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FQHC 2015 Compensation Resolution #1 – Straighten Out Provider Salaries


Provider compensation will continue to be high on the list of “to dos” for FQHC senior managers in 2015. There is no indication that the shortage of interested providers will be easing any time soon, and recruiters are bombarding these same managers with lists of the “requirements” that even recent graduates will be demanding. Some organizations are considering adding incentives, mostly because they’ve been told they need to, or because they are desperate to solve productivity issues.

Before you contemplate what the new folks want, or try to fix issues with complicated incentive plans (that probably won’t work anyway, but we’ll leave that for another post), you need to deal with the real big elephant in the room — the current state of your providers’ salaries. It is likely that they are all over the place, probably because of the time they were negotiated (or renegotiated), the desperation level at the time of the recruitment, or any one of a dozen other factors. It is also likely that they bear little relationship to the performance of the providers (by productivity or any other factor).

If yours are all set, everyone’s happy, and you’re not worried about what monkey wrench the next hire is going to throw into the mix, then stop reading and celebrate. For the rest of us, however, let’s explore a way to test how close to “optimal” your current salaries are. To do this, you’re going to need:

  1. A job description for each provider “role” that states clearly the expectations that the health center has for a provider who is considered “successful” on the job.  How do we do this?  It’s startling simple — write down everything a provider is supposed to do, then write down “how” the provider is supposed to do it.  What is it you care about? Productivity?  Quality?  Patient Satisfaction?  Relationships with Colleagues? Participating in committees/task forces/initiatives?  In short, if you could describe the ideal provider, what would he or she look like on the job?  If you have one of these folks, make the description fit what you see that makes you say that — and most importantly, make it clear enough that you can describe it to anyone on your staff.
  2. Establish a formal salary range for each job, with the center of the range at the place you’ve established in your compensation philosophy.  Whether you do this yourself, or get help from an outside advisor, make sure that the formal salary range reflects the realistic market for the skills you are looking for, and make sure it is affordable for the organization.  Divide the salary range into segments — we use five — that reflect different levels of  performance.  The central segment should reflect full performance of the duties and responsibilities outlined in the job description.

Now comes the fun part.  Apply tools 1 and 2 to your providers.  Use the job description as a checklist — assess the on-going performance of each provider against the job description performance standards.  By doing this, you should be able to easily establish which part of the salary range is appropriate for each individual.  Compare “where the provider is” with “where the provider should be,” and you now have the information you need to determine what you need to do next.

It is quite likely that there will be some scary differences between what you should be paying and what you are paying.  However, it is something you need to fix before you do anything else.  All your providers know where they stack up with their colleagues when it comes to performance, and it’s likely they also know how they stack up compensation-wise.  If compensation and performance doesn’t match, you are going to have problems. Those problems are not going to go away with band-aid incentive plans or annual “make up bonuses.”

The truth is — you need a foundation, and base salaries are the foundation for any provider compensation program.  If the foundation isn’t solid, the rest of your program is going to wobble.