Management Accounting at Hospital - Essay Example

Management Accounting at Hospital a) Various possible effects on the behavior of the laundry supervisor There is always a high employee turnover rate among skilled laundry supervisors in Chinese and Asian firms (e. g., Owens, P.L. 2006). Development Dimensions International Inc. (2007) has done a survey on employee turnover rates in the Hospital. 215 HR professionals and 862 employees in Hospital have answered the questionnaire and more than 80 per cent of them are from Multinational Corporations (MNCs). According to the survey, there are more than 60 per cent of them have been in the Hospital for less than one year. Among the HR professionals, there was 38 per cent of them had an increased employee turnover in the past 12-18 months; 53 per cent stayed the same; and only 9 per cent had decreased. For the laundry supervisor, there was 23 per cent of individual contributors, professionals, first-level leaders, and mid-level executives somewhat or likely to leave within the next year. This study shows that employees in Chinese firms are likely to change their job quite often. This is because it is hard for them to stay within the Hospital for a long time. Moreover, studies done by Owens (2006) argue that finding and remaining high qualified laundry supervisors is the greatest problem in the Hospital. Therefore, turnover rates in the Hospital are quite high. This creates room for prediction that turnover rates in the Hospital’s SMEs may be even higher than the results of this survey. This is because SMEs are more informal and instable than MNCs. (Owens, 2006, p. 71). Hence, it is necessary to research the aspects that could influence turnover in SMEs. In Chinese manufacturing firms, voluntary employee turnover is becoming an expensive problem. The issue is even worse for SMEs (Owens, 2006, p. 101). If SMEs have the power to compete against the larger ones, working conditions for employees are poorer than larger companies, and poorer working environment would be an obstacle to remain employees. The characteristics of employment relations in the Hospital’s SMEs are different from State Owned Enterprises (SOEs), Joint Ventures (JVs) or large private the Hospitals (Owens, 2006, p. 112). SMEs have limited resources, both compensation packages and career enlargement, which can be the key motive for high employee turnover rates in SMEs. However, SMEs could remain employees through other methods and do not depend only on compensation packages. According to the hierarchal of needs theory (Owens, 2006, p. 71), human beings have different levels of needs. There are basic levels which could be fulfilled by extrinsic rewards. Nevertheless, people could only be motivated by intrinsic rewards at higher levels. Hence, firms could remain employees by recognition, care, and career advancement, which are all intrinsic motivators. Thirdly, the laundry supervisor turnover intention after training could be influenced by alternative job opportunities. When there are increased external job opportunities, employees are more likely to leave the Hospital after training. In other words, skilled employees are more attractive to employers. This makes him more likely to seek Hospitals that provide better extrinsic and intrinsic rewards. In (Owens, 2006)’s study, it argues that respectable performers are more probable to depart from the firm than awful performers. Outstanding performers have more job alternatives than those who do not perform well. Not surprisingly, there are studies focusing on the positive correlation between training and turnover intention. However, studies in this field are still not enough. It has been proven that the more training provided by firms in Asia, the higher level of employee turnover. One of the reasons to explain this is the ‘expense of cheap labor’. As trained and skilled employees could be attractive to any employers including the competitors, employees could simply change their job to the Hospital which has provided the best compensation package (Owens, 2006, p. 144). Hence, hiring qualified and knowledgeable employees is the main HR challenge to most Hospitals due to fierce competition. Becker (1965) has predicted that Hospitals may reluctant to invest in employees’ general skill development because trained staff has a higher intention to leave. A research done by Wayne, Shore and Liden (1997) has shown that employees have more chances of leaving the Hospital if they participated in company-sponsored classes outside their job. Also, research done by Owens (2006) has found a positive relation between training opportunities and turnover intention. Therefore, certificate and formal training could increase employees’ turnover intention in SMEs. This is because skilled laundry supervisors prefer finding better jobs in larger companies that provide better job responsibilities, compensation packages and career development. b) Methods Rivington Hospital can decide whether or not a variance should be investigated Nadler and Tushman (1980) have developed a model, which is an analytical tool that considers the critical inputs of the Hospital, its key outputs and the transformation process, which the Hospital control towards achieving their overall goal and to produce its products. This model works on several theories, but the main theory applied is the interdependence of the Hospital’s production factors and the manner in which the resultant changes in one of the factors affects the productivity and the output produced by all other factors. This model has been referred to as the congruence model of the Hospital behavior which is not only essential in analyzing Hospital employee behavior but also imposing corrective measures on the employee behavior as a system. The congruence model has put several considerations into deep concentration. These are the inputs, the components of the Hospital and the outputs of the Hospital, defining each of these components intensively. The inputs of the Hospital have been classified into three main categories, and an additional derivative input has been added. These are; the Environment related inputs, resources and the