Want a no-risk strategy that encourages staff to be more productive and rewards everyone for success? Consider a gain-sharing program. You'll create an environment where your staff strives to run your facility with maximum efficiency and quality.
In need of a spark to stop the sputtering
After exceptional growth in 2002 and early 2003, our growth had slowed. We were running out of room, and fixed costs were growing faster than projected revenues. We had to run the surgery center more efficiently, or eventually our rising costs would erode our profit.
We came up with a plan to provide an incentive for team members to look for ways to make the organization more efficient and more cost-effective. We formed two distinct performance-improvement teams within the organization: a business office team and a clinical team. Each team has three specific objectives; the business office and clinical team both strive for increased volume and productivity. The clinical team also must help control supply costs while the business office must help minimize delays in accounts receivable collections. Using a weighted measurement scale (see "Gain-sharing Score Card"), we tied performance to our facility-wide income goals.
The amount that each employee can earn is based on a pool created by the amount we exceed our annual net income goal. If we achieve our annual net income goal, every dollar beyond the goal is shared - with one-third going to the facility team members and two-thirds to the shareholders. There's no limit on the bonuses, but there's also no guaranteed payout unless we exceed our goal.
We base team members' payouts on their total gross wages at the end of the year. They receive a payout based on their percentage of the total gross salaries multiplied by the dollar amount in the gain-sharing pool. For example, a nurse making $25 an hour would have received a payout of about $2,400 if this program were in place in 2003. The payouts are annual, and the goals are reset every year.
I knew the plan was working when I overheard an employee question the amount of supplies we were sending home with a patient. That same day, I overheard a tech question the wisdom of a case's last-moment move to a different OR because they couldn't use the supplies that were already opened.
A no-risk strategy
Our philosophy has been that there should be no secrets - an informed employee is a better asset to the organization. From our inception, we've always been open about the ASC's financial performance. Everyone knows exactly where the organization stands financially - and how close or far away we are from meeting our net income goal.
The advantage to the shareholders and to the organization is that gain sharing is a no-risk strategy. It we collectively fail to exceed the goals, the shareholders don't lose anything, but if our team members find ways to become more productive and cost-efficient, everyone reaps higher returns. The advantage to team members is they have an opportunity to share in the success of the organization.
Over the long haul, we believe the plan will reduce turnover by creating an environment where all team members feels they make a difference. If we all treat the center like we're the owners, we all win.