Is Positive Psychology Fluff or Financially Beneficial?

March 8, 2018

Some healthcare leaders dismiss teaching employees the principles of Positive Psychology as “fluff,” insisting that their focus must be on hardcore business results. The evidence shows when staff create more positive engagement in their workplace, they also generate solid financial results. In hospitals, the cost of turnover on units has been carefully studied, making it a good metric to use when conducting a cost-benefit analysis of creating a positive work environment. According to the 2016 National Healthcare & RN Retention Report:

“In 2015, the turnover rate for bedside RNs increased to 17.2%, up from 16.4% in 2014. Registered Nurses working in Pediatrics and Women’s Health continue to record the lowest rate, while nurses working in Behavior Health, Emergency and Med/Surg experienced the highest. Certified Nursing Assistant (CNA) turnover exceeded all other positions at 23.8%.

“The cost of turnover can have a profound impact on the already diminishing hospital margin and needs to be managed. According to the survey, the average cost of turnover for a bedside RN ranges from $37,700 to $58,400 resulting in the average hospital losing $5.2M – $8.1M. Each percent change in RN turnover will cost/save the average hospital an additional $373,200.”

Gallup research has revealed that improving employee engagement reduces turnover between 25 and 49 percent, depending on the severity of the problem. Turning over 17 of every 100 RNs employed by a hospital costs between $640,900 and $992,800 per year. Cutting the turnover rate by 25 to 49 percent could result in cost savings of $320,000 – $496,400 annually for every 100 nurses employed by the hospital.

Turnover is only one metric that has been improved by teaching staff to use Positive Psychology. Other areas of financial gain have come from improved HCHAPS scores, enhanced patient flow increasing productivity, fewer workman’s comp claims, less absenteeism and FMLA, and a decrease in patient safety incidents.

Positive practices produce good outcomes in organizations by increasing productivity, quality, customer satisfaction, employee retention, and profitability. In Practicing Positive Leadership, Kim Cameron reveals research that supports these results across 16 different industries that include both for-profit and non-profit organizations.  The big firms studied included General Electric, OfficeMax and National City Bank.

Smaller nonprofit organizations such as educational institutions and hospitals were also shown to be significantly more effective when they had high marks for using positive practices. Moreover, hundreds of studies show that positive practice workplaces benefit employee’s physical health, emotional well-being, brain functioning, interpersonal relationships outside of work, and their ability to learn.

One study Cameron conducted involved 30 healthcare organizations. It demonstrated that positive practices differentiated performance between high- and low-functioning hospital units on a number of metrics, as seen in the figure below. Topping the list of those positive outcomes were improved workplace “climate,” increased manager support, more staff participation, higher patient satisfaction, and an elevated quality of care.

Results of Implementing Positive Practices in 30 Hospitals

PROPEL is an acronym for six Positive Psychology principles that have been shown to be an effective method for teaching hospital leaders and staff how to implement positive practices:

Passion is the first step for developing an optimal level of functioning. Passion arises when people create a compelling vision of how they can be living a valuable life. That process begins by identifying your top 3-5 values.

Having a vision based on the values that are most important to a person sparks a massive amount of motivation, which generates a great deal of energy for achieving goals. A vision must have enough specific details to be like a video of the future. Envisioning the outcome they wish to see is so powerful that when obstacles arise they’ll be able to refocus their attention to seeing themselves successfully overcoming a challenging situation.

Maintaining passion requires mapping out an enticing vision in which everyone can see how they can work together in ways that meet the needs of all of the people involved.

Relationships work well when there are at least 3 positive interactions for every negative encounter, and ideally there’s a 5:1 ratio. To create abundant positivity, people must develop an intense interest in what’s happening in the lives of their family and coworkers. One of the best ways to boost positive feeling is to enthusiastically celebrate the small success people experience. Receiving this support drives people’s dedication to being at their best.

Optimists are able to deal with problems by finding mutually satisfying solutions. Successful people describe problems as being short-term, limited to one aspect of a bigger picture, and occurring as a result of honest mistakes. Highly effective individuals encourage others to collaboratively solve problems by determining what each person (including themselves) can do differently going forward. Optimists recognize people’s efforts, which fuels an upward spiral of positive behaviors.

Proactive people are able to consistently be at their best by using their strengths. Successful individuals know the strengths that have helped them and others to achieve positive results in the past. And they are adept at seeing how those strengths apply to achieving positive outcomes in the future. Discover your strengths at

Energy is required in order to routinely recharge so that we can sustain an optimal level of functioning. We must continually replenish our physical, mental, emotional, and spiritual energy or face burn out. The best method for rejuvenation is to establish daily rituals – establishing times to exercise, meditate, connect to loved ones and to the higher power.

Legacy leads to the highest level of life satisfaction. Passion within an individual is stirred when the person pursues their own purpose. But empowering others to pursue their passion is what brings meaning into our life. When we help others to be at their best, we create an upward spiral of positivity in which individuals and teams are able to achieve extraordinary results.




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