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Twin Oaks Hospital Case Study

In: Business and Management

Submitted By Kfrank0613
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Twin Oaks Hospital in Lexington, Colorado is a 100-bed hospital with a staff of 350 employees that include over 200 nurses and 40 clerical and secretarial employees, the majority of which are women. Recently the staff has had some apprehension and discontent over pay levels. Lexington Memorial Hospital, a public facility near to Twin Oaks recently agreed to demands from their nursing and clerical staff to increase wages five percent. They further agreed to introduce a job evaluation program which would evaluate the nursing and secretarial jobs based on comparable worth and that results of the study would be utilized as the basis for any future pay adjustments. As a result of this the staff at Twin Oaks has come to demand similar wage increases, as prior to the wage increase the compensations between the hospitals was very similar. In addition, union organizer had been meeting with employees and handing out flyers that illustrated findings from a comparable worth study. Meetings with union representatives, the flyer and the newly agreed demands from the staff at Lexington Memorial Hospital created some issues at Twin Oaks Hospital. The director of personnel, David Hardy is now in a dilemma over how to go about keeping Twin Oaks employees happy while remaining competitive in the market since Twin Oaks is in the private sector. Mr. Hardy informed James Bledsoe, the director of the hospital of the situation. As a result of the situation Mr. Bledsoe requested a recommendation for action within three days. Prior to creating the action plan Hardy met with two top aides, Janet Sawyer and Charles Cooper for an informal discussion of the situation. Essentially the biggest issue is the debate over the comparative worth model for determining pay scale. The concept of comparable worth (sometimes called pay equity) is not the concept that women and men should be paid equally for performing equal jobs. Rather, comparable worth attempts to prove that employers systematically discriminate by paying women less than their work is intrinsically worth, versus what they pay men who work in comparable (equally valuable) positions—and to remedy this situation (Ivancevich and Konopaske 2013). Comparative worth looks at each job function and compares the value that each employees is contributing to the company, and compensation is then decided based on the results.

In the meeting Janet Sawyer suggested that a comparable worth model be implemented. She goes on to explain that there is a large gap in pay between female and male jobs across the nation. Janet Sawyer. “Nationwide, there is a disturbingly large gap between the pay levels of predominantly male and female jobs. Consider that there’s no difference in the median education levels of men and women—about 12.6 years. Yet with the same median amount of education, women on the average earn 40.8 percent of a man’s median pay (Ivancevich and Konopaske 2013). She then advises that there are most likely gaps in pay at Twin Oaks Hospital as well.

On the other hand, Charles Cooper is quick to point out some contradictions of the comparable worth system and suggest a pay increase of 5 percent to keep Twin Oaks competitive with Lexington Memorial. First he claims that it would destroy the free market systems, as the market does not discriminate between genders, but on the basis of supply and demand. In return this should determine a job’s worth. Next he feels that there would be some problems with the implementation of the comparable worth structure, and that the end result could result in the fact that the hospital is paying too much for certain positions according to the market factors. Lastly, he advises on the unknown costs and points out that the estimated nationwide costs of implementing these programs are close to $150 billion. After hearing Charles’ concerns Janet suggests that the hospital could create a program made specifically for Twin Oaks Hospital. She further suggests that they could model theirs after other companies that have implemented such programs or use Lexington Memorial as a guide.

If I were the director of Twin Oaks Hospital I would recommend to create a specialized committee as Janet suggested, and create a program that was unique to Twin Oaks Hospital. I feel that a comparable worth program could help the hospital find problems that didn’t realize existed. In turn this would allow them to take steps to correct them. Wages would not necessarily need to change if two separate jobs were found comparable in value. Each issue could be further examined and then determined if the wage gap was a result of discrimination or market factors. Based on the findings a decision could then be reached. Without a comparable worth program, the hospital would simply be guessing and wouldn’t have a foundation to determine if gaps existed to due external market factors or gender discrimination.

This may seem from a Human Resource Management perspective as a costly and time-consuming process. As first and foremost, every job would have to be identified, evaluated and documented.
Next, representatives from each functional area would have to determine the weights for all factors related to the job, such as knowledge, experience, accountability, and judgement. Then, a comparison of all the jobs and weights would have to be reviewed by management to determine if the system was fair and acceptable. Prior to implementation, the system would have to be explained to employees. Lastly, follow-ups would likely have to be held with employees who received a cut in their pay rather than an increase. While certainly time consuming and pricey as Janet suggested the costs of this could be phased in over time. This would not only help to keep the budget balanced but allow time for any necessary changes to be implemented.

In my opinion comparable worth is a legitimate strategy for determining job compensation. An organizations employees are essentially their most valuable asset and resource and should be paid comparable to their worth regardless of gender. Comparable worth implies that work should receive comparable pay without regard to the gender of the workers. The emphasis on "comparisons" recognizes the reality that employers are constantly comparing work values; they price jobs based on both internal job evaluation factors and external competitive market values. One way or another, each organization properly puts its own unique price on its labor, and comparable worth advocates simply want that process to be unbiased. That moves comparable worth into the area of "pay equity” (Brennan 2015).

Ivancevich, J., Konopaske, R. (2013). Human Resources Management, Twelfth Edition
Brennan, J. (2015) Comparable Pay for Comparable Worth – It’s Time. Retrieved

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