Bangor Family Physicians Case Study Essays

Employees are driven by a numerous motivators to stay in the company, but the biggest is simply getting a regular paycheck. Ensuring that the compensation system is effective is not just important but critical. A few organizations evaluate their compensation system to identify any shortcomings. It is always important to look at how the organization can improve its compensation strategy to attract the best candidates who can innovate and lead the company in the industry. In order to retain high performing employees, the compensation plan should offer more than just a competitive salary. A good example is Costco and Walmart, on the benefits side, 82% of Costco employees have health-insurance coverage, compared with less than half at Wal-Mart.

Employee compensation is critical for the satisfaction, motivation, and preservation of the workforce within an organization. HR managers plan, direct, and coordinate salaries, retirement plans, health insurance, and other employee benefits that an organization offers its employees. An organization should spend a great deal of time and resources to plan, create, and implement effective employee compensation strategies. Accordingly, in my opinion HR managers need to carefully examine these strategies that will ultimately effect and meet the organization’s targets and objectives. According to Gerade (2003), the implementation of reward and compensation within an organization will alter an employee’s thought toward organizations view of

7. Option compensation will continue to be a critical component of compensation for executives as it simplistically aligns the executives’ pay to shareholder value in its simplest sense. I don’t believe that options compensation is the primary driver of behavior when things shift from the legal to the illegal. As with most senior executives in industry, ego is a huge driver in individual behavior. Compensation is important, but the recognition of your performance is sometimes even more important. We have created a performance driven culture without the necessary control framework for people to operate within. One minute you are doing a great job, the next you have crossed an imaginary line. The frameworks don’t do enough to quantify behavior as legal and illegal leaving inconsistent rules for organizations to operate within. How does Enron compare to the subprime mortgage debacle, or to Steve Jobs backdating options. There remains too much room for interpretation.

A well-articulated compensation philosophy drives organizational success by aligning pay and other rewards with business strategy. It provides the foundation for plan design and administration and anchors current and future plans to the company's culture and values (Kaplan, 2006, p.32). Recognizing and rewarding achievement is the cornerstone of the company A’s compensation philosophy. The mission of the company is to attract, select, place and promote all individuals based on their qualifications. The company believes that performance-based compensation helps attract, develop and retain talented professionals. In addition to base pay which based upon local market conditions and targeted to be above market, the company provides the following types of potential compensation to reward performance:

Operating a medical group practice is a massive undertaking for administrators which causes them to face numerous challenges. Two external obstacles that they face are (1) reimbursement and (2) governmental and regulatory issues. Compensation is a contentious issue because although the cost of healthcare service is going up the amount of revenue that the organization receives is declining. As for governmental and regulatory matters such as HIPPA, this can create barriers in regards to billing and the delivery of care. One way to overcome the reimbursement matter is to having a competent billing staff that is up to date on the rules to ensure that when a claim is submitted its done correctly so that the practice can obtain the maximum payment

As a result, the fees were usually determined on a dollars-per-hour basis for those oversight services. Generally, in co-management agreements physicians are compensated for the time they commit to managing the service line and scrutinizing the care process. Consistent with the fair market value of the physicians' time and efforts, the compensation is a fixed annual base fee. If physicians meet or exceed mutually agreed-upon quality goals will make them eligible to receive additional bonuses. However, it is extremely important that the incentives are not based on the volume and value of

In the United States, health care is delivered by a complex mixture of government, not-for-profit, and for-profit financial structures. These three financial structures coexist and compete with one another. The financial environment of an organization consists of three major components the financial managers, investors and financial markets. Health care services are provided in a regulatory environment that is both different and more comprehensive than that affecting almost any other industry. In order to fully utilize all financial resources it is important that managers understand the organizations financial structure. During this

Financial incentives for capitation arrangements include financial incentives for Primary Care Providers (PCP) to hold down referrals specialists. Example: PCPs may receive a bonus, depending on monies left over in pools for specialty care.

“Year after year, as executive pay continues its inexorable climb, it's amusing to watch corporate directors try to justify the piles of shareholder money they throw at the hired help (Morgenson 1)”. There are many employees that go the extra mile and produce more for their company, but they often never receive anything extra in return. Due to this, they are less motivated to go the extra mile in the future. In contrast, incentive pay is beneficial to an organization’s overall production efficiency and effectiveness.

Operating its two walk-in clinics in the Bloomington, Illinois, Bloomington Medical Practice provides quality care for the community in Metropolitan areas. The practice was founded ten years ago by two physicians who wanted more free time than their solo practice allowed. Understanding the need for more services, the clinic added three more board certified physicians. These physicians own 10 percent ownership stake each, while the founder physicians own 35 percent. Valued more free time the physicians can work effectively than their solo practice allowed and high patient volume provided an opportunity to increase the number of clinics from one to two (Downtown and Midtown clinics). Having more free time than the solo practices allowed, high patient volume, sufficient staff and the increase in number of our clinics made Bloomington Medical Practice competent enough to provide quality health care services for both patients who come from the work site and from home.

Four models of compensation are described: fee-for-service, capitation, hybrid and fee-for-value. Under the fee-for-service model, physicians are paid for productivity, which encourages physicians to see more patients and perform more procedures

No instances were observed where management’s policies regarding compensation included extreme incentives. Compensation is in line with industry standards and management bonuses are based solely on achievement of short-term performances. Due to the conservative nature of management’s financial reporting practices, there is not an obsessive focus on short-term reported results. To further reduce temptations of potential incentives, performance is tracked against budgets and quarterly forecasts to monitor changes. The board of directors also actively exercises its oversight capacity in compensation related issues. Final approval of all

Compensation is a critical aspect of every organization and appropriate consideration and strategic planning must be conducted in regards to compensation in order to ensure success of the organization’s mission statement. I believe that most managers fail to recognize the importance of compensation in the strategic planning process and write it off as something that they have little input or value added. They fail to consider that they have the responsibility to analyze compensation in the strategic planning process in order to select the appropriate compensation plan that will allow them to meet the organization’s mission with the least amount of resources possible. Any organization, whether it is corporate or government, has a responsibility to return value to its shareholders for their investment. In the private or corporate sector, the shareholders are the people that own stock in the company and in the government sector the shareholders are the taxpaying citizens who have entrusted the organization with acting responsibility with the resources that they have provided. Accordint to Milkovich, Newman, and Gerhart (2014), total compensation is a very dynamic aspect in the strategic planning process of any organization (p.43) and all too often I believe that executives, managers, and employees see it as a static aspect and fail to see how it can give their organization an advantage or edge over their competition. I am currently a middle manager in the United States

The structure of compensation is important because it can help to create an outline on how managers can effectively run companies and create value for shareholders. Pay packages and other benefits should give high-level executives incentives to run companies correctly and efficiently. It should also make executives think in the long

Compensation has long been considered one of the business organizations’ means of gaining competitive advantage. Financial and non-financial benefits are likely to assume a critical role in attracting necessary professionals and retaining competent personnel (Rosenbloom & Hallman, as cited in Marsh & Kleiner, 2004; Shields, 2007; Tetrick, Weathington, Da Silva & Hutcheson, 2010). “How people are paid affects their behaviors at work, which affects an organization’s success” (Milkovich, Newman & Gerhart, 2011, p.5). This notion presses employers to place great importance and careful considerations in designing compensation package for the personnel.