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Strategic HR Audit 1 Qualifacts Systems INC.: Strategic HR Audit Faizan Malik School of Business Liberty University Author Note Faizan Malik I have no known conflict of interest to disclose Correspondence concerning this article should be addressed to Faizan Malik

Strategic HR Audit 2 Company Profile Qualifacts Systems, INC. (QSI) is a prominent electronic health record (EHR) software company that specializes in providing innovative solutions to healthcare providers in the behavioral health field. Established in 2019 as a result of a merger between two competing behavioral health EHRs, Credible Behavioral Health, and Qualifacts, QSI has grown to become one of the largest EHR vendors in the United States. The company has a workforce of over 900 employees spread across three countries, serving more than 1800 customers in all 50 states of the US. In 2019, QSI was acquired by Warburg Pincus, a private equity firm, and has since acquired two additional companies - In Sync Health and OnCall Health. The company is governed by a senior leadership group and board of directors at the organizational level, as well as the dedicated Warburg Pincus healthcare sector leadership. QSI utilizes a Software-as-a-Service (SaaS) business model that allows the company to provide its customers with scalable and cost-effective solutions. Collectively, QSI's offerings include a wide range of clinical and non-clinical services such as scheduling, billing, form management, business intelligence, mobile applications, transcription services, and patient portals. Despite the company's initial merger estimated value of $350 million, QSI's annual revenue of $103.7 million falls short compared to its competitors such as Cerner's Oracle Health ($93 billion), Nextgen Healthcare ($596.4 million), and Netsmart Technologies ($355 million). Despite lagging behind its competitors in terms of revenue, QSI has demonstrated superior performance and usability compared to its peers As a result, Klas Research, a renowned healthcare IT research firm, has recognized Credible Behavioral Health and Qualifacts, QSI's subsidiaries, as the top two behavioral health EHR vendors in both 2022 and 2023. QSI's success, in terms of organizational growth and user experience, can be attributed to its

Strategic HR Audit 3 unwavering commitment to providing high-quality and comprehensive services to its customers. The company's focus on the behavioral health industry has enabled it to develop specialized solutions that cater to the industry's unique needs. Assessment of Human Resource Practices Before the merger, QSI relied on conventional human resource (HR) practices. However, with the continued expansion of the organization, the company has gradually transitioned to a more strategic approach. The HR department, now known as the "People & Culture" department, encompasses talent acquisition, learning and development, and other related functions. Although some traditional practices are still in use, the department's focus is now on aligning its goals with those of the organization by “addressing business realities, focusing on future business requirements, and understanding how the management of human capital fits into the organization’s plans” (Valentine et al., 2020). Consequently, the HR department plays a more central role in the organization's success through recruitment and staffing, training and development, compensation and performance management, and labor relations. Recruitment and Staffing The shift towards a more strategic approach to HR at QSI has had a significant impact on the organization's recruitment and staffing practices, particularly due to its workforce spanning three countries and offering remote work for the majority of its employees. The People & Culture department's talent acquisition sector has focused on repairing the collective QSI organization's employer brand, which had been negatively impacted by poor HR and business practices of the individual companies before the merger. For instance, Credible Behavioral Health had a Glassdoor rating of slightly above 2 stars out of a possible 5, based on anonymous reviews from current and former employees. The reviews cited various areas of concern, such as

