Adapting Industry-Style Business Model to Academia in a System of Performance-Based Incentive Compensation

Abstract

Performance-Based Incentive Compensation (PBIC) plans currently prevail throughout industry and have repeatedly demonstrated effectiveness as powerful motivational tools for attracting and retaining top talent, enhancing key indicators, increasing employee productivity, and, ultimately, enhancing mission-based parameters. The University of Arkansas for Medical Sciences (UAMS) College of Medicine introduced its PBIC plan to further the transition of the college to a high-performing academic and clinical enterprise. A forward-thinking compensation plan was progressively implemented during a three-year period. After the introduction of an aggressive five-year vision plan in 2002, the college introduced a PBIC plan designed to ensure the retention and recruitment of high-quality faculty through the use of uncapped salaries that reflect each faculty member's clinical, research, and education duties. The PBIC plan was introduced with broad, schoolwide principles adaptable to each department and purposely flexible to allow for tailor-made algorithms to fit the specific approaches required by individual departments. As of July 2006, the college had begun to reap a variety of short-term benefits from Phase I of its PBIC program, including increases in revenue and faculty salaries, and increased faculty morale and satisfaction.Successful implementation of a PBIC plan depends on a host of factors, including the development of a process for evaluating performance that is considered fair and reliable to the entire faculty. The college has become more efficient and effective by adopting such a program, which has helped it to increase overall productivity. The PBIC program continues to challenge our faculty members to attain their highest potential while rewarding them accordingly.

Effects of a Reward System on Resident Research Productivity

“…8,12 The resident reward system outlined herein borrows the same strategy guiding faculty performance-based compensation but applies it to residents. Typically, academic otolaryngology departments have discretionary funds that are spent to provide residents with a rich and rewarding residency experience beyond what is absolutely required by the Accreditation Council for Graduate Medical Education.…”

Satisfaction, Motivation, and Retention in Academic Faculty Incentive Compensation Systems:

“…12,20 Organizational psychology and business management principles indicate that an individual's knowledge of his or her respective compensation system, 19 positive perceptions of due process related to the design and implementation of the compensation system (eg, adequate notice, judgment based on evidence and fair hearing), 21 perceived validity, 12,22 procedural justice, 23 distributive justice, and alignment with strategic objectives, 24 are all important predictors of both a successful ICS, and participant satisfaction with an ICS. 13,25 Most outcome reports of academic ICSs have focused on the financial impact to an academic department or unit, 26 changes in clinical and academic productivity, 27,28 and retention rates for the entire unit, 28 rather than the impact of the ICS on the satisfaction, motivation, and retention of individual faculty. Without knowledge of the impact of such systems on individual faculty members' perceptions, there is a risk that these systems, which are intended to reward productive faculty members, may actually lead to harm, 29 including increased rates of faculty turnover, 30,31 and subsequent exacerbation of the shortage of qualified academic family medicine educators and researchers.…”

Validity and Feasibility of the Minicard Direct Observation Tool in 1 Training Program

“…However, performance-based incentive plans have become more common in academic centers. 18 Action plans included almost no comments on professionalism, and professionalism scores were nearly universally in the acceptable range. It is possible that direct observation by supervising staff may have suppressed residents' unprofessional behavior.…”