Twin Oaks Case Study Twin

Twin Oaks Case Study

Twin Oaks Hospital is a 100-bed hospital serving Lexington, Colorado. Discontent has been rising in the hospital's 200 nurses and 40 secretarial employees regarding pay levels. In response, the administration is considering implementing comparable worth pay adjustments. This analysis will identify the key and underlying issues affecting this situation. The facts that affect these issues will also be presented. Lastly, a tentative solution to the situation will be described as well how it should be implemented.

Case Analysis:

The primary issue affecting the Twin Oaks situation is the perceived salary disparity, for the hospital's nursing and secretarial staff, when compared to compensation rates in Denver, 100 miles north of Lexington. Underlying issues include the threat of unionization, from these employees. Hardy needs to determine whether or not a comparable worth study, and a pledge to adjust compensation accordingly, is the right strategic move for the hospital. In this consideration, Hardy needs to determine how this will affect the hospital's profitability, the bargaining power of these two groups of employees in relation to the availability of suitable candidates to replace current staff.

There are several facts that affect these issues. First, the salary levels of Twin Oaks' nursing and secretarial employees are comparable to the other hospital in their area, Lexington General. However, their pay rates are lower than similar job positions 100 miles north of Lexington, in Denver. A previously performed comparable worth study determined that a head nurse should be paid approximately three times that of a secretary; however, secretarial employees were paid more than half the salary of head nurses. In addition, Hardy must consider that the nursing staff make up a significant portion of the hospital's employees, with 200 of 350 employees nurses. In contrast, just over ten percent of their employees are secretarial ("The Comparable Worth").

Comparable worth, also known as pay equity, is "a reform effort to pay different job titles the same based on their value to their employer regardless of the gender predominance of those working in such titles" ("What is Pay"). The motivation behind this reform is the inequity found between women's salaries and men's salaries. The process takes the somewhat subjective process of establishing compensation rates and transforms it into an objective, quantitative process. However, as Charles Cooper explained, there are several challenges to this process, the primary one being the destruction of free market forces in the process. As a private, for-profit hospital, Twin Oaks must not only watch their bottom line, but also remain competitive in the marketplace.

Tentative Solution: