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Original Question
You are the director of the local agency that cares for ill and well elderly patients. You are funded by a private corporation grant, which requires matching of city and state funds. You received a letter in the mail today from the state that says state funding will be cut by $35,000, effective in 2 weeks, when the state’s budget year begins. This means that your private funding also will be cut $35,000, for a total revenue loss of $70,000. It is impossible at this time to seek alternative funding sources. In reviewing your agency budget, you note that, as in many health-care agencies, your budget is labor-intensive. More than 80% of your budget is attributable to personnel costs, and you believe that the cuts must come from within the personnel budget. You may reduce the patient population that you serve, although you do not really want to do so. You briefly discuss this communication with your staff; no one is willing to reduce his or her hours voluntarily, and no one is planning to terminate his or her employment at any time in the near future. Given the following brief description of your position and each of your five employees, decide how you will meet the new budget restrictions. What is the rationale for your choice? Which decision do you believe will result in the least disruption of the agency and of the employees in the agency? Should group decision making be involved in fiscal decisions such as this one? Can fiscal decisions such as this be made without value judgments? Your position is project director. As the project director, you coordinate the day-to-day activities in the agency. You also are involved in long-term planning, and a major portion of your time is allotted to securing future funding for the agency to continue. As the project director, you have the authority to hire and fire employees. You are in your early 30s and have a master’s degree in nursing and health administration. You enjoy your job and believe that you have done well in this position since you started 4 years ago. Your yearly salary as a full-time employee is $80,000. Employee 1 is Mrs. Potter. Mrs. Potter has worked at the agency since it started 7 years ago. She is a registered nurse (RN) with 30 years of experience working with the geriatric population in public health nursing, care facilities, and private duty. She plans to retire in 7 years and travel with her independently wealthy husband. Mrs. Potter has a great deal of expertise that she can share with your staff, although at times, you believe she overshadows your authority because of her experience and your young age. Her yearly salary as a full-time employee is $65,000. Employee 2 is Mr. Boone. Mr. Boone has bachelor of science degrees in both nursing and dietetics and food management. As an RN and registered dietitian, he brings a unique expertise to your staff, which is highly needed when dealing with a chronically ill and improperly nourished elderly population. In the 6 months since he joined your agency, he has proven to be a dependable, well-liked, and highly respected member of your staff. His yearly salary as a full-time employee is $55,000. Employee 3 is Ms. Barns. Ms. Barns is the receptionist-secretary in the agency. In addition to all the traditional secretarial duties, such as typing, filing, and transcription of dictation, she screens incoming telephone calls and directs people who come to the agency for information. Her efficiency is a tremendous attribute to the agency. Her full-time yearly salary is $26,000. Employee 4 is Ms. Lake. Ms. Lake is a licensed practical nurse/licensed vocational nurse with 15 years of work experience in a variety of health-care agencies. She is especially attuned to patient needs. Although her technical nursing skills are also good, her caseload frequently is more focused around elderly patients who need companionship and emotional support. She does well at patient teaching because of her outstanding listening and communication skills. Many of your patients request her by name. She is a single mother, supporting six children, and you are aware that she has great difficulty in meeting her personal financial obligations. Her full-time yearly salary is $48,000. Employee 5 is Mrs. Long. Mrs. Long is an “elderly help aide.” She has completed nurse aide training, although her primary role in the agency is to assist well elderly with bathing, meal preparation, driving, and shopping. The time that Mrs. Long spends in performing basic care has decreased the average visit time for each member of your staff by 30%. She is widowed and uses this job to meet her social and self-esteem needs. Financially, her resources are adequate, and the money she earns is not a motivator for working. Mrs. Long works 3 days a week, and her yearly salary is $23,000. (Huston, 2020, p.266) Fiscal decision making should be brought up in a general meeting and ideas may be addressed. Employees can be told about issues that may arise while budget cuts are made, and be told to offer any insight as to how to go about it. The employees must be made aware that no position is safe from cutbacks, and it is nothing personal once decisions are made. Decisions such as this must absolutely have documented value behind them. One cannot merely cut back on employee salaries or positions without clarification. If a manager makes uncalculated and undocumented choices, they are subject to repercussions of lawsuits and more. The value of the position should be justified as a whole to the organization. Based on the information given, we feel that the best course of action would be to make salary cuts across the board by 10% (except for employees 3 and 5). This would cut an estimated $20,600. We would voluntarily give our own salary an additional cut of $1,300 to assist with additional cuts without further burdening our staff. We also came to the conclusion that patient population would need to be downsized by 20% to keep safe ratios and be cost effective. This downsizing would save approximately $12,100. Since our clerk (employee 3) is already making minimum wage, we can’t cut her salary but we could cut her down to part time. She could come in a half day each day to take calls and do any necessary filing. This would allow for us to still have a clerk each day, her hours would just be limited. This saves us $13,000. Mrs. Long (employee 5) would be asked to consider working on a volunteer basis, seeing as she has her financial needs met and is only working to meet her social and self-esteem needs. This would be a great place to cut costs. She only works three days a week and seems to enjoy what she does. She should not simply be let go, as she has proven to be an incredible asset to the care team. I think if the project director sat down and had a meaningful conversation with her, things would go well. This would save us $23,000. If you were in the position of director, would you have done anything differently? How would you go about addressing your staff when telling them about the cuts that had to be made, and what would you do to best support your staff during difficult times such as these? please cite resources
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