Bringing Total Rewards in Line with Organizational Business Strategy

Total rewards transformation integration for a not-for-profit hospital

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Abstract

In the process of completing an integrated strategic plan, a 400-bed not-for-profit hospital discovered that its total rewards programs were in need of critical care. One of the oldest and largest hospitals in the region, it was also one of the largest local private employers, with more than 3,300 full-time and part-time employees. How could they transform their total rewards strategy to be aligned with employee preferences and corporate goals?

The Challenge

Like many U.S. hospitals at the time, the organization was experiencing both steady growth and a shortage of Registered Nurses (RNs), one of their largest and most critical workforce segments. Yet the elements of their total rewards program simply were not working together.
More specifically:

Compensation was not tied to performance.
The medical plan did not promote or account for campus care.
Vision and dental benefits exceeded their value in returned commitment.
There was a lack of flexibility in scheduling to pursue additional training.
Inherent demands of hospital work put a strain on commitment.

In order to be the leading choice for health care and employment in the region, the hospital would need a comprehensive total rewards strategy that could attract talent while satisfying a diverse workforce that included managerial, administrative, medical and service staff.

How We Helped

With assistance from Deloitte, the organization planned and conducted a comprehensive review of its total rewards program, along with employee attitudes and preferences, market analysis for compensation and benefits, and more. Everything was considered in this ground-up process, which included:

Measuring commitment. Deloitte helped them develop and conduct an employee commitment survey to assess attitudes and preferences, discover problem areas, and capture a benchmark for later evaluation. Remarkably, one of the least committed groups turned out to be RNs, one of the very groups of employees that were considered critical to delivering the mission of the hospital.
Determining how the pieces fit together. The organization examined its entire program, including benefits, compensation, career development, work environment and performance management programs. They found that these areas were functioning more as silos than as an integrated whole.
Benchmarking compensation. To make sure they were offering competitive compensation, particularly for critical employee groups, Deloitte helped them research market rates for nursing, management and staff positions.
Reviewing performance management. A majority of employees favored moving to a pay-for-performance structure, but the performance management system would need substantial changes.

Solution

Using the findings of the assessment, the organization decided to revitalize its total rewards program to reflect campus care, shared responsibility and employee choice. Key changes included:

Creating custom career ladders for RNs and other critical workforce segments
Shifting spending from less-valued benefits to those that enhanced commitment
Improving incentives for training by tracking time spent delivering and receiving training, setting spending objectives for tuition reimbursement and including degree pursuit on career ladders
Building medical options around campus care, recognizing their organization’s value as the principal provider of health care

Because of better alignment between overall strategy and total rewards, the organization raised its profile as an employer of choice for the region. Superior performers were rewarded and promoted more quickly. Benefits were more in tune with actual needs and reflected employee preferences. Professional development was encouraged and supported and employees were given greater involvement in determining their career paths.

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