Mercy Healthcare comprises two different hospitals on the same site, one for-profit and one not for profit, and was originally founded by the Catholic Sisterhood in Australia. They are tasked with delivering the Catholic mission and values and at the same time improving performance and producing a surplus or margin. Money from the for-profit hospital supports the not-for-profit one. Thus, balance is key in the challenge so that both the mission and the margin are successful. The values that underpin the mission are mercy, dignity, care, commitment and quality.

In the 1980s a CEO was appointed to run Mercy Healthcare in place of the Catholic Sisters. Over time there were severe staffing shortages (levels of employment were high) and at the same time they were needing to invest in expansion and redevelopment. Towards the end of the 1990s Mercy Healthcare’s financial position was seriously concerning management. Increasingly the staff in the two hospitals saw themselves as separate, and there was a deterioration in employee sentiments regarding the mission values, and staff satisfaction was low.

To resolve this crisis, they embarked on a period of change, emphasising that nothing could run counter to the mission and values. At the same time, they introduced a HPWS. Both hospitals were to be run in exactly the same manner. A new Director of Mission role was created and there was a focus on improving staff satisfaction and engagement. The highperformance work practices that were implemented were:

HR planning: A new tool developed to graph future employment supply and demand. This tool was recognised as best practice even outside the hospital sector, and was presented at conferences.

Recruitment and selection: Innovative nursing and midwife exchange programme developed between aged care organisations and Catholic hospitals.

Performance management: Best practice system introduced to support managers facilitating interactions with staff. Workshops, computer-based toolkit and other support materials produced.

Learning and development: A new education centre created by Mercy Healthcare. This not only served staff but delivered courses to external paying clients, including universityaccredited programmes.

Engagement, satisfaction and retention improved. Interviews with managers and staff suggested that the mission vs margin was not seen as contrary, but that the mission facilitated the margin. The mission softened the HPWS approach so that potential damaging side effects of an HPWS were not encountered.

Questions 

1. What staffing and other problems might be anticipated by the strategy of running a for profit and a not-for-profit hospital on the same site in exactly the same manner? How might these potential problems be alleviated?

2. How would you design and implement HR practices so that they support the mission and margin strategy? Give examples and justify for each HR practice – include recruitment/selection, development and reward practices as a minimum, but add other relevant practices to these.

3. To what extent could this mission and margin strategy be used in other types or organisation. What are the reasons behind your assessment?