Excerpt of Wen's Master's thesis:
Research on Problems of the Current Salary System and Optimization of Employee Incentive Mechanism in Public Hospitals in China
Abstract
Talent is the primary resource in the hospital. It is the ultimate creator of the hospital's economic and social benefits and the foundation for the survival and development of the hospital. To maintain and strengthen the competitive advantage of the hospital, the most important consideration is to optimize and improve the employee incentive mechanism, understand and respond to the needs of employees in a timely manner, and fully mobilize the enthusiasm of employees. However, employees in China's public hospital tended to leave or work negatively, which had a negative effect on the long-term development of the hospital.
This research found that the main problems in the current compensation system of public hospitals in China can be classified into three aspects: unreasonable distribution mechanism, unsatisfactory incentive effect, and imperfect management mode. The main aspects linked to these problems are linked to the following: the health industry's salary deviates from the market value; the distribution factors are unreasonable; employees' work under huge amounts of pressure.
In order to solve the problems existing in the incentive mechanism existing in public hospitals in China, this study designed the incentive scheme optimization scheme. The designed system is based on the aspects of performance salary distribution system, training systems, and the spiritual incentive system. This study proposes to establish a scientific and reasonable performance compensation distribution mechanism, optimize the design of the training system, pay attention to the career growth of employees, enrich the spiritual incentives, and establish a long-term and efficient incentive mechanism.
Keywords: Public Hospital; Salary System; Incentive Mechanism.
1. Introduction
For every country, the quality of care in hospitals is essential to social wellbeing. Public hospitals are the mainstay of China's medical and health delivery system. It plays an irreplaceable and fundamental role in social, medical needs. However, compared with the scale advantage, the management of public hospitals lags that of private hospitals and enterprises. Due to the political characteristics of China, public hospitals have still embraced the economic model of the past and the management model of public institutions (Xu et al., 2019). They generally ignore the diversity and variability of employees. The management incentive method is mostly weak. This has, to a large extent, affected the enthusiasm and creativity of employees (Ting et al., 2018). Hence, it is difficult to motivate employees effectively. The embraced methods cannot adapt to the development needs of the hospital, which hinder the role of the main body of public hospitals.
At present, although many public hospitals have human resources departments, most of them follow the previous personnel management model. They have not yet realized human resource management in the modern sense. They still have a heavy administrative style and have not realized the innovation and effective application of incentive methods (Ting et al., 2018, Xu et al., 2019). There are still some practical problems in the incentive model, such as passive daily management of employees, insufficient active incentives and potential development; imperfect performance system, one size-fits-all performance appraisal, poor targeting, lack of internal competitiveness and difference in salary distribution (Ting et al., 2018). The enthusiasm of employees is not high. The existence of these problems has dampened the enthusiasm of employees to a certain extent. Consequently, this affects the exertion of the human capital of employees. The resulting brain drain is serious and has a negative effect on the long-term development of the hospital (Krzywdzinski, 2017). Employees in China's public hospital seemed to tend to leave or work negatively.
This research seeks to achieve the following objectives.
- First, studying the existing achievements of incentive theory in China and abroad can provide ideas on how to put together an incentive mechanism for public hospital staff in China.
- The second objective is to study the incentive status of public hospitals and then find out the problems existing in the current incentive mechanism in employees of public hospitals in China.
- The third objective is to draw on the relevant theories of incentive mechanisms, combined with the background of the reform of public hospitals in China. This will help put forward specific suggestions for optimising the incentive mechanism for hospital staff.
2. Literature Review
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3. Methodology
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Therefore, the analysis could not simply analyse the results from the data but should be combined with the social and cultural characteristics of China. […]
Therefore, in the analysis of this aspect, this research used the interpretative research philosophy to analyse the causes of problems. […]
...since this research tried to use collected data to identify problems and then optimize the current mechanism, it was believed that abductive approach would be the most suitable.. […]
In this context, this research requires both an empirical analysis of the incentive mechanism (quantitative analysis) and a qualitative analysis of the Chinese social context.
4. Quantitative analysis results
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5. Overview of performance-based incentive design
5.1 Performance-Based Incentive Mechanism Design Overview
In view of the results of the previous part, in order to effectively solve the problems existing in the incentive mechanism of public hospitals in China, this research believes that we should improve the performance salary mechanism, optimize the training system design, pay attention to the career growth of employees, enrich the spiritual incentive system, and build a long-term mechanism. In the construction of the employee incentive management program of public hospitals in China, this paper will fully consider the special group of hospitals and optimize the incentive mechanism by analysing problems and solving problems. The theoretical basis of Part 7 includes the theory of demand hierarchy, two-factor theory and expectancy theory. Considering this, this research will optimize the mechanism based on the following basic principles.
