New Zealand Journal of Industrial Relations Online

Symposium:
Industrial Relations and the Health Care Sector: Evidence from Australia and New Zealand


Volume 27 Number 2	June 2002

Marco Biagi

The editors send their deepest sympathy to the family, friends and colleagues of Marco Biagi (1959-2002), Professor of Labour Law at the University of Medina who was murdered by Italian terrorists outside his apartment in Bologna on the evening of March 19, 2002.

Professor Biagi was editor of Diritto delle relazioni industriali, and of the International Journal of Comparative Labour Law and Industrial Relations. He organized the World Congress of the International Industrial Relations Association in Bologna where he met a number of readers of this journal.

Professor Biagi was advisor to the Italian Minister of Labour and was working towards a reform of Italian labour law and the Italian labour market. It was this work which led to his assassination, which deeply shocked and saddened those involved with industrial relations throughout the world.

Ian McAndrew & Alan Geare
Editors

Guest Editorial

Industrial Relations and the Health Care Sector: Evidence from Australia and New Zealand
Mark Bray and Glenda Strachan
Professor and Associate Professor, School of Management, University of Newcastle

Introduction

The health care sector provides a complex environment in which to examine industrial relations. The funding of this industry is multi-faceted with different levels of government, the private sector non-profit and profit-making organisations and individuals themselves involved. Expectations of care levels change and the provision of services is altered as a consequence. Demographic changes such as the increase in the over-60s population present specific challenges. The changes in geographic spread of the population result in redirection of resources. Changing social expectations of health care, such as those occurring in mental health in recent decades, produce changes in the modes of delivery of care. None of these issues is clear-cut. All present different options in the delivery of health care, options that are often contentious within the community.
In the midst of all these debates, delivering the services and making the organisational changes are the health care workers. Consuming the majority of the health budget, staff are called on to implement the changes and deliver the services. The workforce is diverse with a wide range of occupations and levels of education represented. Shortages of certain occupations and skills are often a feature of this work force - a workforce that can move internationally - and this can bring added pressures to the workplace. A diversity of organisational arrangements exists, and distinct hierarchies are frequently present, while in other settings team work among a range of occupations is emphasised.

Despite the importance of the health sector and the challenges it confronts, the centrality of human resources to the performance of the health sector and the consistent public debate, there has been remarkably little attention devoted to the sector in industrial relations and human resource management research. This collection of four articles represents a modest contribution to remedying the research lacuna. It began in a session devoted to health sector issues at the conference of the Association of Industrial Relations Academics of Australia and New Zealand (AIRAANZ) in Queenstown in February 2002, where three of the papers appearing below were presented. The papers were subsequently revised, refereed and then revised again.

The four papers are diverse in their subjects and their methodologies, although they all reflect the enormous expectations on the sector and the widespread changes that are occurring. The first, by Roan, Lafferty and Loudoun, explores the impact of major organisational restructuring in an Australian hospital involving downsizing and relocation through interviews, focus groups and an employee survey. Their analysis of the change process and the effects of that process on both "survivors" and "victims" has important lessons for health sector managers, but it also raises broader issues for the industrial relations and organisational change literature.

The second paper, by Corner and Jury, focuses on the attitudes towards work and organizational change held by different groups of hospital employees. The results of a survey conducted by the authors within a New Zealand hospital suggest that despite some important (and perhaps surprising) commonalities, there are several sub-groups within the workforce that hold different values. These differences, the authors argue, hold the potential to hinder organisational change and require specific interventions by human resource managers.

The third paper by Bray and White uses the more conventional industrial relations methods of interviews, documentary evidence and descriptive statistics to explore trends in the structures, processes and outcomes of industrial relations in public hospitals across the state of New South Wales. The argument they develop is that the strong external imperatives for reform in this jurisdiction have not produced major industrial relations change, as they have in some other jurisdictions. Indeed, the strong collectivist institutions in the sector have proved remarkably stable, delivering wage increases to all occupational groups that are comparable with employees in other sectors. More disturbing, however, are the significant increases in productivity, the evidence of work intensification as the main source of these increases and the apparent failure of the industrial relations institutions to regulate the workloads of employees.

