How Did Cambia Health Solutions Revolutionize Human Capital Management?

In an ever-evolving healthcare landscape, organizations must continually adapt their human capital management practices to stay competitive and agile. Cambia Health Solutions, a nonprofit healthcare and insurance company, embarked on a comprehensive overhaul of its performance management system to align with its strategic objectives and enhance overall agility. This case study examines the strategies employed by Cambia to revolutionize its human capital management practices and the outcomes of these initiatives.

The Context of Cambia Health Solutions

Cambia Health Solutions, headquartered in the Pacific Northwest, operates a broad portfolio of companies spanning healthcare information technology, software development, retail healthcare, and insurance plans, among others. The largest business within Cambia's portfolio is Regence Health, a health insurance plan associated with the Blue Cross and Blue Shield brands, operating in Washington, Oregon, Idaho, and Utah. In 2010, Cambia recognized the need to improve its agility and initiated changes to its performance management system for leadership staff, involving approximately 750 individuals​​​​.

Emergence of Performance Challenges

Cambia's diagnostic data revealed several critical issues:

1. Inconsistent Human Capital Management Practices:

2. There were inconsistencies in how human capital management practices were applied across the organization.

3. Lack of Clarity in Leadership Objectives:

4. Leaders were unclear about their individual objectives and how these objectives aligned with the organization's strategies.

5. Disconnect Between Objectives and Professional Development:

6. Objectives were not clearly connected to professional development and career advancement opportunities for employees​​​​.

The Role of Performance Management Overhaul

To address these challenges, Cambia convened a cross-functional task force, supported by an external organizational development and performance management consultant. The task force recommended a new performance management process focused on leadership roles, including supervisors and above. The key elements of this process included:

1. Annual Objective Setting:

2. Leaders were required to establish annual objectives aligned with the organization's strategic goals. This step ensured that individual efforts contributed directly to broader organizational success.

3. Quarterly Performance Conversations:

4. Leaders conducted quarterly performance conversations with their direct reports to review past performance, discuss improvements, set new objectives, and plan future actions. These conversations focused on four key questions:

• Did the employee accomplish what was committed to in the prior performance period?

• How could the employee have performed more effectively?

• What objectives should be continued, stopped, or started for the next quarter?

• How should the employee approach their objectives moving forward?​​​​.

1. Focused Talent Review:

2. A focused talent review was conducted twice a year to assess and manage the development and performance of leadership staff.

3. Revised Compensation and Reward Process:

4. The annual performance conversations were linked to a revised compensation and reward process, ensuring that high performers were adequately recognized and rewarded.

Implementation and Support

To support the new performance management system, Cambia developed an online, on-demand training module for leaders. This module emphasized the importance of sound human capital management practices and the development of "SMART" objectives (specific, measurable, achievable, relevant, and timely). Senior leaders facilitated detailed webinars to reinforce the training, highlighting the importance of the new processes.

Additionally, the leadership team adopted a coaching model, with the CEO and other senior leaders serving as coaches to their direct reports. This approach ensured visible support for the new system and held leaders accountable for its implementation​​​​.

Outcomes and Reflections

The overhaul of Cambia's human capital management practices led to significant improvements:

• Enhanced Employee Engagement:

• Regular performance conversations and clear objectives increased employee engagement and satisfaction.

• Improved Alignment with Strategic Goals:

• The new performance management process ensured that individual efforts were aligned with organizational strategies, enhancing overall effectiveness.

• Recognition of High Performers:

• The revised compensation and reward system provided greater differentiation and recognition for high-performing leaders, motivating employees to excel​​​​.

Implications for Organizational Development

The Cambia Health Solutions case underscores the importance of aligning human capital management practices with organizational strategies. Key takeaways include the need for clear communication of objectives, regular performance reviews, and a strong emphasis on employee development. Organizations looking to implement similar changes can learn from Cambia's experience by fostering a culture of continuous improvement and strategic alignment.

Conclusion

The transformation of Cambia Health Solutions' human capital management practices showcases the potential for strategic change to enhance organizational agility and performance. By implementing structured performance management processes and fostering a supportive environment, organizations can achieve substantial improvements in employee engagement and overall success.

Connect with OrgEvo Consulting

At OrgEvo Consulting, we specialize in helping organizations implement comprehensive human capital management strategies. Our services include strategic planning, performance management system design, and leadership development programs designed to enhance operational efficiency and employee satisfaction. Contact us today to learn how we can support your organization in achieving excellence.