. Provide specific examples to support your rationale.

Chapter 9

Niles, N. J. (2013). Basic concepts of health care human resource management. Sudbury, MA: Jones and Bartlett.

Terminating Healthcare Employees
Learning Objectives
The student will be able to:

• Illustrate the difference between employee dismissal and employee discharge.

• Identify the exceptions to employment-at-will doctrines.

• Assess alternative dispute resolution methods.

• Discuss the steps in the progressive discipline approach.

• Identify the difference between involuntary termination and administrative termination.

• Evaluate the importance of the employee handbook.

DID YOU KNOW THAT?
• Most states adhere to the employment-at-will doctrine, which means that in the absence of a legal employment contract, employees and employers can end their relationship for any reason.

• Termination of an employee is one of the most disliked responsibilities of supervisors in an organization.

• Employee handbooks have been upheld in court as being employment contracts.

• Employment practices liability insurance covers legal fees and settlement fees for organizations.

• A positive discipline approach consists of several conferences that focus on changing employee behavior from negative to positive.

Introduction

Employment is a relationship between an employee and an employer with expectations by each that the responsibilities of the other will be fulfilled. Both employers and employees have rights and should treat each other respectfully. Employers must provide a safe working environment for their employees. Employees must perform to the best of their ability in accordance with their job descriptions, which is why they were hired. However, that does not always happen; therefore there are laws and rules and regulations in place to ensure that both sides maintain their rights when an employee is terminated. The author decided to focus one chapter of this text solely on employee termination because it is often the most difficult action taken in an organization. Although this is the shortest chapter in the text, it may be the most important. If an organization has a legally defensible hiring process that provides an opportunity to hire the best employees for the organization, there should be minimal need to terminate many employees. If an employee is terminated for poor performance, it is possible that the person should not have been hired. The organization must emphasize to their employees that the hiring process must be a quality process that will select the best employees for an organization. In a recent survey of healthcare managers, healthcare employee terminations occurred for the following six reasons: (1) poor performance, (2) ethical misconduct, (3) inconsistent attendance, (4) poor attitude, (5) personality conflicts, and (6) substance abuse (McKinnies, Collins, Collins & Matthews, 2010). The primary reason termination occurred was poor performance by employees. Theoretically, routine feedback and discipline can change employee performance. However, termination occurs because some employees cannot change their performance.

There are two types of employee separation: employee dismissal and employee discharge. Employee dismissaloccurs when an employee has not improved problems with job performance. Employee discharge occurs when an employee exhibits behavioral problems that are offenses for termination (Fallon & McConnell, 2007a).

The organization must impose discipline; if it does not, this may encourage other employees to exhibit similar negative behavior. If an organization allows negative behavior, it is supporting that behavior. Typically, an organization will have a progressive discipline process that consists of written warnings and eventual termination. All documented warnings are placed in the employee’s personnel file. Initially, the supervisor may provide counsel to the employee. This also should be documented.

The passage of labor laws and the institution of unions have focused on establishing and enforcing employee rights in all aspects of their employment. This chapter will focus on employees’ legal and contractual rights in the termination process, the impact of the employment-at-will doctrine on termination of employees, employee discipline approaches, and the importance of a systematic termination process.

Employment at Will

Most states adhere to the employment-at-will doctrine, which means that, in the absence of a legal employment contract, employees and employers can end their relationship for any reason. Employment-at-will policies are more prevalent in private organizations than public organizations. Local and federal laws protect public employees, and, depending on the state, a written notice of disciplinary action or a hearing for termination for cause is provided (Fried & Fottler, 2009). However, states vary as to what degree they support an employer’s right to terminate employees under the employment-at-will doctrine: 43 states acknowledge the public-policy exception, 42 states acknowledge implied contract, and 20 states acknowledge breach of implied covenant of good faith and fair dealing (Employment at Will States, 2011). Approximately 55% of private employers operate an employment-at-will practice (Radin & Werhane, 2003). An example of a private employer using an employment-at-will doctrine is the firing of employees who smoke. Weyco, a medical benefits provider, banned employees from smoking outside workplace premises. Employees are subjected to random tests and have to agree to searches of personal belongings if officials suspect tobacco is being brought to the workplace (Trend: You Smoke? You’re Fired, 2005).

Employment-at-Will Exceptions

There are three major exceptions to employment-at-will policies: implied contracts, the public-policy exception, and breach of implied covenant of good faith and fair dealing. Implied contracts can occur when a potential employer makes a verbal promise such as “if you do a great job, you will have a job for life” to an employee or an employee handbook or manual suggests a type of contract. If an employee handbook has a list of offenses that constitute termination for just cause, a court may assume that these offenses are the only reason an employee can be terminated, which invalidates employment at will. Therefore, it is important that the employee handbook have a disclaimer indicating it is not an implied contract for employees (Dalglish, 2000).

The public-policy exception states that an employer cannot terminate an employee if the employee refuses to comply with an employer’s request to perform an illegal action that would violate a public policy, such as refusing to cover up Occupational Safety and Health Administration (OSHA) violations. If an employer fires an employee for refusing to violate public policy, this would be construed as wrongful discharge.

