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spanishexpert
Replytotwostudents.docxStudent #1
“Developing a compensation system that meets employee and organizational goals requires fine-tuning” (Pynes & Lombardi, 2011). “To attract and retain employees, organizations need to offer either competitive wages or other benefits deemed important to employees and applicants, such as flexible work schedules, career mobility, a sense of purpose and the opportunity to use their skills, and child care or educational reimbursement programs” (Pynes & Lombardi, 2011). Employees have different responsibilities, thus individuals in higher positions such as executives receive a different compensation and benefit package than other employees. Due to commercialization and increased competition from both for-profit and other nonprofit providers, there is a lot of thought that goes into coming up with executive compensation packages. Several nonprofits have shifted from fixed salaries to ones containing a variable cash-compensation component based on fundraising, cost reductions, or specific programmatic outcomes (Correa & Lel, 2016). There should be an assessment of “the agency’s resources and offer the best salary and benefits package they can afford” (Pynes & Lombardi, 2011). The pay rate of other employees in the agency should be examined. “Compensation was associated with technology and patient satisfaction but not with processes of care, patient outcomes, or community benefit” (Joynt, Le, Orav, & Jha, 2014). CEOs who managed more beds were paid more than their counterparts who managed less beds. In addition, a CEO who managed more than one hospital was also paid more as was one who worked for a major teaching hospital (Joynt, Le, Orav, & Jha, 2014). “The CEOs of hospitals with a higher proportion of poor patients and Medicare patients were generally compensated less than were other CEOs” (Joynt, Le, Orav, & Jha, 2014). Executive compensation metrics are a good image of the duties and priorities of an organization and likely have the ability to shape the focus of the CEO (Joynt, Le, Orav, & Jha, 2014).
Executive compensation differs considerably from typical pay packages for either hourly workers or salaried management and other professionals. This is as a result of executive pay being heavily biased toward rewards for actual results (Correa & Lel, 2016). If the organization do not perform as well than the executive will receive a lower rate. The chief executive compensation may consist of the following: base salary, performance based annual incentive (bonus), performance based long term incentive, benefits, executive perquisites or perks and contingent payments (Correa & Lel, 2016). Executive pay is structured to reward company performance and align executive pay with shareholder value. The base salary for executive pay is their annual salary. The purpose of the performance based annual incentive is to compensate executives for achieving the company’s short-term business strategy. The largest potential component of executive pay is the long term-incentive (Correa & Lel, 2016). The purpose of the long-term incentive is to reward executives for achievement of the company’s strategic objectives that will maximize shareholder value. Benefits are typically the same range as other salaried employees. Executives also participate in other company benefits such as vacation, holidays, sick days, severance pay, life insurance, and medical insurance. The perks executives receive constitute additional compensation for senior executives which are not available to other salaried employees. These extra benefits are normally structured to recognize the value of the executive to the company, extraordinary demands on his or her time and other unique conditions (Correa & Lel, 2016). Many executives are also covered by severance which provide for payments to executives in the case of involuntary termination except in the event of termination for cause. The “right” amount to pay an executive is the minimum amount it takes to attract and retain a qualified individual (Correa & Lel, 2016). The compensation package should be designed so that it motivates the executive to perform in accordance with the company’s objectives and risk tolerance.
Overall, I am totally agreed that executives should be paid more. I think that executives get a lot of perks that are not needed. The executive should do an executive’s job and be paid accordingly. However, when pay becomes the big picture and executives start doing things just for pay bonuses or perks than that makes things difficult. The issue is that once you link someone’s financial rewards to a particular measure or set of measures, it is going to affect that person’s behavior. “The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty” (Provers 21:5). If you work hard at something you will be rewarded in return. (Word Count 747)
References
Correa, R., & Lel, U. (2016). Say on pay laws, executive compensation, pay slice, and firm valuation around the world. Journal of Financial Economics, 122(3), 500-520. https://doi.org/10.1016/j.jfineco.2016.09.003
Joynt, K. E., Le, S. T., Orav, E. J., & Jha, A. K. (2014). Compensation of chief executive officers at nonprofit US hospitals. JAMA internal medicine, 174(1), 61-67. doi:10.1001/jamainternmed.2013.11537
Pynes, J. E. & Lombardi, D. N. (2011). Human Resources Management for Health Care Organizations: A strategic approach. San Francisco: Jossey-Bass Wiley.