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Strategic HR Audit 4 the organization's culture and values, management practices, and diversity and inclusion efforts. However, post-merger, the QSI organization has achieved a collective Glassdoor rating of over 3 stars, demonstrating a significant improvement in employer branding. While there is still much work to be done to enhance the organization's employer brand, QSI has made commendable progress and is on the right path. QSI has adopted a more strategic approach to staffing by aligning its hiring practices with the organization's objectives. This involves understanding both the current financial capabilities and future staffing needs of the company. The talent acquisition team at QSI utilizes a combination of staffing forecasts and a diverse talent pool to bring in multiple candidates for the interview process who are qualified from both a talent and culture fit perspective. Additionally, QSI can reallocate potential candidates to other departments or platforms if they are deemed a better fit. By limiting the number of candidates in the interviewing process, QSI reduces the cost associated with interviewing and the subsequent costs of poor hiring. According to Tarki et al. (2022), “Replacing an employee costs companies anywhere from thousands of dollars to hundreds of thousands of dollars. And this might just be the tip of the iceberg, as a poor hire will also have indirect costs, for example in regards to morale and company culture” (Tarki et al., 2022). Moreover, a poor hire can have indirect costs such as lowered morale and a negative impact on company culture. QSI's streamlined hiring and staffing process ensures that the organization's daily activities are minimally interrupted in the event of staffing issues. Training and Development As the People and Culture department oversees the entirety of the organization, the training and development of new staff members become more complex. To address this challenge, the learning and development departments at QSI have tailored training based on a

Strategic HR Audit 5 new hire's position and which platform they are joining. Each new hire starts with an orientation that covers organizational-level details such as the company's mission and values, HR policies, and benefits information. The remainder of the training is then completed within the individual organization specific to the new hire's respective role, facilitated by an "orientation partner" who helps the new hire navigate the nuances of their respective departments. Once successfully on- boarded, the development of new employees becomes the responsibility of the leadership of the department and the employee themselves, with a majority of the learning requiring self-learning by the employee. However, QSI provides multiple avenues for employee self-development, such as knowledge bases of software functionalities, cross-departmental training opportunities, and interactive training videos. A study performed by Zhang et al. (2006) found students who had some level of interactivity “achieved significantly better learning performance and a higher level of learner satisfaction than those in other settings” (Zhang et al., 2006). While self-learning can prove challenging for some employees, it also creates a deeper understanding for those who can successfully engage in it. Compensation & Performance Management QSI has offered varying degrees of total rewards, or the combination of monetary and non-monetary benefits (Test, 2020), to its employees both before and throughout the merger. Before the merger, Credible Behavioral Health employees’ salaries varied depending on a multitude of factors, which resulted in some employees being paid above the market value while others in the same position were paid well below the average salary. However, all employees received a lavish benefits package that included free healthcare insurance at the individual level and discounted rates for families. However, since the merger, QSI has taken steps to address the issue of salary disparity among employees. By increasing the salaries of underpaid employees,

Strategic HR Audit 6 they have attempted to create greater equity across the organization. However, this has come at a cost, as the benefits package that was previously offered to employees has been reduced. This has resulted in increased healthcare insurance costs for employees, which has been causing concern for some. It is worth noting that while this approach may have resulted in greater equality across the organization, it has also led to some tenured employees seeking employment elsewhere. This suggests that there may be some dissatisfaction among employees regarding the changes that have been implemented. Overall, it is important for companies to strike a balance between providing competitive salaries and benefits packages, while also ensuring that all employees are compensated fairly for their work. QSI has established a performance management system, defined as the “ongoing series of activities designed to align and improve individual performance to drive organizational results” (Valentine et al., 2020), to guide and improve individual employee performance, and thereby drive organizational results. This system includes yearly reviews and goal setting. At the beginning of the year, employees set their own goals, which they track throughout the year intending to make progress or achieve them by year-end. The progress made on these goals is used by management to provide feedback to employees and to create performance appraisals that assess performance expectations. One notable feature of the performance management system is that the goals and metrics used to demonstrate progress are entirely subjective to the employee, although management approval is required. While this approach can allow for greater employee ownership and empowerment in the goal-setting process, it also raises questions about how to ensure the fairness, consistency, and validity of these goals. Additionally, there appears to be no required oversight or governance of the goals' progress throughout the year, which could potentially lead to issues with accountability and measurement of success. Performance

