Chapter 5

Planning in Nursing Management

1. PLANNING
= Is a continuous process of assessing and establishing goals and objectives and implementing and evaluating and
controlling them. This is subject to change as new facts are known.

= it is deciding in advance what to do, how to do a particular task, when to do it, and who is to do it.

A. Types of Plans
1. Strategic Plan- usually prepared by the upper levels of management. And it serves as basis for operating plan.
2. Operating Plan- activities in specific departments of an organization. It deals with tactics or techniques for
accomplishing things.
3. Continuous or Rolling Plan – mapping the day-to-day activities.

Purposes of Planning:
1. To increase the chance of success by focusing on results, not on activities.
2. To force analytic thinking and evaluation of alternatives, therefore improving decisions.
3. To orient people to action, instead of reaction.

Principles of Planning:
1. It is based on the vision, mission, philosophy and clearly defined objectives of the organization.
2. Is a continuous process.
3. It should be pervasive within the entire organization covering the different departments, services and the different
levels of management to provide maximum cooperation and harmony.
4. Utilizes all available resources.
5. Must be precise in its scope and nature. It should be realistic and focus on its expected outcome.
6. Should be time bound.
7. Must be documented for proper dissemination to all concern for implementation and evaluation.

Characteristics of a Good Plan: A well-developed plan should:

1. precise, with clear objectives, with desired results and methods for evaluation.
2. guided by policies and /or procedure affecting the planned action.
3. indicate priorities.
4. develop actions that are flexible and realistic in terms of available personnel, equipment, facilities and time.
5. develop a logical sequence of activities.
6. include the most practical methods for achieving each objectives.
7. pervade the whole organization.
The effectiveness of a plan is enhanced by the environment in which the nursing personnel work. A positive
climate promotes good working relationship and leads toward achievement of identified goals.

Elements of Planning
1. Forecasting
- looking into the future and decide in advance where the agency would like to be and what is to be done in order
to get there.

2. Setting the Vision, Mission, Philosophy, Goals and Objectives.

Vision
= it outlines the organizations future role and function. It gives the agency something to strive for.
Mission
= a pre-establish and often self-imposed objectives or purpose.
Philosophy
=it is the statement of beliefs and values that directs ones practice. It gives direction towards attainment of a
certain goal.
Goal
=desired aims or condition towards which one is willing to work.
Objectives
=statement of a desired short-term condition or achievement, with measurable end result to be accomplish by
specific terms or individual with time limit.

3. Developing and Scheduling Programs/projects/activities, set the time frame.

Planning a formula using: What-When-Where-How-Who-Why-Can

Time management = allocating of one’s time through setting goals, assigning priorities, identifying and eliminating
wasted time and using managerial technique to reach goals effectively.

PRINCIPLES OF TIME MANAGEMENT:

 1. Planning for contingencies - Thinking of other options.
2. List of tasks - Calendar of activities
3. Inventory - Looking at the task done and not done
4, Sequencing - Prioritizing
5. Setting and keeping deadlines - Do not procrastinate
6. Delegating - Give a portion of the task to those who can do it.

Multitasking = When several tasks are done in less time.

4. Prepare budget and allocation of resources.

= Budgeting is a systematic financial translation of a plan. A tool for planning, monitoring and controlling cost and
meeting expenses.

Allocation of resources.
Nursing budget = allocates resources for nursing program and delivery of patient care.
Hospital budget = designed to meet future service expectation for clients, provide patient care at minimum cost.
Budget plan = a plan for future activities such as
1. revenue budget = The income the management expects to generate during the planning period.
2. expense budget = Expected activity in operational financial terms in a given period of time.
3. capital budget = Program acquisition, disposal and improvements in the institutions physical capacity.
4. cash budget = Money received, cash receipt and disbursement during the planning period.

TYPES OF BUDGETS:
Operating Budget
- An operating budget portrays a company’s expenses, expected costs, and estimated income, considering the
quarterly or the annual performance.

A. Cash Budget
- Estimation of the cash flows of a business over a specific period of time. This could be for a weekly,
monthly, quarterly, or annual budget.
- Is the actual operating budget in detail.
- It is a day to day budget and represents money coming in and going out.

