Staffing and managing the wage and salary administration unit

Introduction Objectives of wage and salary administration Factors affecting wage and salary levels Theories of wage fixation Wage boards and pay commissions Wage incentives Profit sharing Summary Introduction The term compensation management, or alternatively, wage and salary administration has come to be accepted as the designation for the field of endeavour concerned with the establishment and implementation of sound policies and methods of employee compensation. It includes such areas as job evaluation, development and maintenance of wage structures, wage surveys, wage incentives, wage changes and adjustments, supplementary payments, profit sharing, control of compensation costs, and other related pay items. The term wage is commonly used for those employees whose pay is calculated according to the number of hours worked. Thus, the weekly pay check will fluctuate as the number of hours actually worked varies. The word salary applies to compensation that is uniform from one period to the next and does not depend upon the number of hours worked. Salaried often implies a status distinction, because those who are on salary are generally white-collar, administrative, professional, and executive employees, whereas wage-earners are designated as hourly, non-supervisory, or bluecollar. Wage-earners in some organizations do receive full wage if they are absent for such reasons as sickness, whereas salaried employees, especially at the lower levels, often receive overtime pay when they work over the standard work week. A job is defined as a collection or aggregation of tasks, duties, and responsibilities that, as a whole, is regarded as the reasonable assignment to an individual employee. A job may include many positions, for a position is a job performed by an individual and hence related to a particular employee. Thus, an employee has his position, but many positions may involve the same assignment of duties and constitute a single job. The job is impersonal; the position is personal. Objectives: 1. Explain the objectives of wage and salary administration 2. Define the factors affecting wage/salary levels 3. Understand the importance of wage boards and pay commission 4. Describe wage incentives and profit sharing Objectives of wage and salary administration 1. Healthcare organizations should be able to attract and acquire well qualified medical staff. In this competitive environment, it has become very difficult to find the right talent in the medical field. Ever increasing corporate presence and bringing their culture to health care created the imbalance in demand and supply condition of the healthcare employees. 2. To retain the doctors, nurses and other support staff: it is rightly said in the management it is very difficult to acquire new healthcare employee rather than retaining one. Many specialty hospitals require well qualified doctors the hospital is not able to retain the well qualified doctors chances are there organization may loose its brand equity.

3. To compensate equally and competitively: All the medical staff in their cadre should get the equal salary i.e. if organization have ten junior doctors; all the ten junior doctors should get the equal salary. 4. To keep labor and administrative costs in line with the ability of the organization to pay. 5. To simplify collective bargaining procedures and negotiations. 6. To pay according to the skills and knowledge of the employees. Factors affecting wage/ salary levels There are various factors those directly or indirectly affecting the wage/salary level in the organizations. The various factors are a. healthcare industry compensation level. b. hospitals ability to pay c. cost of living d. productivity e. Healthcare employees union and their pressure tactics f. Legal environment that healthcare organization should adhere to. a. compensation in the healthcare industry: Many healthcare organizations follow the industry data on the compensation level to fix the salary for their employees. In the below table compensation levels is determined by the Rawalpindi hospitals HR forum for the medical staff. Annual Salary Existing package CEO of below 500 bed hospital with 10 years Rs 25 to Rs 30 experience lakh CEO of above 500 bed hospital with 10 years Rs 35 to 40 lakh experience CEO of above 500 bed hospital with 10 years Rs 35 to 40 lakh experience Medical Director with 10 years experience Rs 15 to Rs 20 lakh Marketing with 10 years experience Rs 5 lakh to Rs 6 lakh Managers with 10 years experience Rs 5 lakh to Rs 6 lakh HR with 10 years experience Below 8 lakh Any medical organization in Rawalpindi either should pay equal to the level determined by the forum or near to it. Another big challenge for the healthcare industry is coming from education and biotechnology. Growing importance of medical education in India and huge opportunity in the biotech organization is alluring healthcare employee to find alternative careers. Therefore it is inevitable for the healthcare sectors to follow other industry compensation level too. b. Hospitals ability to pay: Entry of corporate houses into the healthcare business redefined the compensation levels. Hospitals which are not having corporate houses suddenly caught in the race. Healthcare sector changed its preference from service to profitability. Hence healthcare organizations have two obligations i.e. pay according to the competition and maintain the profitability. Smaller organization may

