This blog post is the second of four excerpting our article, It Pays to Overhaul Compensation: Boost Retention and Operational Efficiency.
When healthcare organizations spend too much time on compensation due to a lack of systems are hours that managers could spend far better by talking to employees, soliciting input, and engaging strategies for a more streamlined and touch-heavy compensation program. For instance, according to Deloitte’s 2018 Global Human Capital Trends report (Agarwal, et al, 2018), there are three areas where rewards, or compensation strategies, are out of line with employee desires:
The report concluded that an annual rewards program around raises, bonuses, and other incentives was not optimal. More frequent rewards, be those in the form of money or other compensation elements, were found to keep employees as much as eight times more engaged than those who receive annual compensation or bonuses.
Incorporating the Needs of a Diverse Workforce When Managing Compensation
Current programs often do not factor into the needs of a diverse workforce, which often fall outside mainstream benefits such as health insurance, sick leave, and overtime pay to include flexible hours, training and development, and personalized achievement recognition. And lastly, employees report that, even if their compensation is standard to the industry, they feel that the process for setting salaries, raises, and incentives is political or worse yet, arbitrary.
Avoiding the Heavy Costs Involved in Turnover
Put all together, it’s a recipe for early exits, particularly in healthcare where there is intense competition for qualified employees, especially nurses. And when those employees leave, there’s a cost. A recent Colosi PayScale BenchMark Report (2015) revealed that:
This data, and much more, points out the disparity between the existing annual review structure and employees’ desire for more frequent feedback. While many companies are embracing more frequent reviews, such as those held as a part of rounding practices, they are not tying compensation to those efforts. According to Deloitte, 20 percent of companies are giving workers performance ratings more than once a year, but only 9 percent are adjusting salary at that pace. And even when they do review compensation, they are using programs aligned with the strategies Holbert referenced, ones that are built in a rigid manner to only focus on experience and tenure vs. satisfaction and other intangibles that might be part of the review process.
The full article also advises healthcare leaders to:
Agarwal, Dimple, Josh Bersin, Gaurav Lahiri, Jeff Schwartz, and Erica Volini. “2018 Deloitte Global Human Capital Trends.” 2018. Accessed July 13, 2018. https://www2.deloitte.com/content/dam/insights/us/articles/HCTrends2018/2018-HCtrends_Rise-of-the-social-enterprise.pdf.
Download the article here.
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