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Journal of Human Resources Education 13 Volume 3, No. 3, Summer 2009

STRATEGIC HRM AT THE MAYO CLINIC:
A CASE STUDY

Sunil Ramlall
Hamline University

Tripp Welch, Jennifer Walter, and Daniel Tomlinson

The Mayo Clinic

ABSTRACT

For many decades, Mayo Clinic has been ranked as one of the top medical institutions in the
world. The entire health care industry has been experiencing immense challenges. Given the
current and historic success of Mayo, what does Mayo need to do from an HR perspective to
maintain this standard of excellence? This case identifies the strategies used by Mayo to achieve
excellence in employee and patient satisfaction. The case describes how this complex service
organization fosters a culture that exceeds customer expectations and earns deep loyalty from
both customers and employees. The role of HR is analyzed to explain how strategic HRM
enables the organization to achieve its strategic business objectives.

INTRODUCTION

Mayo Clinic is the first and largest integrated, not-for-profit group practice in the world.
Doctors of every medical specialty work together to care for patients, joined by common systems
and a philosophy that “the needs of the patient come first.” More than 3,300 physicians, scientists
and researchers and 46,000 allied health staff work at Mayo Clinic, which has sites in Rochester,
Minnesota, Jacksonville, Florida, and Scottsdale/Phoenix, Arizona.

For many decades, Mayo Clinic has been ranked as one of the top medical institutions in
the world. Over the past few years, the entire health care industry has been experiencing
immense challenges. Mayo is not immune to these challenges and faces the risk of losing critical
components of its culture and overall tradition of excellence that have been at the core of its
success. Given the current and historic success of Mayo, what does Mayo need to do from a
human resource (HR) perspective to maintain this standard of excellence?

Journal of Human Resources Education 14 Volume 3, No. 3, Summer 2009

This case study examines the core components of HRM at Mayo and details the
respective HR strategies used to sustain Mayo’s highly touted culture. The case describes how
this complex service organization fosters a culture and practices that exceeds customer
expectations and earns deep loyalty from both customers and employees. Specifically, the case
will enable you to:

1. Study Mayo’s organizational strategies and be able to articulate the relevance of
organizational culture as part of the business strategy.

2. Understand the value of organizational culture in helping an organization to build
its brand.

3. Critique HR practices using logic and reasoning to identify the strengths and
weaknesses of alternative solutions, conclusions or approaches to problems.

4. Identify relevant value-added strategies necessary to deliver services at the
highest quality.

Currently, the HR team at Mayo is a major player in helping to maintain and build a

culture of teamwork. Workforce planning, employee recruitment and selection, training and
development, compensation and benefits, and performance management are key areas in which
HR strategies are used to develop and reinforce Mayo’s Model of Patient Care.

The founders of Mayo have established the mission to “provide the best care to every

patient every day through integrated clinical practice, education and research.” It therefore
supports a comprehensive research department to “bring the bench to the bedside” and the Mayo
College of Medicine to teach and prepare tomorrow’s medical professionals. In doing so, the
premise of teamwork has been at the root of the culture, and subsequently human resource
management (HRM) strategies have been designed to maintain these values.

[ Case begins on next page ]

Journal of Human Resources Education 15 Volume 3, No. 3, Summer 2009

STRATEGIC HRM AT MAYO CLINIC: THE CASE

The role of human resource management (HRM) in organizations continues to be of
stronger importance and relevance (Bartel, 2004; Becker & Huselid, 1998; Cascio, 2003). Like
other progressive organizations, Mayo Clinic has created a unique organization and continues to
thrive even in a challenging economy and increasing costs of providing healthcare. Not only
does Mayo provide quality healthcare, but it is regarded as one of the premiere healthcare
institutions in the world (Lee, 2008). Mayo may have started out as a small outpatient facility,
but now, a century later, the Mayo Clinic is one of the top-ranked hospitals. Medical
professionals from every medical specialty work together at Mayo to care for patients, joined by
common systems and a philosophy of “the needs of the patient come first.”

The Mayo Clinic is the first and largest integrated, not-for-profit group practice in the

world. It is an organization where medical professionals from every medical specialty work
together to care for patients, joined by common systems and a philosophy of “the needs of the
patient come first.” More than 3,300 physicians, scientists and researchers and 46,000 allied
health staff work at Mayo Clinic, which has sites in Rochester, Minnesota, Jacksonville, Florida,
and Scottsdale/Phoenix, Arizona. Collectively, the three locations treat more than half a million
people each year.

Mayo’s mission is to “provide the best care to every patient every day through integrated

clinical practice, education and research.” It therefore supports a comprehensive research
department to “bring the bench to the bedside” and the Mayo College of Medicine to teach and
prepare tomorrow’s medical professionals. Healthcare institutions have faced significant
challenges over the past few years.

