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Course of Action for First Hospital

Discuss about the First Hospital HRM.

Human Resource Management function has emerged as a key function for organizations (Smith, 2001). The objective of this paper is to discuss to case study of Fist Hospital. The organization, ‘First Hospital’ is a mid-size hospital with 400 employees. The organization does not have a dedicated human resource function. The CEO of the hospital believes that there is no need of HRM function as they have an external HRM consultant visiting every week. However, this model has failed for the company as it has low employee satisfaction, high absenteeism, high staff grievances, etc. The paper would discuss the future course of action in HRM area for First Hospital. The benchmarking can be done against another similar size hospital that has a dedicated HR function (Canonico & Nito, 2015). This hospital has excellent track record of staff retention and high employee morals.

Authors argued that for any organization, the human resource management function should be part of the strategic planning. The most challenging aspect of strategic planning in healthcare is the financial uncertainty created by a mix of regulations and out of control inflation. Healthcare is a multi-billion-dollar industry that take up over 17% of all the money in the economy (Benschop, 2015). Hospitals are extremely expensive to run and regulations and restrictions around reimbursing for services makes long-term planning challenging. The uncertain cost of operations often put pressure on hospitals to optimize or to minimize the number of HR managers. Whether a hospital is for-profit, non-profit, or government owned it must have a budget and make more than it spends. This means that strategic planning revolves around providing services with good reimbursement vs. a focus on providing needed services (Horowitz, 2005). Every hospital provides some services that it loses money on but it must also have services that it produces excess funds to offset these loses.

Strategic planning in healthcare must take into consideration potential reimbursement issues and operating costs. One area that is often overlooked is human resources. Nurses and doctors are both in short supply and there are lots of opportunities for them to relocate or to travel and work as highly reimbursed temporary employees (Alcazar, 2013). While many healthcare professionals that work as locums are beneficial to hospitals, in general these individuals are not invested in the locale and are not going to make major, long-term contributions to any strategic plan. A strategic focus that retains and rewards local talent can realize long-term savings in decreased training costs and increased productivity. Human resources are usually the most expensive financial item for an organization but failure to manage that resource well can produce a lot of hidden costs. Individual inefficiencies are difficult to measure and are often overlooked by mangers who view employees as identical widgets. This also means that such a strategic focus would be a differentiation strategy. People naturally want to feel appreciated and so an ability to communicate that sets an organization apart from other less personable employers (Jackson, 2014). This is also a means to high HR competence without high costs. The ability to retain personnel who are expert in their department as well as experts in the corporate culture will pay dividends.

Minimizing the cost and failure

Quality is a driving force that is poised to change healthcare also. There are two ways that this happens. One is to have a lot of regulations and policies to try to hedge in quality and make it happen (Bleijenbergh, 2010). The other way is to hire and train quality professionals and empower them to give quality care. This dichotomy is being implemented in many places and it will be interesting to see how it plays out in the years ahead.
The course of action could also be discussed under following heads:

Minimizing the cost and failure: Human Resource Management is a major challenge in healthcare and doing more with less is the way of the foreseeable future. It is critical that the cost should be minimized while making any investment in the area of HRM.

Services to Offer: The Human Resource Management function for First Hospital should offer multiple services like recruitment, performance management, appraisals, rewards, etc.

Laws and regulations: It is important that the hospital should operate under the domestic laws and regulations. There are various laws that act as the guiding principles for the organizations in the health care industry. It is important that First Hospital should operate as per these laws and regulations.

The step forward for First Hospital is to establish a full-fledged HR function. The organizations can start with a small HRM function. The CEO should realize that hiring an external consultant may not be the best approach. There must be an internal team of HR managers that address all the issues related to human resources (Park, 2014). The organization should take HRM function as a strategic function in the organization. The view of HRM function for First Hospital can be shown as:

The future course of action for First Hospital would be to have a planning phase where the CEO and other senior leaders can take the input from various stakeholders. The phased wise plan for First Hospital can be shown as:





HRM Planning and vision, goals and objectives 

1 month

Framework Development

Manage change with effective communication with different stakeholders

2 months

Actual Implementation

Ensure that change does not impact Business as Usual

4 months

Continuous Improvement

Make HRM optimized and more flexible


It would be correct to say that effective communication would be a key for First Hospital to move forward. Steps that can improve the communication strategy for my organization would be to identify the goals, schedule regular meetings, breakdown goals so they fit the employees’ personalities, develop objectives that builds communication, ensure the plan is understood within the organization and define the plan throughout the process (Canonico & Nito, 2015).

It is also important that the HRM function should be tightly coupled across the employees ate various levels (Bock & Zmud, 2005). The senior management and top leaders would have the responsibility to develop the policies. However, the management must include mid-level management and low-level employees.