The fourth and final paper by Willis continues the theme of work intensification by reporting on the experience of enterprise bargaining in South Australian hospitals and the exceptional processes and outcomes in a case study of nurses in one hospital. Combining methods familiar to students of industrial relations methods with less common ethnographic methods, Willis traces the introduction of computer software used to determine nurse staffing levels (and, thereby, nurse workloads) and shows how nurses and their union learnt to use the software in enterprise bargaining negotiations to reverse the trend towards work intensification.

As Guest Editors, we would like to thank the editors of the NZJIR for the opportunity and for their patience in dealing with our failings, the authors for their worthy efforts and commitment to the project and the referees for their effort and conscientiousness.

Survivors and Victims: A Case Study of Organisational Restructuring in the Public Health Sector
Amanda Roan, George Lafferty and Rebecca Loudon

This paper examines a process of major organisational restructuring in an Australian hospital within a context of decentralisation of health services and relocation of clients, brought about by changes in government policy. The change process differed from the abrupt downsizing often found in the private sector in that the organisation initiated significant job losses concomitantly with the development of new facilities around the State, while attempting to deal with employee issues related to downsizing. The paper focuses on the process involved in the downsizing, from the perspective of both the "survivors" and "victims" of the change. It draws on interviews and focus groups with managers, union officials and employees, as well a survey of employees to assess the outcomes and effectiveness of the restructuring process. Using a stakeholder analysis framework, the paper examines the complex issues and perspectives raised by the downsizing process.

Introduction

Significant organisational restructuring has been undertaken in the Australian health care industry and this paper discusses the major changes that occurred in one health care facility. As Dunford, Bramble and Littler (1998: 387) note, a central element of the restructuring of public and private sector organisations is the substantial reduction of employee numbers and this occurred in the instance discussed in this paper. "Downsizing" is a generic term referring to this form of restructuring, which can permit a number of courses of action. These include: first, a direct reduction in the number of staff who carry out the organisation's existing activities through across-the-board cuts or the reduction of staff involved in a specific activity; second, the centralisation of infrastructural functions such as administration and public relations, which results in a loss of jobs; and third, the reduction in the number of levels ("delayering") in the organisation that may lead to staff reductions (Dunford et al., 1998: 387-388).

Downsizing is most often associated with a response to falling profits and the need for cost reduction (De Witt, 1998; Robbins and Pearce, 1992). However, McKinley and Mone (1998: 199) report that downsizing is now being implemented in profitable organisations that do not face actual or impending revenue declines. This non-revenue driven restructuring and downsizing has occurred in public sector organisations in search of efficiencies and changes in modes of service delivery (Ryan, Parker and Hutchings, 1999: 122-123).

Regardless of the organisational intention behind downsizing, the process of change and the employment outcomes can have a dramatic impact on employees' working and personal lives. Appelbaum and Leblanc (1998) report symptoms of an unproductive "survivor" culture, amongst those who remain in an organisation after significant downsizing. Survivor attitudes may include disbelief, guilt and betrayal, and may result in lack of motivation, loyalty, trust and recommitment to the new organisation (Ryan and Macky, 1998: 35; Mishra and Gretchen 1998: 567-568). Further, the downsizing process can leave employees with feelings of anger and frustration. The literature has tended to classify these employees under the terms, "survivors" and "victims". The survivor/victim dichotomy remains problematic as persons who remain in organisations can have their job status radically changed while those who leave the organisation may eventually gain from the experience. However, in this research the term "survivor" is used to describe those who stay in the organisation while the term "victim" is used to define those who no longer work at the physical location of their former employment.