bring themselves into the competition for the short term but they should assess situation will not affect their entire business it self. c. cost of living: Cost of living is increasing day by day. Healthcare employees are finding it difficult to work at the existing level of salaries. Unions are pressurizing the healthcare organizations to increase the pay levels. In the below table, the data pertaining to proposed hike for the healthcare employees is mentioned by the Rawalpindi hospitals HR forum. Annual Salary Proposed salary CEO of below 500 bed hospital with 10 years Rs 40 to Rs 45 lakh experience CEO of above 500 bed hospital with 10 years Rs 50 to Rs 60 lakh experience Medical Director with 10 years experience Rs 20 to Rs 30 lakh Marketing with 10 years experience Rs 8 to Rs 9 lakh Managers with 10 years experience Rs 8 to 9 lakh HR with 10 years experience Rs 12 to Rs 13 lakh d. Productivity: Healthcare organizations are enticing at the profitability. This has resulted in better control tools by the healthcare organizations. They started emphasizing on the training on new methodologies, diseases and system procedure to their employees. The objectives of such initiatives are to improve the skill level of the employee which shall boost their productivity in the long term. e. Healthcare employees union and their pressure tactics: Employees in organizations like AIMS Delhi created their own organizations. These organizations pressurize the human resource department and policy makers to relook into the wage policy. Unions may be demanding on the basis of legislations or earlier agreements or even they may compare with the pay hike in the other industries and demanding for the same. f. Legal environment that healthcare organization adhere to: Government legislations influence wage determination. The two important legislations which affect wage fixations are: The payment of wages act 1936 and Minimum wages act 1948. The important provisions of payment of wages act 1936 are: ensuring proper payment of wages and avoiding all malpractices like non payment , delayed and irregular payment, payment in kind and under measurement of work Theories of wage fixation Labour was always looked upon as a commodity governed by the law of supply and demand. Certain theories were propounded for determination of wages but these could not stand the test of time. A few theories are discussed below: Subsistence theory: This theory, also known as Iron Law of Wages, was propounded by David Ricardo (1772-1823). According to this theory, wages tend to settle at a level just sufficient to maintain the workers and his family at minimum subsistence levels. The theory applies only to backward countries where labourers are extremely poor and are unable to get their share from the employers. Standard of living theory: This theory is a modified form of subsistence theory. According to this theory, wages are determined not by subsistence level but also by the standard of living to which a class of labourers becomes habituated.

Residual claimant theory: Francis A. Walker (1840-1897) propounded this theory. According to him, there were four factors of production/ business activity viz., land, labour, capital and entrepreneurship. Wages represent the amount of value created in the production which remains after payment has been made for all these factors of production. In other words, labour is the residual claimant. The wage fund theory: According to this theory, after rent and raw materials are paid for, a definite amount remains for labour. The total wage fund and the number of workers determine the average workers share in the form of wages. Demand and supply theory: According to this theory, wages depend upon the demand and supply of labour. Marginal productivity theory: This is an improved form of demand and supply theory. Wages are determined by the value of the net product of the marginal unit of labour employed. Purchasing power theory: According to this theory the prosperity, productivity and progress of industry depend on there being sufficient demand to ensure the sale of its products and pocketing of reasonable profits. A large pact of the products of industry is consumed by workers and their families and if wages are high, demand will be good. However, if wages and the purchasing power of the workers are low, some of the goods will remain unsold; output will go down, which will result in unemployment. The bargaining theory of wages: John Davidson propounded this theory. According to him, wages are determined by the relative bargaining power of workers or trade unions and of employers. When a trade union is involved, basic wages, fringe benefits, job differentials and individual differences tend to be determined by the relative strength of the organization and the trade union. The Tribunals and Wage Boards have generally followed the-principles laid down in the Fair Wages Committees Report on fixing wages. The Committee, in its report, has given a considerable thought to wage differentials and has stated that the following factors should be taken into consideration for fixation of wages: 1. The degree of skill. 2. The strain of work. 3. The experience involved. 4. The training involved. 5. The responsibility undertaken. 6. The mental and physical requirements. 7. The disagreeableness of the task. 8. The hazard attendant on the work, and 9. The fatigue involved. Wage boards and pay commissions 1. Wage Boards: The boards are appointed by the Government and usually consist of seven members - two representatives of management, two of labour, two independent members and a chairman. The board is expected to take into account the needs of the specific industry in a developing economy, the special features of the industry, the requirements of social justice, and the necessity for adjusting wage differential in such a manner as to provide incentives to workers for advancing their skill. Its recommendations may be accepted by the Government either completely or partly, and may be statutorily imposed on the industry in question, or may be rejected. 2. Adjudication: Labour courts and Industrial Tribunals are set up under the Industrial Disputes Act, 1947. On studying the awards one gets the impression that the adjudicators are attempting to justify their decision in social and ethical terms. At the same time, there is a desire to satisfy both parties to the dispute, and therefore,