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Strategic HR Audit 7 appraisals are then used to “assess an employee’s performance and create a mechanism for providing feedback about past, current, and future performance expectations” (Valentine et al., 2020) and subsequently determine an employee's compensation package, including salary raises and bonuses. Labor Relations The People and Culture department at QSI is responsible for managing labor relations across the organization, including compliance with labor employment laws, increasing employee engagement, and employee retention. Given the diverse nature of the workforce in terms of employees, geographic locations, and software platforms, the department must take into account the unique needs and challenges of both remote and in-office workers. With offices located in India, Peru, and the United States, the department is working to establish policies that address the differences between these locations while ensuring equality throughout the organization. Throughout the Covid-19 pandemic, QSI has fine-tuned its policies for remote workers, but employees who have returned to the office are now facing new challenges, such as new open desk policies. As such, the People and Culture department is tasked with finding ways to accommodate these changes and ensure that all employees are supported and valued regardless of their work location or status. Employee engagement and retention are also key priorities for the department, as they recognize the importance of creating a positive and supportive work environment that encourages employees to stay with the organization for the long term. Human Resource Recommendations Recruitment and Staffing To improve the strategic and theological soundness of QSI's HR practices, it is recommended to first focus on recruitment and staffing. Despite efforts by the People and

Strategic HR Audit 8 Culture department to enhance the employer brand for the individual companies, negative online reviews continue to hinder the attraction of top talent. Potential candidates are influenced by online employer reviews, with perceptions on factors such as company culture, leadership, and work-life balance impacting application decisions. A study performed by Dabirian et al. found that online employer reviews such as Glassdoor can influence an employer’s image to potential candidates with impressions on factors such as company culture, leadership, and work-life balance impacting application decisions. “Brand image emerged as a new value proposition that IT employees specifically cared about when evaluating IT employers. While brand identity describes the brand a firm intends to portray, brand image is how the brand is perceived through the eyes of its target audience. Here, brand image is defined as how employees perceive the company brand as an employer” (Dabirian et al, 2019). To address this issue, it is recommended that QSI hire or dedicate a team member to manage online reviews, both positive and negative. The team member should have experience in media relations, brand management, social media management, and/or customer service. This person would be responsible for responding to reviews, investigating any claims in negative reviews, and documenting and managing valid issues if necessary. By addressing the issues reported in negative online reviews, QSI can demonstrate its commitment to integrity, as suggested by Keller in his text "Every Good Endeavor: Connecting Your Work to God's Work." Keller believes that organizations that emphasize ethical behavior and transparency will have a positive employer brand. “Integrity is profitable; dishonesty isn’t. And most of the time, at least in the long run, this is true. " (Keller, 2012). In a study by Carpentier and Van Hoye, which also highlighted the impact of negative employer reviews on potential applicants' attraction toward an organization, the researchers stated “when potential applicants see an online negative employer review, research found that

Strategic HR Audit 9 this can negatively affect their attraction towards that organization” (Carpentier & Van Hoye, 2021). To mitigate the impact of such reviews, the researchers suggested offering apologies, providing explanations or solutions, and highlighting positive aspects of the organization. Therefore, it is essential for QSI to proactively address negative reviews and showcase its strengths to potential candidates. By doing so, QSI can enhance its employer brand, attract top talent, and align its HR practices with its strategic and theological goals. QSI's recruitment team has successfully streamlined the hiring process, leading to organizational-wide benefits. However, one area where the organization needs improvement is succession planning, which Valentine et al. defined as “the process of preparing for inevitable vacancies in the organization's hierarchy” (Valentine et al., 2020). Although QSI efficiently handles the hiring of backfill positions, new employees require a period to become assimilated to both workflows and organizational culture. While this has minimal impact on daily activities at the individual contributor level, a lack of succession planning at the management or executive level can be detrimental to the organization's long-term success. Watkins highlights this point, stating that the “main reason for the abysmal failure rate (40%, according to one study) of newly hired outside executives is poor acculturation: they don't adapt well to the new company's ways of doing things. Unfortunately, acculturation tends to receive little attention from employers because it's a difficult problem to quantify” (Watkins, 2007). Establishing a succession plan for executive and management positions would provide QSI with the benefits of identifying internal candidates for future leadership positions, decreasing the risks associated with losing top-level talent, and reducing the costs associated with hiring an external candidate. By focusing on succession planning, QSI can ensure that the organization is prepared for future leadership changes and can continue to thrive in the competitive market.