Isaksson and Johansson (2000: 241-243) report that studies into the effects of downsizing have tended to focus on the victims and their job status following downsizing. However, they note that in the last decade there have been a number of studies on employees who have remained in organisations following restructuring or personnel cut backs. They report that studies have found that the perceived fairness of the downsizing process, level of job security following downsizing, influence over the downsizing process and prior organisational commitment are all important in the favourable reactions of survivors to downsizing and survivor job satisfaction. This paper examines the process employed in the restructuring and downsizing of a large psychiatric facility in Australia (Facility Z). In this case, the restructuring was driven by policy changes and new approaches to the delivery of psychiatric care. The paper focuses on barriers to change brought about by the historical makeup and goals of the organisation as well as problems encountered as a result of the chosen process for change. A preliminary examination of the outcomes of the change on employees is also provided. Utilising a range of research methodologies, findings are reported from the perspectives of different stakeholders.

Considering Values in the Current Restructuring of the New Zealand Health Sector
Patricia Doyle Corner and Denis Jury

New Zealand's hospitals are undergoing another round of restructuring due to the health sector reforms being implemented by the Labour-Alliance coalition. Current restructuring presents a major challenge to hospitals because evidence suggests that such change efforts are difficult unless reformers consider the values held by hospital staff. Moreover, restructuring gets complicated by the fact that disparate hospital subgroups are likely to see different values reflected within the organization. Value dissimilarities form additional barriers to change that need to be addressed and bridged before restructuring can deliver patient benefits. The purpose of the current paper is to test subgroups in a chosen New Zealand hospital for differences in organizational values. Different values are identified and interventions to cope with these are recommended.
New Zealand's Labour-Alliance coalition government formed in late 1999 is significantly modifying the way publicly financed hospitals and other health sector services are organized (see Gauld, 2001 and the New Zealand Health Strategy at www.moh.co.nz). The coalition is implementing a population-based funding system that enables a community voice in health sector decision making through district health boards. This change harkens back to the structure of New Zealand's health system prior to the quasimarket model the National government introduced in 1993 (Devlin, Maynard & Mays, 2001). The current round of restructuring may not appear as comprehensive as those implemented in 1993, but they present a challenge for executives and human resource specialists attempting to implement these policy changes within hospitals (Donald, 2001).

There are three reasons why the most recent reforms represent a major challenge. To begin, the Labour-Alliance changes to funding mechanisms and governance practices likely mean restructuring within hospitals (Gauld, 2001), where healthcare workers are already demoralized as a result of coping with 10 years of health reform (Devlin et al., 2001; Gauld, 2001). Second, experts warn that the changes proposed by the latest coalition government are not to be underestimated simply because they reflect the familiar Area Health Boards (Gauld, 2001). Scholars predict substantial restructuring to be implemented in the following areas: the formation of new agencies, job displacements across the health sector, the forging of new relationships both vertical and horizontal within and across health providers, and a modification in the focus of administration. Third, evidence from the broader organizational change literature suggests that even minor restructuring efforts can prove difficult because reformers do not consider the human side of change, particularly the values held by workers within the organization (Kotter, 1995; Nadler & Tushman, 1990).

It is essential to understand such values when implementing change because values are a key determinant of behavior and are particularly resistant to change. This is especially true in hospitals because, historically, disparate hospital subcultures, such as clinicians and administrators, have reflected different values within an organization (Simpson et al., 2001). For example, administrators exhibit values oriented toward "counting" or "costing" while clinicians value "curing" and "caring" (Simpson et al., 2001). Such divergence in values creates an additional barrier to change that needs to be addressed and bridged before restructuring can be completed (Schein, 1996). A challenge for executives and their human resource managers trying to implement change, then, is to identify the value disparity across hospital subgroups. It may be that different intervention strategies are required for disparate subgroups before the health reforms proposed by the Labour-Alliance coalition can be comprehensively implemented within New Zealand hospitals. The well-known patient safety case in the winter of 1996 at Christchurch Hospital shows the very negative consequences that ensued after the 1993 reforms, when attention was not paid to value disparity. The case centers on Mrs Robyn Stent, who was then the Health and Disability Commissioner. She investigated and reported on patient safety at Christchurch Hospital after four hospital doctors publicly announced safety concerns over what they perceived as the unwarranted deaths of seven patients (McNeil, 1998b). Mrs Stent's report found that hospital executives, motivated to cut costs through restructuring, pushed through significant changes too quickly. The report suggests the executives' "culture" that valued the minimization of costs clashed severely with the long established "culture" of care held by the doctors and nurses (McNeil, 1998a; The Press, 1998). Further, the culture clash directly compromised patient safety and hospital executives were found culpable for ramming through restructuring without taking note of clinician's strong values for patient care (The Press, 1998). The report finally concludes that executives' values for cost minimization triumphed over clinicians' value of patient care to the extent that "it was a miracle more did not die" (Bruce, 1998; McNeil, 1998a; The Press, 1998). This case helps demonstrate the need to examine value differences across subgroups within New Zealand hospitals. As already stated, an examination appears particularly urgent in light of current reforms.