- Combine material incentive and immaterial incentive
Employees must have autonomy in their work, have the right to speak, have career advancement channels, and have scientific research opportunities. [...] we must build a platform and continuously provide opportunities for further study and skills improvement [...]. - Combine positive and negative incentives
The principle of combining positive and negative incentives is rooted in Skinner's Reinforcement Theory. [...] It is necessary to avoid "averageism". Rewards should be done according to merits and performance. [...] In the case of negative incentives, employees should be punished properly. [...] This requires managers to strictly enforce institutional norms [...]. - Combine efficiency with fairness
In the process of formulating incentive management measures, it is necessary to balance efficiency and fairness. [...] while assessing efficiency, managers need to consider fairness. Rewards and punishments must be clear, and work should be clearly distinguished. - Combine individual incentives with team motivation
For team incentives, effort should be made to facilitate communication, cooperation, and collaboration [...]. Attention also has to be paid to the value of the individual. [...] when developing an incentive plan, managers must fully consider the relationship between the individual and the team.
5.2 Basic measures of optimized mechanism
From the perspective of economics, performance and remuneration are the reciprocal commitment relationships between individuals and organizations. Performance is the individual's commitment to the organization, and remuneration is the organization's commitment to the individual. The essence of this kind of reciprocal commitment relationship embodies the principle of equivalence exchange, and the principle of equivalence exchange is the basic operational rule of the market economy. The usual rewards include both material and spiritual incentives. In this part of the study, different incentives are proposed for different purposes of performance evaluation based on the results of performance evaluation.
5.2.1 Material incentives
Material incentives include remuneration, such as salary, job allowances, bonuses [...]. First, the key performance indicator method (KPI) is used to rationally design the weight of each factor in the performance salary distribution. [...] The salary distribution should be tilted to the frontline employees. [...] hospitals should regularly organize the evaluation of the implementation effect of the system. [...]
5.2.2 Spiritual motivation
- Optimize the training system
As a knowledge-intensive organization, the hospital generally has a high level of education and cultural quality and pays more attention to individual ability improvement and career development. [...] - Establish an effective in-hospital communication mechanism
A good communication mechanism is conducive to opening barriers between departments, leaders and employees. [...] - Optimize the work environment
In recent years, the increasingly tense doctor-patient relationship has begun to impact the medical service order. [...] - Strengthening honour incentives
Hospitals can organize an annual selection of advanced workers, excellent case writers, and so on. [...] - Increase welfare
Hospital administrators and departments should ensure that employees enjoy the right to annual leave as stipulated by law. [...] - Establish long-term and efficient incentives
The implementation of long-term incentives in hospitals can promote the healthy development of employees and constrain the need for leave. [...]
6. Conclusions
This study, through literature analysis and secondary data analysis, found the following results. […]
6.3 Research innovation
At present, scholars' incentive research on Chinese hospitals is mostly limited to employee satisfaction and small sample salary level display. Most of the analysis comes down to the reason that the salary level is not competitive, and there is a shortage of posts. In the choice of hospitals, researchers are also more concerned about the analysis of private hospitals and pay less attention to the incentives of public hospitals. This study focuses on public hospitals. Based on the analysis of large samples, we look for root causes from problems and have some innovation in the content.
6.4 Limitations
Despite a lot of effort, there are still limitations in this study in several places, summarized as follows.
- A. The data sources for this study are all secondary data. In China's unique political and social environment, respondents who participate in the survey may be more inclined to answer questions in a positive way if they know that the results will be made public. Therefore, the credibility of the questionnaire involving subjective feelings is not as high as expected. In addition, because the items in the questionnaires in different regions are not necessarily identical, a scope of the study may be narrower when selecting comparative items. There are some projects that I want to analyse, but because of the lack of data, I have not been able to.
- B. Due to the limited data collected, the quantitative analysis of this study is insufficient. Future research can improve quantitative analysis by studying more data.
- C. Although this study has done some research on the performance evaluation of public hospital staff, due to limited time and ability, this paper does not discuss the selection of evaluation indicators in detail. Future research can do further work on this part.