A Balancing Act: Work-Life-Balance and Multiple Stakeholder Outcomes in Hospitals*

A Balancing Act: Work-Life-Balance and Multiple Stakeholder Outcomes in Hospitals

Full Paper

Ariel Avgar*

University of Illinois at Urbana-Champaign

Rebecca Givan

Cornell University

Mingwei Liu

Rutgers University

* Authors contributed equally to this paper and names appear in alphabetical order.

1 “In recent times I’ve felt I’ve had no life, been totally exhausted. When you try to switch off from work you feel like you’re compromising your profession and you can’t switch off from your family. The two just don’t marry up – it’s an either / or situation” Nurse manager (Wise, 2003).

1. Introduction: Meeting Multiple Stakeholder Interests in a Challenged Healthcare Setting

This paper examines the direct and indirect effects of work-life-balance (WLB) practices on multiple stakeholder outcomes in hospitals. Healthcare organizations in most developed and developing countries are facing a myriad of dramatic clinical, economic and organizational pressures (Porter and Teisberg, 2006; Weinberg, 2003; Clark, 2002; Lee and Alexander, 1999; in the British context, see National Patient Safety Agency National Reporting and Learning System,

2008). Most healthcare organizations are confronted with, among other things, two crucial and often opposing challenges – namely the urgent need to improve patient quality of care while also containing escalating costs (Weinberg, 2003; Porter and Teisberg, 2006). In addition, healthcare organizations have been struggling with a drastic shortage in skilled healthcare professionals

(Auerbach, Buerhaus, and Staiger, 2007; Hayhurst, Coleen, and Stuenkel, 2005; Brush,

Sochalski, and Berger, 2004; Buerhaus, Staiger, and Auerbach, 2003) coupled with an extremely high level of employee stress and burnout (McVicar, 2003; Vahey et al., 2004; Chang, et al.,

2005; Laschinger and Leiter, 2006).

As a result, hospitals and other healthcare organizations have been experimenting with a variety of workplace innovations designed to assist them in recruiting and retaining high skilled employees, enhancing the delivery of care, and reducing workforce and operational costs. Many of these responses have been documented by recent industrial relations and human resource management research. Thus, for example, there is a growing body of literature on the effects of practices associated with a high performance work system (HPWS) in the healthcare context (for

2 reviews of the HPWS literature in healthcare see Givan, Avgar and Liu, 2010; Avgar, Givan and

Liu, 2010). Other studies have examined emerging models and practices for the delivery of patient care, such as patient-centered-care (PCC; see for example Avgar et al., 2010) or relational coordination of care (see for example Gittell, Seidner, and Wimbush, 2009).

This emerging body of literature on workplace innovations in healthcare has clearly advanced existing knowledge on the effectiveness of different organizational initiatives and the outcomes associated with their implementation. This research has also generated important public policy prescriptions for addressing the healthcare crisis. Nevertheless, this research has a number of empirical and theoretical limitations. First, an overwhelming number of these studies have focused on high performance work practices or very closely related modifications for the healthcare arena. Although evidence on this central category of work arrangements is important, this dominant focus has come at the expense of attention to other forms of work innovation taking place in this setting (for a similar argument see Avgar et al., 2010).

Second, much of the research on work arrangements in healthcare has focused on the implications of these innovations for a single or narrow set of stakeholders. Most often, studies have examined the effects of different work practices on organizational performance measures

(see for example West et al., 2002). Some studies have addressed patient or employee outcomes

(see for example Avgar et al., 2010; Gittell, 2009). However, scholars rarely integrate multiple stakeholder outcomes and the diverse manner in which they may be affected by the same set of work practices (see also Givan et al., 2010).

Finally, as noted above, one of the most persistent work related challenges in healthcare is the extremely high level of employee stress, burnout and turnover associated with frontline

3 work in this industry. Nevertheless, the work practices studied are often not directly designed to deal with these problems, and the effects of innovations on these outcomes are often neglected.

In an effort to address these limitations, this paper examines the direct and indirect effects of WLB practices in 173 hospitals in the United Kingdom on organizational, patient care, and employee outcomes. The study of WLB practices, which are intended to provide employees with a greater level of work flexibility in order to accommodate family and other life responsibilities, has been receiving growing academic attention and has been linked to different organizational and individual level outcomes (see for example, Anderson, Coffey, and Byerky, 2002; Perry-

Smith and Blum, 2000; Osterman, 1995). Much of this research, however, has been conducted outside the healthcare setting, especially as it pertains to the linkage between WLB practices and measures of organizational performance. Given the unique healthcare industry challenges, outlined above, the study of practices that emphasize increased employee flexibility and greater balance between work and family is likely to have important theoretical and practical implications.