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Strategic HR Audit 10 Training and Development QSI has a well-defined organizational-level orientation for all employees. However, at the individual company level, the various internal departments are given discretion, resulting in a lack of uniformity across departments and making it challenging for new employees to contribute to the team immediately. The absence of proper training can lead to poor employee performance, lack of employee development, decreased employee morale, employee turnover, and even legal consequences for the organization. To address this issue, QSI should standardize its new hire training across all departments and individual companies, including the use of metrics and benchmarks to assess progress. Carucci recommends an onboarding process that spans the first year of an employee's tenure at an organization, with a “focus on three key dimensions: the organizational, technical, and social aspects. By utilizing this integrated approach, organizations can enable their employees to stay and thrive” (Carucci, 2018). Keller emphasizes the importance of continuously developing one's talents and using them to make meaningful contributions to the community. "However, you worked with talents you did not earn; they were given to you. You went through doors of opportunity you did not produce; they just opened for you." (Keller, 2012). By providing proper training and development, QSI can empower its employees to make a greater impact, both personally and professionally. Compensation and Performance Management QSI’s current system of managing employee performance through goal setting and annual reviews should be evaluated and potentially restructured. The lack of standardization in goal setting and progress tracking diminishes the importance of goals and decreases employees’ motivation to create meaningful goals. This aligns with Keller’s belief that work becomes fruitless for man, “in all our work, we will be able to envision far more than we can accomplish,

Strategic HR Audit 11 both because of a lack of ability and because of resistance in the environment around us. The experience of work will include pain, conflict, envy, and fatigue, and not all our goals will be met” (Keller, 2012). Additionally, the annual review system limits employees’ ability to address challenges or reassess goals throughout the year. To address these issues, QSI should consider implementing a standardized goal-setting process such as the S.M.A.R.T. (specific, measurable, achievable, relevant, and time-bound) approach, which can be applied at both the company and department levels. Quarterly reviews would also provide more frequent feedback and allow employees to make course corrections as needed to achieve their goals. According to Odiorne, “Behaviorally, the most effective performance reviews include both immediate and periodic reviews. We can let people know how well they are doing in their work while they are doing it by defining some goals up front, major areas of responsibility, plus some standards of performance” (Odiorne, 1990). To ensure a fair and motivating compensation system, QSI should implement a performance-based pay system rather than a goal-based one. By setting performance metrics that are measurable and achievable, employees will have a clearer understanding of what is expected of them and will be motivated to work harder to achieve their goals. This will also create a sense of fairness among employees since bonuses and raises will be based on their measurable achievements rather than subjective goals. Research conducted by Green and Heywood demonstrated that employees who received performance-based pay reported higher levels of job satisfaction, with the researchers stating, “workers prefer employment environments seen as rewarding their productivity, and that such environments increase worker optimism about future employment. In addition, some types of performance pay may be part of a bundle of HRM innovations associated with high-performance workplaces. Such workplaces may create greater