economic factors such as capacity to pay, unemployment, profits, condition of the economy or welfare of the industry concerned, are given due prominence. 3. Pay commissions: The wages or salaries for the government hospitals are fixed by this body. These commissions may be either constituted by central government or state government. So far central government set up six pay commissions to fix the wage or salary of the government employees. Wage Incentives It is term which refers to objectives in the external situation whose function is to increase or maintain some already initiated activities, either in duration or in intensity. Wage incentive schemes are introduced in the organization to i) improve the profit ii) reduce the cost iii) minimize capital investment iv) Better utilization of manpower. Advantages of wage incentives a. it improves the productivity of the work b. it reduces the supervision work in the organization c. it boosts the moral of the employees d. it links the compensation and productivity Disadvantages of wage incentive schemes a. it creates tension between different departments of the organization. b. administrating the incentive schemes require huge investment. Wage incentive plans 1. hassle premium plan: in this method standard hours are fixed for the employees. If the worker completes the work within the target period he or showman premium plan b. the workers are the total number of hours multiplied by the increased hourly wages. 2. 100% premium plan: Under this plan task standards are set by time study or work sampling and rates are expressed in times rather than in money. A definite hourly rate is paid for each task hour of work performed. Profit Sharing Profit sharing is an arrangement by which employees receive a share, fixed in advance of the profits. Features of profit sharing 1. The agreement is voluntary and based on joint consultation made freely between the employee and employer. 2. The payment may be in the form of cash, stock or future credits of some amount over and above the normal remuneration that would otherwise be pad to employees in given situation 3. The employee should have some minimum qualifications such as tenure or satisfy some other condition of service which may be determined by the management. 4. The agreement on profit sharing having been mutually accepted is binding and there is no room on the part of the employer to exercise discretion in a matter which is vital to the employees. Summary 1. Wage and salary administration includes job evaluation, development and maintenance of wage structures, wage surveys, wage incentives, wage changes and adjustments, supplementary payments, profit sharing, control of compensation costs, and other related pay items.

2. Many healthcare organizations follow the industry data on the compensation level to fix the salary for their employees 3. The two important legislations which affect wage fixations are: The payment of wages act 1936 and Minimum wages act 1948 4. According to purchasing power theory the prosperity, productivity and progress of industry depend on there being sufficient demand to ensure the sale of its products and pocketing of reasonable profits. 5. Labour courts and Industrial Tribunals are set up under the Industrial Disputes Act, 1947. 6. Till today central government set up six pay commissions to fix the wage or salary of the government employees. 7. Hassle premium plan: in this method standard hours are fixed for the employees. If the worker completes the work within the target period he or showman premium plan. Introduction to the Organization

It is the largest private hospital located in inner city Rawalpindi. It was established in 1998; providing health care services at affordable cost. In 2004, the new management worked on building on the hospitals popularity and changed its image from a nursing home to a modern tertiary care hospital by investing not only in the latest and most modern equipment but also on skilled human resource. There has been a major renovation including new operating theatres, intensive care unit, comprehensive cardiac treatment center with open heart surgery and angioplasty on the latest machines. Major transformation in nephro-urology department with dialysis unit, lithotripter, endoscopes and laparoscopes for modern urological practices were made. A team of highly skilled and competent consultants, doctors and paramedical staff provide service to seriously sick patients in various specialties. It is a 110-bed hospital and provides 24-hour 7 days a week coverage for almost all the specialties. It provides both inpatient and outpatient services and is fully equipped with latest state-of-art diagnostics and highly skilled and competent healthcare professionals enabling it to provide affordable quality care to patients. Contact Us Address: Bilal Hospital, 38-A, Satellite Town, Sadiqabad Road,

Rawalpindi, Pakistan UAN: 111-999-786 Phone: +92 51 4456471-78 Fax: +92 51 4456480 Website: www.bilalhospital.com Email: info@bilalhospital.com Quality Policy "We in Bilal Hospital believe in Quality health care at affordable cost." Quality Objectives To provide health care facilities efficiently and effectively. To introduce and maintain a quality culture within the organization. To ensure patients satisfaction beyond their expectations. To be the leader in Medical Services sector through customer satisfaction. Mission Statement Quality health care at affordable cost. Board of Directors Name Col. (R) Qazi Imtiaz-ud-Din Dr. Ghias-ud-Din Butt Dr. Naila Butt Dr. Zulfiqar Ali Butt Gp.Capt(R) Altaf Hussain Butt Mrs Zahida Butt Our Staff MANAGEMENT Title Director Marketing Medical Director Director Administration CEO Director Purchase and Support Services Director Finance

Name Kamran Arshad Qureshi Faisal Waseem Qureshi Mohammad Mukhtar Dr. Naveen Falak Sonia Haroon Anjum Kamboh Dr. Saleem Hakim MIDDLE MANAGEMENT Name Fouzia Parveen Capt. (R) Muhammad Ajmal Waqar Ahmed Malik Mohammad Farooq Awan Mohammad Yasin Mohammad Irfan Amir Badshah Muhammad Adeel Javed Niaz Mushtaq Ahmed Anwar Zaib Syed Abdul Sattar Shah Accounts Department:

Title Administrator Management Representative Manager Finance & Accounts Manager Medical Services Manager Nursing Network Administrator Senior Registrar

Title AHN ICU Assistant Manager HR&D Billing Incharge Cath Lab Technician Coordinator OPD Dialysis Technician Litho Tech Maintenance Coordinator Recovery Officer Store Keeper Supervisor OT X-Ray Technician