We propose a model in which the effects of WLB practices on patient care outcomes are mediated by employee turnover intentions. That is, it is the positive employee outcomes stemming from work-life balance that in turn improve organizational and patient performance outcomes. As will be discussed below, our unique dataset allows us to test this hypothesis and therefore provides an examination of the mechanism by which WLB practices may deliver their benefits to organizations in general and in the healthcare setting in particular.

In doing so, this study seeks to extend existing research in a number of ways. First, we focus on a set of practices that has not received much attention in the healthcare setting. Second, we employ a multi-stakeholder perspective by exploring the effects of WLB practices on a broad

4 set of performance outcomes, including multiple clinical measures, patient perceptions of their care, and employee outcomes. WLB practices are especially appropriate for this purpose since one of their underlying premises is that they have the potential to deliver positive effects for employee outcomes, while also increasing organizational centered outcomes and performance

(Yasbek, 2004; Batt and Valcour, 2003).

2. A Review of Work Life Balance Research

WLB initiatives include a wide range of individual practices or bundles of practices that are intended to provide employees with greater control and the ability to integrate work and family responsibilities. Furthermore, there is a great deal of variation in the specific practices adopted across different organizational and industry settings. Nevertheless, the dominant types of policies associated with work-life balance are family leave, flexible work-time, childcare support

(such as subsidies or on-site childcare), compressed working weeks, telecommuting and job- sharing (Glass and Estes, 1997). It is also important to note that organizations have been shown to vary with regards to their strategic objective guiding the adoption of WLB practices, a source of variation in associated outcomes (for a discussion of different underlying motivations for the adoption of WLB practices see Dex and Scheibl, 2001; for distinction between employee friendly and employer friendly flexible practices, see Fleetwood, 2007).

Interest in the ability of WLB practices to deliver positive gains to both employees and their organizations has been increasingly growing (Gregory and Milner, 2009; Dex and Scheibl,

2001; Osterman, 1995). WLB scholars have tended to focus on a set or bundle of workplace practices associated with “family friendliness” or “work-life balance” (see for example Batt and

Valcour, 2003; Dex and Scheibl, 2001). Early WLB bundles were primarily designed to

5 accommodate the needs of working parents, but have more recently evolved to also focus on more general flexibility and stress-reduction for all employees (Fleetwood, 2007). Thus, in addition to reducing work family conflict, these organizational practices are also designed to reduce stress, turnover and burnout, increase employee satisfaction, and lead to improved organizational performance.

WLB research outside the healthcare arena has established a link between practices promoting work-life balance and certain employer and employee outcomes (for a review see

Yasbek, 2004; Batt and Valcour, 2003). More specifically, research has provided empirical support for a positive relationship between the adoption of WLB practices and both employee level outcomes and organizational performance. With regards to individual level outcomes, a large body of research has supported the relationship between WLB practices and variables such as job satisfaction, turnover intentions, and stress levels (for a review see Yasbek, 2004).

With regards to organizational outcomes, existing research has supported a relationship between the existence of WLB practices and improved recruitment and retention capabilities

(Yasbek, 2004; Batt and Valcour, 2003; Evans, 2001), higher returns on investment in employee human capital (Yasbek, 2004; Dex and Scheibl, 1999); increased employee loyalty and commitment and organizational citizenship behavior (Thompson and Prottas, 2005; Yasbek,

2004; Dex and Scheibl, 2001; Lambert, 2000); and improved productivity (Eaton, 2001;

Galinsky and Johnson, 1998).

However, the evidence regarding the relationship between WLB practices and organizational performance and productivity has been mixed with less consistent findings (Wang and Walumbwa, 2007; Batt and Valcour, 2003; Evans, 2001). Early scholarship on WLB suggested that while positive for employee outcomes, these practices would not have a positive

6 effect on organizational performance (Lambert, 2000). WLB studies rarely examine the effects of the same practices on multiple organizational stakeholders, thus assessing both employee and employer effects in a single study. Our data allow us to test this relationship empirically.

Furthermore, WLB studies seeking to assess the “business case” for the adoption of associated practices, or tend to conduct a straightforward cost benefit analysis (see for example, Dex and

Scheibl, 2001). The spectrum of organizational benefits is, however, often broader than what gets captured in traditional cost benefit analyses. Examining the effects of WLB practices on performance measures in hospitals, where there are multiple different organizational outcome measures across different stakeholders, is therefore likely to contribute to this literature.

