Emerald Group Publishing Limited
Copyright © 2011, Emerald Group Publishing Limited
Spire Healthcare: engaged employees drive change
Article Type: HR at work From: Strategic HR Review, Volume 10, Issue 5
Short case studies and research papers that demonstrate best practice in HR
In 2007 Spire Healthcare was formed from the sale of a network of hospitals by private healthcare provider, Bupa. The organizational development (OD) team quickly recognized that a number of significant changes needed to be introduced to deliver the new business strategy. These would require the commitment of all employees.
The task ahead was substantial. The business was to undergo a great deal of change both in terms of structure and culture, moving from a traditional paternalistic culture to a financially driven, high performance culture. Failure to engage our staff emotionally would have had a detrimental impact on our ability to develop a high performance culture and deliver business results. We also recognized that to engage our employees fully we would need a structured program that we could measure and monitor and that we would need to benchmark our activities. Our goal was “to make Spire a great place to work.”
By the beginning of 2008 our employee engagement program was approved by the board and underway. The OD and HR teams selected Ixia as a partner for an engagement program survey. This saw the introduction of an independent staff engagement survey, which is conducted each year with four key measures: engagement, nature of work, autonomy and control, and my manager. The response rate has increased from 66 percent in 2008 to 75 percent in 2010.
Three key stages
The engagement project involved three key stages. The initial stage was to conduct focus groups in a number of hospitals to gain an in-depth insight into current contextual factors specific to Spire that were affecting employees’ ability to engage at that point in time.
The second stage saw the survey launched in three pilot locations, so that key stakeholders were involved in the development of the measurement and reporting processes. Finally, the executive team and members from the wider HR team developed a communication plan and implementation strategy. We decided that the executive team, hospital directors and heads of departments would be given written reports within four weeks of the results being collected.
Understanding the organization
The undertaking was considerable. Spire Healthcare is a leading provider of private healthcare, with 37 private hospitals throughout the UK. The organization is the second largest private hospital group in the UK, employing over 8,000 people nationwide.
Rob Wise, then chief executive officer, put his name to the communication around the first full annual Spire Engagement Survey, clearly explaining the reason the company was focusing on engagement. The OD team designed workshops and provided support with access to information to help employees understand the benefits and purpose of the survey.
The first results from the 2008 survey gave us useful data on which to build. We found that a high percentage of staff felt that managers failed to manage under-performance and that there was poor alignment between objective setting and organizational and business unit goals. We saw that managers needed to manage and communicate beyond process and employees needed to understand the link between reward and performance.
Using survey results to build new structure
The Spire engagement survey needs to be seen in the context of the changes happening in the company. It was and is not a stand-alone activity; it supported the need for restructuring and redesigning Spire into an organization that built in greater autonomy and accountability at local level. The Spire engagement survey was a central platform for change supporting the ethos of “The Power of Engagement.”
Outputs of the survey were used to support the design of management development programs. They included:
Management Fundamentals, which is a four-day intensive introduction to Spire culture and performance management processes.
Leadership Essentials, which is a workshop to provide insight into leadership dynamics and engaged followership.
We invested in excess of £500,000 developing our managers to understand fully our high performance culture, with organizational alignment to ensure all employees understood how they play a part in achieving individual and organizational success. We simplified and aligned our “Enabling Excellence” performance management system and behaviors to balanced scorecard measures (see Figure 1) to ensure clear line of sight to organizational goals. Annual bonus payments are aligned to balanced scorecard outputs.
Spire Healthcare has targeted considerable investment in developing its facilities, equipment, standards of clinical quality, customer service and employee engagement over the past three years. This has resulted in an 89 percent increase in EBITDA from £89 million in 2007 to £168 million in 2010, with an EBITDA margin of 26.4 percent in 2010.
Our customer service levels have improved every year resulting in 90 percent of patients rating their service as either very good or excellent in 2010 – up from 88 percent in 2008.
In addition, 71 percent of medical consultants rated the overall service from their hospital as either very good or excellent in 2010 – up from 51 percent in 2008.
The outputs from the engagement surveys provided the platform for culture change and growth, including the following:
Increased focus on KPI measures to increase organizational pace. The company’s overall people strategy critically holds its leaders accountable for the engagement of their employees and for delivering the appropriate interventions to address the changes needed.
Improved collaboration – collaboration has been encouraged through senior management forums where key business issues are discussed with employees and their feedback and ideas are actively encouraged. These face to face meetings are complemented by initiatives including “The Brain Bank” where employees can write issues or ideas on a white board.
Year-on-year improvement to benchmark results – see Figure 2 and Table I.
Table I shows how our results have improved across all four areas of the survey over the last three years, measured on a ten-point benchmark scale.
Return on investment
Spire employee engagement results were compared to the financial performance and ratings from our consultant engagement survey for every hospital using correlation analysis. The results identified that in hospitals where more employees had reported a strong sense of belonging to Spire Healthcare, consultants were more likely to rate the service they received from the hospital as excellent and recommend that hospital to other consultants starting a private practice.
In terms of financial performance, the hospitals where more employees felt a sense of emotional attachment and agreed that they were proud to work for Spire Healthcare also achieved higher levels of EBITDA as a percentage of their revenue. Employee engagement survey outputs have shown that year-on-year employees have rated an increase in managerial capability and supporting behaviors.
In summary we have identified that there is a relationship between the employee engagement results and the other sets of data that were compared. Spire financial results and consultant and patient satisfaction results have increased year-on-year and our engagement results have increased significantly. Our overall result demonstrates that we have made significant improvements over the last three years, continuing on the journey towards our goal of making Spire a great place to work.
Paul LeachBased at Spire Healthcare.
About the author
Paul Leach, Chartered FCIPD, is Head of OD at Spire Healthcare. He has extensive strategic and operational experience managing HR and OD. Prior to joining Spire Healthcare, he was a senior consultant within an HR and employment law consultancy. He previously held roles with J. Sainsbury plc and BUPA. He was also head of HR for a diverse group of companies responsible for managing change and actively involved in mergers and acquisitions. He has acted in the capacity of lecturer for the Chartered Institute of Personnel and Development professional examination courses. Paul Leach can be contacted at: Paul.Leach@spirehealthcare.com