A Brief Overview of Mayo Clinic

Mayo Clinic is the first and largest integrated, not-for-profit group practice in the world.
Doctors from every medical specialty work together to care for patients, joined by common
systems and a philosophy of “the needs of the patient come first.” More than 3,300 physicians,
scientists and researchers and 46,000 allied health staff work at Mayo Clinic, which has sites in
Rochester, Minn., Jacksonville, Fla., and Scottsdale/Phoenix, Arizona.

As other progressive organizations, Mayo Clinic has created a unique organization and
continues to thrive even in a volatile economy and during a time when costs of providing
healthcare are increasing. Medical professionals from every medical specialty work together at
Mayo to care for patients, joined by common systems and a philosophy of “the needs of the
patient come first.”

Mayo’s mission is to “provide the best care to every patient every day through integrated
clinical practice, education and research.” It therefore supports a comprehensive research
department to “bring the bench to the bedside” and the Mayo College of Medicine to teach and

Journal of Human Resources Education 16 Volume 3, No. 3, Summer 2009

prepare tomorrow’s medical professionals. Healthcare institutions have faced significant
challenges over the past few years.

MAYO MODEL OF PATIENT CARE

The fundamental elements of the Mayo Model of Care include:

– A team approach that relies on a variety of medical specialists working together to provide the
highest-quality care

– An unhurried examination of each and every patient with time to listen to the patient

– Physicians taking personal responsibility for directing patient care in partnership with the
patient’s local physician

– The highest-quality care delivered with compassion and trust

– Respect for the patient, family and the patient’s local physician

– Comprehensive evaluation with timely, efficient assessment and treatment

– Availability of the most advanced, innovative diagnostic and therapeutic technologies and
techniques

Significant Achievements

The Mayo Clinic name is so widely recognized that it may be the only true national brand
name in American medicine. Rather than the result of a carefully crafted advertising campaign,
its’ reputation has been built by word-of-mouth on more than a century of quality patient care. It
is the quality of care that Mayo Clinic patients appreciate and that makes the organization stand
out from the many healthcare centers that also provide excellent care. Ever since its creation, the
focus of Mayo Clinic has been on delivering the highest level of care to all patients. In achieving
this dream, Mayo has steadily focused on teams rather than individual contributors. The Mayo
Model of Care provides the framework in which all employees perform their responsibilities.

Aligning HRM and Business Strategy at Mayo

Mayo has accumulated many achievements over its history. Indeed, a major component
of its strategies has been the workforce management. The HR function of Mayo has been a
leader in helping to deliver the Mayo Model of Care. Given the trends facing the healthcare
industry and the need to create and maintain high performance organizations such as Mayo, the
role of the workforce and HR becomes even more critical.

The human factor is central to healthcare, yet its proper management has remained

beyond the reach of healthcare organizations (Khatri, Wells, McKune, & Brewer, 2006). A
central tenet of high performance organizations is the measurement of the impact of HR practices
and policies on organizational performance (Godard, 2004). A major problem in the healthcare

Journal of Human Resources Education 17 Volume 3, No. 3, Summer 2009

sector is the contentious nature of the measurement of performance, with international studies
attempting to link people management practices to patient mortality in acute hospitals (Bartram,
Stanton, Leggat, Casimir, & Fraser, 2007). The need to always identify and implement HR
practices to the mission of the organization is absolutely critical. Mayo’s strategic plan identifies
the workforce as the key to success. Therefore, the HR function which is responsible for the
hiring, rewarding, and retaining the employees becomes a core role of the strategic plan.

Primary Value: The needs of the patient come first
Mission: Mayo Clinic will provide the best care to every patient every day through

integrated clinical practice, education, and research
Vision: Mayo Clinic will be the premier patient-centered academic medical organization

Satisfy Our Patients Achieve Mission-Advancing Financial Performance

Improve and Demonstrate Quality, Safety, Service, and Value

Attract, Develop, and Retain the Best People

Mayo Clinic Strategic Plan

• Achieve the highest levels of patient service
and satisfaction

• Demonstrate Mayo Clinic as the choice
destination medical center

• Achieve operating margin target
• Achieve sufficient and stable sources

of funding for Research and Education

• Achieve the highest levels of quality care and safety
• Develop high-value care models targeted to specific patient populations

• Improve staff satisfaction, training, retention,
and recognition

• Increase diversity of all staff

• Strengthen leadership development
• Establish a culture of innovation and discovery

V
IS

IO
N

E
X

E
C

U
TI

O
N

P
R

IO
R

IT
IE

S

Quality
Integration

Science of
Health Care Delivery

Individualized
Medicine

Since the concept of HRM emerged in the early 1980s, two basic paths of research have

been developed in investigating the relationship between HR practices and organizational
performance (Chand & Katou, 2007). The first was based on the assumption that there is a direct
relationship between individual HRM practices and/or internally consistent HRM systems of
HRM practices, and organizational performance, e.g. (Arthur & Boyles, 2007; Huselid, Jackson,
& Schuler, 1997; Jackson & Schuler, 1995).

