Considering Compensation

John Commins, April 16, 2015

In our November 2014 Intelligence Report, 82% of healthcare leaders said that their organization needed to enhance its executive compensation structure to attract, retain, and engage leaders. HealthLeaders Media Council members discuss the factors involved.

This article first appeared in the May 2015 issue of HealthLeaders magazine.

Michael D. Williams
President and CEO
Community Hospital Corp.
Plano, TX

Michael D. Williams
Michael D. Williams

One of the challenges that we face is finding individuals who possess the experience and the business acumen that are necessary to lead in this complex environment. Historically in healthcare, relational skills sometimes were enough to create opportunities for success. Now the mandate is the combination of relational skills with business skills to be able to lead organizations in such a fashion that they can be competitive and continue to be successful.

Executive compensation is but one component of the fit. It is what I would call the threshold component. Once that interest is created, we find that if we are competitive in executive compensation, then it's all about culture.

Finding the right metrics for value-based compensation is a fairly straightforward process. Historically the gatekeepers for incentive compensation have been quantitative in nature from the standpoint of EBITDA earnings or financial focus. What many organizations, including ours, are now doing is having clinical outcome gatekeepers in place, as well, before incentive compensation can be paid. That is a great opportunity to say externally that the bottom line is important but outcomes are just as important, if not more so.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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