What HR Departments Should Be Doing about Healthcare

Seven Steps to Improve Staff’s Time-Management Skills

By Daniel Butcher

Academy of Management Scholar Herman Aguinis of the George Washington University School of Business, one of the most influential management researchers, said that performance management—when organizations’ managers and leaders do it properly—is critical for organizations because it drives decisions about who gets a bonus, who gets promoted, who gets demoted, and who gets transferred or cut. He offered the following tips for business leaders to help build “time management-friendly” organizational cultures:

1. Follow through on lessons learned during employee training programs:

“Understand that training programs aimed at building time management skills, such as to-do lists, quiet time, and so forth, are only the first step. Employees need a role and work environment conducive to using these skills. If employees face structures and norms that make them waste time, the skills they learned will be useless and lost if they are not put to use,” Aguinis said.

2. Set a good example for rank-and-file employees and put them in a position to succeed:

“Leadership is critical in creating time structures and norms conducive to good time management. First, leaders need to manage their own time well. For example, running meetings efficiently and not letting people waste time at meetings. Also, leaders need to implement performance management and reward systems that discourage wasting time based on how well people manage their time and the results they obtain. Measure the time management performance of middle management. How many performance and rewards systems measure time management? Not many.”

3. Embrace flexibility and hybrid work schedules

“Use technology to minimize commuting time, allow flexible hours and telecommuting.”

4. Avoid and eliminate recurring meetings that aren’t likely to move the needle:

“Don’t create committees and task forces that study issues endlessly without taking action.”

5. Recruit candidates with strong time-management skills:

Use situational interviews to screen out candidates whose attitudes about time do not match those of the organization. For example, job applicants can be asked to choose an alternative among several available choices. Or, job applicants can beasked, ‘tell me about the last time when,’ and they are presented with a situation when they need to make decisions about how to manage their time.”

6. Analyze the implications of the cliché “time is money”:

“Benjamin Franklin wrote that ‘time is money.’ But time is more than money. It is the most fundamental resource that allows people and organizations to get other resources, such as financial, social, physical, and human resources. Without sufficient time, we cannot get any of these other resources that allow a firm to get ahead of the competition,” Aguinis said. “But time itself is often under the radar because ‘what is not measured does not exist.’ It is critical to raise awareness of time as a resource, measure it, and reward units and individuals who manage time well. Also, business leaders should identify and remove systems and norms that prevent people from managing their time well, such as bad bosses who force people in their departments to engage in time-wasting activities.”

7. Reimagine formal systems that can affect employees’ time-management effectiveness, including:

• Time structures: “Systems used to manage time, such as performance appraisal and reward systems that reward individuals for working long hours. For example, using punch- or time clocks or including a question on a performance appraisal form about how many hours a week employeesare at their desk.” Other time structures include project timelines, cleaning schedules, and holidays.
• Time norms: “Informal rules about how to do things right and wrong about time at work. They are based on values and are often implicit, but everyone knows them. For example, arriving at meetings late is not a big deal in many organizations or cultures.”

Performance Management Needs to Be Well-Defined

By Daniel Butcher

As crucial as performance management is to make sure that organizations’ decisions about compensation, promotions, hires, and cuts are aligned with organizational goals, it can be difficult to define. Leaders first must define performance before they can measure it and evaluate their organization’s performance-management processes and procedures.

That’s according to Academy of Management Scholar Herman Aguinis of the George Washington University School of Business and author of Performance Management for Dummies, who said executives at various organizations have asked him about performance issues, complaining that their employees weren’t performing at the level they should have been. In response, when he asked them how they define performance, they typically fell silent.

“Sometimes leaders don’t do a good job of measuring performance because they don’t define performance well, so the first advice I would offer is to be able to make sure that you define performance in alignment with the strategic goals of the organization, the performance goals for individuals, units, teams, and departments all have to be aligned with the strategic goals of the organization,” Aguinis said.

