Hospital Image and Compensation/Benefit System on Organizational Attractiveness

Chih-Ming Kung, PhD

Department of Information Technology and Communication Shih Chien University Kaohsiung Campus Kaohsiung City, Taiwan (R.O.C); E-mail: alex@cvig.org

INTRODUCTION

Organizational attractiveness is one of the core values of business management, especially for the labor-intensive healthcare industry. Due to Taiwan’s National Health Insurance (NHI), NHI restrictions and hospital accreditation system norms, hospitals are powerless to recruit more medical and nursing manpower to offer care to patients, thus resulting in over-fatigue of medical staff. The increasingly complex healthcare environment and healthcare resource shortages have also aggravated the environment of medical practice. It is also because of the unhealthy work environment, job leaving or career changes for medical personnel that have caused manpower shortage problems to surface.¹ Taking a resource-based viewpoint, hospital image and compensation/ benefits have been regarded as niches for attracting more outstanding medical professionals in the labor market,^2-3 which are important indicators for the acquisition of a key competitive advantage.^4-5 that having a positive hospital image is conducive to organizational attractiveness.⁶ Businesses’ provision of more flexible benefit policies is more attractive to potential job seekers.^7-8

Concerning organizational attractiveness, relevant studies have shown progressive enrichment.⁹ Empirical study results also show that work and organizational characteristics indeed affect organizational attractiveness. For example, organizational size, degree of corporate internationalization,¹⁰ work challenge,^11-12 work location,^6,13 warm and friendly colleagues,6 corporate reputation,^3,14 corporate image,¹⁵ corporate ownership and corporate familiarity.¹⁶ Following the implementation of the global budget payment system in hospitals in Taiwan, hospitals have adopted various flexible manpower use measures to control costs. Therefore, medical manpower and global budget payment show a correlation. Hospitals’ global budget payment affects medical personnel recruitment, especially for medical manpower directly offering care to patients.

An organization that has the ability to attract talents and bring out the best in employees will have a competitive advantage over opponents.¹⁷ Previous studies show that reputation^{14,18,19,20,21} and image^{15,22,23,24,25} have a positive impact on organizational attractiveness. In recent years, hospitals have begun attaching importance to patients’ needs and the creation of a hospital image. Some scholars also defined “hospital” image^26-27 believe that “hospital image” is the sum of a person’s belief, idea, and impression of a certain hospital; it is a conceptual definition. Hospital image as social associations and hospital staff’s overall impression and evaluation of hospitals, the performance and characteristics of hospitals.²⁸ Hospital image is expressed through various constituents, including many intangible impressions. A good image affects the public’s trust towards a hospital.

In view of the above, it can be found that organizational attraction means hospitals should maintain their professional and good image to attract outstanding job seekers to come forward. Powell also mentioned in 1984 that although organizations can use recruitment activities to affect organizational attractiveness,²⁹ job seekers’ perceived hospital image before applying for a job is the key to the degree of organizational attractiveness.

Among domestic compensation/benefit related studies, some scholars pointed out that a good compensation/benefit system can produce positive results on a business. If the business has an unfair system, it will have a negative impact on the business.³⁰ Regular employees holding different job posts, their reactions towards the compensation/benefit system lacks internal fairness,³¹ and their seniority fails to be fairly reflected through compensation/benefits. An insight into compensation/benefits on organizational attractiveness and in-service employees is an important consideration factor at work. In addition, Mentioned that proper benefit system management enables a company to obtain positive results in terms of organizational attractiveness,³² employee retention rates, and productivity.

The healthcare industry possesses uniqueness. Hence, it greatly varies from other corporate organizations in terms of organizational matter handling and decision-making. The healthcare industry, in response to the uncertainty at the time of a disease occurrence, information asymmetry, moral crisis, and reversed selections, are often confronted by many economic problems. Economy related compensation (i.e., salary) is of concern to many employees. Relevant studies at present rarely include discussions of the “compensation issue” in the healthcare industry. Scholars have also found through research that satisfactory compensation affects employees’ work attitude and behavior.³³ At the same time, it also enhances employees’ organizational commitment and work performance and reduces absences and job-leaving.³⁴ Many studies have pointed out that satisfactory compensation has an influence on employees. The compensation/benefit system can be used to encourage employees in recognition of their work performance and prompt them to keep up the good work. Therefore, the compensation/ benefit system, as believed by many, is one of the ways to encourage employees.^31-32

In Taiwan, the government permits the setup of corporate and private medical institutions whose business management adheres by the multiple goals of “serving public interests” and “achieving private gains”. Therefore, the purpose of this study is to compare private and non-profit proprietary hospitals in terms of clear hospital image and compensation/ benefit system on nursing organizational attractiveness, with hospital employees as participants. Through the research, practical and theoretical research implications for academic and medical management practice can be proposed, which shall serve as a reference or basis for the government during system design. Additionally, practical strategic recommendations can be put forth for healthcare organizational managers.

