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Incentive pay plans boost managers' performance
Health Progress (Saint Louis, Mo.)
|February 9, 1987
Summary
Management incentive compensation can help hospitals retain top managers and achieve key objectives. Effective programs require strategic planning, clear objectives, measurable standards, and robust evaluation systems.
Area of Science:
- Healthcare Management
- Organizational Behavior
Background:
- Incentive compensation is increasingly adopted in competitive industries and is emerging in healthcare.
- Its application in not-for-profit hospitals is less common but offers significant advantages for management.
Purpose of the Study:
- To explore the benefits and requirements of implementing management incentive compensation programs in healthcare settings.
- To identify key components for successful adoption in hospitals.
Main Methods:
- The study outlines the necessary support systems for an effective incentive program.
- It emphasizes the role of strategic planning, objective setting, performance standards, and evaluation.
Main Results:
- Effective programs require strategic and operating plans, manager-specific objectives, measurable performance standards, and management action plans.
- A strong performance evaluation system is crucial for success.
Conclusions:
- Management incentives can attract, motivate, and retain key managers while promoting teamwork.
- Successful implementation necessitates senior management commitment to change and objectives beyond routine unit management.