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How to shape incentive plans for the hospital's top executives
Trustee : the Journal for Hospital Governing Boards
|July 10, 1983
Summary
Hospital boards rarely use executive incentive plans. This article explains why they should, reviews different plan types, and offers a sample contract for top hospital leaders.
Area of Science:
- Healthcare Management
- Executive Compensation
- Organizational Economics
Background:
- Hospital boards often overlook executive incentive payment plans.
- A gap exists in understanding the benefits and implementation of these plans for hospital leadership.
Purpose of the Study:
- To provide a rationale for implementing incentive payment plans for hospital executives.
- To review diverse formats of executive incentive plans.
- To propose a sample incentive contract for hospital leadership.
Main Methods:
- Literature review on executive compensation in healthcare.
- Analysis of incentive plan structures.
- Development of a sample contract framework.
Main Results:
- Few hospital boards currently utilize executive incentive plans.
- Various incentive plan formats can be adapted for hospital settings.
- A structured approach to incentive contracts can facilitate adoption.
Conclusions:
- Implementing executive incentive plans can align leadership goals with organizational objectives.
- A clear framework and sample contract can demystify the adoption process for hospital boards.
- Further research could explore the impact of these plans on hospital performance.