METHODS

Research Design and Participants

Two hospitals with different attributes in Taiwan were selected in this study, including private and non-profit proprietary hospitals. The two hospitals are regional hospitals accredited as excellent in the hospital accreditation. The private Hospital (543 beds) is committed to improving the health of the community by providing high quality care in state-of-the-art facilities, was established in 1988, number of employees at hospital from 2016 (in 1,214s). It has been more than 35 years since the nonprofit proprietary hospital (580 Beds) was established in 1976. Number of employees at hospital from 2016 (in 1,235s). During this period, the hospital has gradually grown in terms of facilities and the number of patients, and the quality of services provided has also improved to meet international standards.

For the questionnaire respondents, the hospital employees were the main targets. The structured questionnaire was the data collection method adopted. The questionnaire contents are in reference to domestic and foreign literatures, which were finalized after undergoing expert validity tests conducted by hospital management research scholars. The effects of survey modes and lengths of questionnaire on the response rate survey modes and lengths of questionnaire on the response rates. We undertook an additional analysis to check concerns over the small sample size. According to Dillman,³⁷ sample size can be determined using the following equation:

NSAMPLE signifies the sample size, Np the population size, E tolerance error, C the Z-value (=1.96) of the 95% confidence interval, and p, 1-p population variance. In the case of a normal distribution and fitting the expected characteristics, the maximum population variance is 50%. According to the above calculation equation, the hospitals samples from two case hospitals in this study tallied as of the end of June 2016 include 2,449 persons. The questionnaires were distributed from July to August 2016. 1,138 valid copies were obtained, with the questionnaire recovery rate of 46.47%. The theoretical statistical samples of 208 persons were reached. Thus, relevant research statistics were carried out. The questionnaire and research design in this study were reviewed and passed by the Human Subject Committee (IRB 1050507), and all the respondents signed the human subject consent.

Research Tools and Reliability and Validity Tests

The self-prepared questionnaire in this study includes the background attribute data of respondents who filled out the questionnaire, corporate image, compensation/benefit system, and organizational attractiveness scales. The 5-point Likert scale was adopted to measure the satisfaction towards organizational attractiveness items. The scale is divided into “highly satisfied” 5 points, “satisfied” 4 points”, “average” 3 points, “dissatisfied” 2 points, and “highly dissatisfied” 1 point. The questionnaire development in reference to domestic and foreign literature involves the establishment of original questionnaire questions and the determination of preliminary draft contents. The questionnaire scoring method was then selected. Finally, the questionnaire was modified based on actual interviews and the theoretical control basis to complete the questionnaire. After the prediction of the preliminary draft, the questions were slightly modified. The variables and dimensions measured are said to possess certain validity. The overall reliability analysis of the empirical data shows the Cronbach’s α for the total scale was 0.978. Thus, the empirical data in this study is said to possess a certain degree of reliability.

The scales underwent expert validity tests by three scholars with medical management expertise. The experts’ mean Content Validity Index (CVI) for the total scale was 0.902. Prior to the questionnaire survey implementation, official documents were sent to the hospitals to obtain their consent. The purpose of this is to solicit possible opinions on questionnaire question revision. The corporate image consists of 15 questions, with the CVI was 0.941 and cronbach’s alpha demonstrated a reliability of 0.951; the compensation /benefit system consists of 15 questions, with the CVI was 0.957 and cronbach’s alpha demonstrated a reliability of 0.974; the organizational attractiveness consists of 15 questions, with the CVI was 0.955 and cronbach’s alpha demonstrated a reliability of 0.976 (Table 1).

In terms of empirical analysis, the confirmatory factor analysis was adopted in this study. Corporate image, compensation/benefit system, and organizational attractiveness scales underwent construct validity analysis. The split half reliability concept was applied for division into two measurement systems. The analysis results show that in terms of model fit, the chi-square freedom is 2.334; RMR=0.06; GFI=0.853; AGFI=0.798; NFI=0.830; IFI=0.895; TLI=0.870; RMSEA=0.08. In terms of convergent validity, since the factor loads all reached the significant standard (p<0.01), after the Average Variance Extracted (AVE) value square rooting, the values all exceed the Pearson correlation coefficients of dimensions in pairs. Clearly, the scales in this study possess a certain degree of discriminant validity (Table 2)><0.01), after the Average Variance Extracted (AVE) value square rooting, the values all exceed the Pearson correlation coefficients of dimensions in pairs. Clearly, the scales in this study possess a certain degree of discriminant validity (Table 2).