In the healthcare setting, which is the focus of this paper, research on the effects of WLB practices is still much less developed. There are several studies of physicians’ work-life balance, often focusing on the causes of the higher burnout rate among female physicians (Gjerberg,

2003; Heiligers and Hingstman, 2000; Keeton et al., 2007; McMurray et al., 2000). These studies find that women physicians tend to choose specialties and working hours that allow them to take on some domestic responsibilities. Much less attention has been given to the effects of WLB practices on other healthcare professional groups, especially other frontline staff.

As noted above, the healthcare setting is notorious for fatigue, stress, burnout and high turnover. A recent report, commissioned by the UK government, examined the extremely high levels of absence due to sickness in the National Health Service. Indeed, absence rates in the

NHS are significantly higher than at workplaces in the rest of the public or private sectors

(Boorman, 2009 sec 1.13). For example, after musculoskeletal problems, the second highest cause of absences in the NHS was “stress/depression/anxiety”, which are likely to be influenced,

7 at least in part, by work life balance issues (for research linking work life issues and burnout among frontline nursing staff see Burke and Greenglass, 2001).

It is not surprising then that a great deal of research in the healthcare setting has focused on antecedents to and the effects of stress and burnout. Thus for example, in a well cited paper,

Aiken et al (2002b) found a relationship between staffing levels, burnout and health outcomes in hospitals. Specifically, the authors looked at nurse-patient ratios and found that higher ratios caused poorer clinical outcomes, higher rates of burnout, and job dissatisfaction among nurses

(see also Hall et al., 2003). Nevertheless, during a period characterized by a dramatic shortage of health professionals across most of the industrialized world, it is essential not only to focus on the effects of the long hours and high pressure associated with healthcare work, but also to examine the effects of organizational efforts, such as WLB practices, to mitigate these challenges and to enhance employer and employee outcomes. In addition, it is important to examine the effects of WLB practices on clinical outcomes. Our hypotheses development section below proposes a model linking WLB practices to multiple outcomes in hospitals.

3. Hypotheses Development

Our study of WLB practices in the hospital context allows us to examine key research questions that have not yet been fully addressed in and outside the healthcare setting. How does the use of WLB affect key measures of organizational performance, in our context as evidenced by patient quality of care and financial performance? If WLB is positively related to organizational performance, does the use of these practices also have a positive effect on other stakeholders, such as employees? Finally, what is the mechanism by which WLB delivers its

8 organizational performance benefits? In this section, we develop hypotheses geared at examining each of these questions.

Taken together, our hypotheses propose a mediated model of the WLB-performance relationship. First, we maintain that the use of WLB practices will have a positive direct effect on central quality of care outcomes, such as error and mortality rates. Next, we maintain that the use of WLB practices will also be positively related to employee outcomes, as measured by job satisfaction and turnover intentions. Finally, our model proposes that these employee outcomes mediate the relationship between WLB practices and quality of care and patient perceptions of care outcomes.

This mediation hypothesis stems from the integration of research regarding the costs associated with negative employee perceptions and attitudes in the healthcare setting, with general evidence regarding the positive relationship between WLB and such outcomes attained mostly in other settings. High levels of turnover intentions have been documented to negatively affect patient care outcomes (see for example, Aiken et al., 2002b). As reviewed above, research outside the healthcare setting provides strong empirical support for a positive WLB effect on firm performance, especially financial performance. Thus, we argue that WLB practices have the potential to positively affect organizational performance outcomes for hospitals, and that these outcomes are delivered, at least in part, through the positive effect on employee related outcomes. In what follows, we develop each of the separate linkages in this mediation model.

First, we argue that WLB practices have a direct positive effect on quality of care measures as well as financial performance. These hypotheses build on one of the core attributes of WLB practices and their implications for how work is organized. More specifically, we focus on the linkage between WLB practices and a greater degree of work organization flexibility,

9 alongside a greater degree of control and flexibility in balancing work and family demands. We maintain that WLB practices contribute to organizational financial and quality of care performance measures by providing employers with more flexibility in designing work and by providing employees with greater flexibility in managing work and life demands.

