Aligning executive compensation can aid in hospitals’ recovery
Healthcare organizations are looking to their boards to help guide them through the transition into a post-pandemic world. Becker’s recently highlighted the top five concerns healthcare boards have as they plan for recovery and a return to normal. One of them is making sure their compensation programs are still aligned with their organizational goals: “It is important to revisit incentive plans periodically to make sure they still align with the business strategy of the organization. Incentive plans should reflect the special circumstances from the pandemic and also drive business priorities.”
Maxworth can help organizations through the process of realigning their incentive compensation with their organizational goals no matter how they might have changed due to the pressures of the pandemic.
Our Healthcare Executive Advantage Plan offers a strategic approach to executive compensation that’s designed to help hospitals not only achieve their goals but also improve the retention of their leadership team. C-suite continuity is critical to the achievement of long-term objectives since it fosters a clear and unified vision for the future, which is perhaps more important now than ever.
Review and Realign
Incentive compensation programs should be reviewed often. This has always been true, but the pandemic has made re-evaluation critical by causing a shift in priorities at most facilities and putting a financial strain on the industry. Without proper alignment of compensation and organizational goals, incentive plans can become a liability, both financially and culturally, since they can impact team morale when they’re viewed as inappropriate for current circumstances.
The Impact of Retention
Hospitals that take their current circumstances into consideration when designing compensation arrangements send a positive message to their team, showing them that there’s a strategic plan in place for the future. This adds to executives’ sense of security at a time when not much is certain about the post-pandemic landscape of healthcare.
A sense of security will go a long way in retaining executives, and we know that executive turnover is the kind of financial burden that can break an already strained budget. On average, the loss of a CEO costs healthcare organizations 4-8X that CEO’s salary. When you factor in average turnover rates and the cost of replacing other c-suite executives, healthcare organizations are losing millions of dollars every 3-5 years to executive turnover. Avoiding that kind of financial burden should be a part of a hospital’s larger recovery strategy.
We Can Help
MaxWorth can assist you in reviewing your incentive compensation programs. Most often, even small changes to the design of a plan can make your rewards more meaningful to your employees. Meaningful rewards have a lasting impact. They improve retention and recruitment and support the achievement of long-term goals. Ultimately, they can help organizations continue their mission of providing quality care to their communities.
If you’d like to find out more about how we can help you align your executive compensation with your organizational goals, feel free to schedule a call with one of our team members. In the meantime, you can download our white paper: Rewarding Excellent Administrators.
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