Is Positive Psychology Fluff or Financially Beneficial?

October 24, 2017

Some healthcare leaders dismiss teaching employees the principles of Positive Psychology as “fluff,” insisting that their focus must be on hardcore business results. However, the evidence shows that 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.

How Do Positive Workplaces Make a Difference?

Over fifty percent of healthcare employees have given up trying to improve things.  After concluding that nothing will ever change, they’ve stopped beating their head against the wall.  The acute headaches subsided as they disengage because they don’t care as much.  They simply do what they must to get through your day without making a mistake that will lead to being fired.  They say the best part of their day is quitting time. So they watch the clock, eagerly awaiting the moment they can get out of work and go do something that makes them feel good.

Now for the bad news. Around 15 percent of healthcare workers have become deeply dissatisfied with their workplace. For one in six of your employees, their level of frustration and resentment has built up within to the point that they can’t contain it.  They feel compelled to criticize people who they see “screwing up”.  They blame their boss for allowing the problems to plague the organization. Their coworkers seem inept at best, and downright incompetent at times.

And these BMW’s – Blame, Moan and Whiners – aren’t shy about sharing their feelings.  They tell everyone within earshot—coworkers, patients, neighbors—about the terrible conditions and incompetent coworkers.  They feel they’re “telling it like it is.” The fact of the matter is they are a primary factor in making it the way it is.

Find out what to do to turn around a staff who has succumbed to disengagement, or worse, is plagued by overt hostility. Read more about how to apply 6 positive psychology principles in PROPEL to Quality Healthcare: Six Steps to Improve Patient Care, Staff Engagement and the Bottom Line.

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Dr. Tom Muha is the Director of the PROPEL Institute. As the science of optimal human functioning has emerged, Dr. Muha has been at the forefront in the study of how people involved in healthcare systems can achieve the highest levels of success and satisfaction. Research at major academic medical centers has shown that applying the PROPEL Principles empowers healthcare professionals to achieve remarkable results.

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