WLB practices are intended to provide the organization with greater flexibility vis-à-vis its workforce. The use of these practices allows for a wider choice of work arrangements for frontline staff and mangers. Thus, these practices can provide the organization with greater flexibility in the manner in which employees achieve its goals and objectives (see for example,

Anderson et al., 2002). For example, research has suggested that WLB practices are often adopted as part of broader high performance and commitment organizational strategies, which place a strong emphasis on organizational flexibility (Batt and Valcour, 2003; Smith and Blum,

2000; Osterman, 1995). Furthermore, there is also empirical evidence that the effectiveness of such practices is greater when they are adopted as part of a broader performance strategy

(Osterman, 1995).

In the healthcare setting, where work demands are extremely variable and organizational certainty regarding staffing and other workforce planning issues is low, the ability to attain greater flexibility through the use of WLB practices is likely to have clear positive implications for performance. We argue that providing hospitals with more degrees of freedom in meeting the intense demands of providing care to patients will translate to lower error rates and better clinical outcomes alongside improved financial performance.

Alongside efforts to increase organizational flexibility, a second dominant WLB objective is to increase employees’ abilities to meet the challenges inherent to balancing both work and family (broadly defined) responsibilities. As will be discussed below, this WLB

10 dimension helps support the proposed positive employee outcomes hypotheses. We also maintain that increasing employees’ ability to balance work and family by allowing for alternative work arrangements and scheduling options will lead to improved organizational performance. More specifically, it is likely that employees in hospitals that provide greater levels of flexibility and control will have the ability and willingness to reciprocate in ways that are likely to improve organizational outcomes (see Thompson and Prottas, 2005). For example, by addressing employee needs for dependent care or flexible scheduling, a hospital is alleviating potential obstacles to high performance. Furthermore, WLB research in other settings has supported a social exchange mechanism through which practices increase organizational performance (see for example Wang and Walumbwa, 2007; Lambert, 2000). In other words, employees in organizations that signal a genuine concern for their wellbeing by adopting WLB practices will reciprocate by exerting additional effort on behalf of the organization. Taken together, we hypothesize that as a result of the increase in flexibility, greater emphasis on WLB in hospitals will directly and positively affect organizational performance outcomes.

Hypothesis 1a: Greater use of WLB practices in hospitals will have a direct and positive effect on organizational financial performance.

Hypothesis 1b: Greater use of WLB practices in hospitals will have a direct and positive effect on patient quality of care.

In addition to a direct relationship between WLB practices and organizational performance, we also hypothesize a mediated relationship. WLB practices, we propose, also deliver organizational benefits to hospitals by positively affecting employee related outcomes.

WLB practices, according to this argument, decrease turnover intentions and it is through these effects that it also yields organizational benefits. In order to support this hypothesis, we need to support two linkages. First, we need to demonstrate that WLB practices have a direct effect on

11 both job satisfaction and turnover intentions. Second, we need to support the hypothesis that job satisfaction and turnover intentions are directly related to our financial and quality of care performance measures. As noted above, both of these separate linkages have extensive empirical support in two different bodies of literature (WLB and healthcare). Nevertheless, to the best of our knowledge, empirical support for an integrated model combining both linkages has not been provided in the healthcare setting.

It is also important to note that support for a mediated role of employee outcomes in the relationship between work practices and organizational performance has been clearly established in the industrial relations and human resource literature. For example, Huselid (1995) documented the mediating role of turnover in the relationship between HPWS and financial performance. Although a separate bundle of practices, this evidence regarding HPWS provides strong support for the proposition that one of the mechanisms through which work practices delivers organizational benefits is improvements in employee related outcomes. Similarly, Batt

(2002) also demonstrated the role of turnover in mediating the effects of work organization on performance outcomes. We build on this established literature; however, the rationales for the mediating effects of turnover intentions and job satisfaction are not the same.

Our hypothesis regarding the effects of WLB practices on job satisfaction and turnover intentions is based on two dimensions of these practices. First, as noted above, WLB practices address a clear and increasingly important issue for employees, namely their ability to balance between their work and family commitments. Put simply, WLB practices are intended to enhance employee well being by addressing common tension, and to the extent that they are able to deliver on this objective, they will be positively related to employee satisfaction with work and their intentions to stay with the organization. A large body of general WLB literature has

12 supported a negative relationship between work family conflict and job satisfaction and turnover intentions (Thompson and Prottas, 2005; Anderson et al., 2002; for a summary see Kossek and

Ozeki, 1998). Balancing work and family is likely to be important to employees in most work settings, but the healthcare arena is one in which the tensions between work and family are dramatic. Unresolved, these tensions will likely lead to employee decisions or intentions to leave the organization (for a similar argument see Anderson et al., 2002). Therefore, we expect the effects of providing healthcare employees with access to WLB practices on job satisfaction and turnover intentions to be especially pronounced.