Hospital’s history inputs. The derivative input outlined by the model is strategy, as it determines the functionality, productivity and interrelation of the rest of the inputs. The hospital has been broadly categorized into four key components which are the task, the individual, formal Hospital arrangements and relationships as well as information Hospital aspects, such as leadership skills. From the components, the model has covered the outputs of the Hospital, which will be the core focus of our analysis. The outputs have been categorized into three main classes, which include Individual output, Group output and Hospital output. Using the model, this paper will analyze a company outlining the various issues pertaining to the Hospital and the extent to which the Hospital has achieved efficiency as defined by the model and the creators. The selected company for this paper is Industrial Services of America Inc. this is a Hospital whose main role is recycling, reselling and processing scrap metal. The primary outputs of the Hospital can be categorized in three main classes as suggested by the Congruence Model. At individual level, the main outputs include proficiency in the employees, who are grouped in various departments of the Hospital, task completion and quality of the service the individual offers. This being the case, each individual in the Hospital can be judged from the ability of the individual to complete a task and the accuracy of the individual in whatever department he or she belongs to. c) Re-writing and re-calculation of support memo The Hospital evaluates and measures its performance through two main ways. One of the ways is through the sales posted by the Hospital. During every year, the Hospital evaluates its sales quarterly. For instance, in the third quarter of 2011, ISA posted total sales amounting to $500,000 (Wayne, Shore, & Liden, 1997, p. 239). This time last year, the Hospital scored a resounding $76.6 million which illustrates a drop in the Hospital’s performance. The Hospital evaluates its performance at the end of every three year period. This assists the Hospital to achieve its long-term goals. Another way through which the Hospital evaluates its performance is through the value of its shares. For instance in this period, the Hospital’s shares dropped by $0.67 each. As earlier cited, there are four main divisions in the Hospital. The management of ISA has selected these four divisions through their functionality and their output as well. The contribution of each of the divisions to the final output has also been considered in deciding the functionality of these divisions. Some divisions that facilitate the performance of the Hospital and are not directly involved in the final output such as the financial department, the technical department and other such like departments have not been considered in determining the various levels of output in the Hospital. Each of the division’s output has been categorized in the section above. Performance evaluation in these divisions can be measured through the amount of output produced by the alloy and recycling divisions. For WESSCO, the number of sales made can be used to measure the performance of the Hospital. For the logistics group, the levels of efficiency, time usage and amount of goods handled with minimal if any stress or delays. Individual efforts which lead to individual output and performance play a key role in determining the total output by all individuals in a given group. The delay or reduced productivity of one of the individuals affects the total output the group. The group’s performance is thus influenced by individual performance. Thus, if individuals are not as efficient as expected, the Hospital is doomed to fail. The group performance collectively influence the total output of the Hospital. However, at group level, there are different performance levels and thus Hospital output is not as dependent on Group output, as group output is dependent on individual output. The interaction of the outputs at Industrial Services of America Inc. from the three different levels of the Hospital, interact to generate medium performance of the overall Hospital. I believe the performance of the Hospital is moderate, basing this fact on the drop in the sales performance of the company from last year. If the Hospital had improved, I believe that its overall performance would be overly high. References ISA Recycling. 2011. Welcome to Industrial Services of America. Retrieved 29th Dec, 2011 from http://www.isa-inc.com/ Nadler, D.A. & Tushman, M.L. 1980. A model for diagnosing organizational behavior. Organizational Dynamics, 9(2), 35-51. Taglictch Brothers. 2000. Industrial Services of America, Inc. Retrieved 29th Dec, 2011 http://www.taglichbrothers.com/equityuniverse/companies/industrialservam/industrialservam.aspx Owens, P.L. 2006. One more reason not to cut your training budget: The relationship between training and organizational outcomes’, Public Personnel Management, Vol. 35, No. 2, summer 2006 163-172 Palich, L. E., Hom, P. W., & Griffeth, R. W. 1995. Managing in the international context: Testing cultural generality of sources of commitment to multinational enterprises’, Journal of Management, 21, 671–690 Warr, P. & Birdi, K. 1998. Employee age and voluntary development activity’, International Journal of Training and Development, 2: 3, 190-204 Waterman, R. H. Waterman, J. A. & Collard, B. A. 1994. Toward a career resilient workforce’, Harvard Business Review, 72(4): 87–95 Wayne, S. J. Shore, L. M. & Liden, R. C. 1997. Perceived organizational support and leader– member exchange: A social exchange perspective’ Academy of Management Journal, 40, 82–111 Kletter, H. (November 14, 2011). Industrial Services of America, Inc. Reports Third Quarter 2011 Results. New York Times. Retrieved from http://markets.on.nytimes.com/research/stocks/news/press_release.asp?docTag=201111140800BIZWIRE_USPRX____BW5121&feedID=600&press_symbol=153043 Noble, J. (November 16, 2011). Industrial Services of America. Retrieved 29th Dec, 2011 http://www.taglichbrothers.com/TaglichTrack/Reports/industrialservam/industrialservam-11162011.pdf Read More