Student #2
Chief Executive Compensation
As the board member of a health care organization, there are various determinants other than salary I would want to consider prior to making a chief executive officer (CEO) compensation recommendation. The role of CEO in any organization can reasonably be expected to carrier higher duties and responsibilities than other positions within an organization. For that reason, I feel their compensation should be partially based on their role and responsibilities. Additionally, the level of experience and education should be factored into their compensation. “CEO attributes, not firm economic variables, appear to be the primary determinants of compensation contracts” (Page, 2018, p. 379). This strengthens the need to focus on the CEO candidate and what he or she brings to the table when making compensation decisions.
“Hospital CEOs play an important role in promoting positive patient experiences as they set the organizational vision and strategic goals and can execute change to support positive experiences.” (Galstian, Hearld, O'Connor & Borkowski, 2018, p. 50). Hospital CEOs have direct impact on the experiences and outcomes of the end users, the patients. The level of experience a CEO has can contribute to successful achievement of the organizational vision and strategic goals. For this reason, obtaining information of the CEO candidate’s level of education and depth of experience is critical in determining the appropriate compensation for the position. In terms of education, I would give higher merit to higher degrees and having various certificates applicable to the position. Information provided on the experience of the CEO candidate should be carefully evaluated. It is important to determine which components of the CEO’s experience are applicable to our hospital’s CEO position. Not all experience can translate successfully to the position of a hospital CEO. Some experience traits such as leadership, financial management and managerial experience will general carry over. As our organization is a hospital, it is important to look for experience related to hospital or health care settings. I would recommend compensation based on experience to be higher for each experience that translates to our organization.
In comparison to the responsibilities of other healthcare employees, the responsibilities of chief executives should be considered as higher. This does not discredit the responsibilities of other healthcare employees, but it does mean their responsibilities ultimately fall under the chief executives. Each position in a hospital is an important component of a hospital, and all of these components fall under the chief executive. A good example is the manager of facilities does not necessarily need to worry about the daily operations or financial problems of the patient relations department. There may be some interfaces such as if customers complain about an elevator not working or something. The chief executive, however, does need to remained informed and involved for each department. Though some responsibilities are delegated to lower management, every concern or issue within the hospital ultimately falls under the chief executive. The chief executive should have an organizational view, while other employees may have a position or departmental view. For this reason, the chief executive should receive higher compensation. Another reason the chief executive should be more compensated is that he or she is the face of the company. In the event of a major scandal or crisis, the chief executive in most cases will bear the brunt of scrutiny of the situation. The chief executive should be held to answer to the stakeholders. This liability also warrants higher compensation than other healthcare workers.
“Deciding what the compensation of executives should be is difficult” (Pynes & Lombardi, 2011, p. 267) Compensation for chief executives should be within reason, using various determinants such as experience, education and salary. There are more determinants for consideration, however, I feel these are the top three for consideration. A wise board member will look at these, at a minimum, and review other determinants as necessary.
Proverbs 12:11 (NKJV) states, “He who tills his land will be satisfied with bread, But he who follows frivolity is devoid of understanding”. This passage is applicable to this assignment in that if a chief executive functions ethically and in the best interest of his or her hospital, the compensation will be there. I believe that if a chief executive functions as such, they should be just as aware of the intrinsic rewards as they are of the compensations.
References
Galstian, C., Hearld, L., O'Connor, S. J., & Borkowski, N. (2018). The relationship of hospital CEO characteristics to patient experience scores. Journal of Healthcare Management, 63(1), 50-61. doi:10.1097/JHM-D-16-00020
Page, T. B. (2018). CEO attributes, compensation, and firm value: Evidence from a structural estimation. Journal of Financial Economics, 128(2), 378-401. doi:10.1016/j.jfineco.2018.02.006
Pynes, J. E., & Lombardi, D. N. (2011). Human resources management for health care organizations: A strategic approach (1st ed.). San Francisco, CA: Jossey-Bass.
Snavely, T. M. (2016). A brief economic analysis of the looming nursing shortage in the united states. Nursing Economic, 34(2), 98.
