title: Designing an incentive compensation program that works.
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.
authors.affiliation: Winchester Hospital, MA, USA.
authors.forename: S
authors.initials: S
authors.lastname: Laverty
authors.forename: B J
authors.initials: BJ
authors.lastname: Hogan
authors.forename: L A
authors.initials: LA
authors.lastname: Lawrence
mesh_terms: D017046:Cost Savings; D004649:Employee Incentive Plans; D017721:Hospital Costs; D006801:Humans; D007324:Institutional Management Teams; D015274:Interdepartmental Relations; D007400:Interprofessional Relations; D007857:Leadership; D008404:Massachusetts; D019982:Organizational Case Studies; D009937:Organizational Objectives; D010557:Personnel Administration, Hospital; D010865:Pilot Projects