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Hospital Staffing Incentives: A Critical Tool

Bonnie L. Barndt-Maglio, PhD, RN, August 17, 2010

Facing declining patient volumes and tough economic times, hospitals have sought to minimize costs by reducing staff. Layoffs have been abundant as hospitals have attempted to get by with a leaner staff. However, prudent leadership teams should be mindful that any uptake in patient volume—driven, for example, by a bad flu season—can leave a hospital stranded and scrambling to increase staff. Also, consider the influx of the newly insured entering the healthcare system. The work demand of care providers such as internists, hospitalists, nurses, and personal care assistants will undoubtedly increase exponentially. It is important for health leaders to look forward and be prepared for a potential increase in demand, using all available tools, including one of the most valuable tools: a well-defined incentive program.

Incentives can be a powerful tool to increase workforce capacity when patient volume or intensity increases. A sound and effective incentive program must be time limited, proactively initiated only when very specific predetermined conditions and criteria are present, and provide the type of incentive that motivates the target population. All three of these characteristics must be present; otherwise, an incentive program quickly becomes a very expensive exercise in staffing frustration—one that is difficult to reverse.

Having an incentive program that is time limited prevents it from becoming embedded within the compensation structure or seen as a “given” by the employees. Also, by limiting an incentive to a short period of time, management can evaluate its cost versus its efficacy. For example, limit an incentive to only winter months when workload is expected to exceed the workforce’s capacity. Or, host a popular national event and offer an incentive to staff to commit to be available to work extra shifts during that specific week if needed. By using an incentive in a time limited manner, employees may be more motivated to commit to work while the incentive is available.

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