Health is an important factor in the formation of human resources development which will play a vital role in improving the qualities of  human beings, who are the active agents of economic development. So any measure of development achievement in a nation must affect the state of personal wealth in the nation. Better wealth would contribute to improving the economic status of the poor and for expanding total output. This demands sound management of a hospital.

 Meaning of a hospital

According to the World Health organization, Health is a “State of complete physical, mental and social well being and not merely the absence of disease or deformility”

  1. One of the fundamental rights of every human being without distinction of race, religion, political belief, etc. is the enjoyment of the highest attainable standard of health
  2. But, owing to a variety of factors like lack of health consciousness, low per capita income, lack of adequate education, on availability of proper sanitary condition and safe drinking water, unhealthy social taboos etc., the health status of the average Indian remains dissatisfactory. It has been the endeavour of successive Government in India to improve the situation. This is especially so after the Independence. The National Health Policy which was approved by the Parliament and announced by the Government in 1983 marked a beginning to the Quest for equity in health expressed as WHO’s goal of “ Health For All ” by the year 2000 A.D.
  3. To achieve this goal massive inputs with restructuring of the organization setup and management has been achieved incurring huge amounts of revenue expenditure as well as capital expenditure financed from various sources- Central Government, State Government and externally aided projects. In views of this currently there have been many emphases on analytical study of hospital management pattern of health care expenditure and determination of costs of service.

Meaning of hospital management :

Hospital Management can have different meanings

  • Management as a process: Often it is said that it is a professionally managed hospital; it is well managed hospital, meaning thereby the management is described as an activity, type of work. Management applies certain principles, techniques and activities which are performed by certain management functions. What the hospital Management does is Management.
  • Hospital Management is a subject: A subject, a discipline taught in universities, colleges or institutes. It is an accumulated body of knowledge that can be learned, at some places the broad specialty is Health Management including Hospital Management. Various degrees, diplomas, certificate courses are run by the institution/universities.
  • Hospital management as people: The Management of this hospital is very insensitive, the hospital management of this hospital is not responsive to society are the terms often used. While using these terms, we are referring to body of people responsible for management, the board of directors, director, medical superintendent and his team.
  • Hospital management as career: News published in the national daily says that hospital management will be among top ten careers in the next decade. Such statements imply that hospital management is a career.

The team management has been defined by different expects as below :-

According to Hawalskantz,

  • “Management is the art of getting things done through and with the people in formally organized groups.”

According to George Terry,

  • “Management is the process undertaken by one or more person to coordinate the activities of other persons to achieve results not attainable by any one person acting alone.”

According to McFarland,

  • “Management is a distinct process consisting of activates of planning, organizing, actuating and controlling, performed to determine and accomplish stated objectives with the use of human beings and other resources.”

From above discussion, the application of management in hospital can be defined as below.

  1. As a hospital administrator, he has to carry out management functions of planning, organizing, staffing, directing, controlling and coordinating
  2. Management applies to all kinds of organization, whether government or non government, small or big hospital, profit making hospitals or charitable hospitals.
  3. It applies to administrator at all organizational level, whether lower level or top level.
  4. The aim of all administrators is the same that is to maximize the output.
  5. It is concerned with productivity that implies effectiveness and efficiency.


The managerial function of directing is like the activities of a teacher in a classroom. In order to teach, a teacher has to guide his students maintain discipline, inspire them and lead them to the desired goal. It is a very important function in the management of any enterprise. It helps the managers in ensuring quality performance of jobs by the employees and achievement of organisational goals. It involves supervision, communication and providing leadership to the subordinates and motivating them to contribute to their best of capability .


While managing an enterprise, managers have to get things done through people. In order to be able to do so, they have to undertake many activities, like guide the people who work under them, inspire and lead them to achieve common objectives.  An office manager ,for instance, has to supervise the activities of his subordinates, i.e., typists, office assistants, dispatchers, accounts clerks, etc. He has to issue instructions to them and describe and illustrate the work and related activities. He has to tell them what to do, and how to do it.

