Hospitals are reluctant to move away from merit pay because “time-in grade” pay increases provided similar wage bumps to both high and low performers. So what should hospitals do?
Instead of killing merit pay, hospitals need to transform its parameters, according to the article. For example, instead of instilling a blanket merit pay structure in which many employees receive nickels and dimes in compensation increases, hospitals can announce they are going to recognize the top 10 or 20 percent of performance in the organization, said Kevin Haeberle, senior vice president of Integrated Healthcare Strategies and author of the article.
“Focusing the dollars on a smaller number of people, with a program which helps manage expectations and allows for employee input, can help revive the expiring ‘merit’ program concept in healthcare,” he said.
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