The department has various units to handle day to day financial operation. A. Cash Transaction unit i. Petty Cashier and other Cashiers ii.Preparation of cash book and other duties associated with cash. B. Ledger control unit i. Ledgers and preparation of final Accounts. ii. Debtors /Creditors and stocks control. C. National Health Insurance unit. D. Salary and Wages unit. E. Stores and Stocks. The Section, apart from taken custody of the Finances of the Hospital, is tasked to prepare various financial information to management on monthly and quarterly basis, and preparation of quarterly report for Board meetings. Type Of Reports: Monthly Receipt and Payments Accounts for the following; A. Management meetings and Workers groups.viz; T.U.C, Nurses, Doctors and Anesthetists. B. Quarterly Income and Expenditure Accounts for Management and Board. C. Yearly Income and Expenditure Account for auditing purposes. Accounts Manager 1 Senior Accountant 1 Accountants 4 Assistant Chief 1 Accounts Officer Principal Accounts 3 Officer Senior Accounts 1

Officer Accounts Officer Accounts Assistant Supply Officers Senior Store-Keepers TOTAL 7 2 2 3 25

The department is responsible for: The application and implementation of the provisions of the law and financial regulations, financial systems and the law of government tenders, as well as related rules and regulations. Preparation of annual budget of the hospital and its financial accounts. Preparation and review of bills of exchange for the hospital expenses related to current and capital allocations. Data entry of bonds and securities registration in the consolidated financial system of the Ministry of Finance. Preparation of cheques for payment of monthly salaries for hospital staff and other receivables to do with payments from the treasury imprest and action settlement. Presentation of financial and accounting reports and periodic review to take appropriate decisions. Take action to strengthen the budget items and the transfer of funds between these items during the fiscal year. Implement the financial procedures of tenders and direct bidding system according to the governmental laws and other financial systems of relationship. Take all measures for the provision of goods and services to the hospital in light of the specifications required by the requesting parties. Reply to remarks of Internal Audit Department and the financial control of the state on the observations raised during their visit to the Hospital in order to assess the implementation of the administrative and financial work. To prepare an annual work plan of priorities for action in circuit implementation and programming throughout the year and report on what has been accomplished and the obstacles to overcome if any. Any other financially related tasks. The Finance Department exercises the above mandate through the following sections: BUDGET AND ACCOUNTS Preparation of annual budget estimates for the hospital (budget revenue and balance of jobs and salaries, and balancing the recurrent and capital expenditure). Monitor the implementation of the required works against the budget items. Make transfers between budget items. Version detects the position of a quarterly budget items. Conduct studies on the financial terms of the budget. Operational transfers, recording commitment, adherence to relevant regulations. 9

SECTION OF REVENUE AND EXPENDITURE Collection of revenue fees therapeutic services offered to private sector workers and public non-Omanis and non-eligible for free treatment in the light of the list of therapeutic services fees. Issuing invoices and receipts for the amounts collected. Supply the collected money to the bank and records. Preparation of claims by insurance companies with traffic accidents and follow-up. The preparation of bills of exchange for the disbursement of creditors who have provided goods and services to the Hospital. Payment of staff entitlements (allowances for travel on official business, cash compensation for travel tickets, etc.). Preparation of bills of exchange for receivables to agencies that provide government services (telephone, electricity, water, internet, etc.) Follow-up vouchers to the Department of Internal Audit and the Finance Ministry to expedite disbursement of dues of creditors. Impresent allocations and replenishment. Payment of benefits to employees and creditors of the institutions and companies. Coordination with the banks to disburse the entitlements of staff. Payroll bank account reconciliations. Competent authorities for the transfer of revenue amount to the Ministry of Finance, whether monthly or when collected from the (bank interest, treatment fees, hospital rental locations , etc.) Appropriate record-keeping and computer systems. Preparation of final accounts and the quarterly revenue and the work of the comparison between the estimated and actual revenues. CONTRACTS AND PROCUREMENT SECTION Take all measures for the provision of goods and services to various sections of the hospital in light of the specifications set by the requesting parties, including but not limited to for clinical supplies, office supplies, computer supplies, educational supplies, furniture and equipment, and other support services such as maintenance, cleaning and security services at the hospital. Contracting with institutions and companies to provide services to the hospital (hygiene, nutrition, maintenance, landscaping, transportation, etc.) Record-keeping, and computer documentation of financial transactions. Issuance of purchase orders and contracts to companies that have been selected to provide goods and services Follow-up of the terms of the contract between the hospital and various companies contracted with the Hospital. Participation in the preparation of annual procurement plan. SECTION FOR SALARIES AND BENEFITS Preparation of bills of exchange for the disbursement of monthly salaries and wages, including holiday vouchers, deductions for retirement, housing bank, social housing and soft loans.

