First, the turnover rate of the company's nursing assistants was extremely high. For example, turnover at St. Leonard's Center, FHSD's 60-bed skilled nursing-care facility in Centerville, Ohio, had reached a whopping 146%. Most of the turnover was occurring in the first six to eight months of employment. The HR staff concluded that it needed to look at the employee-selection process more closely. New hires weren't staying long, and in many cases, if they did stay, they weren't doing a good job. Absenteeism, poor performance and dissatisfaction with the job were the main reasons that forced the HR staff to terminate employees.
Second, high turnover was taking a toll on productivity and quality of care. "Nursing assistants are primary caregivers. High turnover in this position places extra pressure on the rest of the staff and upsets patients," says Rick Willer, personnel director for Schroder Manor, FHSD's 85-bed skilled nursing facility located in Hamilton, Ohio. "Although turnover is high for the industry as a whole [approximately 85%], we needed to get our turnover down below that level if we wanted to provide the level of care that our patients needed."
The system's HR staff realized that one of the best ways to overcome a problem like this was to hire workers who contribute to the company's success. Franciscan needed a system for choosing skilled, productive people who would make a long-term commitment to the organization and who could excel at oftentimes difficult and stressful jobs. In addition, FHSD needed a system that would reduce the tendency of the HR department and nursing managers to hire based on gut feelings.
Management agreed with the need to solve these problems and invested in a battery of tests to help select the best nursing assistants possible from hundreds of applicants. The investment paid off. Since 1990, the tests—called the Nursing Assistant Test Battery—have saved the company more than $300,000 annually by reducing turnover and increasing overall employee productivity among nursing assistants. After selection interviewing and testing were implemented in mid-1990, turnover rates dropped to 71% in 1991 and to 51% in 1992.
"The cost savings from using these tests are dramatic. More important, though, is the improved quality of care the patients at St. Leonard's Center are receiving," says Delores Shuermann, HR director for St. Leonard's Center. "The nursing assistants spend the most time with the patients. It's their actions and behaviors on which the quality of care is judged most. We received numerous positive comments from patients, family and other staff on how much nicer the new nursing assistants are."
The tests help FHSD choose nursing assistants who provide excellent care because it's important to them, not simply because their job description requires them to. Finally, the tests single out candidates whose values are similar to the values of Franciscan Health System: competence, compassion, collaboration and creativity.
"Getting the right people in the first place is crucial," says Shuermann. "We have initiated a total-quality-improvement process within the health-care system. Improving the selection process is a key part of having employees oriented toward the organization's values. This is a way to use data to make selection decisions."
Tests provide HR with a more objective look at job candidates.
The Nursing Assistant Test Battery consists of three separate tests:
- The Personnel Decisions Inc. Employment Inventory
- The Guilford-Zimmerman Temperament Survey
- Personnel Decisions Inc. Job Preferences Inventory.
Applicants can take all three tests in about 90 minutes.
The three tests work together to give FHSD's human resources staff a more objective look at job candidates than that provided by personal interviews alone. "The tests are an aid in helping us to identify the true skills and capabilities of applicants," says Shuermann. "This is especially important because it's more and more difficult to get references on people." The tests were customized to evaluate each candidate systematically on the performance dimensions critical for nursing assistants:
- Cognitive skills (such as understanding directions)
- Administrative skills (such as being able to organize)
- Interpersonal skills (such as likability and cooperation, compassion and consideration)
- Motivation (such as personal pride and quality orientation, enthusiasm and commitment)
- Adjustment (such as reliability and responsibility).
The tests focus on factors that differentiate between excellent and less-than-excellent performers. In designing the tests, Personnel Decisions Inc., a Minneapolis-based firm of organizational psychologists who specialize in assessment-based management, found that the factors that identified the best nursing assistants included interpersonal skills, motivation and adjustment.
The first test—the Personnel Decisions Inc. Employment Inventory—identifies those people who show conscientious work behaviors. Designed to uncover those who are the most motivated, follow directions the best and take pride in their work, the test asks questions such as the following:
- True or False: At this time in your life, a job is a job, not a career.
