Performance Improvement in Health Care Organisation


Performance management and improvement is an area that has captured the mind of management in all organisations, including health care institutions. It has, in fact, become one of the major mindset issues within health care organisations (Walburg, 2006; Stahl, 2004; Barnard, 2004). The fact that health care organisations are required to establish objectives and quality standards, so as to achieve high performance in their industry, has prompted them to devise realistic strategies in the effort of developing their management in terms of performance (Huber, 2006; Arah, Klazing, Delnoij, Ten and Custers 2003). Research shows that development of management practice, as well as organisational culture, decreases errors in medical practices, and increases efficiency in operation (Stock, McFadden and Gowen, 2007; Kroch, Duan, Sillow-Carroll and Meyer, 2007; McFadden, Towell and Stock, 2004). Therefore, the main purpose of management practices is to measure and improve the organisational performance in health system and its related fields (Harris and Associates, 2006; Arah et al 2003). Performance management helps to generate useful information that is in turn used by the management to make appropriate decisions and/or necessary changes that are realistic and achievable and in so doing, there is improvement in the way the organisation is run and in provision of its services (Arah et al., 2003).

However, there is a large gap between the potentialities of performance improvement and existing practices (Walburg, 2006). The implications of performance improvement takes into account: local autonomy and decision making, planning methods, effective communications, leadership and effective management schemes, culture of accountability and directness, amongst other aspects(Martinez and Martineau, 2001). The improvement efforts needs to be implemented at the most effective and manageable rate, and capacity, to be able to flourish health care organisations amid accelerating change and rising complexity (Harris and Associates, 2006; Walburg, 2006). Understanding the method(s) of facilitating development of performance management in health care systems is considered necessary in order to progress in performance improvement and quality (Shaw et al, 2007).


The fundamental aim of this essay is to critically analyse and discuss performance improvement in relation to ‘King Faisal Specialist Hospital and Research Centre’ (KFSH&RC), Riyadh Saudi Arabia, as the selected health care organisation for our analysis. The essay will be discussed in regard to the areas requiring performance improvement which encompasses: the approach to improving organisational performance, its indicator(s), and the strategies to motivate and engage stakeholders in the pursuit of performance improvement.


This essay will look at performance management development in respect to the relevant organisational goals and objectives, required steps in the process of implementing this development, the best approach that suits performance improvement, selected performance indicators or measures, and strategies for motivating and engaging the stake holders in KFSH&RC.

Background information of the health organisation

King Faisal Specialist Hospital and Research Centre (KFSH&RC) is a recognised health care organisation and a public teaching hospital, located in Riyadh (Boardman and Hewitt, 2004 ; Medhunters, 2010). It is a big hospital, employing thousands of employees from different nationalities, who make up the staff, and treating a big number of patients (Medhunters, 2010). Provision of the best health care services, teaching, as well as research is regarded as the mission of KFSH&RC. The strategic goals of KFSH&RC have put emphasis on health care reform programme in an attempt to promote and protect the health of the Saudi people (Medhunters, 2010).

The organisational structure of the hospital, however, does not seem to be suitable for effective management of health care. At KFSH&RC, as a public hospital, managerial autonomy, particularly in decision making, and government bureaucracies needs to be reviewed and improved, to allow the necessary changes and improvement of performance. Over the last decade there has been a tremendous increase in Riyadh’s population (an external factor of demographic aspect), a challenge for the hospital in delivering of sufficient health care services (Medhunters, 2010). This increase has been contributed by immigrants from other parts of the world in search of favourable business environments and working opportunities that have attracted people from all over the world. Further challenges of King Faisal Specialist Hospital includes the centralised type of management approach, innovations and technologies, health care cost (economic issues), efficiency issues, to name just but a few. The performance improvement in this research, therefore, focuses on perspectives in the context of local organisation’s service delivery. Theoretically, some of the performance measurements towards the organisation level perspective consist of efficiency (profit motive), health outcomes, safety, and cost and benefit analysis (Harris and Associates, 2006).

Approach with respect to improving organisational performance

The main purpose for changes in the management performance is to improve the competitiveness of an organisation due to a lot of competition in the related industry. The kind of services offered must be of high standards and, satisfaction of the client(s) should be the first priority for the organisation. This is because they have to portray and maintain a positive public image that will help them to remain competitive in the industry.

It is very imperative for an enterprise to seek for a method(s) to consistently measure and improve its performance. In practice, benchmarking appears to be an appropriate approach focusing on performance improvement of an organisation. Benchmarking is a continuous process that is used to measure performance of activities against a best level that has been set (Baker and Judith, 2000). The aim of benchmarking is to accomplish efficiency, quality and cost effectiveness (Anderson-Miles, 1994; Harris and Associates, 2006; Roussel et al 2008). The areas of improvement should be fundamentally addressed within performance frameworks (Arah et al., 2003). At KFSH&RC, the strategic benchmarking should be initiated by the management to improve managerial processes. This contributes to the improvement of operational outcomes as well as clients’ satisfaction (Sower and Swansburg, 2007; Blank and Valdmanis, 2007). For our case the clinical outcome of the hospital will be high and efficient, and patient satisfaction will be forged.

