A Strong Compensation Strategy Can Help
In today’ s environment, compensation planning is no longer just about making sure everyone is paid correctly( although that is still important); it is a tool that can be used to dramatically improve retention using many of the systems your organization may already have in place.
In this report, we’ ll share 5 ways healthcare providers can better utilize their compensation planning to improve employee retention, including:
1. Define Your Compensation Strategy 2. Identify Your Critical Healthcare Talent 3. Build a Pay for Performance Model 4. Pay Competitively. Pay Appropriately. Pay Accurately. 5. Create a Compensation Communication Plan
1. Define Your Compensation Strategy
Developing a Strategy
A well-defined compensation and rewards plan starts with a clearly focused compensation strategy which is set out to define and answer the following fundamental questions:
• What do we wish to pay for?
• How do we want to pay for it?
• What would be our competitive posture?
• How would we apply the budget to achieve the best results?
Healthcare organizations that answer these questions can develop a clear compensation mission statement that aligns them with recruiting, performance, market positioning, employer branding, and ultimately organizational goals. An effective healthcare compensation strategy should:
• Reflect the economic realities of your location and service offerings
• Reflect the beliefs and values of C-level executives, HR, and other management
• Consider‘ softer’ issues such as industry standards, corporate culture, and growth strategy
For example, if the hospital wants to emphasize pay for performance, then the strategy may include a clear statement that associates will have some portion of their total rewards that will be variable and based on performance results.
Aligning Compensation with the Organization
An effective compensation strategy, particularly in healthcare, must take into consideration larger organizational goals. Healthcare executives have to think far in advance for organizational planning— they must have a clear understanding of where they are, where they want to go, and the challenges that lie ahead.
For example, a small regional hospital planning to double its bed size may have significantly different compensation strategies than a national healthcare provider that is trying to integrate multiple acquisitions. Compensation will need to be used in different ways to achieve corporate goals and retain the right talent.
Implementing a compensation strategy aligned with organizational goals creates better synergy and allows for a more effective allocation of compensation budgets to help retain the best healthcare talent.
2. Identify Your Critical Healthcare Talent
Once we have a compensation strategy in place, the next step is to identify the most critical talent in the organization to whom it should be applied. Focusing your compensation planning strategy on your top performing employees will yield better, faster retention results.
There are a number of factors to consider when identifying this group. Some good questions to consider are:
• Who are our top performers?
• Who are our most critical talent( based on skills, need, etc)
• Who are at-risk for turnover?
• How are they paid? Why?
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