- True or False: You demand a lot, sometimes too much from yourself.
- Choose the word that is most like you: a) Thorough, b) Quick, c) Thrifty.
- Which kind of employee do you think is best—one who: a) Comes up with a lot of good ideas to improve the job, b) Is always friendly to others at work, c) Follows every company rule, d) Is hardly ever absent, e) Starts work without being told to.
The second test, the Guilford-Zimmerman Temperament Survey, is a published instrument that identifies candidates who are more people-oriented and are more likely to interact positively with others. Because the Guilford-Zimmerman test is a broad-based personality measure, FHSD includes only those parts of the test that measure characteristics applicable to the nursing job. For example, the test uses the emotional-control scale, which distinguishes applicants who are cheerful, tolerant and don't worry a lot—all qualities needed to get along better in the nursing-care industry. It doesn't include skills such as leadership and confidence in public speaking because those skills aren't as important for nursing assistants.
The final test—the Personnel Decisions Inc. Job Preferences Inventory—looks for a match between actual job conditions and people's preferences for job conditions. This test is important because a major cause of turnover is a conflict between the environment that people like to be in and the environment that they are in, which makes adjustment difficult. For example, someone who prefers a predictable, stable workday would be a poor candidate for a career as a nursing assistant, which is filled with unpredictable emergencies.
The tests aren't a panacea, but rather a screening device to help HR focus on which people are more likely to succeed. In addition to the three tests, FHSD developed a structured interview format, used primarily to identify behaviors that are representative of Franciscan's values.
"The structured interview process gave us time to reflect on the applicant, and the tests gave us another tool to use in our decision making," says Caroline Haig, a registered nurse at St. Leonard's Center. "The whole process was similar to a road map to help us get to where we wanted to go."
Turnover decreased, and productivity increased during the trial period.
During the 10-month trial period, FHSD tracked whether hiring decisions based on test results reduced turnover and increased productivity and quality of care. The results were solid. St. Leonard's Center reduced its turnover rate by 82% during the 10-month trial period. Under the previous selection system, an average of 46 nursing assistants were terminated each year. Assuming an average staff of 31.5 nursing assistants, the annual turnover rate had been a whopping 146%. With the new test battery in place, only seven nursing assistants were terminated. An estimated annual turnover of 26.6% (8.4 nursing assistants) was extrapolated for the trial period.
To quantify the dollars saved, St. Leonard's Return On Investment (ROI) was calculated using the annual-turnover data. The estimated annual ROI calculations showed an ROI of 66%, assuming a staff of 32 nursing assistants, three applicants tested per opening and a replacement cost (as estimated by the facility's staff) of $514 per opening.
Assuming St. Leonard's is representative of the other two facilities in FHSD, the annual turnover rates and the replacement costs for St. Leonard's can be used to estimate the systemwide ROI of the test battery. Therefore, assuming a total staff of 250 nursing assistants, 146% turnover and three applicants tested per opening, the total annual savings for reduced turnover for all facilities would be $127,385. (It's important to note that the accuracy of the estimates depends on the representativeness of the sample as well as the accuracy of the employee-replacement costs. The estimates for the entire organization may be somewhat inflated because they're based on a small sample.)
Employee productivity, which is another way to evaluate ROI, also was tested at St. Leonard's Center. A dollar productivity calculation was used to associate dollar values with productive and counterproductive job behaviors commonly noticed by supervisory staff.
For example, the company cost of a nursing assistant watching 15 minutes of television in a patient's room is $5.85—15 minutes of the nursing assistant's time, $1.60, and 15 minutes of the supervisor's time to deal with the situation, $4.25. Other counterproductive behaviors include turning in an incomplete assignment sheet, which costs $9; leaving an unpleasant task for the next shift, which costs $11.50; and making unnecessarily long trips to the restroom or central services, which costs $8.
Through training and coaching, FHSD had made an attempt to stop these counterproductive behaviors, to no avail. When FHSD began using the tests in addition to interviews, the time supervisors spent on discipline and patient complaints decreased.