Statistical Analysis The archiving and analysis of research data were done through the SPSS for Windows 18.0 package software,³⁸ with the significant level of 0.05. Descriptive statistics and screening were applied to eliminate erroneous information and carry out statistical analysis. For the deductive statistics part, multiple regression analysis was employed to explore the relationships among corporate image, compensation/benefit system, and organizational attractiveness. In addition, Chow test was adopted to find the best regression model from the questionnaire data of private and non-profit proprietary hospitals. Chow test was also used to test whether the multiple regression models of both hospitals produce differences.

RESULTS

Sample Characteristics

Among the valid samples recovered, the male respondents account for 158 persons (13.9%) and the female respondents account for 980 persons (86.1%). The age group of 31-50 years old comprises the majority of 683 persons (60.2%), followed by “under 30-year-old”, accounting for 416 persons (36.6%) and “above 51-year-old”, accounting for 39 persons (3.4%). For the years of employment, “below five years” takes up the majority of 553 persons (48.6%), followed by 6-15 years (33.9%). As for education level, university takes under the most of 1,010 persons (88.8%), followed by senior high school, taking up 67 persons (5.9%). Those that need to shift systems for 768 persons (67.5%), those that need not shift systems for 370 persons (32.5%). For the compensation (i.e., salary), NT$30,000-NT$50,000 takes up the majority of 726 persons (63.8%), followed by under NT$30,000, accounting for 239 persons (21.0%), as shown in Table 3.

Through correlation analysis, this study gained an initial insight into the correlations among the three research variables, namely, hospital image, compensation/benefit system, and organizational attractiveness. The analysis results show that hospital image, compensation/benefit system, and organizational attractiveness all show a positive correlation (γ=9.068; 19.834). Compensation/benefit system and organizational attractiveness show a positive correlation (γ=5.928; 13.358), both showing a positive correlation and both reaching the significant standard (p<0.05) (Table 4).

The impact of work motivation and work involvement on work satisfaction was further analyzed in this study. During multiple regression analysis targeting the controlled variables and independent variables, the problem of collinearity may arise. The study first carried out variance inflation factor (VIF value<10) and conditional index (CI value<10 tests on relevant variables to avoid the problem of collinearity private hospitals multiple regression model different test results show the F-statistic of 70.431 (p<0.001); non-profit proprietary hospitals multiple regression model difference test results show the F-statistic of 40.003 (p<0.001) (Table 4).

Secondly, Chow test is an econometric test method used to verify the parameters of different groups (such as slopes, intercepts) or whether the coefficients of two linear regression equations with different data are equivalent.³⁹ Does the structural essence of private and non-profit proprietary hospitals (different groups) change using Chow test? The multiple regression model difference test results show the F-statistic of 19.901(p<0.001). From Chow test it shows that private hospitals possesses structural differences in terms of organizational attractiveness.

The multiple regression model in Table 4 shows that concerning the factors affecting organizational attractiveness, the factors affecting non-profit proprietary hospitals include gender, education level, hospital image, and compensation/benefit system, reaching the statistically significant standard (p<0.01); the factors affecting private hospitals include age, whether taking shifts, age, hospital image, and compensation/benefit system, reaching the statistically significant standard (p<0.1). Among the factors affecting organizational attractiveness, the male employees in private hospitals have lower satisfaction towards organizational attractiveness compared to the female employees. Those below 30 years old have lower satisfaction towards organizational attractiveness compared to those under the age category of 31-50 years old and in the compensation (i.e., salary) category of NT$50,000-NT$70,000 compared to those in the compensation (i.e., salary) category of NT$40,000-NT$50,000. Hospital image and compensation/benefit system have a positive impact on organizational attractiveness. In non-profit proprietary hospitals the male employees have higher satisfaction towards organizational attractiveness compared to the female employees and those under university and postgraduate studies education level categories. Hospital image and compensation/benefit system also positively affect satisfaction towards organizational attractiveness.

DISCUSSION AND CONCLUSION

Theoretical Contributions

The empirical analysis results in this study show that when a hospital has a better hospital image and compensation/benefit system, the organization will produce positive organizational attractiveness results. This finding coincides with the social identity theory and explains that when a hospital displays a good hospital image, the organizational attractiveness of the hospital is enhanced during the process of employees seeking a job. The research results also support this viewpoint.

