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PubMed · 10175108

Designing an incentive compensation program that works.

S Laverty·B J Hogan·L A Lawrence
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Abstract

To encourage innovation and improve departmental and organizational bottom lines, Winchester Hospital, Winchester, Massachusetts, developed and implemented a middle management and staff incentive compensation plan. Middle managers and staff who participate in projects that provide savings to the hospital are paid a share of the savings. The plan allows staff the option of designing "horizontal" projects, in which a project leader carries out a project individually or with peers, or "vertical" projects, in which a project leader directs a team of key individuals. Increasing numbers of vertical projects have been proposed since the plan's inception in 1994. In addition to increasing the hospital's operating income, the program provides cost-effective, variable compensation, which especially appeals to motivated, high-performing employees; motivates employees to overcome roadblocks; facilitates a team approach that bridges traditional departmental boundaries; and encourages a beneficial and collegial competitiveness among managers.

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Cost SavingsEmployee Incentive PlansHospital CostsHumansInstitutional Management TeamsInterdepartmental RelationsInterprofessional RelationsLeadershipMassachusettsOrganizational Case StudiesOrganizational ObjectivesPersonnel Administration, HospitalPilot ProjectsJournal Article

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S Laverty, B J Hogan, L A Lawrence. 1998. Designing an incentive compensation program that works.. https://pubmed.ncbi.nlm.nih.gov/10175108/

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