COMPENSATION & MARKET CONDITIONS
A large nursing home company was having difficulty attracting and maintaining their operations staff, with nurses in particular being a problem. Studies indicated that they were behind the market, but budget constraints were not allowing the organization to catch up. They were also dealing with regulatory practices on Medicare and Medicaid payments.
In conjunction with organization management, we established an internal hierarchy to identify where the biggest problems were in terms of numbers of employees and costs to bring them to market. This was then analyzed with budget capabilities. We further determined that old practices were not going to allow the breakthrough that was needed. This meant we needed a strong communication program to educate employees about the coming changes.
The strategy that we established was a merit program that was built around basic performance expectations. This allowed us to get more of the available funds to the best performing employees; the ones we most wanted to retain and attract. However, we still needed to address the market conditions. We did this by establishing “Control Points” within the pay grades, set up with the internal hierarchy that could better reflect market practices. The merit pay was distributed based on a percentage of the control points, instead of existing base pay rates. We got a double bang for the bucks.