Benchmarking is arrived at through a number of steps which are: collection of performance data, analyses of the work processes with regard to organisational strength and weakness, and monitoring for settlement (Roussel and Swansburg, 2008; Anderson-Miles, 1994). By the use of operational benchmarking, the hospital can gain benefits through comparative information towards operations and performance. Indeed, benchmarking facilitates an organization to initiate changes in performance. Health care facilities too can be enhanced to a higher position (Isenberg, 1998; Daniels, Light and Caplan, 1996). The expected outcome of benchmarking initiative is to ultimately overcome competition posed by related organisations in the industry, as well as operate efficiently (Roussel and Swansburg, 2008; Sower, Duffy and Kohers, 2007; Walburg, 2006).

In benchmarking, the performance of the best practices is used for the comparison of the processes. The best practices for benchmarking can be cross-country, cross-state or even cross-industry (Roussel and Swansburg, 2008; Anderson-Miles, 1994). The step of finding an applicable benchmarking partner(s) is very critical, but difficult and time consuming. Previous studies have shown that Robert Wood Johnson University Hospital Hamilton (RWJ Hamilton), in the United States is an example that can be employed as a benchmarking partner. This is because RWJ Hamilton hospital has been recognised as one of the best-in-class hospitals in the U.S. and in the world (Sower et al 2007). Since 1999, RWJ Hamilton implemented quality programmes in accordance with leadership and acceleration of quality. For instance, the programmes guarantee that patients will receive medical attention within 15 minutes by a nurse and 30 minutes by a doctor on entering the emergency department of the hospital (RWJ Hamilton, 2009).

It is moreover important to explain that benchmarking does not attempt to copy successful organisations. It attempts to understand the goals of best-in-class organisations and the methods to achieve those goals by improving operations and processes. Obtaining those types of information is very necessary in order to determine how to reach comparable results (Sower et al., 2007; Joint Commission Resources, 2005). Organisations operate within unique environments, both internally and externally. To understand the effectiveness of a particular process, environmental and strategic factors need to be taken into consideration (Joint Commission Resources, 2005). This is because the differences in those factors can give rise to different results in context of the effectiveness of the process (Sower et al., 2007).

Collecting the internal data is primarily carried out to track the quality of management and operational procedures. This allows the hospital to entirely comprehend the organisation’s performance making it possible to compare with the performance of the chosen best-in-class organisation (Blank and Valdmanis, 2007; Anderson-Miles, 1994). External data of the benchmarking partner (referring to RWJ Hamilton hospital, for example) can be acquired through comparative databases (primary sources), as well as researches, reports and publications (secondary sources) (Anderson-Miles, 1994). The success of benchmarking depends highly on those aforementioned steps which include identifying the area, identifying benchmarking partner, and the method used to gather data for the purpose of comparison.

Analysing internal and external information has to be conducted in an attempt to define performance gaps. By so doing, opportunities for improvement as well as practical process/functions can be addressed. Although some of the best processes/functions may be non-transferable, the organisation can still adopt the knowledge and apply applicable changes (Blank and Valdmanis, 2007; Sower et al., 2007; Anderson-Miles, 1994). Integration of findings into the organisation is typically carried out by establishing objectives to create functional goals for the hospital, and building up an action plan (Sower et al., 2007), which is needs to be developed towards the objectives and goals of the organisation. With the analysis derived from the dependable internal and external information, the change process can give rise to a lot of potential to move forward with fewer resistances, if any, and higher chances of success (Joint Commission Resources, 2008; Blank and Valdmanis, 2007; Anderson-Miles, 1994). Anderson-Miles (1994) argues that determining of a specific timeline and accountability contributes to ensuring success for completion of the change process. Monitoring of the process is vital as it enables observation of all the integrated changes, to anticipate performance improvements.

Performance indicators used to monitor the approach

Every approach with respect to performance improvement involves measurement as a method to evaluate performance (Joint Commission Resources, 2005). Performance measurement in health care system poses a wide range of difficulties. Ozcan (2007) argues that it is as a result of the nature of health care services, that poses these difficulties. However, the complexity is also dependent on levels of measurement adopted. At the hospital level, measuring the output commonly takes account of the scope and volume of operations (Ozcan, 2007). In the context of benchmarking, the approach cannot be assessed without the performance measurement. A performance indicator is accordingly used to identify the functional process in benchmarking approach (Harris and Associates, 2006; Wireman, 2005; Courtney and Briggs, 2004).