The purpose of this paper then is to explore the extent to which subgroups in a chosen hospital see organizational values differently. Towards this end, the competing values model is used as a framework for hypothesizing about divergence in values across hospital subgroups as well as providing an instrument for measuring values. This model was developed by Quinn and his colleagues (Quinn, 1988; Quinn & Rohrbaugh, 1983) and extended by Zammuto and co-researchers (Zammuto & Krakower, 1991; Zammuto & O'Connor, 1992). Identification of divergent values is useful because the organizational theory and change literature reports particular interventions that address such general values when restructuring organizations (see Collins and Porras, 1994; Kotter and Heskett, 1992). Detection of competing values within a New Zealand hospital thus may enable hospital executives and human resource specialists to design interventions to affect change in the health system through people. This is this kind of bottom-up change that is needed to ensure changes are long lasting and implemented at the level at which patients are served. Finally, it is of note that the competing values model applied in the current study emanates from the broad organizational effectiveness debate in the organizational theory and change literature. Unfortunately, locating this study in the larger organizational effectiveness debate is beyond the scope of the present study. Instead, this study employs the model for its specific focus on values and its recognition that values constantly compete with each other within a single organization.

A System Under Pressure: Industrial Relations in New South Wales Public Hospitals
Mark Bray and Nadine White

The article examines the pressures for greater efficiency and cost-cutting over recent years in public hospitals in New South Wales and the changes in industrial relations structures, processes and outcomes that they produced. It is argued that strong external imperatives at work resulted from the increasingly neo-liberal philosophies adopted by governments and from industry-specific cost increases associated with new medical technologies and procedures. In New South Wales, the collective institutions of industrial relations, which are described in some detail, remained strong, indicating no radical push to undermine unions or collective regulation as a response to these pressures. Indeed, one of the key outcomes of the collective system was wage increases for all major groups of employees that were in line with increases enjoyed by other sectors of the workforce. However, the second main outcome was significant increases in productivity in the sector, which indicate considerable work intensification. The limited available evidence suggests that this work intensification was introduced by processes external to the collective system of bargaining/consultation. The conclusion is that this lack of regulation will ensure that work intensification becomes an even greater source of conflict between employees and managers in the sector.
Introduction

Despite the considerable numbers of people employed in hospitals, the importance of these facilities to public health and their prominent place in public policy debates, the existing literature in Australia and New Zealand on patterns of industrial relations in hospitals over recent years is remarkably thin. There is some analysis of the politics of health and changes in health policy (for example, Degeling and Thomas, 1995; Baume, 1995), but very little research has emerged exploring how these developments impacted upon employees or industrial relations institutions (see the Introduction to this Special Issue for a discussion of the exceptions). The contribution made by this paper is to examine at a system-wide level the pressures on public hospitals in New South Wales and to explore their implications for the structures, processes and outcomes of industrial relations in that state.

