In healthcare, there's no longer any room for the entitlement attitudes that once dominated the industry. Now, the name of the compensation game is performance. Demonstrate it and you've earned the ability to grow and prosper. Ignore it and you've all but sealed a downsized fate.
Although provider-based salaries have seen a modest average increase of 3.5%, according to William M. Mercer's 1999 Integrated Health Networks Compensation Survey, incentives and bonuses can add as much as 25% to the base salary of communications executives. Here, Jose Pagoaga, Mercer's principal and national leader of the healthcare performance and rewards practice, discusses the performance expectations of healthcare leaders and the retention strategies that are most effective in keeping top employee talent.
HPRMN: What compensation trends will shape healthcare employment in the next few years?
JP: There will be a continuation of [compensation] practices that have become commonplace in healthcare that focus on performance. The role of incentives, particularly among managers, is becoming more popular for healthcare organizations to retain key talent.
Healthcare organizations are also becoming much more selective in how much they invest in employees that play less than a mission-critical role. The emphasis is on individual performance and contributions to the overall organization's success.
HPRMN: Where are the opportunities for communication professionals to prove their worth?
JP: The opportunities are in demonstrating value both individually and as a member of a team that works toward measurable goals. There are different ways to contribute value.
In PR and marketing some of the results are intangible. High performers, however, find ways to focus on achievements that are important and relevant to the organization. Branding and image are critical to an organization's market share and showing those results is increasingly important given all of the mergers and acquisitions that recently took place. Very few organizations have succeeded at achieving post-merger cultural progress, the focus, instead, has been on more strategic goals. The real opportunities exist with unlocking the true value of a merger to the community.
HPRMN: What are some of the more effective retention strategies healthcare leaders are using to keep highly talented executives on board?
JP: Retention strategies have to be personalized for each organization's top executives. Employee contracts that extend for several years and provide clear severance provisions are ideal for employees that need long-term security. There are also long-term incentives that may not be performance-based, but provide vestment opportunities over a three- to five-year period. Other retention strategies involve sophisticated retirement plans for board members.
Financial compensation, however, is just one of several factors that influence retention. Maintaining a work environment that promotes professional growth and employee satisfaction is the most effective retentive factor.
Jose Pagoaga can be reached at 404/614-2992.
Short-term Incentive Drivers
Fifty-seven percent of the healthcare organizations surveyed by William M. Mercer offer at least one type of short-term incentive plan to all or a portion of their employee population.
The factors that drive these incentives for management include the organization's:
| Profit/Margin | 19% |
| Revenue | 18% |
| Customer Satisfaction | 18% |
| Cost Control | 16% |
| Patient Care | 11% |
| Product/Service Quality | 11% |
| Productivity/Efficiency | 10% |
| Market Share | 6% |
| Employee Satisfaction | 5% |