Aguinis argued that performance evaluations shouldn’t be a once-a-year event. Organizations need to train supervisors on how to provide good feedback, measure performance in an unbiased way, have honest professional-developmental talks with employees regularly, and use performance management as a tool for spotting star performers, skills development, and performance improvement.

“If you’re a manager, your top responsibility is to manage the performance of the people in your unit, because if they do well, then the company does well, and you look good, so performance management should not be pushed by HR only; rather, it should be something that every manager and supervisor is doing,” Aguinis said. “Performance evaluations shouldn’t be just as a tool for punishing and rewarding past behavior, but also as a tool for motivating future outstanding performance.”

Performance Management Is Often Biased or Misused

By Daniel Butcher

Performance management is critical for all organizations because it drives major decisions about who gets a bonus, who gets promoted, who gets demoted, and who gets transferred or cut. Such decisions are most effective when they are fair and merit-based and made in ways that are consistent with the organizational goals.

That’s according to Academy of Management Scholar Herman Aguinis of the George Washington University School of Business and author of Performance Management for Dummies, who said that performance management done correctly serves all of those important purposes. Unfortunately, he estimates that about 90% or more of companies don’t do performance management the right way.

“A lot of people hate performance management. Why? Because employee ratings are often biased, and some supervisors use performance management to punish people they don’t like,” Aguinis said. “For example, I have seen cases of supervisors giving employees a very high performance rating so that person can be transferred out of their unit, because they don’t like them.

“This is how perverse performance management can be sometimes,” he says. “Also, you tell me the name of a supervisor who likes to give negative feedback to employees or share negative or bad news with them—most don’t.”

At many organizations, performance reviews are annually or quarterly at most. It’s a task that HR pushes on managers, who typically do it as fast as possible without much attention to detail. For all these reasons, most supervisors and employees alike hate performance management, Aguinis noted.

Many companies, especially during the COVID-19 pandemic, decided to halt performance management—a classic case of throwing the baby out with the bath water.

“The idea was we should stop providing ratings or performance feedback, because it causes a lot of damage when not done properly, and during the pandemic, managers were saying, ‘I don’t see my employees in person—I don’t interact with them on a daily basis, so I don’t know what’s going on, and thus let’s just do away with performance management,’” Aguinis said. “Obviously, it was a very bad idea, because managers don’t know who to promote, and when it’s time for bonuses and rewards, leaders don’t know how best to allocate resources, so people came back around.

“Many companies, including Microsoft, Apple, IBM, and Deloitte, that had announced the end of performance ratings and performance management all, came back with a vengeance,” he said. “There were some tweaks, but it is still performance management.”

How Sustainability and Corporate Social Responsibility Became Intertwined

By Daniel Butcher

As scientists’ warnings about climate change have become increasingly urgent, environmental issues and sustainable business practices have become more central to corporate social responsibility (CSR). Now, there is much more pressure on companies to track environmental, social, and governance (ESG) metrics, including their carbon footprint, and consider other environmental factors affecting the climate and ecosystems as part of their CSR commitment.

That’s according to Academy of Management Scholar Herman Aguinis of the George Washington University School of Business, who noted that 99% of companies in the S&P 500 report ESG information to some degree, most annually, including:

• 452 that align with the Sustainability Accounting Standards Board (SASB);
• 395 with the Taskforce for Climate-related Financial Disclosures (TCFD); and
• 346 with the Global Reporting Initiative (GRI), with some following more than one set of standards.

“That dimension has become so, so critical that CSR-ESG and sustainability are key aspects of it,” Aguinis said. “In the 1980s, there was a big emphasis on making the business case for CSR, and now, things have changed a little bit, because many companies are saying, ‘This is the right thing to do—if we make money, great, but if we don’t, that’s not that critical—we need to do the right thing.’

“But CSR and sustainability work best when you do good and do well simultaneously,” he said. “For example, by embracing sustainable practices, you can actually save money and make money, and at the same time, you can look good in the eyes of the community, consumers, and very importantly, your own employees, who are your best ambassadors.

“In fact, if you do CSR and sustainability right, you can use that as a recruitment and retention tool.”

