Hospital Payment & Information Management
Keep skilled IS personnel where you want them — on staff
Hospital slows exodus, changes salary structure
For two years, Karen Ondo watched skilled employees leave North Broward Hospital District in Fort Lauderdale, FL, for other organizations. "We were seeing about a 25% annual turnover," says Ondo, North Broward’s vice president and chief information officer.
The health information employees weren’t leaving because they didn’t like their jobs or because they didn’t like the facility. Instead, they were acquiring nine to 15 months of knowledge and experience and then leaving for higher salaries at other organizations.
She could only watch their departures. "Once employees were hired and in their positions [at North Broward], they would have to stay with us about three more years to get to the same figure that someone would be offering them on the outside."
Pay structure, policies needed total revamp
But if Ondo rehired them at their present skill level, she could match the salary of the outside company. Unfortunately, the hospital’s policy and procedures prohibited her from rehiring the employees for six months unless they returned under the same salary as they had when they left.
"We were bound in what we were able to do," Ondo says. "Plus we didn’t have a mechanism to see if we could stay somewhat competitive in that arena. Our organization was paying at the 60th percentile at the time, regardless of the position, and that’s what I had to learn to live with."
To decrease the turnover rate, the hospital tried sign-on bonuses, retention bonuses, and project bonuses. The bonuses worked but were limited to the term or the scope of the bonus. "A sign-on bonus wasn’t enough, because if you didn’t stay long enough and the bonus was forfeited, the company on the outside would make up the difference," she explains. The problem was aggravated by a lack of qualified applicants to fill the open positions.
The next step North Broward took was to completely overhaul the way it categorized and paid its information technology staff. North Broward previously categorized positions by job families. For example, a candidate who was hired as a systems associate could be promoted to systems specialist in 15 months to two years if he or she progressed and such a position became open.
Ondo and North Broward’s human resources department decided to try the career-banding approach, which makes job families obsolete. Career banding is a system or process of grouping jobs with similar responsibilities and impact. Career growth is defined in terms of skill and competency development rather than through upward advancement through grades and titles.
For example, someone hired as a systems analyst would stay in that analytical band as that person’s career progressed, unless that employee transferred out of that band. As the person acquired skills, management would rate those skills and pay competitively for them. "I budget dollars to do things called analytical work, and as long as I work within parameters, it’s not material whether [a higher] position is available," she says. "As soon as the skills are there, I have a method to pay for them."
In the traditional position-control type of arrangement, jobs often have a somewhat fixed pay width, such as a 50% width or 60% from low to high, Ondo explains. The pay bands in the new arrangement have a 150% width.
Employees in the band don’t have to change titles to get to the top of the salary range. "If you’re acquiring the skills you need to do that job, and you’re still in the analytical band — you haven’t made a career change into something like management — you just stay on that track," she says.
"In essence, you can determine your top end instead of it being a fixed salary range for that job. There is obviously a limit, but it’s 150% width as opposed to the more traditional narrower width," Ondo explains.
With the new system, managers are obligated to evaluate everyone at least on an annual basis, but employees can request a rating of their skills or a manager can initiate a re-rating of someone every six months. During the evaluation, employees are rated using seven different skill sets on a career development matrix.
The matrix determines the four stages of the employee’s development:
1. apprentice;
2. colleague;
3. mentor;
4. sponsor.
These stages encourage employees to share their experience, Ondo says. "A lot of times people hoard their knowledge because they think they are more valuable to the organization because they are the keeper of the keys. Now to get credit and get rated higher on a skills acquisition, you have to prove that you are mentoring other people and sharing that information."
Employees are evaluated as to whether they are accomplishing their tasks as designed or whether they are still stretching to that level of competency. "The stretch [measurement] gives us a way to distinguish someone who is absolutely doing the job from someone who is stretching and showing signs that he or she is almost to the next step but not quite."
Once the evaluation is complete, the employees are assigned a number that is matched to the pay zone for their career band. The system analyst, for example, may be rated in the $55,000 to $60,000 pay zone for that career band.
If that is more than the employee’s current salary, he or she receives a raise.
The reverse is true, also. "If employees are being compensated more than their competencies, we have policies that give them an amount of time to improve their competencies or we will structure their pay accordingly," Ondo says. (To see how North Broward employees reacted to the restructuring of their salaries, see related story, above.)
Ondo doesn’t post jobs if an employee is progressing up the career band since the person doesn’t change job titles; she simply pays for the additional skills. But if someone switches to another business unit, such as from analyst to technical work, she has to post the job first. "The posting allows us to function as an employee advocate. Everyone has equal opportunity to [the new job]," she explains.
Since implementing the career-banding system, Ondo has seen her turnover rate fall to single digits. "It’s done exactly what we needed it to do," she says. She still loses some employees who want management positions when none are available. Jumping ship to get compensated more for technical skills, though, is not as common. "People don’t think they have to change jobs and change employers to improve their salaries."
Overall employee reaction has been positive, she adds. "The new system (1) gave employees the opportunity to be recognized for their skills, (2) gave us a more objective way to value their skills as to the marketplace, and (3) created good discussion about career planning and what skills were really important to accomplish any given task."
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