The Labor Management Partnership at Kaiser Permanente - Essay Example

Healing Together: the Labor Management Partnership at Kaiser Permanente Introduction The CEO of Kaiser Permanente created the largest, most innovative Labor- management partnership between the President of AFL – CIO and the leaders of the coalitions of members representing employees at Kaiser Permanente in 1997. This report is going to analyze the aspects of Labor-management in Kaiser Permanente, which were specific to the organization and which fit in the partnership process. The report is also going to discuss if management should be less resistant to partnership initiatives, whether unions should be wary of the partnership, how the government should promote partnership and strengths and weaknesses in the partnership Body Were there aspects of Labor-management relations at Kaiser Permanente, which were specific to that organization and which more readily fit into the partnership process? Kaiser Permanente was facing massive losses in its organization, some as a result of competition from other health care providers. Employees from the company were getting laid off and for others, wages and benefits were being reduced. This led to union members responding with strikes. Kaiser Permanente was given the option to split the organization into two, insurer and health care provider (Thomas K., Robert, Paul 1). This move would force KP to move from its mission of integrating health care and insurance services that have been their business for the past 50 years (Thomas K. Robert, Paul, 1). The organization was eventually split into two parts with the executives and union leaders deciding to form a partnership that involved the labor and health care delivery challenges. Should the management be less resistant to partnership initiatives? During its first ten years, the partnership helped Kaiser Permanente’s achieve many goals. These were; their financial performance improved tremendously and they were turning a profit, there was peace among the laborers and it demonstrated how important it is to use negotiation while carrying out day after day activities. The agreement made in contract negotiations in 2008 has helped in keeping the workers’ wages whole. It has also helped retain the health retirement account which enables the workers use their unused sick leave insurance during their retirement (Thomas A. K. 2). The partnership is now able to move to the next level due to an agreement made in the contract negotiation. The agreement establishes a new performance improvement program that will recognize workers efforts and increasing the wages of people who perform well (Thomas A. K. 2). The agreement also created a labor-management committee who are highly qualified to work on marketing and other plans which will help secure Kaiser Permanente’s future. All these developments were the fruits of a labor-management partnership. Thus, management should be less resistant to partnership and embrace it (Jody 3). The partnership has expanded relations of the labor-management department through the ways I have mentioned above. The workers, as well as committee members of the organization, are happy with the outcome of the partnership as economic losses have reduced with improved efficiency. Lessons learned in the Kaiser Permanente partnership has helped to improve health care delivery. This has been done at a time when the country has a shortfall of nurses and health care providers (Thomas A. K. 3). Should unions be wary of partnership? Unions should not be wary of partnerships as we have seen in the labor-management partnership at KP. Kaiser partnership had covered more than 90,000 employees by 2007 (Thomas K., Robert, Paul 5). This is evidence that the partnership is not just theoretical, but offers real help to the workers that need it. State of the art negotiations was used in three path-breaking agreements to address sensitive issues that are not normally discussed in unions (Amy 7). Different policies continued to be set, which includes work – family relationships. The employees were given more time to be with their families i.e. balance between work and home. Introduction to IT equipment in the industry was also addressed and employees given lessons on how to use them and how to incorporate medical records electronically (Jody 3). Why do not governments more actively promote partnership? In the health care industry, power is usually decentralized and doctors have more power in decision making and usually tailor practices in medical care to suit their needs. However, the Kaiser partnership has accomplished many things despite the fact that doctors have more power in making decisions (Amy 7). These changes were however not easy to come across as the doctors, nurses and other health care providers had to feel the need for change for it to occur. Most of the workers had to be highly convinced that a partnership was the best way forward in dealing with their issues. Coming to an agreement on the principles of the partnership was also not easy because everyone had a different opinion on different issues (Amy 7). The government feels that the labor-management unions require strong and progressive leaders who will ensure consistency in the partnership. This is not easily achieved and most unions fail because of it. Another issue is that the union members’ density is declining and this is a big