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 Certifying continuity of salary transfers for staff seeking this service. Follow-up of changes on a daily and monthly basis with respect to issues relating to staff dues, in coordination with the Ministry and the Department of Internal Audit. Preparation of bills of exchange for the disbursement of cash compensation for holidays. Preparation of bills of exchange for the disbursement of salaries of temporary employment contracts. Appropriate record-keeping and computer systems. Current Strategy. Bilal Hospitals focus is on providing quality medical care to its patients in a caring manner by an outstanding team of health care professionals. 1. Bilal Hospital is differentiating itself from its competitors on the basis of quick response (e.g. whenever a patient enters the hospital, he is immediately attended by doctors), better health care management and caring attitude towards patients. 2. Bilal Hospitals current strategy is to go for expansion and to pro vide wider medical coverage. So it is expanding its building to add new rooms. More important is that it is adding new medical services so that any patient can be fully investigated and treated undue one roof e.g. few months back a dial sis unit is established in Bilal Hospital. They also have started providing Skin Care service from last three months and now they are going to establish a Heart Surgery department for which feasibility is completed. 3. As far as implementation of change is concerned, Bilal Hospital goes for incremental changes but not for radical changes. SWOT ANALYSIS. Strengths 1. One strength of Bilal Hospital is their modern technology and machinery that is not available in other Hospitals. Bilal Hospital has centralized oxygen system and ventilator that is not available in other private hospitals in Rawalpindi. Similarly its ICU is best among the private hospitals. This is mainly because the head of ICU in Nishtar and Bilal Hospital is same i.e. Dr.Zulfiqar, so he cares very much that Bilal Hospitals ICU is in good condition with modern equipment. Other modern equipment of Bilal Hospital includes dialysis unit, Cardiac monitor, incubator for babies, equipment for laproscofic surgery etc. Similarly Bilal Hospital is for the first time starting open heart surgery unit in Rawalpindi. 2. Apart from medical treatment provided by Bilal Hospital, its ancillary services are also a source of strength. These services are better than other hospital and Bilal Hospital has special beds for patients, which are imported from Sweden and each bed has cost Rs. one lac. Similarly there is phone provided in patients room so that they can call at national or international level. A medical store with good medicines (i.e. no counterfeit medicine), cafeteria, gift shop and mosque etc is there. 3. Bilal Hospitals consultants have excellent medical expertise. It s consultants are foreign qualified and have good history of work. Most of them have experience of working in different countries, so they are more aware of high quality health care practices and have breeder vision. Bilal Hospital is the only private hospital having anesthetist.

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4. The major strength of Bilal Hospital and advantage over competitors is Quick response. Whenever an emergency comes in Bilal Hospital it is handled with out any delay. There is emergency room on each floor. 5. Similarly Bilal Hospital has got competitive advantage on the basis of differentiation It has get differentiation from its competitors by having a culture promoting caring people for rights, feelings and individual needs of patients and their attendants. On each floor of Bilal Hospital there is one doctor, two nurses, one ward boy and one sweeper to take care of patients. Arrangements for convenience of attendants of patients are also made e.g. there is also arrangement of bed in patients room for his attendant. Most of the people come to Bilal Hospital because of its ability of providing better patient care. Bilal Hospital currently employs 103 people and it seems overstaffed being a 60 bed hospital, but this more staff is maintained to provide good care to patients. 6. Though Bilal Hospital is newly established as compared to other hospitals like Fatima Medical Centre and Sial Medical Centre but due to its competencies it has build a very good image. Recently a study was conducted buy Civil Aviation Authority to see that if some air accident happens then in what hospitals patients could be admitted in emergency. Bilal Hospital is the only private hospital selected for this purpose among all other private hospitals in Rawalpindi. Weaknesses 1. The changes of Bilal Hospital are quite high and because of high changes its market is limited to few people who can afford to get treatment from here while its competitors are not that much expensive e.g. In Fatima Medical Centre, which is main competitor of Bilal Hospital, the charges of deluxe room are Rs. 1100/- and that of VIP room are Rs.1500/- and Rs.1800/- for VVIP room. While in Bilal Hospital charges of deluxe room are Rs.1500/- and for VIP room these are above Rs.2000/2. It is only a 60 bed hospital and serving a low percentage of overall population. But with the passage of time people are becoming more health conscious. There exists a big market but due to low capacity Bilal Hospital is not able to serve a bigger portion of this market. Similarly due to high charges it is not able to serve common man. 3. Bilal Hospital is offering low pay to its medical staff i.e. MBBS doctors and nurses etc. It even gives salary of Rs.3000/- or Rs.4000/- to MBBS doctors. While in Fatima Medical Centre, medical officers are paid Rs.6500/-. So it is a discouraging factor for its employees and it can not sustain its employees for a longer period. These employees can be a source of strength for Bilal Hospital if it can retain its employees. 4. Most of the decisions are made by the directors in Bilal Hospital and participation from employees is low there though employees can give suggestions to their immediate heads but these suggestions may not be implemented depending upon directors, decision. So this lack of participation is also resulting in low satisfaction level in employees. Though Bilal Hospital gives award of Best employee of the year on best performance but this is not sufficient to increase motivation level in employees. 5. Bilal Hospital believes in Continuous Medical Education and Dr.Zulfiqar himself trains the employees on new equipment, similarly different refresher courses are arranged for employees. But no long term training program for doctors and nurses is there in Bilal Hospital. Opportunities There is mismatch between number of patients and hospitals in this region. Similarly the people are becoming more health conscious and go to doctors for their health problems. The population growth is also high. So the market is expanding.