The second was based on the assumption that there is an indirect relationship between

individual HRM practices and/or HRM systems, and organizational performance e.g. (Belanger,
Edwards, & Wright, 1999; Ferris et al., 2007). Similarly, critical outcomes include patient
satisfaction, employee satisfaction and commitment, and operational efficiency at Mayo Clinic.

Journal of Human Resources Education 18 Volume 3, No. 3, Summer 2009

A Focus on Quality

Quality can be defined and measured in many ways. At Mayo Clinic, quality is not just a
simple measure. Quality is a comprehensive look at all aspects of a patient’s experience. Mayo’s
patients seek excellence in care, the best medical knowledge and experience, the best technology
available and the kindness and hope offered by the staff. Quality can be measured in the
outcomes achieved such as mortality rates and surgical infections; in the compliance with
evidence-based processes known to enhance care; in the volume of patients successfully treated
who have complex diagnoses and procedures; and in the safety record of the institution. Quality
and service can also be measured in other ways such as the amount of time spent with each
patient; making sure each patient is treated with respect, kindness and dignity by every member
of the Mayo team; making sure appointments are on time and that all test results and other
patient information are available to every doctor whenever it is needed. Quality at Mayo Clinic
involves the totality of a patient’s experience — from the first phone call to the last appointment.

Today, many organizations measure quality in health care using varying criteria.

Evaluating this information can be difficult and time-consuming since not all measures reflect
the same information from one report to another. However, it is important for patients to ask
questions and look at quality information to ensure they are getting the efficient and effective
care they need. Mayo’s HR function continues to work diligently towards helping the
organization to meet its mission. Following are some of HR’s core strategies and priorities.

Developing Teams and a Culture of Teamwork

Quick (1992) explained that cultural values become the platform for specific and concrete
actions designed to meet difficulty and challenge. The author argued that we cannot think of
organizational culture as a substitute for responsible, problem-solving behavior on the part of
leadership. Culture becomes the vehicle through which problems and challenges become
addressed, defined, reframed, and ultimately solved. When cultural values do not work in this
fashion, they must be modified or jettisoned. The culture is not the end or goal but rather the
means. It may be the focus of attention, but as in the case of the magician, something quite
substantive and important may not be meeting the eye. At the core of Mayo’s culture is
teamwork.

Because of the Mayo brothers’ innovative approach to medicine, the Mayo Clinic system

has also become well known for its use of a multidisciplinary model in caring for patients and
finding new treatments and protocols (Strom, 2001). In the Mayo system, you’re expected to try
to get along and/or you’re someone who has been identified as a person who can get along with
the rest of the team. The Mayo brothers fostered an atmosphere of cooperation and working
together with minimal squabbling. Yet again, one of the factors that help to make this happen is
a salaried system without incentives. It eliminates competition among employees, while
fostering a deeper cooperation for the greater good of all stakeholders.

Today, Mayo enjoys and benefits from a workforce where teamwork is the absolute

norm. Typical of the Mayo Clinic is its century-old team approach to treating patients.
Physicians work in teams, with each team driven by the medical problems involved in a case and

Journal of Human Resources Education 19 Volume 3, No. 3, Summer 2009

by the patient’s preferences. Occasionally, a team will be expanded or even taken apart and
reassembled. At Mayo, diagnosing a complex problem, proposing treatment and slotting the
patient for surgery can happen within 24 hours of the diagnosis. The overall effect at Mayo is
one of orderliness, function and, above all, vigor.

This is an industry that is dominated by increasingly powerful (and increasingly

expensive) technology. Mayo’s biggest innovation is its way of working — especially its way of
working in teams. To be sure, other medical institutions use teams. But Mayo has incorporated
collaborative methods into everything that it does — from diagnosis and surgery to policy
making, strategic planning, and leadership. At Mayo, the art of medicine is the epitome of
teamwork (Roberts, 1999). While most other companies focus on the bottom-line, Mayo’s focus
continues to be on the patient and patient satisfaction.

Employee Recruitment and Selection

Attraction and retention of employees is an increasingly significant aspect of building
organizational capabilities to ensure sustained competitiveness. As practiced at Mayo, one of the
most important aspects of the HR function is to select the “right” employee for every opening.
Mayo uses value-based hiring, looking for team players who have the ability to advance within
the organization, demonstrate empathy for others, and can handle ambiguity. Employees must
be flexible, but firm when necessary. Employees must not be rules-driven and must adhere to
the utilitarian principle of the greatest good.