In addition, our hypothesis regarding the direct effects of WLB practices on job satisfaction and turnover intentions also rests on the unique nature of healthcare work. We argue that WLB practices enhance the ability of employees and their managers to provide high quality care to their patients. By increasing organizational employee flexibility, discussed above, hospitals are creating an environment more conducive to addressing complex patient needs and concerns. A well-established body of healthcare literature has found a relationship between working conditions that allow for the delivery of high quality care and frontline staff perceptions of their work (for a similar argument regarding a different set of workplace practices, see Avgar et al., 2010; also see, Rathert and May, 2007; Hayes et al., 2006; West et al., 2005; Newman and

Maylor, 2002; Aiken et al., 2001). If WLB practices do, in fact, enhance the ability of healthcare professionals to deal with the challenges of providing patient care, they will also, we argue, improve employee perceptions of work.

The second linkage in our mediation hypothesis rests on supporting the proposed relationship between job satisfaction and turnover intentions and quality of patient care and financial performance. Here too, healthcare research has provided empirical evidence to support

13 this individual link. Research on the effects of turnover in hospitals has documented substantial financial costs associated with high levels of employee exit (for a recent review of the effects of turnover on patient care, see Hayes et al., 2006; for evidence on the general relationship between turnover and firm financial performance see Huselid, 1995).

Lower turnover intentions are therefore likely to translate into improved financial performance. In addition, the reduction in organizational turnover has also been linked to increased organizational stability and employee skill levels (Charmel and Frampton, 2008; Aiken et al., 2002(b); Clark et al., 2001). Decreasing turnover intentions, associated with the use of

WLB practices, will therefore increase the ability to deliver high quality care (for additional support also see Avgar et al., 2010; Plomondon et al., 2007; Ash and Seago, 2004). Building on the above rationales, we hypothesize that the increased use of WLB practices in hospitals will enhance employee perceptions of work, which, in turn, will have a positive effect on organizational financial and quality of care outcomes.

Hypothesis 2: Greater use of WLB practices will have a negative effect on employee turnover intentions.

Hypothesis 3: Employee turnover intentions will partially mediate the relationship between WLB practices and quality of care and financial performance.

4. Methods

We used the data collected from 173 acute and teaching hospitals belonging to the

British National Health Service (NHS) to test our hypotheses outlined above. The NHS is a public system with a large amount of documented performance data, all publicly available relatively quickly after it is collected. We take advantage of this public data, and have created a

14 large multi- year dataset matching hospital performance data and patient and employee survey data. To test our hypotheses, we use performance data and employee survey data from 2003 and

2004. The employee survey data is aggregated to the hospital level.

The performance data used here were collected annually from each hospital trust1.

Hospital management are required to report data on a large number of operational, managerial and clinical issues, including quality of care indicators, staff related outcomes and financial management. Each hospital is also required to administer reliable anonymous patient and staff surveys, with most questions mandated nationally. We triangulated the management reported data with these survey data from patients and staff. This leads to a wealth of data both on particular practices and on patient and staff perceptions of the general culture of the hospital. The staff survey has a response rate of slightly over 50% with approximately 60,000 trust employee respondents for each year used.2

The dataset we have created has at least two advantages over most other data sources commonly used. First, much of the current scholarship on work practices and performance uses data from one management respondent matched with additional archival performance data often derived from public filings for publicly traded companies. Our data, which also includes certain single response items, is unique in that it also combines employee and patient perceptions regarding these managerial practices. Second, by utilizing data from different sources, we address the single respondent measurement issues, thereby increasing construct reliability.

Finally, our use of employee data to examine whether WLB practices are in place allows us to

1 A trust is essentially a single hospital, although it may operate over two sites

2 A copy of the employee survey instrument used can be found at: http://www.healthcarecommission.org.uk/_db/_documents/04007747.pdf

15 reach the point of implementation, rather than assuming that a policy has been implemented as stated by a high level manger.

Variables and Measures

The dependent variables in this study include financial performance, quality of patient care, and employee intentions to leave the hospital over the following year. Financial performance is measured by the financial management indicator provided by the Commission for

Health Improvement, which reports whether or not the hospital achieved its budget goals without the need for additional funding (given that the NHS is a public sector healthcare system, there is no notion of profit).