Strategic HR Audit 12 feelings of belonging, esteem and commitment” (Green & Heywood, 2008). Keller also notes that when employees work, they want to make an impact and be recognized for their achievements. “When we work, we want to make an impact. That can mean getting personal recognition for our work, or making a difference in our field, or doing something to make the world a better place” (Keller, 2012). By implementing a performance-based pay system, QSI can motivate and reward employees for their hard work, while also creating a more fair and equitable compensation system. Labor Relations As some employees begin to return to the office, QSI should consider defining policies that address the concerns of those who prefer remote work. According to a study by McKinsey & Company, "One out of every three employees surveyed said their return to the workplace had a negative impact on their mental health, citing feelings of anxiety, depression, or general distress" (Harfoush, 2021). Additionally, nearly two-thirds of employees are willing to resign from their positions instead of returning to the office (Jones, 2022). Given that replacing an employee can cost one to two times their annual salary (Charbara, 2023), QSI may want to reconsider its plans for returning to the office. Even if the cost of losing an employee is insignificant to QSI, it is essential to view employees as human beings rather than as tools to achieve organizational goals. If management insists on a return to the office, the People and Culture department should introduce flexibility into new office policies, such as offering hybrid schedules where employees can work in the office some days and remotely on others. Lenka (2021) highlights the benefits of hybrid work models, such as increased employee productivity, improved employee safety, and reduced employer costs associated with “power consumption, cleanliness of workplace, and

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Strategic HR Audit 13 other miscellaneous cost. Employees saves on travel time and cost, food and other costs which is associated with daily office reporting” (Lenka, 2021)

Strategic HR Audit 14 References Charaba, C. (2023, February 2). Employee retention: The real cost of losing an employee . Personalized Benefits Administration Software. Retrieved March 5, 2023, from https://www.peoplekeep.com/blog/employee-retention-the-real-cost-of-losing-an-employee Carpentier, M., & Van Hoye, G. (2021). Managing organizational attractiveness after a negative employer review: Company response strategies and review consensus. European Journal of Work and Organizational Psychology , 30 (2), 274-291. Charaba, C. (2023, February 2). Employee retention: The real cost of losing an employee . Personalized Benefits Administration Software. Retrieved March 5, 2023, from https://www.peoplekeep.com/blog/employee-retention-the-real-cost-of-losing-an-employee Dabirian, A., Paschen, J., & Kietzmann, J. (2019). Employer branding: Understanding employer attractiveness of IT companies. IT professional , 21 (1), 82-89. Green, C., & Heywood, J. S. (2008). Does performance pay increase job satisfaction?. Economica , 75 (300), 710-728. Harfoush, R. (2021, November 12). Don't let returning to the Office Burn Out Your Team . Harvard Business Review. Retrieved March 5, 2023, from https://hbr.org/2021/11/dont-let- returning-to-the-office-burn-out-your-team Jones, J. (2022, October 12). Once again, workers say they would rather quit than return to the Office . ZDNET. Retrieved March 5, 2023, from https://www.zdnet.com/article/once-again- workers-say-they-would-rather-quit-than-return-to-the-office/ Keller, T. (2012). Every Good Endeavor: Connecting Your Work to God’s Work . New York, NY: Dutton/Penguin Group. ISBN: 9780525952701.

Strategic HR Audit 15 Lenka, R. M. (2021). Unique Hybrid Work model-The future of remote work. PalArch's Journal of Archaeology of Egypt/Egyptology , 18 (7), 2687-2697. Odiorne, G. S. (1990). The trend toward the quarterly performance review. Business Horizons , 33 (4), 38-42. Tarki, A., Cowen, T., & Ham, A. (2022, July 11). It's time to streamline the hiring process . Harvard Business Review. Retrieved March 5, 2023, from https://hbr.org/2022/07/its-time- to-streamline-the-hiring-process Test, L. (2022, December 10). What are 'employee total rewards' and why should you implement them? Lattice. Retrieved March 5, 2023, from https://lattice.com/library/what-are- employee-total-rewards-and-why-should-your-company-implement-them Valentine, S.R. et al. (2020). Human Resource Management (16th ed.). Boston, MA: Cengage. ISBN: 9780357033852. Watkins, M. D. (2014, August 1). Help newly hired executives adapt quickly . Harvard Business Review. Retrieved March 5, 2023, from https://hbr.org/2007/06/help-newly-hired- executives-adapt-quickly Zhang, D., Zhou, L., Briggs, R. O., & Nunamaker Jr, J. F. (2006). Instructional video in e- learning: Assessing the impact of interactive video on learning effectiveness. Information & management , 43 (1), 15-27.

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