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Improving staff engagement does not require employee ownership of the NHS

Brendan Martin, 15 July 2014

Public World is working with NHS trusts and social care providers to introduce the Best Workplace model of staff involvement to improve staff engagement, service quality and resource use. For information about how we can help you, please contact us.

See also:

The Best Workplace: staff involvement to improve quality, productivity and working lives

The Duty of Care of healthcare professionals: a handbook and advice notes


The correlation between staff engagement and health care standards is so strong, and the gap between existing and desirable levels of staff engagement so wide in many hospitals, that it is tempting to welcome any and every new report on the subject.

In 2014 alone, the Point of Care Foundation led the way with its excellent launch report, Staff Care, in January, since when several more reports have confirmed its core message about the importance of staff wellbeing and engagement.

Despite repeating many of the same key messages, however, the new Report of the Review of Staff Engagement and Empowerment in the NHS, published today, needs to be read with an especially critical mindset.

Commissioned by the government and chaired by King’s Fund chief Chris Ham, it suggests that the best route to higher levels of staff engagement is through hiving off National Health Service organisations into employee-owned or mutual companies.

Moreover, it makes that case by linking two sets of literature in a way that, while sleight of hand would be overstating it, is certainly on the dubious side.

One set of literature shows the correlation between staff engagement and performance, and the other links employee ownership to staff engagement. But while the first set concerns public services, the second draws on the experience of employee share ownership in private companies.

Much can be learnt from both, but the two contexts are quite signficiantly different, particularly when considering staff engagement, because each has its own motivational dynamic.

Is it right to infer from higher levels of staff engagement among employee shareholders of private firms that such a structural arrangement in the NHS would have the same effect? Judging by paragraph 22 of the report, it would appear that Ham’s review team were not all convinced that it is.

“A core question on which opinion was divided within the Panel”, it states, was “the relative importance of ownership and governance in comparison with other critical factors such as leadership, culture, and ways of working in securing a highly engaged workforce."

How much more useful the report would have been if, rather than simply mentioning that difference of view, it had explored it in detail, as presumably the panel itself must have done.

Instead, having set out convincingly the case for better staff engagement, and despite acknowledging other approaches to improving it, the report ends up pointing firmly in the direction of hiving off NHS trusts to employee-owned or mutual firms.

The argument draws heavily on the experience of Circle Health, the company owned largely by hedge fund millionaires, which gave the staff of HInchingbrooke NHS Trust a small minority of shares when, in 2012, it became the first private company to run an NHS hospital.

Circle introduced some staff involvement practices that appear to have improved performance, and there is no doubt that other trusts might learn some important lessons from that experience. But it is as important to distinguish those lessons from Circle’s corporate structure as it is to distinguish the Mid Staffs scandal from public ownership.

The reality is that it is not only possible but essential to improve staff involvement in the NHS -- and no ownership change is required to achieve it.

As the Ham report states (paragraph 2), an “engaged and valued workforce” is “a necessary condition for meeting the NHS’s unprecedented challenges against a backdrop of growing service pressures and tightening finances”.

It adds: “We need to unleash the power of NHS staff to drive service improvements and innovations that transform care,” and “successful leaders are those who work in partnership with staff, giving them a strong voice, involving them in decision-making and empowering them to improve care.”

Those are powerful messages, and the report is also right to note (paragraph 7) that “the NHS culture has traditionally been one of performance management in which providers have been expected to deliver improvements based on centrally determined targets and standards”.

That culture must change because we need “coaching and participative approaches if staff are to be engaged effectively”.

Perhaps there is a place for mutuals and social enterprises in the NHS. Perhaps that would help dismantle bureaucratic obstacles to improving staff involvement and engagement. But the evidence of those causal links is not strong, whereas the costs and risks of NHS fragmentation and privatisation are great.

We know that it is possible to improve staff involvement in public organisations. If the Ham report diverts us from that path it will have done a disservice to its own premise.

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