Central Illinois Community Hospital is a new 67-bed acute care hospital in semirural Redmon, Illinois. The hospital—the first in the county—was planned and financed by a community board. The first executive the community board hired was Syd Baker, as CEO. Syd had been a successful pharmacist in town and is respected by many. Because his family has lived in the area for generations, he is also related to a large portion of the county’s small population.
Immediately on accepting the role, Syd was swamped by requests for positions. One board member joked that Syd probably had enough relatives to staff the entire hospital. Other prominent community members are also lobbying to hold positions of responsibility in the new hospital because of their status and political connections in the county. Syd has concerns about showing favoritism to any group, especially his relatives.
At the first board meeting (at which his second cousin presided as board chair), Syd proposes a set of hiring policies for the new hospital. He suggests creating job descriptions for each position, which would establish minimum degree and experience requirements. The hiring process for each department head will involve a panel composed of the human resources director, one board member, and Syd. In addition, he proposes the following nepotism policy, which will apply to all new hires:
Nepotism Policy
It is the goal of this policy to avoid creating or maintaining circumstances in which the appearance or possibility of favoritism, conflicts, or management disruptions exist. The hospital will not allow related* persons to be hired into or to work in the following conditions:
Related individuals may not work under the supervision of the same manager.
Assignments may not create a supervisor/subordinate relationship with a related individual.
Individuals may not supervise or evaluate a relation.
Work relationships will not create an adverse impact on work productivity or performance.
Work relationships may not create an actual or perceived conflict of interest.
Employees may not audit or review in any manner a related individual’s work.
No individual may be employed at the hospital if anyone related to the individual serves on the hospital’s Board or on any Committee or Council which has authority to review or order personnel actions or wage and salary adjustments which could affect the individual’s job.
*For purposes of this policy, “related” persons shall include relationships established by blood, marriage, or legal action. Examples include the employee’s spouse, parent, grandparent, child, grandchild, or sibling, including in-law or step-relations, as well as the employee’s niece, nephew, uncle, aunt, and similar relations.
After Syd proposes the policy, one board member says that the new hospital should be an innovative, adaptive organization and this kind of policy will turn it into a bureaucracy. The board member then launches into a story about how the hospital in the neighboring county refused to take responsibility for billing errors and how its policies had prohibited the hospital from helping his family members receive the care and respectful treatment they deserved.
The rest of the board seems to agree with the member’s comments, but no action is taken and the meeting adjourns. Syd is now left wondering what he should do.
Case Questions
Would establishing a nepotism policy create a bureaucracy?
Is a bureaucracy necessarily bad?
How could Syd convince the board that a nepotism policy would protect the hospital and promote general goodwill and productivity?
If a nepotism policy were necessary, how could Syd make certain that it would not have negative effects on the organization?
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