Rather than viewing HR as a critical driver of organizational strategy and outcomes, most

health care organizations see HR as a drain on the organization’s bottom line. Only by aligning
HR with the organizational strategy will HR leaders truly get a seat at the leadership table.

HR leaders have stated that, in hiring new employees, loyalty, a strong work ethic, and

the ability to be an outstanding team player are among the criteria Mayo seeks. Mayo has
subsequently benefited from incredibly low turnover rates and the ability to retain employees
who possess the expertise, passion, and empathy to deliver the best patient care to all patients.

In its’ 2007 Annual Report, Mayo’s HR team explained that effective recruiting is vital to

achieving Mayo’s strategic plan and reported that 6000 allied health positions were filled in
2007. Furthermore, its quality initiative within the department resulted in a reduction in time to
fill a job from a median of 35 days to 29 days. Potential increases in the number of patients,
however, may provide additional increases in recruitment and labor costs.

Diversity is another area of high importance in Mayo’s recruitment strategy. In 2007,

12% of the employees hired were minorities. This figure far exceeds the percentage of qualified
individuals in the respective geographic locations, though Mayo continues to work diligently to
increase this number.

As Mayo deals with the current industry trends and economic challenges, HR is faced

with the continuing challenge of recruiting and retaining skilled employees. The health care
industry, which employs more than 11 million workers, faces significant workforce challenges.

Journal of Human Resources Education 20 Volume 3, No. 3, Summer 2009

So while it is relatively easy to tout previous successes, the challenge facing Mayo is
unprecedented. As a result, Mayo’s HR function must continually explore innovative ways to
recruit in order to meet its need for skilled professionals.

Promoting Teamwork through Strategic Rewards

An effective compensation system can lead to organizational competitiveness and higher
levels of profitability. It can also help to motivate employees. Mayo emphasizes compensation
strategies to foster the attitudes and behaviors that fit with the Mayo Model of Patient Care.

Mayo prides itself in hiring long-term employees who are team players. Supporting this

compensation philosophy, Mayo does not employ a performance-based compensation system.
Mayo argues that a standard of excellence is expected of everyone. Typically, employees are
paid at the 60th percentile of the market range. In addition, employees are given a
comprehensive benefits program that includes medical, dental, tuition reimbursement, defined
benefit pension plan, and other retirement options.

Over the years, HR compensation professionals at Mayo have:

• Created a framework for titling management jobs and reviewed options for

changing the management job salary structure
• Conducted a comprehensive market review of Administrator positions and made

recommendations to leadership
• Designed leadership development programs for leadership transitions
• Focused on reviewing jobs to ensure everyone is paid at the desired levels
• Conducted internal surveys to ensure employees are satisfied with their pay

While Mayo has historically provided an outstanding example of compensation strategies

aligned to business strategies to achieve a standard of excellence, the question arises as to
whether this philosophy would be relevant in hiring more employees where fewer qualified
candidates are available. Furthermore, as opportunities become available with greater
frequencies, Mayo’s HR function questions if employees are likely to leave for the opportunity
to earn more through incentive based compensation.

Building and Maintaining a Highly Committed Workforce

Through deliberate efforts such as teamwork, focus on employee well-being, minimal
incentive-based compensation, and providing a great work environment, Mayo has benefited
from incredibly low turnover rates and the ability to retain employees who are the ones
possessing the expertise, passion, and empathy necessary to deliver the best patient care to all
patients. Mayo’s turnover is approximately 5% annually.

A report published by the Gale Group stated that the cost of employee turnover is roughly

$4.1 billion annually and on average, there is a 45% average annual turnover rate in a long-term
care workforce of roughly 2.6 million, with an average turnover cost of $3,500 per employee,
including indirect and direct costs (Edwards, 2005). The HR staff at Mayo works diligently to

Journal of Human Resources Education 21 Volume 3, No. 3, Summer 2009

support recruitment efforts through various retention strategies. The focus continues on ensuring
employee satisfaction. Frequent employee surveys, meetings with employees, and observations
help to gauge employee satisfaction.

As a specific means to attracting and retaining employees, Mayo has defined a Total

Rewards program that is quite attractive to most. The rewards program is based on the principle
that no one is big enough to be independent of others and is comprised of:

• Paid time off
• Work life balance
• Competitive total compensation
• Comprehensive benefit plans at a relatively low cost
• Retirement funded by Mayo
• Income protection
• Professional development
• Regular salary increases

Mayo has identified the personal attributes that best fit its culture and philosophy. In

particular, it looks for people who are committed to high-quality care and service; convey a
positive attitude; are enthusiastic, resourceful, and honest; have a strong work ethic unconnected
to extrinsic rewards; demonstrate understanding of cultural diversity; and aspire to collaborative
work. Mayo invests in a time-consuming, collaborative hiring process to find staff who will
thrive in the Mayo system (Berry, 2004). It is through these hiring practices, its culture, and total
rewards that have proven to be critical in helping to have such stellar retention rates over its
history.

