Reference no: EM131369235

Management Principles Case: Professional Behavior- The Bumping Game

Background

Dr. Gable, chief of anesthesiology, said to vice president Arthur Phillips and human resources director Carl miller, "There are no two ways about it. We're going to have to raise the pay of our nurse anesthetists by at least 10 percent. With Don Williams leaving us and going to Midstate Hospital for a lot more money, we're going to have to pay more than we're paying now to fill that spot. Among the nine hospitals in this city, our nurse anesthetists are by far the lowest paid." Miller said, "Since we spoke of this issue a week ago, I personally surveyed every hospital compensation manager in town. We're not the lowest paying of the nine. In fact, we're the third highest paying." Dr. Gable shook his head. "That doesn't wash," he said. “Some of our people moonlight at other hospitals and they've told me the hourly rates they're getting for part-time work. They said they’d bring in pay stubs to prove it.” Phillips said, “A week ago you said you were going to bring in some of those pay stubs from other places. Did you get them?” “No. They forgot.” Miller said, “Moonlighting rates aren’t relevant. Most of these places pay their part-time or casual nurse anesthetists a rate that amounts to more than their full-time employees get. That’s because these casuals work only when called and they don’t receive vacation, sick time, or other benefits, and they don’t get retirement credit.” Phillips asked,”How about Midstate? I understand it has more than one scale for nurse anesthetists, with a second scale that might not be readily shared with other places.” Miller nodded and said, “That’s right. Midstate is the highest-paying hospital in the area, based on this sort of hidden scale that it applies to some of its people. It pays up to 15 percent more for this one small group, all of whom have agreed to an extra-long work week and a certain amount of weekend call. But it’s not really comparable to our situation.” Phillips said, “In all the years I’ve been here, it seems I can depends on this same exercise coming up every time one of our nurse anesthetists leaves. I’ve also come to count on it happening with the pathologists and radiologists every few years- they go to work at one hospital to get their compensation increased, then they use this new pay leader as a wedge to get other hospitals to pay more.” Miller said, “i’m sure that all of the nurse anesthetists in town know what the others earn. All it takes is a few people in one hospital to get a strong advocate to go to bat for them, and the pressure to bump pay rates is felt through the region.” Dr. Gable said, “I take it that you’re seeing me in that strong advocate role.” Miller did not respond. Phillips said, “Anyways, Dr. Gable, you obviously see the nurse anesthetist pay rates as a problem and we’re willing to listen to any potential solutions that you may have to offer. However, the budget year is barely one-third over and there is no more money to play with until the first of next year. As a first pass at the problem, we’ll be happy to take a close look at any creative solutions you can come up with that lie within the limits of this year’s budget.”

Questions

What does this case say about the supply of of a particular skill- the nurse anesthetist- in the area? And what might come of Dr. Gable’s arguments if the realities of supply were different.

Do you believe that the interorganizational “bumping” of pay rates, if indeed a fact, constitutes professional behavior? Why or why not?

Because it might be reasonably suggested that the nurse anesthetists in the area are acting together, at least in a loosely organized way, one might be tempted to suggest that the area’s nine hospitals get together and establish fair and consistent pay rates for this occupation. Which hazards are inherent in this approach, and in what sense has one of the case’s participants already ventured into hazardous territory?

How would you suggest that Phillips and Miller in their consideration of Dr. Gable’s request?