B. Personnel Budget
- Most budgets for nursing personnel are based on quantitative workload measurements such as a patient
acuity system. (Based on the level of intensity, nursing care and tasks needed for each patient)
- include all employee-related expenses, including salary and bonuses.

C. Supplies and Equipment Budget

- Equipment is classified as a long-term asset and usually refers to items that will last and be used longer
than a year. Equipment in a business is often referred to as tangible property. It is utilized over a longer period
of time, it often depreciates.

D. Capital Budget
- a budget allocating money for the acquisition or maintenance of fixed assets such as land, buildings, and
equipment.
- Projects the planned costs of major purchases and investments.

USE OF BUDGETS:
1. Planning. Preparation of a budget forces the organization to plan for the future. Forecasting future resource
needs allows an organization to respond by anticipating changes rather than reacting to them.

2. Monitoring and motivation. The budget serves an important role in monitoring the use of resources and in
measuring a manager’s performance as it relates to the effectiveness of the planning process. The budget
can also serve as a motivating tool for managers.
However, for the budget to be effective motivational tool there must be some type of reward for those
managers who exceed expectations in planning and in monitoring resources.

3. Communication. Another purpose of a budget is to serve as a coordination and communication vehicle within
an organization. For example, individuals must work collectively to understand how their department
objectives work on behalf of the entire organization.

Nursing Budget
- It is a systematic plan that is an informed best estimate by nurse administrators of revenues and nursing
expenses. It projects how revenues will meet expenses, and it projects a return on equity, that is, profit. The
nursing budget serves three purposes:

1.To plan the objectives, programs, and activities of nursing services and the fiscal resources needed to
accomplish them.
2.To motivate nursing workers through analysis of actual experience.
3.To serve a standard to evaluate the performance of nurse administrators and managers and to increase
awareness of costs.
 Budget Stages:
Formulation Stage
a. Develop objectives and management plans
b. Gather all financial, historical, and statistical data
c. Analyse data

1. Review and Enactment Stage

a. Prepare unit budget
b. Present unit budgets for approval
c. Revise and combine into organizational budget
d. Present to budget council
e. Revise and present to governing board
f. Revise and distribute to cost-centred manager

2. Execution Stage
a. Direct and evaluate expenses and receipts
b. Revise budget if indicated

TYPES OF EXPENSES OR COSTS:

A. Fixed Costs - are not related to volume. They remain constant as volume increases and decreases over a
period of time. Cost or expense that is not affected by any decrease or increase in the number of units
produced or sold. (Rentals, loans and taxes)
B. Variable Costs - are production costs that change in proportion to the amount of goods that are produced.
(raw material-labor-production-commission-cards-freight)
C. Sunk Costs - are fixed expenses that cannot be recovered even if a program is cancelled.
(advertising, research and development, hiring of employees, training/seminars)
D. Direct Costs - are the costs of providing the product or service and are often considered to be those directly
related to patient care, such as personnel costs and the variable cost of supplies.
- is providing the product or service and those directly related to patient care, such as personnel costs and
consumable supplies.
E. Indirect cost – are expenses that cannot be traced back to a single cost object or cost source during the
manufacturing process. They are not directly related to patient care. (legal expenses, administrative salary,
housekeeping, office expenses and building maintenance)

5. Establish Policies, Procedure and Standards:

Policies
- standing plans used repeatedly, or guides or basic rules that govern action at all levels in the organization.
Ex; Personnel policies and nursing services policies

Procedures
- are specific guide to action.

Standards
-minimal level of achievement acceptable to meet the set objectives.
C. Stages of planning
1. Development of the purpose or mission-vision statement, the creed or philosophy, goals, and objectives.
2. Assessment of strengths (opportunities and threats in achieving the goal and objective of the organization).
3. Formulation and statement of realistic and general statement of goals.
4. Identification of strategies to achieve specified goals.
5. Development of time table for accomplishing each objective.
6. Providing guidelines for developing operational and functional plans.
7. Putting of the plans to work.
8. Provision for formative evaluation reports before, during and after the plan is implemented.