Challenges Facing the Healthcare Industry

There is no shortage of reports about the rising costs of healthcare. As the healthcare

industry continues to grow and as more focus is placed on healthcare costs, there will be a need
for more strategic models for management of hospitals, clinics, and practice groups (Wooten &
Decker, 1996).

Industry Trends

A report by the American Hospital Association’s Society for Healthcare Strategy and

Market Development and the American College of Healthcare executives, cosponsored by VHA
Inc., stated that the major trends facing healthcare organizations include the following:

a) Providers and insurers are poised to create new, consumer-sensitive innovations
designed to meet individual needs.

b) Payers and the government will continue to push for better disclosure on what
services cost and on the quality of patient care, making transparency an expectation.
That is likely to be a divisive force among providers and within integrated groups.

c) CEOs and other senior executives will be increasingly held accountable for achieving
high performance with measured results.

Journal of Human Resources Education 22 Volume 3, No. 3, Summer 2009

d) Increasing numbers of physicians will demand reimbursement for input, call and
other activities.

e) Hospitals will continue to increase the use and expand the scope of advanced practice
nurses and physician assistants.

f) Hospitals will continue to take advantage of the current period of relative financial
stability to make capital investments (Wooten & Decker, 2006).

Demand for Service

Mayo is faced with the likely prospect of an increase in demand for service given the
aging population of the U.S. There may even be a shortage of physicians. This is a concern for
many administrators. The Association of American Medical Colleges underscored this problem
in 2006 when it compiled studies from at least 16 states, citing shortages in physician specialty
fields. The report highlighted that even with substantial increases in medical education and
training capacity, it is unlikely that all of the increased demand for health services can be met
with physicians.

Many of these reports pointed to shortages in specialties such as allergy and immunology,

cardiology, child psychiatry, dermatology, endocrinology, neurosurgery and psychiatry, in
addition to primary care. The bottom line is that the country is not producing enough physicians
to keep pace with the demands of a growing, aging population. Given its outstanding reputation,
Mayo wonders if it will be able to maintain the highest quality as more patients flock to its doors
to be treated. Will they be able to adequately and effectively hire healthcare professionals who
fit its culture?

Diversity

The Mayo brothers saw the value of bringing people with different skills, backgrounds

and beliefs together to better serve the patient. Today, the clinic’s goal is to create a caring
service environment where individual differences are valued, allowing all staff to achieve and
contribute to their fullest potential.

Mayo defines diversity as all the characteristics which distinguish individuals or groups

from one another. Formally, the definition includes distinctions based on race, color, creed,
religion, gender, age, national origin, marital status, sexual orientation, veteran’s status,
disability, or status with regard to public assistance. The benefits of this approach include a
workforce that:

• Offers a broad pool of talent
• Contributes different viewpoints and perspectives in concepts, initiatives and decision

making
• Generates energy and creativity
• Better represents and responds to our patients and our colleagues

Support for diversity is comprehensive through Mayo Clinic’s structure, with broad

leadership provided by the executive leaders on Mayo Clinic’s Board of Trustees and the

Journal of Human Resources Education 23 Volume 3, No. 3, Summer 2009

Trustees’ appointed Mayo Clinic Diversity Advisory Committee. The Diversity Advisory
Committee serves as a forum for review and promotion of diversity activities undertaken at all
Mayo sites. These efforts are supported at each clinic location by a site-specific diversity
committee. Resources available to these leadership committees include the departments of
Human Resources, Education Services, Research Services, Legal, and the Personnel Committee.

Mayo’s diversity initiatives represent a cogent approach to integrate diversity into

Mayo’s overall strategy for growth. Collectively they contribute to a diverse Mayo Clinic.
When looking at the percentage of people of color in the 18 and over population of their
respective Metropolitan Statistical Areas (MSAs), the number of minorities employed at each
Mayo site is more than one-half of that percentage. More importantly for Mayo, over 40 percent
of these minority employees work in positions classified as management and professional, the
feeder pipeline for highest-level leadership positions.

Diversity in healthcare, seen at all organizational levels, includes people from differing

cultures, races, religions, gender, physical ability, backgrounds, and values (Ivancevich &
Gilbert, 2000). Once an organizational decision is made to value and promote diversity among
staff, the challenge lies in trying to manage this diversity through “systematic and planned
commitment…to recruit, train, reward, and promote a heterogeneous mix of employees.”
(Ivancevich & Gilbert, 2000).