This study also found that for the respondents from both hospitals who filled out the questionnaire, gender and whether taking shifts showed differences in terms of organizational attractiveness. Unlike previous studies, Explored the impact of employer image on organizational attractiveness from the functional and symbolic architecture. In terms of gender,⁴⁰ no significant difference was found, possibly because of the organizational characteristics of healthcare, specifically labor intensive, knowledge intensive, and a high degree of professional division of labor. The male employees from both hospitals showed significant differences in terms of number of recruitments and manpower on shifts, leading to varied organizational attractiveness results. Secondly, in terms of age and education level, both hospitals differed. The employees from non-profit proprietary hospitals and under 30 years old have lower satisfaction towards organizational attractiveness; those from private hospitals under the university category of education level have higher satisfaction towards organizational attractiveness, this finding is in line with other previous studies. Martins, Eddleston and Veiga⁴¹ found in his study that age and organizational attractiveness are related. The research found that young people are more aware of their capabilities and capacity. Therefore, organizations will be more supportive of their growth needs. The research of Trank et al⁴² also believes that in terms of education level, those with high cognitive ability and high achievements are fonder of challenging work. If organizations can provide such opportunities, organizational attractiveness can be enhanced.

In addition, talents are important assets for organizational planning strategies, goal accomplishment, and acquisition of a competitive edge.⁴³ This study also confirmed that although the two hospitals differ in attributes, the greater the satisfaction towards hospital image and compensation/ benefit system, the higher the organizational attractiveness would be. This finding coincides with previous studies with different attribute types. Believes that enhancement of physician expertise and the maintenance of a robust financial status are effective routes that can enhance organizational attractiveness of hospital professionals.⁴⁴ The research results of Adıgüzel and Kayadibi⁴⁵ also confirmed that the establishment of knowledge assets enables employees to receive job satisfaction, leading to the establishment of hospital attractiveness. Leopold³² believes that proper benefit system management enables a company to obtain positive results in terms of organizational attractiveness, employee retention rates, and productivity. Also pointed out that a company with a better hospital image usually has better compensation/benefits than companies with a relatively more negative hospital image. Moreover,^36,46 an organization with a good image is also more likely to be recognized by the relatives and friends of job seekers whose encouragement will enhance the job seekers’ willingness to apply for the job. Adler and Ghiselli²¹ believes that the establishment of relevant compensation and enhanced benefit system and hospital image will also affect the willingness of job seekers. Chhabra and Sharma⁴⁷ found that potential employees could proclaim the value of a company through ideology and bring the best out of the employer’s brand, which will in turn affect the willingness of job seekers.

As far as medical institutions are concerned, Taiwan’s hospitals comprise public, non-profit proprietary, and private hospitals. Among them, those with larger sizes are public and non-profit proprietary hospitals. Most non-profit proprietary hospitals uphold “social welfare” as the founding purpose and set goals on community welfare and aid activities. Moreover, these hospitals are exempted from business land taxes, license taxes, and business taxes, while private hospitals have no such preferential tax clauses. Furthermore, since Taiwan is facing great difficulties in professional healthcare manpower recruitment, especially private hospitals, the plight of not being able to attract healthcare talents has become a bottleneck hindering development. Therefore, the creation of hospital image and the provision of a comprehensive compensation/benefit system are the only ways for employees to create excellent healthcare services and for hospitals to enhance their competitiveness.

Implications of Management Practice

This study confirmed that hospital image and compensation/ benefit system produce positive results on organizational attractiveness for potential job applicants. It means a hospital that excels in performance, medical management talent training, fulfillment of social responsibility, and other aspects are more capable of winning the favors of potential job applicants. Therefore, hospitals should establish and manage their hospital image in order to enhance organizational attractiveness. For example, through public welfare events or public welfare advertising and marketing approaches as well as medical professionals paying visits in communities and remote towns to provide medical services will enhance medical professionals’ positive impression of the hospital. Even more so, during employee recruitment, human resources supervisors may also, with the hospital image as a competitive advantage, tell applicants the value of the hospital other hospitals lack, such as if the applicants become employees, they will attain a social status no one else has. This way, outstanding talents hospitals wish to attract can be recruited. While the intangible asset of hospital organizational reputation is enhanced, the attractiveness of the hospital to job seekers will be increased, which will help the hospital accumulate important internal human resources capital to achieve a competitive advantage and more desirable performance.

RESEARCH LIMITATION AND FUTURE RESEARCH DIRECTION

This study carried out data collection and analysis on hospitals under Taiwan’s healthcare industry. Result inferences in other industries may have their limitations. For example, the service years of employment dimension did not reach the significant difference in this study, while the hospitals with different attributes showed significant differences in gender, whether taking shifts, age, and education level. According to the social identity theory, people tend to categorize themselves under a certain group to convey and maintain their personal self-image.⁴⁸ Therefore, whether the research results can be inferred to other industrial categories still require further in-depth discussion.

Since this study only targets employees from hospitals with different attributes as participants for discussing hospital image and the impact of compensation/benefit system on organizational attractiveness, it is recommended that followup research takes on the perspective of individual differences as the starting point in order to explore whether there are other personal attribute factors that produce a mediating effect on the relationship between organizational characteristics and organizational attractiveness.

CONFLICTS OF INTEREST

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

FUNDING

The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: Tainan Municipal Hospital, Taiwan (Grant number 105-22).

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