challenge for the leaders and also the government. What overall strengths and flaws do you see in Kochan’s analysis? Strengths The major achievement of the labor- management partnership is that it has managed to have a decade long labor peace. The partnership was born because of the crisis in the Kaiser Permanente health care organization. It was greatly assumed that the partnership would not last long because of that reason. Their decision to form the partnership proved to be a historic move which has improved the countrys health care system. The partnership proved to work through pivotal events that would otherwise break the partnership (Jody 4). Some of the major achievements of the partnership are; Negotiation of a comprehensive and secure income has been a notable achieve, the partnership did not break through the time of transition to a new CEO and the executive director of the union (Thomas K. Robert, Paul 4). Before the partnership, Kaiser Permanente organization was going through financial losses as their competitors were winning customers over them. However, after the agreements and focusing on how to get a profit, the organization has had a lot of financial gains over the years (Amy 8). The partnership helped its members achieve managerial, business and technological skills. Another achievement of the partnership is initiation of unit-based team processes All the regions in the United States have a team that works together to generate ideas to better the organization. The capacity for employees who assisted in making decisions increased both at individual and group level (Jody 4). Initially, this was not the practice and the progress was limited. There was negotiation for employment over the years, the employees could freely discuss their wages and benefits and seek the best deal. This came with income security protection where the employees were guaranteed wages. The partnership led to use of electronic medical records technologies which ensured faster and more accurate input of data on the patients’ health records. This technology is known as Health Connect. Health Connect was highly supported by both the leaders and members of the organization. This would improve America’s health care (Jody 4). The Northern California Optical Laboratory was restructured during the partnership era. The laboratory serves the whole of North West region of California that it was important for it to work again. The health care of the people in California thus improved. It led to the creation of more employment that is good for the people. Members saw this as an opportunity to grow their skills and become specialists in different areas. There was also a collective agreement of the partners on how the transition from one leadership to another should be handled. This is a great achievement as it helped workers accept new systems easily and also to decide on any new technologies as a team (Thomas A. K. 6). Workers from lower ranks were able to receive support from those in the higher ranks of this partnership. Their place of work also became more bearable. This led to the growth of membership size. The number of members of the labor-management partnership has increased since its initial day (Jody 4). Weaknesses To come up with the partnership and to maintain it proved to be costly. This meant choosing of union representatives and the partnership leaders, which was costly, and there were no financial returns. The budget went up from 16million dollars in 2005 to 28 million dollars in 2012 (Adam, Adrienne 6). This cost, however, does not reflect the full effort, time and energy, put in by the executives, union leaders and members of the union in trying to make it a better organization. The amount however is not able to measure return on investments, thus prove it to be expensive. There was a slow evolution of labor relations programs to an operating to provide quality health care. The leaders of the partnership had not yet by 2008 come up with effective strategies for improving health care. Their main focus was on creating unit-based teams. There is also rivalry between the unions of the partnership that is slowing down the progress of the organization (Thomas A. K. 6). Conclusion Since the Labor-Management Partnership began in 1997, there has been major progress in the organization and health care has tremendously improved. The partnership can be labeled as successful, though work needs to be done on it. The partnership has been good for the organization and has helped it in achieving great financial gains. Employees’ wages have improved and they stand at getting more benefits as members of the unions of the partnership. Works Cited Thomas A. K., The Kaiser Permanente Labor Management Partnership: 2009-2013 MIT Sloan School of Management. September 2013 Thomas K., Adrienne E., Robert M., Paul A. Healing Together: The Kaiser Permanente Labor Management Partnership. Ithaca, NY: Cornell University ILR Press, 2009. Adam S. L., Adrienne E., “Frontline Teams and the Mystery of the Missing Performance Link,” Johns Hopkins University School of Business and School of Medicine, November 2012. Jody H. G., High Performance Healthcare: Using the Power of Relationship to Achieve Quality and Efficiency. New York: McGraw Hill, 2009 Amy E., Teaming: How Organizations Learn, Innovate, and Compete in the Knowledge Economy. Boston: Harvard Business School Press, 2012. Read More