Many approaches have been used in healthcare to manage diversity. The most common

are training sessions, subordinates’ feedback, performance appraisals, and reward systems.
Whatever strategies are used, common goals are fostering staff commitment to diversity,
recruiting and empowering staff champions, identifying the value added to the system by group
differences, and empowering staff through skill development.

Operational Efficiency

Several factors are forcing health care organizations to streamline their operations. These
factors include competitive pressures, increased consumerism, regulatory requirements, and
others. Process improvement techniques traditionally used in manufacturing and other industries,
such as Six Sigma and lean processes, are gaining popularity in health care. Operational
efficiency is about increasing productivity and improving quality and consistency which can
seem overwhelming to healthcare facilities with declining reimbursements.

Today, Lean and Six Sigma may be buzzwords within the Fortune 500 business circles,

but that doesn’t mean health organizations can’t leverage their principles to address their own
financial challenges. Lean principles improve patient care by reducing rework and waste. Six
Sigma tools are also transforming management philosophy in healthcare. Six Sigma is a
statistical approach that measures process capability— mainly in terms of accuracy and standard
deviation. It helps companies strive for customer satisfaction by consistently meeting or
exceeding their commitments. It can reduce double payments to vendors, savings in net income
and produce effective billing and collections structure. This process, while tedious, increases
customer satisfaction, improves productivity and builds a quality mindset within an organization

Journal of Human Resources Education 24 Volume 3, No. 3, Summer 2009

(Holland, 2007). Healthcare organizations are leveraging real-time, web-based applications to
increase operational efficiency also.

Mayo’s Challenges

As HR professionals, the Mayo HR team is entrusted with the responsibility of managing

the organizational culture. Mayo’s core values, beliefs, and norms have long been a pride of
medical excellence and have become further strengthened across generations of employees.
Given the challenges the country faces, such as the current economic recession, decline of
available medical professionals, aging population, and a need to utilize specific performance
improvement measures, making rapid changes becomes difficult.

Hospitals, including Mayo, will soon start to feel the impact of 78 million Americans –

Baby Boomers – aging into higher-risk pools. As these Baby Boomers become patients seeking
care, the prestigious reputation of Mayo will potentially result in excess demand for specialized
treatment. Mayo is currently operating at or near capacity so the question remains as to whether
an increase in patients will allow Mayo to continue providing the highest quality of service to its
patients.

Furthermore, the administration of the newly-elected U.S. president has promised

additional healthcare coverage for uninsured Americans. The healthcare reform plan, as
proposed, would provide affordable, accessible health care for all Americans, building on the
existing healthcare system, and would use existing providers, doctors and healthcare plans to
implement the government plan.

Hospitals and clinics, such as Mayo, are more frequently using performance

improvement methods introduced in the manufacturing industry. These interventions are now
the norm and include Lean Operations and Six Sigma. Performance improvement methods are a
means to hoped-for improvements in patient access, cost reductions and improved quality of
patient care.

Mayo’s culture will have to change to adapt to these new methods quickly. The

resistance argument, in some quarters, is that Mayo has been successful with its historic
practices. So why are these changes necessary? HR will have to play a key role in championing
these planned changes to improve performance.

While historically, HR at Mayo has been relatively effective and it has been viewed as a

business partner, but with the many challenges facing organizations, the question as to how HR
can have even greater utility must be examined. Recent writers have highlighted the need for
better people management practices in health care that directly support other goals such as
providing a quality and safe service and hence improving healthcare performance and patient
outcome (Leggat & Dwyer, 2005; Stanton, 2002). Given all of the external challenges, including
financial instability, HR executives have been asked by senior management to evaluate the
effectiveness of HR practices and to determine the level of alignment between HR practices and
organizational outcomes. Some critical information in this evaluation is presented in the table
below.

Journal of Human Resources Education 25 Volume 3, No. 3, Summer 2009

Information HR Threat
The pipeline of highly qualified candidates
has significantly decreased.

• Time to fill open positions may
lengthen

• Lower number of candidates that
meet the hiring profile for Mayo

More than 30% of the total workforce is
expected to become retirement-eligible in
the next 5 – 10 years.

• 5% turnover rate may grow

The pay of medical professionals continues
to escalate, so paying at the 60th percentile
might risk the retention of employees who
seek higher compensation

• Attractions of Mayo for core-
competency jobs such as physician
may have less effect when
compared to opportunities for
greater pay

• Dissatisfaction may grow as
employees struggle with pay as
compared to others in their field, or
as requests for discretionary
spending are rejected more

Diversity of the workforce does not
represent that of the patient and general
population.