A balanced scorecard (BSC) has been widely adopted as a strategic performance measurement by a good number of industries across the board. It has also been applied in a number of health organisations (Roussel et al., 2008; Zelman, 2003). BSC can is a tool for measuring operational activities with reference to an organisation’s objectives in the context of its mission, vision and strategic goals (Roussel et al., 2008; Harris and Associates, 2006; Zelman, 2003). BSC focuses not only on financial outputs, but also on inputs in terms of the operation, marketing, and development (Niven, 2006; Kaplan and Norton, 1996). The BSC framework engages in four key perspectives:

  • Financial perspective
  • Internal business perspective
  • Customer perspective or patient perspective
  • Innovation perspective
  • Learning perspective

These are illustrated in the figure 1 below.

Balanced scorecard generic strategy map 
Figure 1: Balanced scorecard generic strategy map 

To achieve the organisational strategic goal, KFSH&RC requires emphasising on measuring and improving all the key perspectives mentioned above. Major dimensions of the hospital performance to be measured, principally, take into account of clinical effectiveness, safety, patient outcomes, production efficiency, staff orientation, team performance, responsive governance, to name just but a few (Jeffcott and Mackenzie, 2008; Stock, McFadden and Gowen, 2007; Walburg, 2006; World Health Organisation, 2003). Main activities and processes have to be concentrated on, in an attempt for the KFH&RC to stand out and to offer productive and efficient values to the patients. Roussel et al. (2008), claims that it is very important for a hospital to realise that an organisation should not measure itself as excellent. The rationale being that an organisation should prepare to change with respect to the measurement outcomes. Once a strategy map is determined, key performance indicators (KPIs) which refers to strategic performance metrics can be employed to measure the performance (Roussel et al., 2008; Parmenter, 2007; Niven, 2006).

Roussel et al. (2008), the key performance indicators should be determined based on a way to measure the effectiveness of the internal processes to reach the strategic goal(s). It is vital for KPIs to focus on issues related to financial perspective. In addition, it should also consider the cost of other facilities and medicines. This is to measure the performance of the health care facility as well as the financial progress (Davies, 2001). KPIs for customer perspective are composed of patients’ accessibility to medical facilities, patient satisfaction, cost of treatment, to name just but a few. It contributes to understanding the patient expectations and perceptions on the subject of the hospital facility. The internal process perspective is related to the managerial processes to initiating and delivering the patient value plan (Roussel et al., 2008; Niven, 2006; Kaplan and Norton, 1996). In relation to operations perspective, it is possible to use KPIs to evaluate the mean time taken in regular queues, mean time taken in developing new medicines and other facilities and time taken in receiving medical attention. In general, it is used to identify the key processes compelling improvement. Pertaining to innovation and learning perspective. KPIs gauge health education plans, public health care initiatives, discarding and recycling of medical waste, amongst other uses (Roussel et al., 2008; Davies, 2001).

Strategies for motivating stake holders for performance improvement

A wide range of studies shows that organisational culture plays an important part for motivating the performance improvement, and this includes health care organisations (Stock et al., 2007; Sower et al., 2007; Marquis and Huston, 2006; Huber, 2006; Kimball, 2005; Daniels and Ramey, 2005). We can, therefore, conclude that organisational culture is the key to success or failure in performance improvement in any organisation. Organisational culture refers to shared beliefs, norms, value, ethics, and expectations (Stock et al., 2007; Daniels and Ramey, 2005). It is a powerful aspect which is able to affect the performance and its improvement. Among positive organisational cultures, employees appear to be supportive, solicited and following organisational guidelines and ethics. Moreover, teamwork, positive thinking and shared accountability characterises positive organisational culture (Daniels and Ramey, 2005). As a result, the performance improvement can be achieved in a positive organisational culture environment. On the other hand, negative organisational culture can drain energy and, therefore, affect development in an adverse manner. Employees tend to be defensive, self protective and difficult to communicate to in a negative organisational culture (Daniels and Ramey, 2005), which makes performance improvement difficult.

In actual facts, however, most organisations are perceived to have a combination of both positive and negative organisational cultures. Encouraging positive culture is considered important for the motivation of stake holders towards performance improvement. The collaboration of employees can result to greater improvement. The management should give earlier communication with respect to expected changes in performance management and organisational goals. This gives the employees the needed time to prepare for, and adjust to change, thereby, eliminating failure and resistance from the employees (deConstantin Corporate Transformations, 2007). In addition, the hospital should build up a culture that motivates the employees to have an open communication process so that their expectations can be met and to help them solve and cope with any difficulties involved in their day-to-day operation in the hospital. They will also give insightful ideas regarding the expectation of the clients (patients) as they interact with them on frequent basis.