The quality of care outcomes we examine are: (1) deaths within 30 days of surgery

(includes deaths in hospital and after discharge for non elective admissions, excluding diagnosis of cancer); (2) employee reported errors and near misses that could hurt patients in the last month; and (3) employee reported errors and near misses that could hurt staff in the last month.

While the measure of surgery deaths is drawn from the performance data reported by the trusts, the two measurements of medical errors come from the employee survey data. We believe that the use of both management-reported specific clinical outcomes and employee-reported errors gives as a broad view of the essential elements of clinical performance.

Employee turnover intentions are measured by a three-item scale (Cronbach’s alpha=0.926). See Appendix 1 for the detailed measurements of these variables.

The independent variable used in this study is the WLB scale we developed, which incorporates measures of three dimensions: (1) WLB culture (three items; Cronbach’s alpha=0.890); (2) flexible work, which is measured by eight items. Factor analysis indicates that the eight items are loaded on two factors, which are flexible work schedule and site (four items,

16 Cronbach’s alpha=0.661) and variable work length (four items, Cronbach’s alpha=0.689). The

Cronbach’s alpha of the flexible work scale constructed by the two factors is 0.628; and (3) employer-provided childcare (five items, Cronbach’s alpha=0.771). For details of these items, see Appendix 1. The WLB scale is constructed by taking the average of the standardized values of the three dimensions (factor analysis shows a single factor). The Cronbach’s alpha of the

WLB scale is 0.629.

Analyses

Fixed effects and random effects are the two approaches normally used to analyze panel data sets. According to Greene (2003, p. 293) and Cheng (2003, p.43), a fixed effects approach is more appropriate when the inferences will apply only to the cross-sectional units in the sample, while a random effects approach is more appropriate when the inferences will extend to observations outside the sample. Given our sample and purpose of analysis, the random effects approach seems more appropriate. However, although a random effects model provides more efficient estimates, it may increase the possibility of inconsistent estimation. Therefore, there is a trade-off between efficiency and consistency when making a decision between the two approaches.

In our analysis, we chose fixed effects or random effects models based on the results of the Hausman test (1978), which provides a method to test whether the cost of inconsistency in the random effects model exceeds the gain in efficiency. We also tested whether a fixed effects model or a random effects model was a better choice than the pooled OLS regression approach, based on the F test or the Lagrangian Multiplier test respectively.

17 5. Results

Table 1 reports the means, standard deviations, and bivariate correlations for the variables used in this study. WLB is significantly and positively correlated with financial management, and significantly and negatively correlated with the two measures of medical errors and employee turnover intentions. The relationship between WLB and surgery deaths is also negative, but not significant. In addition, errors and near misses that could hurt patients and staff have significant and positive relationships with surgery deaths, and significant and negative relationships with financial management, which suggests that medical errors may increase mortality and decrease financial performance, as one might reasonably expect. It is also worth noting that employee turnover intentions are significantly and positively associated with both medical errors and surgery deaths, indicating the correlation between employee attitudes and clinical outcomes. The relationship between employee turnover intentions and financial performance, however, is not significant.

Insert Table 1 about here

Table 2 shows the regression results of WLB on the multiple stakeholder outcomes including financial performance, clinical outcomes (surgery deaths and medical errors), and employee turnover intentions. First, WLB is significantly and positively correlated with the financial management indicator (b=0.131, p<0.05), which supports our hypothesis 1a. Our hypothesis 1b, however, is only partially supported. As is shown in table 2, WLB has a significant and negative relationship with both of the two types of medical errors, i.e. errors and near misses that could hurt patients and errors and near misses that could hurt staff (b=-0.024, p<0.001 and b=-0.062, p<0.001 respectively), which is consistent with our hypothesis.

Unexpectedly, however, the direct effect of WLB on surgery deaths is not significant.

18 Insert Table 2 about here

Secondly, hypothesis 2 is supported given the significant and negative relationship between WLB and employee turnover intentions (b=-0.055, p<0.001).

Finally, using Baron and Kenny’s (1986) recommended procedures we tested the mediating role of employee turnover intentions on the relationships between WLB and financial management and medical errors. First, the regression results of WLB against financial management, errors and near misses that could hurt patients, and errors and near misses that could hurt staff show significant relationships between WLB and all of the three dependent variables (see equation 1a, 3a, and 4a in table 2). Second, as examined earlier, WLB is significantly and negatively related to employee turnover intentions (see equation 5 in table 2).