• Mayo’s diversity efforts may have
to increase

• Mayo may gain a poor reputation
with potential employees (e.g.,
“chilling effect”) or customers

• Groupthink may affect Mayo’s
ability to be innovative, adversely
contributing to the business
objectives

Several pertinent questions, therefore, remain for Mayo and its HR function:

1. How can planned changes be implemented without losing the core culture of Mayo?
Basically, how can Mayo change its culture while maintaining the Mayo Model of
Patient Care? Should Mayo consider culture change? If so, what parts of the existing
culture should be maintained? What parts of the existing culture should be released?
What additions to the culture need to be made?

2. How might the recruiting strategies change at Mayo?

3. What changes to compensation should Mayo consider?

4. What metrics (qualitative and qualitative) should be used to determine the
effectiveness of HR?

5. How can Mayo establish diversity goals that help the organization to be more
representative? Can the diversity goals help connect to other threats to Mayo’s
culture? Should Mayo expand its definition of diversity?

Journal of Human Resources Education 28 Volume 3, No. 3, Summer 2009

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Journal of Human Resources Education 30 Volume 3, No. 3, Summer 2009

ADDENDUM

This addendum provides additional data for student use in the case analysis. Data include:

• Information on the age of Mayo’s workforce
• Headcount growth
• New applicant sources
• Employee turnover/Retention data

Changes in the age of the workforce are dependent upon the current age of the workforce,
growth in the workforce headcount, age at hire, and age at termination.

Examples of influences on the aforementioned factors and sources for additional insight are
provided in the following pages.

CURRENT AGE

Average Ages (Active=2005 YE, Terms/Hires= 5 Year Average)

Active Hires Terms
AH MDs* AH MDs* AH MDs*
Rochester 41.2 47.7 31.1 38.6 39.6 48.1
Arizona 44.3 46.9 37.7 41.3 39.7 47.6
Jacksonville 41.8 47.9 35.3 41.2 39.0 46.6

*MD includes Consultants, SAC’s and MFS

The percent hired in different age groupings over the 5 year period from 2001 through 2005 for
the allied health staff at the three sites is identified in the table below.

Age Group Jacksonville Rochester Arizona
<=25 23% 45% 19%

26 – 30 18% 16% 17%
31 – 35 16% 11% 11%
36 – 40 14% 9% 14%
41 – 45 12% 8% 13%
46 – 50 9% 6% 13%
51 – 55 6% 4% 9%

>55 3% 2% 5%

Journal of Human Resources Education 31 Volume 3, No. 3, Summer 2009

MAYO CLINIC HISTORICAL AND PROJECTED AGES

(Projections based on continued patterns of growth, hiring practices, and termination patterns)

Ages of Allied Health New Hires
(2001 – 2005 Average)

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

<=25 26 – 30 31 – 35 36 – 40 41 – 45 46 – 50 51 – 55 >55

Years of Age Groupings

P
er

ce
nt

o
f N

ew
H

ir
es

Jacksonville Rochester Arizona

Arizona Employee Counts – AHS

0

100

200

300

400

500

600

700

800

<25 25 – 29 30 – 34 35 – 39 40 – 44 45 – 49 50 – 54 55 – 59 60 – 64 65+

Age Grouping

E
m

pl
oy

ee
C

ou
nt

s

2001 2005 2010 2015

Arizona Employee Counts – Physicians/Scientists

0

10

20

30

40

50

60

70

80

90

100

<35 35 – 39 40 – 44 45 – 49 50 – 54 55 – 59 60 – 64 65+

Age Grouping

E
m

pl
oy

ee
C

ou
nt

s

2001 2005 2010 2015

Jacksonville Employee Counts – AHS

0

100

200

300

400

500

600

700

800

<25 25 – 29 30 – 34 35 – 39 40 – 44 45 – 49 50 – 54 55 – 59 60 – 64 65+

Age Grouping

E
m

pl
oy

ee
C

ou
nt

s

2001 2005 2010 2015

Jacksonville Employee Counts – Physicians/Scientists

0

10

20

30

40

50

60

70

80

<35 35 – 39 40 – 44 45 – 49 50 – 54 55 – 59 60 – 64 65+

Age Grouping

E
m

pl
oy

ee
C

ou
nt

s

2001 2005 2010 2015

Journal of Human Resources Education 32 Volume 3, No. 3, Summer 2009

GROWTH IN HEADCOUNT

Source: HR Staff Pages

MCR
AREAS OF GROWTH BY JOB TYPE, 2000-2006

Headcount Job Type

989 Nurse
956 Lab
658 Other Business Professionals
389 Service Workers
376 IT support
372 Technicians/Technologists (less labs)
331 Physicians
301 Management
157 Craft Workers
151 HR/Finance/Business Professionals
70 Laborers
46 Sales

