Innovative Human Resource Practices in U.S. Hospitals: An Empirical Study

Abstract

Contemporary organizations increasingly recognize human resource (HR) capabilities as a source of sustained competitive advantage; about 80% of an organization's value is attributable to intangible assets, including human assets and capital. Some scholars consider effective human resource management (HRM) the single most important factor affecting organizational performance. This study examined (1) the extent to which HRM strategies were included in organizational strategic planning and (2) the association between the involvement of senior HR professionals in strategic planning and the use of innovative HR practices in U.S. hospitals employing strategic HRM theory. A survey was administered to 168 chief executive officers and HR executives from 85 hospitals during spring 2005. Binary logistic regression was conducted to determine whether HRM involvement was associated with the use of innovative HRM strategies in the hospitals. We found significant associations between HRM strategy inclusion in the strategic planning process and senior HR professionals' involvement in organizational strategic planning and in three innovative HR activities: finding talent in advance for key job openings (odds ratio [OR] = 4.61, 95% confidence interval [CI]: 1.10-7.38), stressing organizational culture and values in the selection process (OR = 3.97, 95% CI: 1.01-3.97), and basing individual or team compensation on goal-oriented results (OR = 6.17, 95% CI: 1.17-3.37). Our data indicate that innovative HR practices were underused in some U.S. hospitals despite their potential to improve overall hospital performance. Hospitals that emphasized effective HRM were more likely to use some of the innovative HR approaches. In this article, we discuss this research and the practical implications of the findings.