Finally, the breach of implied covenant of good faith and fair dealing has been adopted into the Uniform Commercial Code and the American Law Institute’s Restatement of Contracts. It is the basic assumption of contractual relations that both parties will act fairly and in good faith (Dessler, 2011). Suppose an employer fires a long-term employee without cause, claiming employment at will. However, the long-term employee worked for the company under the assumption that if he performed to the best of his ability, he would be allowed to work for the company until his retirement. This could be a breach of good faith by the employer.

Due Process Methods
An alternative to employment-at-will doctrines is the establishment of due process methods that provide employees with the opportunity to appeal the organization’s decision to terminate the employee. Due process also includes the fairness of the employer process of determining employee actions that result in disciplinary actions. Establishing these types of policies may avoid a legal dispute between the employee and employer. An alternative to arguing disciplinary actions in the court systems is alternative dispute resolution methods, which consist of open door policy, peer review panels mediation, and arbitration (Dessler, 2012).

An open door policy, the “in-house” method of resolving employment issues, is the easiest form of alternative dispute resolution. Supervisors indicate that if there are any employment issues, their door is open to any employee to discuss any potential problems from the employee’s perspective. An employer should have a forum for disgruntled employees. An open door policy is the easiest method of providing an avenue for discussion. The disadvantage of an open door policy is that there is only one person, a supervisor, who is listening to an employee issue. The employee issue may be related to another supervisor who is friendly with the employee supervisor that is listening to employee complaints. However, rather than having no due process in place, an open door policy can be beneficial to both the employee and the employer. A second in-house method is peer review panels. Peer review panels consist of specially trained employees that become involved in evaluating employee disputes. They are required to sign confidentiality agreements regarding the process. They review the dispute and make recommendations to resolve the dispute, which both sides agree to follow.

Two external procedures for resolving employment disputes are mediation and arbitration. Unlike the open door policy and peer review panels, both mediation and arbitration use an external third party to hear the complaint. Mediation is also a third-party system but with less rigidity. The mediator intercedes to resolve a dispute, but the mediator’s suggested agreement is not legally binding (Dessler, 2011). Arbitration uses a third-party system to make a decision regarding the employment dispute. The decision of the arbitrator is a binding decision that both parties must abide by and is enforceable under federal and state laws.

The American Arbitration Association (AAA), which is the largest alternative dispute resolution provider, trains individuals in resolving employment issues through arbitration and mediation. Established in 1926, this nonprofit public organization has been responsible for dispute resolutions in many different industries including health care. In 2001, AAA launched the Healthcare Payer Provider Arbitration Rules, which focuses on reimbursement disputes between providers and payers in the healthcare industry (About Us, 2011).

The United States is a litigious society. In addition to establishing alternative dispute resolution methods, organizations including healthcare organization are purchasing insurance to protect them from numerous lawsuits. Employment practices liability insurance (EPLI) covers employer legal fees, settlements, and judgments due to employment matters. These insurance products became popular in the 1990s when the Civil Rights Act of 1991 (amendment to the Civil Rights Act of 1964) was passed, which allowed financial damages for discrimination and harassment suits. There are currently 60 carriers for EPLI that cover all industries including the healthcare industry (What Is EPLI?, 2011).

Employee Discipline
Termination of employment is the result of unacceptable behavior by the employee as determined by organizational policy, procedures, and ultimately employment law. Organizations must have a system in place to discipline employees in order for employees to understand if their behavior is positive or negative. Employees who exhibit negative behavior that does not receive feedback do not understand or know that their behavior is, in fact, negative. Most employers use the progressive discipline approach, which is a formal discipline process in which repeated negative behavior results in more serious disciplinary measures. The following are typical steps in a progressive discipline approach (Byars & Rue, 2006):

1. Oral warning: often unofficial between supervisor and employee.

2. Official written warning: goes in personnel file.

3. Second written warning: could also include temporary suspension threat.

4. Temporary suspension plus notice of possible termination.

5. Termination.

Establishing a progressive discipline approach depends on the organization’s diligence in written policies and procedures for employee performance and expectations. Another popular disciplinary approach is the positive discipline approach, which assumes that employees can change their behavior if given constructive criticism. The approach consists of problem-solving conferences between the employee and supervisor. The four steps of the positive discipline approach include:

1. Counseling: Inform employee of organizational rules. This is a conference between the supervisor and the employee.

2. Written documentation: The employee fails to correct behavior after step 1, and written documentation is noted in the employee’s personnel file. The conference result is written up and placed in the employee’s personnel file.

3. Final warning: A conference is held, and the employee is asked to develop an action plan to remedy inappropriate behavior. This is placed in the employee’s personnel file.

