Kaiser Permanente Drops Demerit Plan

Kaiser Permanente, the Pasadena-based health care giant, defused a bitter labor dispute with 17,000 unionized hospital workers in a manner that labor specialists consider unorthodox: The company issued what some view as an apology.

“It was rather unique,” said Audrey W. Friedman, a New York labor analyst, referring to a Kaiser memorandum that announced the immediate suspension of an unpopular demerit system. The memo was distributed last week to Kaiser employees in Southern California.

Although Kaiser maintains that it has not apologized, labor specialists describe the memo, in which Kaiser Regional Manager Hugh A. Jones thanked employees “for speaking out on this issue,” as unusually conciliatory.

The point system, a modification of Kaiser’s longstanding attendance control program, drew protests from employees at its nine medical centers in Southern California.

Kaiser ‘Had No Choice’

Employees claimed that the point system, established in January to tighten Kaiser’s control over excessive tardiness and absenteeism, unfairly punished conscientious employees as well as errant ones.

In light of the protests, labor specialists said it is not surprising that Kaiser backed down.

“Given the circumstances,” said Friedman, “(Kaiser) really had no choice.”

Two weeks ago Kaiser staunchly defended the policy, saying that it had saved the nationwide health maintenance organization millions of dollars by reducing sick leave and improving overall attendance.

But under mounting pressure by the unions, the company suspended the program.

“We regret that the modifications to the program have created unnecessary anxiety among the employee population,” Jones wrote in the memo. “That was unanticipated and unintentional.”

‘Put to Rest’

He continued: “We hope that the controversy which has arisen over the point system can be put to rest and that we all can return to the business of providing quality health care and services to our members.”

Labor relations and human resource specialists said, however, that the negative reaction from employees should have been expected.

“Managers are always looking to strengthen their attendance controls,” said Friedman, whose company, The Conference Group, researches employee-management techniques. “I can cite various techniques they use, but they are more the carrot than the stick approach.”

Daniel Mitchell of the Institute of Industrial Relations at UCLA said the point system was doomed from the start.

‘Bound to Fail’

“I never heard of anything quite like that,” he said. “Formulaic techniques like that are bound to fail.”

Others called the point system archaic, a throw-back to days when managers lacked savvy about employee-relations practices.

But specialists find it surprising that Kaiser backed down so quickly--before the two sides were to have met in an arbitration session ordered by the National Labor Relations Board.

Janice Seib, a spokeswoman for Kaiser’s labor relations department, said Kaiser management changed its mind when it realized that employees were not going to accept the policy.

She added that Kaiser continues to support strong attendance controls. Kaiser has lost “huge sums of money” through attendance abuses, she said.

“We do believe the program needs to be reevaluated,” Seib said. “The system was never designed to be a punitive system or to punish conscientious workers.

“But there are those that habitually abuse the (attendance) system. (The point system) was designed to be directed toward that type of employee.”

She said that the point system’s suspension should not be construed as a get-soft policy on attendance abuse or that the memorandum was an apology for getting tough with errant workers.

After the point system took effect, about 5,000 Kaiser employees participated in a one-day “informational picket line” at the corporation’s two West Los Angeles hospitals, as well as facilities in Harbor City, Panorama City, Woodland Hills, Anaheim Hills, Bellflower, Fontana and San Diego.

Union leaders recently collected more than 11,000 signatures from disgruntled union members, dozens of whom had filed formal grievances against the company for assessing points against them.

Thousands protested the policy by pinning black and red buttons that read “No Points” to their identification badges. Some said that the point system treated them “like children” and complained that morale at the hospitals had sunken to low levels.

Union leaders also accused Kaiser of violating federal labor law because the demerit system was not part of collective bargaining.

In January a grievance was filed with the federal Labor Relations Board by attorneys for the 9,500-member Hospital and Service Employees Union, Local 399. An arbitration session scheduled for September has been called off, officials said.

Thomas W. Ramsay, a Local 399 spokesman, said he doesn’t expect the point system to become an issue during contract talks scheduled to begin at the end of the year.

He said that points already accumulated by employees would be erased if a review finds that the points were assessed unfairly.

After five months of fighting the point system, Ramsay said that union members were “ecstatic” about the decision.