-136 Clerical

Rochester Employee Counts – AHS

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

<25 25 – 29 30 – 34 35 – 39 40 – 44 45 – 49 50 – 54 55 – 59 60 – 64 65+

Age Grouping

E
m

pl
oy

ee
C

ou
nt

s

2001 2005 2010 2015

Rochester Employee Counts – Physicians/Scientists

0

50

100

150

200

250

300

350

400

<35 35 – 39 40 – 44 45 – 49 50 – 54 55 – 59 60 – 64 65+

Age Grouping

E
m

pl
oy

ee
C

ou
nt

s

2001 2005 2010 2015

Change Growth
AH 3191 3897 706 22.1%
CN 256 356 100 39.1%
Total 3447 4253 806 23.4%
AH 3434 3699 265 7.7%
CN 283 343 60 21.2%
Total 3717 4042 325 8.7%
AH 20455 24663 4208 20.6%
CN 1425 1730 305 21.4%
Total 21880 26393 4513 20.6%

MCA

MCJ

MCR

Headcount
Site Group

As of
12/31/2000

As of
12/31/2006

Journal of Human Resources Education 33 Volume 3, No. 3, Summer 2009

MCA
AREAS OF GROWTH BY JOB TYPE, 2001-2005

Headcount Job Type
150 Secretarial

109 Registered Nurses A
102 Health Technician
71 Registered Nurses B
64 Medical Consultants
60 Orderlies & Nursing Assistants
39 Health Technologist
36 General Clerical
34 Radiology Technicians
32 Financial Rec. Process & Acctg. Clerk
31 Operational Managers & Supervisors
28 Clinical Professionals
28 Food Service
22 Lead&Asst. Supv. Clinic, Research & Health Tech.
-30 Specialized Clerical
-45 Clinical Lab Technologist
-83 Clinical Lab Technician
-91 Health Service Occupations
-134 Medical Secretary

*Several job groups were collapsed in 2003, 2004 and 2005. This accounts for some of the
growth/decline in numbers shown above.

Recruitment efforts

Example of influences:

• Job posting practices (MayoClinic.org vs. Association webpage)
• Community job fairs vs. college recruitment

Examples of potential data sources:

• E-recruiting (examining applicant pool- individuals who have expressed explicit
interest in a specific position

• New hire survey
• Search Committee Survey

Employment contract – people’s reaction of acceptance of implicit and explicit conditions of
employment and their current economic situation

Example of influences:

• Total compensation offer
• Stability
• Culture
• Perceived options (e.g., RNs not employed as RN’s)
• Alternative offers from other institutions

Journal of Human Resources Education 34 Volume 3, No. 3, Summer 2009

Examples of potential data sources:

• New hire survey
• Turndown survey

Type of position: Basic job qualifications/preferred requirements and exclusions

Example of influences:

• Desired skills/certifications
• Educational requirements
• Preferred experience or other criteria (e.g. established research program)
• Employment record/ criminal record

Examples of potential data sources:

• Selection Criteria/ job descriptions/postings
• Hiring policy

TERMINATION/RETENTION RATE

The termination rate is a combination of involuntary and voluntary terminations.

Source: Mayo HR Staff Pages

Site Group Type

2001-2005
Average
Turnover

2006
Turnover

Involuntray 1.0% 1.0%
Voluntary 9.6% 11.3%

AHS Total 10.7% 12.3%
MD/SCI Involuntray 0.0% 0.0%

Voluntary 3.3% 2.0%
MD/SCI Total 3.3% 2.0%

MCA Total 10.1% 11.4%
Involuntray 0.9% 0.6%
Voluntary 11.9% 10.6%

AHS Total 12.8% 11.2%
MD/SCI Involuntray 0.0% 0.0%

Voluntary 4.0% 3.5%
MD/SCI Total 4.0% 3.5%

MCJ Total 12.1% 10.6%
Involuntray 0.7% 0.6%
Voluntary 4.7% 4.0%

AHS Total 5.4% 4.7%
MD/SCI Involuntray 0.1% 0.0%

Voluntary 3.1% 3.3%
MD/SCI Total 3.2% 3.3%

MCR Total 5.2% 4.6%
Mayo Clinic Total 6.7% 6.2%

MCA

MCJ

MCR

AHS

AHS

AHS

Journal of Human Resources Education 35 Volume 3, No. 3, Summer 2009

Involuntary Termination
• Policy violations
• Deaths
• Leave of absences

Data sources
• HRIS

Voluntary Termination
• Opportunities
• Family commitments
• Retirements

Data sources
• HRIS
• Exit Surveys

Retention Rates

* Rates expressed as a percent

Retention
5 Yrs*

Retention
10 Yrs*

Allied Health
Rochester 60.3 51.2
Arizona 42.8 32.7

Jacksonville 37.5 27.1