Leaders who want to embrace CSR and sustainability as an honest, genuine, strategic core aspect of the business need to embed them throughout the organization, Aguinis stressed.

“If you do not measure these things at all, and if you don’t reward them, then all employees are not likely to take them seriously,” Aguinis said. “They can’t be evaluated as something you do on this side, as a nice-to-have, so it is critical to embed CSR and ESG within the strategic goals and the organization’s operations.”

CSR, ESG, and sustainability becoming intertwined strategically also relates to reimagining the purpose of the corporation. For example, in 2019, Business Roundtable issued a Statement on the Purpose of a Corporation signed by 181 CEOs who committed to leading their companies to benefit all stakeholders, including customers, employees, suppliers, communities, and shareholders.

“The goal of the business in a publicly traded company is to make money and create value for shareholders, but even if you’re not publicly traded, you have a responsibility to serve your customers,” Aguinis said.

“We have expanded the concept from shareholders to stakeholders more generally—not only the customers you serve but also the communities within which you’re embedded. So, to what extent are you adding value—both financial and otherwise—to all of these stakeholders?”

How to Make Hybrid Models Work Well

By Daniel Butcher

Should organizations be flexible and enable work from home or demand that employees come into the office? Post-pandemic, some organizations gave their employees the option to continue working remotely, but most moved to a hybrid model of two or three days per week in the office and two or three days per week working remotely.

That said, more CEOs have decided to mandate that their organization’s personnel come into the office five days a week again, especially in industries such as financial services and technology, with Amazon, X, AT&T, Boeing, Dell Technologies, Goldman Sachs, Morgan Stanley, Citigroup, and J.P. Morgan Chase being the latest Fortune 500 companies to do so. However, that may hurt morale and increase turnover, not to mention impede innovation.

Each of the three options has positives and negatives, complicating leaders’ choices.

Academy of Management Scholar Wendy Smith of the University of Delaware said that leaders need a different way to think about this issue. She noted that most organizations are trying to split the time—some time at home and some time in an office. Yet that approach occasionally ends up with the worst of both worlds.

“Key tensions between autonomy and collaboration, independence and interdependence, well-being and productivity underlie this decision,” Smith said.

Rather than frame these tensions as an either/or, Smith argued that effective leaders see these as a both/and. They explore how to create an approach that values the benefits of both at-home and in-office time and understand how they can benefit one another.

For example, rather than split the number of work days into some sort of a hybrid schedule, leaders can strive to create valuable in-office experiences that contribute to a positive, cohesive organizational culture while being willing to be flexible when it makes sense or is necessary.

“If you expect your employees to be in the office, then make sure that they come for a reason—staff meetings, in-person events, networking opportunities,” Smith said. “Moreover, if they are home, give them the skills, technology, and opportunity to truly have autonomy over their time to the best extent possible so that they can navigate when and how they get their work done.

“The main insight from our research is: If you shift from thinking you’ve got to pick one or the other—an either/or approach—and instead you value and hold these competing demands in your mind simultaneously—a paradoxical both/and approach—that’s when you get to a better solution,” she said.

Counterintuitive Aspects of Workaholism

By Daniel Butcher

Most people see workaholism as hurting emotional and physical well-being and personal relationships. Continually working long hours can affect professionals’ health and lead to all sorts of other problems. But a passion for work can mitigate the consequences of workaholism and may even give some workaholics a sense of purpose.

Academy of Management Scholar Nancy Rothbard of the University of Pennsylvania said her research with colleagues revealed that there are actually two types of workaholism. The classic type of workaholism is significantly negative due to the detrimental effects it has on workaholics’ health, wellness, and long-term on-the-job engagement. But another set of workaholics are really passionate about their work.

“For the set of passionate workaholics who are really engaged and love their work, it turns out that the negative health implications were not there, and in fact, they had a lower risk of metabolic syndrome, which essentially means risk of cardiovascular disease,” Rothbard said.