Third, when WLB and employee turnover intentions were entered into the equations simultaneously, we found that (1) employee turnover intentions do not have a significant relationship with financial management, which suggests that the mediating role of employee turnover intentions on the relationship between WLB and financial performance is not supported;

(2) employee turnover intentions were a significant predictor of errors and near misses that could hurt patients (b=0.125, p<0.05) and the negative relationship between WLB and this dependent variable became insignificant (see equations 3a and 3b in table 2), which suggests that employee turnover intentions fully mediate the relationship between WLB and errors and near misses that could hurt patients (there is a statistically significant increase in R2 from the “base case” of equation 3a); and (3) employee turnover intentions were also a significant predictor of errors and near misses that could hurt staff (b=0.29, p<0.001) and the negative relationship between the two variables was reduced from 0.062 to 0.018 (see equation 4a and 4b in table 2), which suggests that employee turnover intentions partially mediate the relationship between WLB and errors and

19 near misses that could hurt staff (there is a statistically significant increase in R2 from the “base case” of equation 4a). Therefore, hypothesis 3 is partially supported.

6. Conclusions and Discussion

This paper provides strong support for the potential vested in WLB practices in the healthcare setting. Examining the effects of WLB practices on three central stakeholders, our results indicate that greater use of WLB practices enhances outcomes for hospitals, their employees and the patients they care for. More specifically, WLB practices were shown to positively affect hospital financial performance, reduce employee turnover intentions, and decrease errors that could harm patients and staff. Each of these outcomes is central to the functioning of a healthcare organization.

As noted above, hospitals in the U.S and the UK have struggled with the reduction of medical errors. In addition, financial viability has been an aspiration many healthcare organizations have struggled to attain. Finally, much has been written about the dramatic shortage of high skilled professionals and retention challenges in healthcare. Our findings indicate that WLB practices can, to some extent, alleviate each of these pressures. In other words, increasing the ability of healthcare frontline staff to balance the intense demands of hospital work with family and life responsibilities can be beneficial to the entire system. Given the multiple challenges that most hospitals are confronting, this evidence regarding organizational practices that can deliver for diverse stakeholders has very practical implications.

In addition, these findings suggest that hospitals interested in addressing key problems should complement their focus on work arrangements that center on actual delivery of care, such as

PCC and relational coordination, with work practices that are primarily focused with the work

20 experiences of employees. In other words, some of the workplace innovations in healthcare should be explicitly designed to deal with employee related issues.

Interestingly, we did not find a significant negative relationship between WLB practices and hospital mortality after surgery. This finding suggests that while WLB practices have clear organizational benefits, they are by no means a cure all for the challenges facing the industry.

There are many other innovations being experimented with in hospitals and other healthcare organizations, and researchers must continue to assess the extent to which these deliver on important quality care indicators, such as mortality rates. Furthermore, future research must also begin to examine the manner in which different innovations interact or complement each other

(for a similar argument and for empirical evidence see Avgar et al., 2010).

In addition, our study also partially supported the hypothesized mediating mechanisms for the relationship between WLB practices and organizational outcomes. Turnover intentions fully mediated the relationship between WLB practices and errors that could harm patients.

Turnover intentions partially mediated the relationship between WLB practices and errors that could harm staff. Thus, the capacity to enhance an important quality of care indicator is delivered, at least in part, by the improvements to employee commitment to remain with the organizations. Some of the potential vested in this set of practices operates though employee perceptions of their organization. This finding has important implications for how hospitals should view their efforts to confront the challenges they face. Employees and their relationship with the organizations must, according to our findings, stand front and center in any effort to reform and restructure how hospitals are organized.

Interestingly, employee turnover intentions did not mediate the significant relationship between WLB practices and hospital financial performance. This suggests that the mechanisms

21 linking WLB to different types of outcomes are likely different. Although WLB clearly has the potential to benefit multiple stakeholders, the ways in which these are delivered may vary. This supports our call for a delineated assessment of how work arrangements affect different organizational stakeholders. Future research should explore other possible variables mediating the relationship between WLB practices and hospital financial performance.

In addition to the paper’s healthcare specific implications, our findings make a contribution to the general WLB literature. First, we document a clear linkage between WLB practices and two organizational performance indicators. As noted above, the research on WLB and organizational performance has been mixed. The “business case” for WLB has not yet been conclusively settled. Our study supports existing research documenting a positive performance effect on two distinct outcomes. Second, our study provides evidence as to one of the mechanisms by which WLB practices enhance performance. Most of the existing WLB research has focused on direct effects. Our results highlight the need for future research to continue to examine WLB-performance mediating variables.