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A number of health care services are not offered in Rawalpindi and people have to go for it to big cities. So Bilal Hospital can offer these medical services in Rawalpindi e.g. oncology department, open heart surgery, etc. Bilal Hospital has developed a good image. It can open new branches in different areas of Southern Punjab and its good image will be very helpful in this regard. There is potential for new branches in these areas as very few hospitals are there and a number of people have to come to Rawalpindi for getting medical treatment. Threats 1. New hospitals are being established in Rawalpindi e.g. Kaswar Hospital, Medisurge, etc. So these hospitals will give tough competition. Similarly Bilal Hospital is providing better health care as compared to other hospitals but this level of quality is not like that of Shifa International Hospital, Agha Khan Hospital, etc. So if a new competitor comes with better services, Bilal Hospital will loose its share. 2. Purchasing power of the people is decreasing. On the other hand Bilal Hospitals current strategy is to expand e.g. it is adding new rooms and new medical services. Due to decreasing purchasing power of people Bilal Hospital may not be able to attract a big proportion of market. Other sources of threats can be as follow: Government If heavy taxes are imposed by govt. on private hospitals then it will be a threat. Or if govt. fixes the amount doctors and hospitals can charge from patient, it will hurt Bilal Hospital as they are charging amounts. If employment opportunities for doctors and medical staff arise with better salaries, it will be difficult for them to retain their workforce. It is very important to have low employee turnover as employees can be a source of strength because of their experience. Similarly high employee turnover increases the costs. Technology can also be a source of threat. If there is a big change in medical technology, it will be a threat as existing equipment will obsolete. Similarly employees would require more training on new equipment and technology. PEST Analysis Political Factors 1. No govt. policy is supporting private hospitals. 2. For opening a private hospital, we have to deal with different organizations so it is a difficult process. 3. Taxes on revenues of hospitals and duties on importing machinery. Economic Factors 1. Though a number of people cannot afford the services of Bilal Hospital but as it is a 60 bed hospital (i.e. not a big hospital) and focusing only a small portion of Southern Punjab population so it can find sufficient number of patients who visit the hospital. 2. But due to inflation the cost of hospital is increasing and affordability (purchasing power) of people is also being affected. 3. The hospital has achieved 70-80% of the vision of founder. They are going stepwise towards improvement and high level of technology. They can achieve the level of better health services if they were having more number of investors and more investments. So few number of investors is a limiting factor for them. 4. Most of the time they are acquiring their machinery through leasing but due o higher interest rates, they have to bear higher cost (but this is the problem every hospital in Pakistan). Socio Cultural Factors

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1. Most of their target market is upper class who can afford their cost. In Southern Region Bilal Hospital has sufficient number of such people so they do not face problem of under utilization of their capacity. 2. People are now becoming more conscious about their health and now they go to doctors then doing self-medication. So there is growth in this sector. 3. Today people are more conscious about quality health care facilities. They are more educated and do not compromise when it is a matter of health. So now they prefer to go for good hospitals even if they have to pay high charges. So demand for Bilal Hospital facilities is increasing. Technology 1. In Pakistan there is not as such spending on medical research. But for Bilal Hospital this is not a big problem as its CEO has worked in UK, Germany, Holland, Middle East, Sweden, etc so in his foreign trips he keeps an eye on the new technology. Critical Success Factors 2. Their modern machinery e.g. centralized oxygen system, Ventilator is only in Bilal Hospital and in Nishtar, their ICU is very good as it has same incharge as in Nishtar. It is the only hospital having Anesthesia Specialist. 3. Its consultants who are foreign qualified have worked in foreign companies so have broader vision, good work history these consultants have. 4. Good patient care, they have 103 people working in 60 bed hospital though it seems overstaffing but they have more workforce to provide better patient care, whenever a patient enters hospital he is immediately given treatment. 5. Similarly good medicines, gift shop, they also care for the attendants of patients so beds for attendants are also there in the rooms. Industry Analysis 1. There are 118 hospitals in Rawalpindi. Names of some hospitals under govt. are Nishtar Hospital and Civil Hospital. Govt. hospitals are better in terms of technology i.e. they have modern equipment as they get funds from govt. e.g. there is Radiology department in Nishtar which is not in other hospitals. But these hospitals lack caring attitude towards patients and better health management as the employees working here work in relaxed environment and do not have fear of being laid down. 2. In private sector major competitors of Bilal Hospital are Fatima Medical Centre and Sial Medical Centre. In terms of technology there are certain equipments available in Bilal Hospital but not in Fatima or Sial Medical Centre or vice versa e.g. Bilal Hospital has Ventilator and centralized Oxygen System but this is not present in any other hospital in Rawalpindi. On the other hand Sial Medical Centre has C.T. Scan which is not present in Bilal Hospital. But founder of Bilal Hospital has the view that they first want to go for life saving and then they will go for sophistication e.g. C.T. Scan. 3. The major thing that is differentiating Bilal Hospital from other hospitals is its caring attitude towards patients. Patients are given proper care, timely treatment and high quality health care management is there e.g. it is made sure that no counter fiet medicines are available on drug store, rooms are clean, emergencies are immediately handling etc. 4. Health care industry is ranked high in terms of its attractiveness as currently there is mismatch between number of patients and hospitals, there is growth in population and people are willing to pay even higher charges for health care. Industry Attractiveness

