Pay-for-Performance: The Merit Question

1. What are the advantages of adopting a merit pay plan for hospital nurses?
Are there any disadvantages to starting a merit pay program?
Advantages for nurses Merit pay is an effective device in HR
management and become more and more prevalent in profit and non-profit
organizations. As to the memorial hospital, adopting a merit pay plan has
many advantages for the hospital nurses. Give them the opportunity for
increased earnings. It is a recognition of personal value, and stimulates them
to seek for self-development constantly. It makes the nursing work more
competitive, interesting and challenging, and stimulates their working
enthusiasm.
Problems analysis Merit pay has numerous advantages, but the
memorial hospitals merit pay implementation still encountered many
problems.
There are three main issues. 1. Annual appraisal---long period 2.
Supervisor is the only evaluator---unilateral view 3. Small differential among
pay increase amounts--- not enough to motivate performance at a higher
level. In fact, merit pay is adopted by many companies, but the really
succeed one is rare. Failure of merit pay implementation normally results
from ambiguous standards, authoritarian planning, or arbitrary award
determinations and budget limitations. The hospitals failures are all
attributed to its failure in design and implementation of the merit pay system,
for example, the period of the appraisal, the participants and the incentive
standard are all not accurate.
2. What problems might arise with a supervisors appraisals of nurses?
As stated in #1, Supervisor is the only evaluator thus only unilateral
view can be used.
3. Develop a merit pay guideline chart based on the following levels of
performance evaluation: superior, above average, average, below average,
and poor. Use current cost-of-living figures for you area or salary survey data
available to you to guide your merit percentage increase.
For the hospital, the pay system suppose including four aspects: basic
pay + personal merit salary group merit salary benefits Remuneration
Personal merit pay. Since the Memorial Hospitals appraisal which
mostly depends on the supervisors may be one-sidedness, so well use
in the 360feedback evaluation for personal appraisal. The
360feedback evaluation is also so-called multiple-input approach to
performance feedback. The participants include supervisors, peers,
subordinates, customers and oneself.
The implementation of the 360feedback evaluation consists of six
main processes:
1. Set up an appraisal team - The appraisal period can be monthly,
quarterly. The main participants are oneself, nursing supervisor, peers,
patient.

2. Determine the appraisal criterions - The criterions should content

nurses skills, service attitude, working performance, cooperation
ability.
3. Evaluation implementation - At this stage, strict monitoring and
high-class management are required to ensure the objectivity and
fairness.
4. Count the score and determine the grade and its merit awards.
5. Feedback Give a detailed feedback to nurses to ensure that they
know their advantages and weakness and what they should do to
improve themselves. There is a possible sample of the 360evaluation
table below
360 degree feedback evaluation table
Samaritan Memorial Hospital
Name of evaluated:
Department:
Time:
Position:
(DD/MM/YY)
Name of evaluator Department:
Position:
Evaluation Time period : from to Grade and score Excellent (10),
good(8), ok(6), not ok(4), bad(2)
Evaluate items scores supervisors Personality peers subordinates
Patient Ones self weight % Work Attitude % professional knowledge %
working capability achievement % Total scores 100 Working
performance comprehensive evaluation Analysis Advantage
4. It is not uncommon for hospital nurses to work in teams. Explain how a team
based incentive program for nurses might be developed. What criteria might
be used to evaluate team performance?
Group merit pay The nurses team-based performance are supposed their section
performance .For the evaluation of the nurses team-based performance, we suggest the
Balanced Scorecard approach. Financialthe ability to provide financial profitability and
stability or cost-efficiency Customer the ability to provide quality goods and services
,delivery effectiveness ,and customer satisfaction Internal business process internal
process that lead to financial goal Learning and Growth the ability of the employees,
technology tools and effects of change to support organizational goals .
Clear vision, mission and development strategy Develop a Clear Sense of Direction and
strategic target of the whole hospital, identify the hospitals key target and index.
Determine the specific departments target based on the whole hospitals target. Set up a
merit appraisal system The appraisal index contents four main part. Financial: business
income, balance of payments Customer: patients' satisfactory degree Internal business:
average length of stay, out-patient consultation, utilization of hospital beds Learning and
growth: the professional growth of the department employees. Make compositive
evaluation of each department from the four indexes quarterly. Reward the department
that got high score in evaluation. The department can allocate the merit award to the
department employees according to the employees 12 responsible weighing and their
personal performance. Advantage: It make the whole organization together work for the

strategic goal. It can convert the organizations strategic goal to merit index of all levels of
organization. It is good for the organization and staffs learning and core competency
improving. It can realize the organization s long term development With the
implementation, it can enhance the management level of the whole organization