While counterproductive behaviors lose money for the company, productive behaviors contribute to the bottom line. For example, cleaning up work areas before the end of the shift can save the company $9; suggesting a new way to improve work can save $5; and helping other staff members when time is available can save $3.
The supervisory staff monitored both the productive and counterproductive behaviors of the nursing assistants and calculated a dollar productivity figure for each one. The figures were calculated by multiplying the frequency with which the employees displayed these behaviors by the dollar value of the particular behavior. Starting with a base of zero, the supervisors were able to figure each nursing assistant's annual dollar contribution by observing his or her job performance.
Nursing assistant dollar contributions ranged from -$19,037 to +$17,925, with an average of +$6,638.41. After several months of using the test battery, a strong positive correlation was found between test score and employee dollar contribution. The higher the test score, the higher the dollar contribution and the more money the company saves.
"We started seeing employee behaviors that were in line with our mission and shared values," says Shuermann. "Nursing assistants were showing compassion, displaying competence in their care and collaborating with co-workers." In addition, Shuermann says creativity could be seen in their interactions with the residents, such as providing extra time for reading, talking or listening.
Adds Haig, "New employees weren't only willing to do what they were hired to do, but they began to take on extra shifts when open. Weeding out people who only wanted a job and hiring those who were concerned about our residents made a tremendous difference in the quality of our care." She found that new employees who scored high on the tests adapted to the facility faster. They also were faster learners and more cooperative.
Knowing this, it was possible to assign performance-prediction percentages to test scores. Job candidates scoring in the top third, for instance, show a better-than-63% chance for above-average performance. These are Green Light candidates, meaning proceed and hire.
Candidates scoring in the bottom third show a less-than-50% chance for above-average performance. These are Red Light candidates, meaning don't hire. Those scoring in the middle third are Yellow Light candidates, meaning proceed with caution.
Any company's goal, then, would be to hire only Green Light candidates, those scoring in the top third. However, many organizations are forced to hire a good number of workers who fall in the Yellow Light group, or middle third, because of a lack of good candidates or an urgency to fill positions.
If St. Elizabeth's Medical Center, a 631-bed acute-care facility located in Dayton, hired from both the Green and Yellow Light groups, each new hire in the test situation would show at least $727 in more-productive behaviors when compared to the current nursing-assistant staff. Better yet, if the organization limited its hires to those in the Green Light group, each new hire would show $1,989 in more-productive behaviors.
Using the added-dollar contribution from Green Light candidates, it's possible to estimate ROI systemwide. Meshing the turnover information gathered from St. Leonard's with the productivity information gathered from St. Elizabeth's, a $132,268 increase in systemwide productivity was extrapolated. This represents a 480% ROI for the entire organization.
Total savings to the organization can be calculated by adding the savings from the decrease in turnover with the savings from the increase in productive behavior. Total 10-month savings came to $259,752, representing a 950% ROI.
While senior management evaluated the financials, FHSD's registered nurses reported on improvements from the floor. RNs said that the new nursing assistants seemed more caring and more interested in doing a good job. They smiled more, laughed more and talked with patients more frequently. They also seemed to call in sick less often. One RN supervisor noted that nursing assistants began answering call lights without having to be tracked down in the break room and prodded to do their job. "The dollar savings makes the test battery worthwhile," says Shuermann, "but the positive change in the quality of our nursing assistants makes the test battery absolutely necessary."
It's been more than a year since the 10-month trial, and FHSD now is using the Nursing Assistant Test Battery systemwide. Management and staff continue to notice an improvement in the quality, motivation and reliability of nursing assistants since the new hiring system was put in place. In fact, it's working so well that Personnel Decisions Inc. and FHSD are developing customized test batteries to fit other employee groups, such as dietary aides, housekeepers and clerks.
FHSD is certain that its current hiring procedure will continue to help the organization prosper for years to come. "Employees represent our competitive advantage in delivering quality health care," says Willer. "Although technology is important, it's the interaction with employees upon which patients judge quality. Selecting conscientious, responsible candidates that share our values is the key to our future success."
Personnel Journal, November 1993, Vol. 72, No.11, pp. 89-92.