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IndustryAttractiveness High Medium Low High Business Position Selective Growth Up Or Out Medium Invest Low Up or Out Harvest Selective Growth Up or Out Harvest Divest Bilal Hospital position in above matrix is in the upper right quadrant. Thus is because there is rapid market growth in health care sector. Similarly business position of Bilal Hospital is also high as it has strong competitive position. So the strategy for Bilal Hospital is to invest. It should concentrate on single business i.e. health care, as there is potential in it and can go for expansion in health care services. Value Chain Analysis Value chain analysis of Bilal Hospital is as follow. Secondary Activities Firm Infrastructure: In secondary activities first is firms infrastructure. Bilal Hospital is highly centralized organization where all the decisions are made by its directors. Bilal Hospital has functional structure but her4e departments on the basis of functions are not very much developed and there are not clear boundaries between the departments which help in better communication and co-ordination between the departments. As the chief executive in Bilal Hospital has got more authority so he plays important role in implementing strategies. He believes in strict control over employees and makes them work according to the rules through strict control. Human Resource Management: Bilal Hospital believes in Continuous Medical Education and for this it arranges different refresher short courses for its employees. But it lacks long term training for its employees. Bilal Hospital also do not have sufficient incentives to motivate the employees. Though there is Best employees of the year award announced every year on good performance of an employee but it is not sufficient to increase motivation level in employees. Similarly low salaries and lack of participation is also causing dissatisfaction in employees. Technology Development: Bilal Hospital believes that proper equipment is very important to provide good health care. That is why Bilal Hospital is continuously buying modern technology for its hospitals. For example Bilal Hospital has recently bought Dialsis Machine. Similarly it has Incubators, Ventilators and Centralized Oxygen System which is not present in other hospitals of Rawalpindi. Despite these efforts Bilal Hospital is not fully successful in introducing modern technology and this is because of lack of funds. For example, Bilal Hospital does not have C.T. Scan which is quite sophisticated equipment. The strategy of Bilal Hospital is first to go for life saving then sophistication. So first they are going for equipment for life saving than sophisticated equipment. Procurement:

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The equipment of Bilal Hospital is purchased from foreign countries. While there are local suppliers for surgical instruments, bed linen, etc. so it is made sure that best surgical instruments and other supplies are provided by suppliers. As far as medicines are concerned, there is a drug store in Bilal Hospital which is given on contract to 3rd party but Bilal Hospitals management makes it sure that there is no counterfeit medicine there. As Bilal Hospitals main product is health care service, so its most important supplier is its medical experts who treat the patients and also the nurses, ward boys, etc. to serve the patients. Bilal Hospital has the advantage that its consultants are foreign qualified and have good work history. Primary Activities Inbound Logistics, Operations, Outbound Logistics: As Bilal Hospital is dealing in health care services so we can not separate inbound logistics, operations and outbound logistics for its services as a single person i.e. a specialist along with his team of doctors and nurses perform these functions. Apart from these services, preventive medicine is also very important for health care, so they make it sure that no counterfeit medicine is available in their drug store. Operations of Bilal Hospital are the strongest activity that gives it competitive advantage and differentiates Bilal Hospital from other hospitals. Operations of Bilal Hospital are its strong activity because its highly qualified and experienced consultants e.g. its experienced Gynecologists. Similarly modern equipment and good nursing makes Bilal Hospitals operations its core competence. Marketing Bilal Hospital is not very active in marketing and as such no promotional activity is carried out by Bilal Hospital. Currently the image of Bilal Hospital and its competency in its ability to provide high quality health care is attracting patients. But as it is now going for expansion, so Bilal Hospital must focus on marketing activities. Though there is a public relationing department in Bilal Hospital to get feed back from patients, but its not sufficient as it is focusing only on those who visit the hospital. Bilal Hospital must also focus and attract those people who have never visited Bilal Hospital and they are potential market for Bilal Hospital. Services Along with core medical services, the auxiliary services provided by Bilal Hospital are contributing towards its success. Bilal Hospital takes care of patients comfort. One example for it is that Bilal Hospital has imported special beds for patients costing Rs. 100,000 each from Sweden. Similarly it has one doctor, two nurses, one ward boy and one sweeper every time on each floor to take care of patients. There is a gift shop in hospital. Similarly there is arrangement for care of patients attendant. So a bed is also there in patients room for his attendant. Whenever a patient is admitted in hospital, public relationing officer goes to him to ask if the patient has any problem and then this problem is eradicated. Problem Statement We have identified three problems in Bilal Hospital. a. Satisfaction level in employees is quite low and their turnover is high. This low satisfaction is due to the low salary paid to them e.g. Bilal Hospital pays even Rs. 3,000 or 4,000 to its doctors which is quite low. Similarly employees are not given participation in decision making which also causes dissatisfaction. Most of the decisions are made by Dr.Zulfiqar Hassan Mumtaz and if there is some major decision, it is made by directors jointly.