“When we unpacked those findings to try to understand what was going on there, we found that people who are engaged workaholics have more social support, they have a better handle on their recovery activities, things like going to the gym and managing their health in real time,” she said. “They are workaholics; they’re very engaged in their work; they feel obsessive about their work, but they also love their work.

“And so, they’re not being drained in the same way over time and, despite working very long hours, had better work-life balance or more social support from their managers, peers, and family than what we call non-engaged workaholics.”
Managers can help to avoid some of the negative effects of non-engaged workaholism.

“There are ways to increase the engagement of your employees through providing them with a strong set of goals and vision,” Rothbard said. “All the great leadership types of activities that we that we know work are really important for increasing engagement.”

An Overlooked Factor Increasing Health Insurance Denials

By Daniel Butcher

U.S. law governing health insurance and benefits administration has had an unintended consequence of encouraging insurers and third-party administrators (TPAs) to deny more claims and authorizations.

Academy of Management Scholar Jeffrey Pfeffer of Stanford University said that the remedies for harms caused by improper denials of doctor-recommended medical procedures or medication under the Employee Retirement Income Security Act (ERISA) are limited to recovering money.

“If an insurer denies you access to care and you die or are permanently injured by this denial, its only recourse is to recover for the actual money that it should have paid,” Pfeffer said. “Because of the limited remedies, the base case is denial, and so many prior authorizations and many claims are denied by health insurers or TPAs.

“It turns out that if you appeal, in about 60% of the cases, the appeal is actually going to be successful; the problem is, only about 10% or, depending upon the study that you look at, 20% but not very many people ever appeal,” he said. “When you get a notice that says, ‘This medicine has been denied’ or ‘This procedure has been denied,’ it’s required by law to send you a long form in several languages that tells you what you can do to appeal.

“Only about 10% of people appeal,” he said, “but if you do appeal, you will, in fact, have a good chance to be successful.”

The appeals process is complicated, discouraging many people with legitimate claims that were denied from appealing. In addition, poor and working-class people may be less likely to have the time to appeal.

“Health insurance executives say to themselves, ‘Who’s likely to appeal? ’Who’s likely to appeal are people who have time and who have the social capital and resources to appeal, so this mass denial of claims and denial of authorization adversely affects less educated, less wealthy people and underrepresented minorities,” Pfeffer said.

“This is one of the reasons why the U.S. healthcare system has such enormously unequal outcomes, because your access depends upon your social capital and your time and willingness to fight with these insurance companies,” he said.

Executives Need to Oversee Employee Benefits

By Daniel Butcher

The buck for healthcare benefits administration should not stop with human resources (HR). In fact, top executives need to help ensure that their employees are getting the healthcare benefits and services that they’re paying for. If they don’t, their organization may get sued.

Academy of Management Scholar Jeffrey Pfeffer of Stanford University said that most large organizations have a head of benefits who reports to the head of HR, but the CEO and CFO ought to get involved.

“If you do not clean up how you’re doing your benefits administration and all this stuff continues to go on, you’re going to be liable for suit,” Pfeffer said. “Under ERISA [the Employee Retirement Income Security Act of 1974], employers have a fiduciary duty. “I think I pay $250 twice a month at the moment for health insurance, and my employer contributes some money as well to go to paying Anthem for paying medical claims.

“A university or U.S. Steel or American Airlines or whoever your employer is holds that money in trust for the employees, and under ERISA, they have a fiduciary duty to manage those resources prudently, but most do not do so,” he said.

The same issues facing the healthcare industry can be found in the history of third-party administrators of retirement benefits.

“Retirement benefit administrators were charging too much money and not doing a very good job, and then there were a bunch of class-action cases filed against companies that said, ‘You are not exercising your fiduciary duty,” Pfeffer said. “In about a 12-year period, $6 billion was paid out, and then everybody cleaned up their administration of retirement benefits.

“I can tell you with almost 100% certainty, the same firms that file those class-action cases are going to be filing class-action cases against employers for health benefits under the same claim that the employers have done a poor job exercising their fiduciary duty to manage these benefits for employees effectively,” he said.

