Section 3: Compensation and Benefits
Employees have been identified, recruited, hired, and retained (at least in the short-term, whether they stay is up to you). In order to allow engaged employees to provide income and security to themselves and their families, healthcare organizations must consider not only the pay rates they offer their employees but also the benefits they provide. Benefits such as health insurance, dental insurance, life insurance, long-term disability coverage, vacation time, retirement plans, etc. are important to most healthcare professionals. Both the compensation and benefits offered to the employee need to match up with their expectations and needs for the total package to be effective.
Any organization, whether involved in healthcare or some other industry, allocates a certain percentage of its total expenditures to the cost of its labor force. The amount allocated depends on the specific industry; and while there is no exact percentage for healthcare, it is not unusual for a healthcare facility to spend up to 60% of its total expenditures on the cost of labor. Since this expenditure represents over half of a healthcare facility’s budget, it is critical that each dollar spent is spent wisely and represents the best value for that expense.
It falls to the organization’s HR professionals to ensure that the organization has a compensation plan that pays adequately without overpaying. It’s also incumbent on the organization to offer (and pay for) the benefits that are desired by employees and that those benefits are being purchased for the best prices possible.
Also, since many healthcare organizations are open 24 hours a day, 7 days a week, and 52 weeks a year, consideration must be given to incentivizing workers to work non-traditional work shifts; so shift differentials, shift incentive pay, and other strategies need to be implemented to ensure safe staffing levels on all shifts.
As with any organization, healthcare facilities employ diverse staff, including a wide age range along with myriad needs and family situations. Therefore, offering a comprehensive benefits package is vital to workforce stability.
Compensation
There are many aspects to a healthcare organization’s compensation system, such as base pay, shift differential pay, specialty pay, competency/skill pay, overtime pay, productivity incentives, commissions, etc. Each job has a value to the organization as measured by both internal and external factors; therefore, all the pay variables need to be aggregated in order to understand the total compensation opportunity for a given position. A system to evaluate both internal and external factors is critical to determine how much pay should be offered for any position. The goal is to spend what’s needed to attract and retain staff without spending more than necessary to achieve that goal.
In addition, job descriptions need to be written for all positions in the healthcare organization. These descriptions need to accurately reflect the specific duties to be performed along with the skills, abilities, knowledge, and any required certifications and/or licenses required to perform the job.
The format needs to be consistent across all jobs so relative comparisons can be made to determine pay ranges and organizational hierarchy.
Be sure to review this week’s resources carefully. You are expected to apply the information from these resources when you prepare your assignments.
Weekly Resources and Assignments
Review the resources from the Course Resources link, located in the top navigation bar, to prepare for this week’s assignments. The resources may include textbook reading assignments, journal articles, websites, links to tools or software, videos, handouts, rubrics, etc.
Week 5 – Assignment: Devise an Incentive Plan
You are the director of Nutrition Services and one of your managers has come to you complaining of low pay, high turnover, high tardy rates, and an inability to incentivize their staff to produce consistent, quality meals on time. In support of the manager and as a strategy to help the manager correct the challenges faced, you have been asked to prepare an incentive plan for the employees of the Nutrition Services department that objectively and fairly addresses the issues mentioned.
You will develop a PowerPoint presentation that you and the director will present to the employees. Include base pay, incentive pay, and other factors that reward the behavior desired and don’t reward the behavior not desired.
Incorporate appropriate animations, transitions, and graphics as well as speaker notes for each slide. The speaker notes may be comprised of brief paragraphs or bulleted lists and should cite material appropriately.
Length: 3-5 slides, not including title and reference slides
Notes Length: 150-200 words per slide
References: Include a minimum of 5 scholarly resources
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Human resources in healthcare: Managing for success (4th ed.).
Fried, B., & Fottler, M. D. (2015).
Human resources in healthcare: Managing for success (4th ed.). Health Administration Press.
Read Chapter 9
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HR-Guide
HR-Guide. (2015). Compensation: Outline and definitions
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Research: How Incentive Pay Affects Employee Engagement, Satisfaction, and Trust.
Ogbonnaya, C., Daniels, K., & Nielsen, K. (2017). Research: How Incentive Pay Affects Employee Engagement, Satisfaction, and Trust. Harvard Business Review Digital Articles, 2–4.