Services to Offer

It is important that Human Resource Management should be process oriented so that it is sustainable in nature. Strategic human resource management (SHRM) emerged as a dominant approach to human resource management (HRM) policy during the past 30 years. However, during the last decade, a new approach to HRM has evolved. This approach has been labelled sustainable human resource management (sustainable HRM). Strategic planning for health care costs needs to be implemented at every level throwing money at the problem is not working it has had a detrimental effect on quality vs costs ratio. Capital expenditures and people are the major costs for hospitals (Janssens, 2014). Human Resource Managers need to balance improvements and costs while staying ahead of the competition. One way to do this is to retain quality people and get them to buy into the vision and mission of the organization. Happy people make for a happy work place; unhappy workers make for a bad work environment. Retention of workers is much more cost effective than continually training new hires, this is one way to combat the costs. There are five key competencies that can create sustainable HRM environment. These competencies can be discussed as:

It is believed that High-performing HR professionals think and act from the outside/in. They are deeply knowledgeable about external business trends and able to translate them into internal decisions and actions.

The human resource managers and leaders should use the planning function is used throughout the process to determine what can be done, what should be done, and how much will it cost. The lean part of planning is to check with customers and end users to ensure that the service or goods are what are desired (McEvoy, 2012).

The human resource managers should focus on development, more precisely of leadership training, employee development, succession planning and employee incentive plans. When we talk about strategic planning we have looked at it on a company level and then down to a department level.

It is important that organizations should concurrently provide support and guidance to the team that is driving the change. The human resource managers can enable start-up groups to develop their own solutions to the problems they face.  Management will need to set clear standards and deadlines for these groups. This approach influences the benefits of small groups while also taking advantage of the greater scale of resources that large organizations require. This ability to control and reduce risk through business experiments, leads to a decision point (Euchner & Ganguly, 2014).

Laws and regulations

It is important that human resource managers should gel with the employees. The human resource managers should create a culture where employees can express themselves freely. The company should have a business model that includes people and managers together at a common platform. Business Models are not something that an individual first thinks about when starting up a business but it should be. It is an important piece of the puzzle that is essential to any new or existing company. Choosing the right business model for a company is key to a company’s success in both the Internet and physical world.

It is recommended that CEO of First Health should have a long-term plan for human resource management function. It is important that HRM function should be considered as a strategic function in the organization. The human resource managers are the key players in an organization and the management of First Hospital should realize the importance of HRM for long term growth and development. It is recommended that the management should be ready to handle the change that can come with the introduction of dedicated HRM function. The management should have a strategy in place to handle this change.


The CEO of First Hospital should realize that each function is necessary for the business model to be effective for the company. The value proposition is the value that is delivered to the target customers and the market segment is referring to who is getting the most benefit from the technology. The step to integrate human resource strategy with business strategy is very important in developing growth strategies for the company. The structure of the value chain is needed to expand the product or service offer and estimating the cost structure and profit is needed for the first three functions. The position of the firm takes into account the supplier and customer network.


Benschop, Y., Holgersson, C., Van den Brink, M., & Wahl, A. (2015). Future challenges for practices of diversity management in organizations. Handbook for Diversity in Organizations, Oxford University Press, Oxford, 553-574.

Bleijenbergh, I., Peters, P., & Poutsma, E. (2010). Diversity management beyond the business case. Equality, diversity and inclusion: an international journal, 29(5), 413-421.

Bock, G. W., Zmud, R. W., Kim, Y. G. and Lee, J. N. (2005) 'Behavioral Intention Formation in Knowledge Sharing: Examining the Roles of Extrinsic Motivators, Social-psychological Forces, and Organizational Climate', MIS Quarterly, Vol. 29, No. 1, pp. 87-111

Buller, P. F., & McEvoy, G. M. (2012). Strategy, human resource management and performance: Sharpening line of sight. Human resource management review, 22(1), 43-56.

Canonico, P., De Nito, E., Esposito, V., Martinez, M., Iacono, M., & Mercurio, L. (2015) 'The boundaries of a performance management system between learning and control', Measuring Business Excellence, 19 (3), p. 7-21

Euchner, J. E., & Ganguly, A. D. (2014). Business Model Innovation in Practice. Research Technology Management, 57(6), 33-39.

Jackson, S. E., Schuler, R. S., & Jiang, K. (2014). An aspirational framework for strategic human resource management. The Academy of Management Annals, 8(1), 1-56.

Janssens, M., & Zanoni, P. (2014). Alternative diversity management: Organizational practices fostering ethnic equality at work. Scandinavian Journal of Management, 30(3), 317-331.

Martín Alcazar, F., Miguel Romero Fernández, P., & Sánchez Gardey, G. (2013). Workforce diversity in strategic human resource management models: A critical review of the literature and implications for future research. Cross Cultural Management: An International Journal, 20(1), 39-49.

Park, S. (2014), 'Motivation of Public Managers as Raters in Performance Appraisal: Developing a Model of Rater Motivation', Public Personnel Management, 43 (4), pp. 387-414

Purce, J. (2014). The impact of corporate strategy on human resource management. New Perspectives on Human Resource Management (Routledge Revivals), 67.

Smith, E.A., (2001) 'The role of tacit and explicit knowledge in the workplace', Journal of Knowledge Management, 5 (4), pp.311-321

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