4. Termination: If the action plan is not followed, then the employee will be terminated (Dessler, 2011).

Many supervisors are uncomfortable with these processes. Disciplining employees can be difficult particularly in a small organization where socializing is common among employees. However, negative employee behavior must have ramifications or more employees will exhibit similar behavior, assuming that it is acceptable. To increase the supervisor’s comfort level, training supervisors should receive training regarding these disciplinary processes.

Involuntary Termination of an Employee
An employer initiates involuntary termination of an employee. It is a difficult process to initiate and rarely a happy occasion for either the employer or employee. It is extremely important that there is a written process in place to document this decision because of potential lawsuits that may be initiated by the unhappy employee. Employees are terminated for cause, which occurs when an employee jeopardizes other employees. Examples are stealing or threatening another employee. This may be the easiest way to terminate an employee because the action is an open violation of company policies. Employees can be terminated because of poor work performance. This reason is typically documented, as the employee with poor performance will have received documentation on how to improve. The employee is terminated if the performance does not improve. A more difficult termination is an administrative termination, which means it is a termination of employment without cause, such as a layoff of employees. Layoffs occur because there has been a downturn in the performance of the company or in the economy that results in less need for labor or because technology has eliminated positions, also resulting in less need for labor. This type of termination is not the fault of the employee typically; therefore, it is more difficult for the employee to accept. This type of termination does allow the company to rehire the employee if needed at a future date. The employee can collect unemployment benefits (Hume, 2011).

Importance of the Employee Handbook
When the new employee is hired, one of the first pieces of documentation given to the individual is an employee handbook. This handbook is a guide for the employee to the organization’s expectations of employee behavior. It also is a guide to the policies and procedures of the organization. During orientation, the employer reviews the handbook with the employee. When a new employee is given a copy of the handbook, the organization should also ask that the employee sign a receipt indicating he or she has received it, maintaining the receipt in the employee personnel file. All employees should have a copy of the handbook. Supervisors should be very familiar with its content. If there are any changes to the handbook during the tenure of an employee, all updated handbook information must be given to the employee with an additional signed statement by the employee that the updates were provided. This procedure eliminates any claims that an employee was not familiar with the policies and procedures of the handbook. To avoid the impression that a handbook is an employee contract, the handbook is written objectively, providing facts about organizational procedures. There should be no guarantees or promises regarding employment. Even if organizations include a disclaimer that the handbook is not an employment contract, some courts have ruled that a handbook could be construed as an employment contract. To avoid this issue, Fallon and McConnell (2007b) suggest that a new employee who is considered temporary or probationary and has passed the probationary period should be considered a regular employee, not a permanent employee, because the description “permanent employee” may lead the employee to believe he or she is immune to termination.

A Checklist for Terminating Employees
Termination of an employee is one of the most difficult processes in an organization. The process must be legally defensible to ensure the liability protection of the organization. Lawsuits for wrongful discharge can be very expensive to an organization. Lynott (2004), Perry (1997), Steingold (2004), and this author have identified a checklist to ensure that the process is fair and legal:

1. Employee education on employment law and company policies: Both supervisors and their employees should receive training regarding their rights in an organization. The training will help both parties to understand their obligations to the organization and the organization’s legal obligation to them.

2. Communication: Communicate both verbally and in writing the expectations the organization has of the employee’s performance. Communication begins during the hiring process with the job description. Routine communication continues throughout the employment, documenting any issues with the employee’s performance and communicating these issues to the employee. The communications must be maintained in the personnel file of the employee. When the employee is terminated, a termination letter should be given to the employee detailing the reasons why the employee is terminated.

3. Consistency: Enforcement of labor laws equally applied to all employees to ensure there are no issues with discrimination of protected classes.

4. Routine performance appraisals: Establish routine performance appraisals of all employees. These appraisals should be standard and applied to all employees.

5. Employee feedback: During any performance appraisal process, allow an opportunity for the employee to review the evaluation, to make comments, and to initial documentation that they acknowledge and understand the evaluation.

6. Termination deadline: Because employee termination can be a very difficult situation, employers may continue to allow a poor performer to continue in an organization. Establishing a time frame for employee dismissal supports the legal defensibility of the termination process.

7. Exit interview: Managers should have an exit interview with the terminated employee in a comfortable environment. Treat the employee with respect. Do not e-mail their termination letter prior to the interview. Discuss the specific reasons why the employee is terminated, giving him or her a termination letter detailing the reasons. If possible, provide some placement counseling for the terminated employee, discussing his or her future elsewhere. Have his or her final paycheck ready if possible. If there is a potential for litigation, have another individual present who could be a witness to the interview process.

8. Confidentiality: Do not discuss the termination exit interview with other employees. This will prevent any possibilities of lawsuits by the terminated employee for defamation.

This checklist should provide guidelines to ensure that a termination process is fair to the employee, which should avoid any litigation.

Conclusion
Termination of an employee is one of the most difficult responsibilities for a manager because it affects the individual’s livelihood. If you have to terminate an employee, it may indicate that the organization’s hiring process is not adequate. Many guidelines should be followed to ensure that the termination process is legally defensible while providing interactional justice to the employee who is being terminated.