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b. The second problem with Bilal Hospital is that it is quite expensive hospital e.g. charges of Deluxe Room in Bilal Hospital are Rs. 1,500 and more than Rs. 2,000 for VIP room. While in Fatima Medical Centre Rs. 1,100 is charged for Deluxe Room and Rs. 1,500 for VIP Room. Similarly their consultants charge high fee for their hospital but people go there because health is very important thing and Bilal Hospital has certain competencies in its health care services e.g. painless delivery, ICU etc. c. Third problem is unethical practices in Bilal Hospital. The doctors working in Bilal Hospital are also employed by govt. so they give time to Bilal Hospital by not fulfilling their responsibilities in govt. hospitals. Similarly it is quite unethical to charge high fee for their expertise. Dr.Zulfiqar who is the founder of Bilal Hospital is also employed in Nishtar Hospital and being a govt. employee he is not allowed to own private hospital. So the Bilal Hospital Hospital is in his wifes name and she is chief executive of Bilal Hospital but only in papers. In actually Dr.Zulfiqar who runs Bilal Hospital, sits in chief executive office and makes the decision. So this is quite unethical that he is running a private hospital despite govt. restrictions. Recommendations 1. As satisfaction level in Bilal Hospitals employees is quite low and it results in high employee turnover, so their satisfaction level must be improved. For this their salaries must be raised. Similarly they should be allowed to participate in decision making. This will not only increase their satisfaction level but also result in some good ideas by employees to improve the hospital. With satisfied employees, turnover of employees will decrease and Bilal Hospital will benefit from the experienced employees. Otherwise it is a great cost to loose experienced employees and consume resources on hiring and training new employees. 2. Bilal Hospital must reduce its changes as new competitors are entering in the market and will be a great threat for Bilal Hospital e.g. Razi Hospital and Institute of Cardiology. Due to intense competition it would be difficult for Bilal Hospital to charge high amounts from patients. So it must decrease its charges and lowering their unethically high profit margins can also do this. This will also help to further improve Bilal Hospitals image. 3. Bilal Hospital is currently offering few medical services. So it must add new medical services to serve the people of Southern Punjab as these people have to go to by cities for getting such medical services. The new services will help Bilal Hospital to exploit the potential in the market. Those new services can be for example Oncology department, Radiology department, Psychiatry department, Plastic Surgery, etc. Similarly with increased competition and inflation, Bilal Hospitals margin will decrease. So they must increase their capacity from a 60 bed hospital. This will not only help them serve a bigger proportion of population but also help them earn efficient revenues. Recommended Marketing Strategy and Action Plan As far as marketing strategy is concerned, Bilal Hospital is currently changing quite high prices and their market is mainly the upper class who can afford it. But a number of people from lower middle and lower class also get treatment from Bilal Hospital as their health consciousness is increasing and they are ready to pay higher charges for better medical care. For further when there will be intense competition, we recommend that Bilal Hospital should lower its charges. As currently Bilal Hospital is going for expansion, these low charges will help to attract sufficient number of patients to make its capacity maximally utilized. Similarly in terms of product, it must go for product development. As Bilal Hospitals product is its medical services, so new services can be added e.g. Oncology

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Department, Plastic Surgery, etc. and it will help Bilal Hospital to exploit the potential in growing market. Bilal Hospital should also keep on introducing modern equipment in its hospital as it will give them a competitive edge. In terms of promotion, Bilal Hospital is lacking promotional activities. Though now Bilal Hospital is having good image but in future when it will go for expansion and competition will be high, it will be required to have intensive promotional activities. Being a hospital Bilal Hospital can not directly advertise itself (as its govt. regulations) but it can advertise about eth doctors and specialists who practice in Bilal Hospital. Similarly it can go for publicity by arranging symposiums on health care and walks to increase health consciousness like it is arranged by Shifa International Hospital for their publicity. Such activities will promote the name of Bilal Hospital. As far as Bilal Hospitals employees are concerned, it must offer them salaries competitive to other hospitals. Similarly they must also be encouraged to give suggestions and participate in decision making as employees can make quite good contribution towards improvement of an organization by their suggestions. Bilal Hospital currently arranges for short term training of employees by arranging different refresher courses but its employees do not go for long term training as they are dissatisfied with the hospital and will leave it as soon as they get high salaries job somewhere else. But training is very important especially in the field of health care. So Bilal Hospital must increase salary of its employees so that they are satisfied and ready to go on long-term training. Similarly it should motivate them to go on training by giving more incentives and high salaries to employees who have completed their training. Bilal Hospitals strategy should be to concentrate on single business i.e. health care as the health industry is quite attractive because of its growth and high profit margins, and Bilal Hospital also have strong competitive position. Owners should not diversify into unrelated businesses. They should concentrate on health care area and go for expansion in this area.

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