Although our study contributes to the literature on work arrangements in healthcare and to the WLB literature more generally, it is not without its limitations. First, our study addresses the relationship between WLB and turnover using employee intentions and not data on actual turnover. Although we do believe that measuring turnover intentions is important and captures important organizational information, future research should examine the relationship between

WLB and actual turnover rates. Second, our financial performance indicator is also somewhat limited in that it captures the degree to which a hospital met its financial goals and objectives.

Thus, we do not measure actual financial performance but a reliable proxy. That said, we do

22 believe that this study provides an important foundation on which future WLB research in healthcare and in other settings can progress further.

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29 Table 1: Descriptive Statistics and Correlations

Mean S.D. 1 2 3 4 5

1. Financial management 0.45 0.83

2. Surgery deaths 4.71 0.91 0.036

3. Errors (patients) 1.61 0.09 -0.146 ** 0.104 ﹢

4. Errors (staff) 1.52 0.10 -0.112 * 0.191 ** 0.630 ***

5. Turnover intentions 2.65 0.11 -0.083 0.126 * 0.487 *** 0.384 ***

6. Work-life balance 0.00 0.76 0.130 * -0.012 -0.205 *** -0.259 *** -0.358 ***

﹢p<0.10; * p<0.05; ** p<0.01; *** p<0.001

30 Table 2: The Effects of Work-Life Balance on Multiple Stakeholder Outcomes

Financial management Surgery deaths Errors (patients) Errors (staff) Turnover intentions

Eq. 1a (re) Eq.1b (re) Eq. 2 (re) Eq. 3a (re) Eq.3b (fe) Eq.4a (fe) Eq.4b (pols) Eq. 5 (re)

Work-life balance 0.131* 0.123﹢ 0.01 -0.024*** -0.013 -0.06*** -0.018** -0.055***

0.064 0.068 0.084 0.007 0.011 0.016 0.007 0.008

Turnover intentions -0.153 0.125* 0.29***

0.446 0.061 0.046

R2 0.017 0.018 0.0001 0.042 0.2 0.067 0.165 0.128

F 4.27* 14.73*** 33.58***

F test 3.46*** 1.3* 1.06

Wald chi-square 4.21* 4.33 0.02 12.44*** 48.81***

LM test chi-square 25.6*** 25.14*** 35.27*** 70.7*** 58.78***

Hausman chi-square 0.533 1.38 0.11 0.16 17.11*** 3.49﹢ 11.05** 0.21

N 344 344 302 344 344 344 344 344

﹢p<0.10; * p<0.05; ** p<0.01; *** p<0.001

31 Appendix 1

Variables Measures

Financial Management Achievement of the financial position without the need of unplanned financial support. (Source: Performance Significantly under achieved=-1; Under achieved=0; Achieved=1. ratings)

Surgery Deaths (Source: Deaths within 30 days of surgery (includes deaths in hospital and after discharge for non Performance ratings) elective admissions, excluding diagnosis of cancer), %

Errors and Near Misses that In the last month, how many errors or near misses did you see that could hurt patients? Could Hurt Patients None=1; 1-2=2; 3-5=3; 6-10=4; more than 10=5 (Source: employee survey)

Errors and Near Misses that In the last month, how many errors or near misses did you see that could hurt staff? Could Hurt Staff (Source: None=1; 1-2=2; 3-5=3; 6-10=4; more than 10=5 employee survey)

Employee Turnover To what extent do you agree with the following? a. I often think about leaving my current Intentions (Source: employer; b. I will probably look for a new job in the next year; c. As soon as I can find employee survey) another job, I will leave my current employer. Strongly disagree=1; Strongly agree=5.

1. Work-life balance culture: To what extent do you agree with the following?, a. My employer is committed to helping staff balance their work and home life; b. My immediate manager helps me find a good work-life balance; c. I can approach my manager to talk openly about flexible working. Strongly disagree=1; Strongly agree=5.

2. Flexible work: Which of the following flexible working options does your employer offer? a. Flexi-time; b. Working reduced hours; c. Working from home in normal working Work-Life Balance (Source: hours; d. Working to annual rather than weekly hours; e. Teams making their own decisions employee survey) about rotations; f. Job sharing (sharing a full-time job with someone else); g. Career break; h. Flexible retirement. Yes, %.

3. Employer-provided family care: Which of the following care options does your employer offer? a. Access to childcare coordinator; b. Provision of subsidized childcare; c. Provision of childcare vouchers; d. Other childcare support; e. Support for careers of other dependants. Yes, %.