The argument developed below falls into three main steps that correspond with the three main sections of the paper. First, it is suggested that new neo-liberal philosophies adopted by both Labor and Liberal governments during the 1990s, combined with the cost pressures of new medical technologies and procedures, were the main sources of pressure for change. Second, in contrast to many other jurisdictions in Australia, industrial relations in New South Wales in general, and in the public hospitals of that state in particular, did not change radically during the 1990s and early 2000s. There was no major assault on the status quo and the largely collectivist institutions of industrial relations changed only incrementally. A key to the system, however, was the significant opportunities that it retained for managerial unilateralism, especially over the issue of workload allocation. Third, in terms of outcomes, the picture is mixed. On the one hand, the industrial relations institutions delivered to employees of NSW public hospitals wage increases largely commensurate with other workers. On the other hand, there were major increases in productivity in the sector during the 1990s that reflect significant workplace change, especially the intensification of work. There is, however, no evidence that these workplace changes in question were introduced through the collective institutions of industrial relations. While it is difficult to confirm because of the system-wide level of analysis presented in this paper, it would appear - and this is supported by some of the few workplace studies that have so far been completed - that work intensification has been delivered through managerial unilateralism. This conclusion has significant implications for the future of industrial relations within public hospitals.

Enterprise Bargaining and Work Intensification: An Atypical Case Study from the South Australian Public Hospital Sector
Eileen Willis

Abstract
This paper explores the relationship between enterprise bargaining and work intensification through a case study of bargaining between the Australian Nursing Federation and the South Australian Department of Human Services. The third enterprise agreement between these parties, signed in 2000 to operate for three years, included an agreement by the department to staff public hospitals according to Excelcare, a computerised nursing workload program interfaced with rostering and costing products. The outcome was the de-intensification of work for nurses despite shrinking budgets, nursing shortages and the usual understandings that enterprise agreements should increase productivity and efficiency. Central to this atypical case was the process by which nurses and their union learnt from previous experiences with enterprise bargaining and with Excelcare, and the role of middle-level nurse managers, who assisted in the gathering of detailed data that was required to advance the nurses' cause.

Introduction: Enterprise bargaining and work intensification

The relationship between enterprise bargaining and work intensification is both important and problematic. Much of the early research on enterprise bargaining in Australia either explicitly argued or implicitly assumed that workers would be worse off because this system shifted the ground for salary increases by linking them specifically to increased effort (Morris, 1996). However, there are few studies that directly investigate the process and outcomes of bargaining and their impact on work intensity. Allan et al., (1999), for example, provide compelling evidence that work intensification is one of three major trends in recent work relations in Australia and that it has increased employee dissatisfaction and stress at work, but they do not address the role of enterprise bargaining in advancing these trends.

The analysis offered by ACIRRT (1999) suggests that the enterprise bargaining process has not been central to those aspects of work restructuring that might result in work intensification, such as multi-skilling, up-skilling and the reduction in staff numbers. Rather, most enterprise agreements have been confined to negotiations over wage rises and flexible hours of work, not work intensification:

The restructuring that has been a feature of organisational life for over a decade has largely been achieved outside the formal industrial relations system … These changes have been introduced by management without the input from external third parties such as unions and the Australian Industrial Relations Commission … (ACIRRT 1999:54)

These changes have also been brought about with little consultation with workers. Given this, it appears that enterprise bargaining has become an avenue for some workers to negotiate for improved wages and working conditions that might compensate for the fact that they are now working harder.

Research in the health sector about whether or not enterprise bargaining has resulted in increased work intensification, or for that matter productivity and efficiency gains, also suggests problematic outcomes. Stanton (1999), for example, shows that while federal and state governments have seen the enterprise bargaining process as a mechanism for ensuring increased efficiencies and productivity, the outcome has been more complex. Her research on enterprise bargaining in Victorian public hospitals during the Kennett years (i.e. 1992-99) indicates that enterprise bargaining was not itself a mechanism for work intensification but rather it served as a vehicle by which unions tried to win back conditions lost through other cost-cutting processes, such as redundancies, the introduction of casemix forms of funding, real reductions in budgets and the outsourcing of services such as pathology and radiology.

Allan's (1997) research on Queensland hospitals reveals significant work intensification, but again there is little to implicate enterprise bargaining. Rather, governments of both political persuasions endeavored to bring about increased productivity and efficiencies into this sector. The two major vehicles for this were the introduction of casemix forms of funding based on output rather than historical funding models and the various funding incentive measures built into the last two Medicare Agreements (Allan, 1997). In both Medicare agreements, while funding increased, it was tied to performance outcomes such as reducing waiting lists for elective surgery and for patients in causality departments.