The office manager can plan, organise and appoint people, but he can not get things done, unless he assigns specific duties to his subordinates and motivates them to perform well. All these activities of a manager constitute the directing function. Thus, directing is concerned with instructing, guiding, supervising and inspiring people in the organisation to achieve its objectives. It is the process of telling people what to do and seeing that they do it in the best possible manner .

The directing function thus, involves:

  •  telling people what is to be done and explaining to them how to do it;
  • issuing instructions and orders to subordinates to carryout their assignments as scheduled;
  • supervising their activities;
  • inspiring them to meet the mangers expectation and contribute towards the achievement of organisational objectives; and
  • providing leadership.

Managers plan and take decisions. They organise to define the work and create suitable positions in the enterprise. People are employed to perform the jobs, but the actual work of getting the job done comes under the directing function. Thus, directing is ‘management in action’. It is through the exercise of this function that managers get things done through people.


Plans remain mere plans unless they are put into action. In the absence of direction, subordinates will have no idea as to what to do. They will probably not be inspired to complete the job satisfactorily . Implementation of plans is, thus, largely the concern of directing function. As a function of management, directing is useful in many ways.

  • It guides and helps the subordinates to complete the given task properly and as per schedule.
  • It provides the necessary motivation to subordinates to complete the work satisfactorily and strive to do them best.
  • It helps in maintaining discipline and rewarding those who do well.
  • Directing involves supervision, which is essential to make sure that work is performed according to the orders and instructions.
  • Different people perform different activities in the organisation. All the activities are interrelated. In order to co-ordinate the activities carried out in different parts and to ensure that they are performed well, directing is important. It thus, helps to integrate the various activities and so also the individual goals with organisational goals.
  • Directing involves leadership that essentially helps in creating appropriate work environment and build up team spirit.


After the employees have been instructed regarding what they have to do and how to do, it is the duty of the manager to see that they perform the work as per instructions. This is known as  supervision. Managers play the role of supervisors and ensure that the work is done as per the instructions and the plans. Supervisors clarify all instructions and guide employees to work as a team in co-operation with others. Supervisors solve most of the routine job-related problems of subordinates. Supervisor , thus, performs the following functions:

  • clarifies orders and instructions issued to subordinates and ensures that they have understand and follow these fully;
  • ensures that subordinates have the required facilities to perform their jobs;
  • keeps a watch and guides the activities of subordinates in performing their jobs;
  • broadens the horizon of his subordinates by making them aware of the wider aspects of their day-to-day work;
  • coordinates the work of different subordinates under him; and
  • detects errors and omissions and ensures their rectification.

Though supervision is required at all levels of management, it is of great importance at the operational level i.e., at the level of first line supervisor . Managers at this level devote maximum time in supervising the work of subordinates. Though the top or middle level managers also supervise the work of their subordinate managers, but it is the first line supervisors who are in direct and constant touch with operatives i.e., workers in the factory and clerical staff in the office. Thus, they are directly responsible for getting the work done through most of the employees in an organisation.


From what has been said about supervision, it must be clear that supervision is of great significance in getting the work done as per plans and as scheduled. On the basis of the influence on the work at operational level and human approach to the problems of workers, the supervision can ensure workers cooperation and support in achieving organisational objectives.

Supervisors are the key people among managers at different levels. They are the link between the top and middle management and the workers.  Take, for example, the foreman of the factory or the office superintendent in the office. Both of them are members of the management team, and are in direct contact with operatives in the workshop and clerical staff in the office. They are the mouthpiece of management for communicating its ideas, plans and policies to the workers and employees. At the same time, they have to play the role of principal spokesmen of their subordinates to communicate their feelings and grievances to the management. Thus, it is only the supervisor who, as a member of the management team, is capable of developing links to workers. Supervisors are expected to maintain the best and friendly relations with their seniors as well as with the workers and enjoy the trust and confidence of both management and operatives.


Motivation is a process that starts with a physiological or psychological need that activates a behaviour or a drive that is aimed at a goal.  Every employee is expected to show increased and qualitative productivity by the manager. To achieve this the behaviour of the employee is very important. The behaviour of the employees is influenced by the environment in which they find themselves. Finally, an employee’s behaviour will be a function of that employee’s innate drives or felt needs and the opportunities he or she has to satisfy those drives or needs in the workplace. If employees are never given opportunities to utilize all of their skills, then the employer may never have the benefit of their total performance. Work performance is also contingent upon employee abilities. If employees lack the learned skills or innate talents to do a particular job, then performance will be less than optimal. A third dimension of performance is motivation.

