Performance Management In Hospitals: The Role Of Physicians' Motivation

General overview of area:

Worldwide health care systems are facing pressures to reduce costs, be more productive and improve the quality of care (Alves, 2003; D'Aunno et al., 2000). Although relatively recent, management of health care organizations is thus a research area of great interest.

In the last few years, the Portuguese national health system has experienced some significant changes in the way hospitals are managed (Alves, 2003). For example: in the way hospital managers can hire and reward professionals (Antunes, 2001; Batalau, 2003) and in the way hospitals can contract with suppliers (Batalau, 2003). These contribute to a greater interest of this area in the Portuguese case.

The principal aim of this research is to develop a framework that inserted in the management control system of a hospital can help managers to manage performance through the management of physicians' motivation.

Key disciplines: management control, performance management, performance measurement, management of health care organizations, organizational behaviour, human resources management.

My past professional experience as well my academic background can help me in the realization of this research. I have worked one year in the management control department of a Portuguese hospital where I participated in several projects of different sections of the hospital. It can be very useful for the accomplishment of this research, mainly for two reasons. First, I gained knowledge about the internal organization of the Portuguese hospitals. Second, the access to data can be easier. My degree in management, but specially the realization of my masters' of science dissertation on management control systems with case study method also provided me a good base of knowledge.

Relevant literature:

Health services management research is a relatively new area of research (Fried, 2000). The management of health care is very challenging when compared to management in other sectors (Ozcan and Smith, 1998). First, health care outcomes are highly complex (Ozcan and Smith, 1998), frequently uncertain (Lemieux-Charles et al., 2003) and difficult to assess (Lemieux-Charles et al., 2003; Ozcan and Smith, 1998). Second, when public organizations, hospitals cannot, in most cases, be judged on the basis of profitability (Lemieux-Charles et al., 2003). Finally, health care organizations are particularly complex due to their dual lines of accountability: professional and administrative (Lemieux-Charles et al., 2003).

Health care organizations face continuous pressure to become more productive, innovative, and provide quality health care (D'Aunno et al., 2000). The escalation in costs of the health sector is a fact and a cause for concern that most developed nations have experienced (Ozcan and Smith, 1998). Worldwide, many ideas have been introduced in an attempt to address the problems of inefficiency (Ozcan and Smith, 1998).

In the health sector, resource availability and employee competence are essential but are not enough to guarantee desired employee performance (Franco et al., 2002). To obtain performance on quality, cost and patient satisfaction dimensions, health organizations will also have to satisfy their physicians and employees (Griffith, 2000). Health care delivery is high labour-intensive (Franco et al., 2002) and health sector performance is critically dependent on employee motivation (Amaratunga and Baldry, 2002; Franco et al., 2002; Martinez and Martineau, 1998). Because physicians play a crucial role in the use and distribution of health system resources as well in the total work of health care organizations, it is important that managers examine how motivation theories may apply to them (D'Aunno et al., 2000; Lázaro and Azcona, 1996) .

The technical aspects of the performance management processes have been significantly covered in the literature (de Waal, 2004). Despite the importance of the behavioural factors on the performance management process, the research in this area has been underexposed in the literature (de Waal, 2004; Vagneur and Peiperl, 2000). Although employee motivation is a critical element of health systems performance, it is largely understudied (Franco et al., 2002). Specifically fewer studies have concentrate on physician motivation (Alvanzo et al. 2003).

In the work context motivation can be defined as an "individual's degree of willingness to exert and maintain an effort towards organizational goals" (Franco et al., 2002:1255). Employee motivation is a complex internal psychological and dynamic process that results of the interactions between individuals and their work environment, and the fit between these interactions and the broader society context (Franco et al., 2002). Motivation is situational; it is influenced by several characteristics of individuals as well by the context in which they work (D'Aunno et al., 2000). Because health employee motivation is influenced by the interactions between employees and their work environment, health organizations can affect motivation of health employees and consequently organization performance (Franco et al., 2004).

Motivation is a fundamental theme for health care organizations managers; however it can be a very complex one (D'Aunno et al., 2000). In health care organizations different professional groups may have differing determinants of motivation (Franco et al., 2002). Further, Rector and Kleiner (2002) identify three difficulties in motivating public employees: pay is not tied to performance; disciplinary action is not as often used; and many performance appraisal systems have poor quality.

Performance management is an area of growth interest by academics and practitioners (Amaratunga and Baldry, 2002; Marr and Schiuma, 2003; Thorpe and Beasley, 2004). Although the term performance is very used in the management literature, it is difficult to be defined objectively (Lebas, 1995; Lemieux-Charles et al., 2003; Otley, 2001) and no widely definition of performance exists (Lebas, 1995). The concept of performance is contextual as it depends of both the users and the purposes of the information (Lebas, 1995). Generally it is accepted that performance is about past achievements, but performance can be perceived as the capability for future successful implementation of the actions that will allow achieving the objectives and targets (Lebas, 1995). "Performance management creates the context for - and the measures of - performance" (Lebas, 1995:23). In theory, a performance management process conducts to efficient and effective steering and control of the organization through some previously identified steps. In practice,