Pursuing a Comprehensive Compensation Plan for Your Executive Leadership Team
- February 5, 2019
As important as it is for an organization to develop and implement efficient, competitive, and compliant compensation plans for its provider base, it is also critical to establish effective compensation models for their executive leadership team. Well-designed executive compensation plans are necessary not only to recruit for these positions successfully but to retain capable leadership in these roles, as competition for talented and qualified leaders increases throughout the industry. Further, establishing a structure that incentivizes behaviors that benefit the overall organization will ensure that all parties continue driving toward the same outcomes.
Coker recommends addressing the following areas to establish an effective executive compensation structure.
- Complete a comprehensive assessment of your healthcare executives, including position, tenure, experience, key accomplishments, and other pertinent factors. What is the current and projected roster of leaders who will participate in the organization’s comprehensive compensation plan?
- Review the current compensation model and identify its strengths and weaknesses. Do you fully understand the behaviors it drives, both directly and as an unintended consequence?
- Evaluate organizations’ current standing based on numerous reports and metrics (e.g., operating results, engagement scores, budget realities, clinical quality scores, turnover, evaluation processes, etc.). How does your recent performance compare to prior years, and the market?
- Develop a compensation strategy for executives that aligns with your current and prospective performance as well as your institutional goals. What are you asking your leaders to drive toward, and how is “success” in their respective role defined?
- Establish a compensation plan that aligns with your compensation strategy. Consider all aspects of a total compensation package. What are the rewards for leaders who meet their goals and those of the organization? Is your compensation model design in keeping with best practices?
- Compare the proposed compensation plan to industry standards, both regionally and nationally. Do the results of the compensation plan fairly and adequately reward executives, both in comparison to the market as well as a reflection of their contributions to the organization?
For more information on how Coker can assist in reviewing or designing your organization’s executive compensation models, please contact us today.