Three years ago, we introduced a new management compensation program for hospitals that we now call MAP (Management Accountability and Performance). It began in partnership with Memorial Medical Center (MMC) in Modesto, California, a Sutter Health Affiliate. MMC and its visionary CEO (David Benn) and Vice President of Human Resources (Susan Donker) were looking for a better way to motivate and reward their managers. They came to Romanoff Consulting for help. Now that three years have passed, we decided to circle back and ask Susan how things have been going. Here’s what she said.
Q: Why did you decide to develop incentive plans for your organization?
SD: We were frustrated by how managers were being rewarded. In our old system, compensation was not tied to organizational results. By using incentives, we shifted to a program that makes leaders feel more connected and accountable to the organization. They recognize their direct ability to impact the organization’s goals. If they do their job right, they will be rewarded. We eliminated the accepted idea that if you just wait for time to pass and keep breathing, you’ll make more money.
Q: What benefits have these incentive plans brought to your organization?
SD: We have seen a definite improvement in the key measures that are required for all leaders: quality and patient satisfaction. People are paying a whole lot more attention in these areas. These results didn’t change overnight, but over the past three years we’ve seen a significant boost in the two measures that we deem most important to our organization’s success.
Q: What do you appreciate most about the process and logic behind the MAP (Management Accountability and Performance) program?
SD: It drives home the message that salary programs are designed to pay for a person’s worth in the market and incentive plans are designed to pay for their results. An employee’s ability to move through their salary range should be a direct reflection on what kind of a leader they are. Our old program allowed people to move through the range for market adjustments and for performance, even if they failed to meet specific goals.
Q: How has MAP helped you improve your organization’s success?
SD: Having two distinct measurement systems, one focusing on leadership effectiveness and the other on results, allows us to track each critical component separately. We’ve discovered that certain managers who rank very high in leadership don’t produce very good results. We’ve also learned that some of our best results are coming from out least effective leaders. This knowledge enabled us to pinpoint which are managers need to improve and where.
Q: Do you like the plan documents created using the Incentive Plan Builder software?
SD: Yes, the presentation of data is very clear. At the end of the year, we enter the data and verify the results. In addition to generating each manager’s incentive plan, IPB gives us the ability to collect all kinds of data from which we can develop meaningful reports that pinpoint trends.
Q: How do your employees react to these incentive plans?
SD: The majority of employees get it and like the reward system. Good leaders love it. Poor performers tend not to like it because it exposes their weaknesses and withholds dollars they used to get automatically.