Companies Can Reverse Americans’ Declining Life Expectancy

By Daniel Butcher

A handwritten note by Luigi Mangione, the suspect in the murder of UnitedHealthcare CEO Brian Thompson, has called attention to the declining life expectancy of U.S. citizens. The note highlighted the jarring gap between the soaring costs of the U.S. healthcare system and the country’s relatively low life expectancy, as reported by the Associated Press.

The U.S. Center for Disease Control estimated Americans’ life expectancy at 77.5 years, which is similar to that of Ecuadorians and Croatians, while Dr. Steven Woolf of Virginia Commonwealth University said that at least 10% to 20% of health outcomes are directly tied to the U.S.’s privatized healthcare system. Employer-subsidized healthcare insurance plans and third-party administrators raise the cost of care and often deny doctor-recommended medical procedures.

AOM Scholar Jeffrey Pfeffer of Stanford University said that he’s skeptical that the United States will move to a single-payer healthcare system such as Medicare for All or any other national solution such as the public health-insurance option that was removed from the Affordable Care Act before it passed in 2010. That places the onus on employers to help ensure that their employees are getting decent healthcare, which benefits organizations by increasing retention and productivity.

“The idea of us getting to a single-payer healthcare system given the politics of all of this is close to zero, but the interesting thing is, employers do not have to wait,” Pfeffer said. “Large universities, U.S. Steel, J.P. Morgan Chase, and all these organizations could fix their problems themselves—they don’t have to wait for Congress to pass something.

“Employers could save a lot of money and reduce their legal exposure and risk of getting sued under ERISA [Employee Retirement Income Security Act] for not doing their fiduciary duty,” he said. “They could have employees who are happier, more satisfied, and more engaged, because in a paper I did with three colleagues, what we found is that employees who spent time having to deal with their benefits administrators were more burned out and less satisfied and less engaged than the employees who did not have to do so.

“Ironically, employers are paying for benefits that burden the employees rather than benefit them, and if you fix the administration of health benefits, they would have more engaged, more satisfied, less prone to turnover, less burned-out employees.”

What Employees Can Do to Deal with a Broken Healthcare System

By Daniel Butcher

In the wake of the killing of UnitedHealthcare CEO Brian Thompson last year, frustration with the costs, paperwork, and denial rates of U.S. heath insurers and third-party administrators (TPAs) has boiled over. In the absence of legal reform, often employees trying to get the healthcare services they need feel powerless, but employers can do much more to hold their health insurance and administration vendors accountable.

Academy of Management Scholar Jeffrey Pfeffer of Stanford University said that rank-and-file employees who are struggling with denials of doctor-recommended healthcare procedures or labyrinthine administrative tasks should request a meeting with or write to their CEO, CFO, and the head of human resources (HR) and demand that they better manage the organization’s health insurance and TPAs.

“These are vendors, and just as you would manage, vet, and scrutinize a vendor or supplier of any raw material or electricity or software or computing power or whatever your vendors are, you ought to do a better job of overseeing your vendors and making sure that they are delivering what you want them to deliver in a cost-efficient manner,” Pfeffer said. “Stop putting up with all of this administrative complexity and overhead and the idea that you have to accept whatever pricing and administrative processes that the insurer or TPA offers and agree to live with denials.

“I interviewed a health insurance executive for one of my books, and he said, ‘Healthcare is not like any other service; it’s more complicated,’ but I don’t believe that at all,” he said. “You can find metrics of the percentage of our employees able to access care.”

Pfeffer urged executives and HR personnel to ask themselves:

• Are employees able to access care in a way that’s consistent with our diversity initiatives so that we’re not discriminating?
• Are employees able to get the care they need?
• Are they able to access mental-health benefits?

“‘What’s the health of your workforce?’ is a key question that’s interrelated with the success of your organization,” Pfeffer said. “This is not complicated, but we made it complicated.

“This is about delivering a service in a cost-efficient manner,” he said.