Parkland performance plan centers on measurable improvements

Published: 6/11/2014

The Employee Relations Executive Compensation Committee of Parkland Health & Hospital System’s Board of Managers today recommended a fiscal year 2015 Pay for Performance Plan for its executives. The plan links portions of leaders’ salaries to specific performance goals that ultimately led to measurable improvements, particularly in the areas of quality and patient safety.

In addition, recognizing that 230 employees were making below a living wage, Parkland executives recommended, and the Board committee supported, a plan to raise the base salary for entry level positions to a minimum of $10.25 per hour. To finance the increase, the first pool of funds earned by executives as part of the Pay for Performance Plan will be dedicated to increasing the minimum salary for those low income workers rather than be used as part of the incentive plan.

The Pay for Performance Plan brings Parkland in line with the industry standard for academic teaching facilities, incentivizes continual improvement in quality and safety, and, most importantly, enforces accountability among the executive staff.

“Essentially, we’re saying to our executives that both they and the health system have to meet certain predetermined quality, service and operational measures or we’re going to hold back a portion of their compensation,” said Jim Dunn, PhD, Parkland’s Executive Vice President and Chief Talent Officer. “Roughly 75 percent of a performance pay appraisal will be derived from targets approved by the Board, many based on publicly available national industry data. The remaining 25 percent are based on individual performance goals approved by the CEO.”

Every year, the Board will review how executives performed against these measures prior to any incentive compensation being approved. The program is contingent on Parkland’s ability to pay the incentive awards based on overall system financial performance and/or other organizational priorities as determined by the Board.

“The Pay for Performance Plan rewards and encourages clinical excellence, attention to patient safety and personal accountability,” said Paula Dobbs-Wiggins, MD, chair of the Board’s Employee Relations Executive Compensation Committee. “It is the right thing to do and is consistent with industry best practices. I am particularly pleased that we have tied this action for our executives to raising the salary of our entry level employees to a ‘living wage’ thereby recognizing the importance and value of all our employees in fulfilling our mission.”

Comparative market pay data was analyzed to ensure that compensation was well within the normal parameters of the health care industry. More than 80 percent of health care organizations offer similar plans, including Baylor Health Care System, Methodist Health System and Texas Health Resources, locally.

Meanwhile, the rationale for increasing Parkland’s minimum base pay to $10.25 per hour is two-fold. “It brings our minimum base more in line with industry standards and it helps us recruit and maintain a higher caliber of staff at all levels inside Parkland,” Dunn said.

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