Some commentators have even argued that the principles of enterprise bargaining do not readily translate to the public health sector (Harrison and Pollitt, 1994). Enterprise agreements tied to increased productivity and efficiency gains assume a share in generated profits. In the public health care sector what is produced is a service, not a product and staff are increasingly having to deliver this service with capped or reduced budgets (Braithwaite, 1997).

Thus, literature - both within the health sector and more broadly - suggests two conclusions relevant to this paper. First, work intensification has been common during the period when enterprise bargaining has become dominant in Australia and this is detrimental to many employees. Second, mechanisms other than enterprise agreements (especially managerial unilateralism) have been more central than enterprise bargaining itself to the progress of work intensification - indeed, the most likely role for enterprise bargaining is as a potential means by which some employees gain compensation for the work intensification with which they are confronted.

This paper presents a case study that questions these two points. Nurses working in public hospitals in South Australia (and particularly in one hospital) have been able to reverse the trend towards work intensification and they have used the enterprise bargaining process to achieve this end. Furthermore, the story of these events in South Australia suggests two broader factors that may shed light on the problematic outcomes of enterprise bargaining. First, while enterprise bargaining might well disadvantage many employees, this is not an inevitable outcome. In particular, there may well be a learning process by which employees take time to learn how best to advance their interests using enterprise bargaining. Embedded in this factor is the realisation that as the workplace continuously changes new areas for negotiation emerge. This is particularly so for public hospitals given the federal government has allocated significant amounts of funding for innovative forms of service delivery through the National Demonstration Hospital Program (NDHP). It is the innovations introduced through programs like the NDHP that have invariably led to new ways of working and work intensification - and to new opportunities for employees to renegotiate their lot.

The second factor concerns the (often contradictory) role of middle management in the relationship between enterprise bargaining and work intensification. While middle-level managers may often work with senior managers and contribute towards work intensification, the opposite can also happen. Indeed, in the case study presented in this paper there is evidence of opportunistic action taken by middle management in the interests of workers. This role for middle management may be predictable in the health sector, given that middle managers invariably come from within nursing, medicine or allied health occupations and in most instances maintain strong loyalties to their professions (Harrison & Pollitt, 1994), but it may also be more widespread than the existing literature suggests.

Data for this paper are drawn from a larger ethnographic project conducted between 1997 and 2000 in a major public acute teaching hospital in South Australia, called Western. The research project included six months of intensive fieldwork on two wards, interviews with key informants over the following two years and attendance at on-site union meetings over a six-month period in 1998.

RESEARCH NOTE:

The Political Ideologies of New Zealand Trade Union Officers: The Demise of the Far Left
John Howells

Introduction

Although the topic has been under-researched, it is taken for granted by many that the political ideologies and affiliations of New Zealand full-time trade union officers [hereinafter referred to as officers] are steadfastly and strongly left wing. Particularly pronounced is the stereotype view long held in certain quarters that foreign-born officers are even more extreme in terms of their left-wing political ideologies than those born in New Zealand. The former are perceived, more often than not, as a bunch of communist-driven "pommie stirrers". In the Waihi strike in 1913, for example, a business leader pointed to "aliens and agitators who have failed on the other side and who have come here to stir up strife". More recently, the 1975 National Party manifesto referred to "unions that are run by people who import class prejudice and industrial anarchy".

One purpose of this paper, using data drawn from recent research , is to present the self reported political ideologies of New Zealand officers classified on the basis of far left and left through to right and far right. Such a classification has two advantages: it is commonly used by officers and is meaningful to them; it is used in overseas research and so facilitates international comparisons. The paper also considers the relationship between political ideology and some of the biographical and background characteristics of officers. Hopefully, this will show how the political views of officers may vary according to gender, age, the type of union in which they are employed, the level of education and, of course, place of birth.

CHRONICLE:

February-May 2002
Erling Rasmussen, Felicity Lamm and Ian McIntosh

A round-up of recent New Zealand industrial relations events.