Promoting staff morale can also help toward positive organisational culture. Organisational research has shown that employees will perform poorly and below capacity if they feel unappreciated and under-utilised (deConstantin Corporate Transformations, 2007). This leads to low productivity and hence little or no development in performance and at the individual level. The upsurge of staff morale which is very important can be carried out through open communication, training, teambuilding exercises, monetary rewards, to name just but a few. Furthermore increasing of new recruits eases the work burden motivating the workers, hence improving on performance (deConstantin Corporate Transformations, 2007; Harrington, 1995).

To cultivate excellent performance, performance improvement culture needs to be created within the health care organisation. Also, the hospital should realise that individual level, team level, as well as departmental level plays a constructive role towards performance improvement (Paladino, 2007). Specific regulatory measures, in addition to hospital requirements, should be carefully implemented to ensure a performance improvement working culture. These have to be initiated at the top level management and passed down to the subordinate workers in the entire health care organisation. The role of performance improvement culture includes explicit alignments (vision, goals, and responsibilities), buy-in exits based on leadership, commitment for continuing change, proactive issue identification, learning mindset, effective leaders, as well as effective team leadership (Petrex International, 2009). In respect to that, performance improvement culture in an organisation with a positive organisational culture appears to be a significant strategy for motivating related stake holders for performance improvement. The Key thing is to strategically place/fix instructing team leaders as well as management personnel with a drive towards a performance improvement scheme. This will create a growing working culture so that performance improvement is supported.


Performance improvement is imperative for all organisations, including health care organisations. The essay emphasised on the analysis of benchmarking as an approach to improving organisational performance, key performance indicator (KPI) – scorecards as a performance indicator used to monitor the approach, and building up organisational culture as a strategy for motivating the performance improvement. Any organisation is required to create key objectives and quality standards in an attempt to reach high performance. In this essay, King Faisal Specialised Hospital and Research Centre (KFSH&RC) was chosen as the health care organisation to be improved. The hospital is located in Riyadh, Saudi Arabia, and it is a big public hospital. At KFH&RC Hospital, there are a number of management practices required to be improved. These includes managerial autonomy, decision making, innovations and technologies, health care cost, efficiency issue, to name just but a few.

The most suitable approach for improving organisational performance at the hospital is benchmarking. Benchmarking approach aims to improve performance of activities against the best level, set by management. In order to implement benchmarking, the steps required for benchmarking entails collecting performance data, analysing work processes and monitoring the approach. Selecting the best practices to compare the process with the hospital is subsequently carried out. The best practices can be cross-country, cross-state or even cross-industry. Benchmarking approach does not aim to duplicate the best-in-class organisations but rather aims at comparing with their goals and the methods used to reach those goals through improving operations and processes, so as to attain a comparable status. The internal data to track the hospital’s performance and the external data which is the performance of the best-in-class organisation are then gathered, compared, and analysed. The opportunities for improvement and practical processes are then developed by building up an action plan. Through the action plan and proper timeline, the process of improvement has a higher potential to succeed and less resistance from the employees.

Without a doubt, the performance improvement cannot be conducted without performance measurement. Performance indicators are thus employed for the success of performance improvement. Balanced scorecard (or BSC), which we have adopted for our case, is a usual performance measurement adopted by a variety of industries across the board. Balanced scorecard consists of:

  • Financial perspective
  • Internal business perspective
  • Customer perspective
  • Innovation perspective
  • Learning perspective

A particular organisation should not rate itself as being excellent. An organisation should prepare to change in accordance with the measurement outcomes. As a result, key performance indicators should be used in evaluating 4 key perspectives. KPIs used in measuring financial perspective relate to operating profit and various investment cost. On the other hand, customer perspective KPIs relate to:

  • patients’ accessibility to health care
  • Level of satisfaction
  • Cost of treatment.

KPIs for operations perspective involve average time to receive medical attention, regular queues, average length of the stay in the hospital, and so forth. KPIs for innovation and learning perspective determine health education plans, public health care initiatives, discarding and recycling of medical waste.

Organisational culture is addressed as an important role in influencing the performance improvement among health care organisations, giving rise to either success or failure in performance improvement. Accordingly, it is very important to build up performance improvement culture as a strategy to encourage performance improvement. An organisation needs to understand that all levels within the organisation (including individual level, team level, and department level) play a role in performance improvement. Therefore, an organisation should create the organisational culture with clear alignments (including vision, goals, and responsibilities), buy-in exits based on leadership, commitment for continuing change, proactive issue identification, learning mindset, effective leaders, and effective team building. Driving the performance improvement culture appears to be the ultimate strategy for motivating performance improvement. It can be concluded that performance improvement can only be achieved with effective strategic plans along with the cooperation of all stakeholders from the top to the bottom levels, in the organisation.

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