“Motivation is the act of stimulating someone or oneself to get desired course of action,

to push right button to get desired reactions.”

The following are the features of motivation :

Motivation is an act of managers

  • Motivation is a continuous process
  • Motivation can be positive or negative
  • Motivation is goal oriented
  • Motivation is complex in nature
  • Motivation is an art
  • Motivation is system-oriented
  • Motivation is different from job satisfaction


There are several factors that motivate a person to work. The motivational factors can be broadly divided into two groups:

a. Salaries or wages:

Salaries or wages is one of the most important motivational factors. Reasonable salaries must be paid on time. While fixing salaries the organization must consider such as :

  • Cost of living
  • Company ability to pay
  • Capability of company to pay etc,

b. Bonus:

It refers to extra payment to employee over and above salary given as an incentive. The employees must be given adequate rate of bonus.

c. Incentives:

The organization may also provide additional incentives such as medical allowance, educational allowance, hra ,allowance, etc.

d.Special individual incentives:

The company may provide special individual incentives. Such incentives are to be given to deserving employees for giving valuable suggestions.


a.Status or job title:

By providing a higher status or designations the employee must be motivated. Employees prefer and proud of higher designations.

b.Appreciation and recognition:

Employees must be appreciated for their services. The praise should not come from immediate superior but also from higher authorities.

c.Delegation of authority:

Delegation of authority motivates a subordinate to perform the tasks with dedication and commitment. When authority is delegated, the subordinate knows that his superior has placed faith and trust in him

d.Working conditions :

Provision for better working conditions such as air-conditioned rooms, proper plant layout, proper sanitation, equipment, machines etc, motivates the employees.

e.Job security:

Guarantee of job security or lack of fear dismissal, etc can also be a good way to motivate the employees. Employees who are kept temporarily for a long time may be frustrated and may leave the organization.

f.Job enrichment:

Job enrichment involves more challenging tasks and responsibilities. For instance an executive who is involved in preparing and presenting reports of performance, may also asked to frame plans.

g.Job enrichment:

Job enrichment involves more challenging tasks and responsibilities. For instance an executive who is involved in preparing and presenting reports of performance, may also asked to frame plans.

h.Workers participation:

Inviting the employee to be a member of quality circle, or a committee, or some other form of employee participation can also motivate the workforce.

i.Cordial relations:

Good and healthy relations must exist throughout the organization. This would definitely motivates the employees.

j.Good superiors:

Subordinates want their superiors to be intelligent, experienced, matured, and having a good personality. In fact, the superior needs to have superior knowledge and skills than that of his subordinates. The very presence of superiors can motivate the subordinates.

k.Other factors:

There are several other factors of motivating the employees:

  • Providing training to the employees.
  • Proper job placements.
  • Proper promotions and transfers.
  • Proper performance feedback.
  • Proper welfare facilities.
  • Flexible working hours.

Need and importance of motivation

Motivation offers several importance to the organization and to the employees:

  • Higher efficiency
  • Reduce absenteeism.
  • Reduces employee turn over.
  • Improves a corporate image.
  • Good relations.
  • Improved morale.
  • Reduced wastages and breakages.
  • Reduced accidents.
  • Facilitates initiative and innovation.

l.Money as a motivator

It is normally believed that money acts as a motivator. In general the role of money as a motivator depends upon certain factors:

  • Money fails to motivate people, when there is no direct relationship between reward and effort.
  • Economic conditions of people influence the Importance of money.
  • For poor person, the value of certain amount of money is quite high as compared to rich.
  • Money is a significant motivator at lower level of employees level however money may not be a significant factor for senior executives who have already fulfilled their lower level needs.

Employees are concerned not only with the amount of money paid to them, but it should be fair and equitable as paid to that of othe employees of same level or status. Social attitudes towards money and wealth also decides the motivation to earn more and more.