The Governance of CEO Incentives in English NHS Hospital Trusts

Ballantine, Joan; Forker, John; Greenwood, Margaret

doi:10.2139/ssrn.1111534

Cited by 12 publications

(23 citation statements)

References 37 publications

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“…They act like stewards in an "odd" kingdom that uses performance ratings to evaluate organizations, blaming directors when ratings are bad, but with no rewards when good performance is achieved. In the "NHS kingdom," the relationship between organizational performance and CEO turnover is significant (Ballantine et al 2008), whereas that between performance and pay is not.…”

Section: Discussionmentioning

confidence: 99%

“…Cardinaels (2009), for Dutch non-profit private hospitals, found that CEOs, on average, earn more when the hospital's supervisory board members have a lower level of expertise and receive more remuneration. Ballantine, Forker, and Greenwood (2008) study the relationship between CEO pay, CEO turnover and organizational performance in NHS acute hospital trusts. NHS trusts were the predecessors of the NHS FTs.…”

Section: Performance and Remuneration In The Healthcare Sectormentioning

confidence: 99%

“…These authors found a significant relationship between low performance, in particular for financial performance, and CEO turnover, but they did not find any relationship between financial performance and CEO pay or between service quality and CEO pay. Ballantine et al (2008) excluded FTs from their analyses because they warrant separate study and called for further research to investigate these relationships in FTs.…”

Section: Performance and Remuneration In The Healthcare Sectormentioning

confidence: 99%

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Stewards in an “Odd” Kingdom: Performance and Remuneration of the Boards of Directors of NHS Foundation Trusts

García‐Lacalle

Royo

Yetano

2018

International Public Management Journal

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Performance measures and rewards are becoming commonplace in public sector organizations. This paper studies the implementation of performance-related pay (PRP) mechanisms in the boards of directors of the Foundation Trusts (FTs) of the National Health Service (NHS) in England and analyzes whether their remuneration is linked to organizational performance using qualitative and quantitative analyses (structural equation model). FTs operate in a favorable context for implementing PRP to remunerate executive directors. Our results show that many FTs have not implemented PRP and hardly any report having payed bonuses. However, most of them disclose that they carry out some kind of performance appraisal. These results indicate both reluctance to and difficulties in adopting PRP in public sector entities. Results also suggest that executive directors of NHS FTs are stewards in an "odd" kingdom that uses performance ratings to evaluate organizations, blaming directors when ratings are bad, but with no rewards when good performance is achieved. STEWARDS IN AN "ODD" KINGDOM. PERFORMANCE AND REMUNERATION OF THE BOARDS OF DIRECTORS OF NHS FOUNDATION TRUSTS.conducted a review of the literature on the effectiveness and value for money of PRP in the UK public sector. Their findings were mixed, with PRP scheme effectiveness often dependent on scheme design and organizational context. Several authors argue that PRP may not produce the desired results in the public sector (see, e.g., Christensen, Paarlberg, and Perry 2017;Bellé 2015;Bregn 2013;Brewer and Walker 2013;Langbein 2010;Ritz, Brewer, and Neumann 2016;Weibel et al. 2010). Motivation and pay are more likely to be substitutes than complements in the public sector; therefore, PRP may have unintended adverse consequences and more analyses of the relationship between performance and pay are necessary in this sector (Langbein 2010).National Health Service (NHS) Foundation Trusts (FTs) are autonomous public sector organizations within the NHS and provide over half of all NHS hospital, mental health, and ambulance services in England. Monitor, an independent public agency, regulates the FTs and monitors their performance using a defined and specific set of performance measures. FTs provide a suitable environment in which to study the implementation of PRP, for three reasons. First, Monitor backs the implementation of some type of PRP mechanism. Second, the top management teams of the FTs are structured in boards of directors. Third, their performance is assessed with specific performance measures which are periodically disclosed and, thus, easy to track. This paper has two objectives. First, to study the level of implementation of PRP mechanisms to remunerate the boards of directors of the FTs. For this purpose, we review the remuneration sections of the annual reports published by the FTs. Second, to study whether the remuneration of the directors, in particular the executive directors, is linked to the performance of these organizations. For this purpose, we use the structural...

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Section: Discussionmentioning

confidence: 99%

Section: Performance and Remuneration In The Healthcare Sectormentioning

confidence: 99%

Section: Performance and Remuneration In The Healthcare Sectormentioning

confidence: 99%

See 1 more Smart Citation

Stewards in an “Odd” Kingdom: Performance and Remuneration of the Boards of Directors of NHS Foundation Trusts

García‐Lacalle

Royo

Yetano

2018

International Public Management Journal

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“…It seems that this level of turnover, with attendant organizational instability and increased recruitment costs (Ballantine et al . , Havens et al . , Thrall , Hart et al .…”

Section: Introductionmentioning

confidence: 99%

Stress and resilience in a post‐Francis world – a qualitative study of executive nurse directors

Kelly

Lankshear

Jones

2016

Journal of Advanced Nursing

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Recent fiscal austerity and scandals relating to quality of care have increased pressure on executive nurse directors. Increasing size of organizations, limited resources devoted to quality combined with poorly defined limits of responsibility are all major stressors and executive nurse directors, both in the United Kingdom and internationally, need clear strategies to maintain resilience. Repetitive demands for data by oversight organizations may detract from more important quality assurance strategies.

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“…They concluded that these organisations manage earnings around a surplus or deficit close to zero through accruals management and discretionary spending. Similarly, Ballantine et al (2008), who studied public sector NHS Hospital Trusts in the UK, and Chang and Tuckman (1990) who examined non‐profit organisations in the US, found that accruals management facilitates the manipulation of reported earnings to achieve a result of low or no profits 3…”

Section: Salient Characteristics Of Organisational Forms For Health Smentioning

confidence: 99%

Not Reporting a Profit: Constructing a Non-Profit Organisation

Cordery

Baskerville

Porter

2011

Financial Accountability &Amp; Management

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Public sector reformers advocate contracting‐out as a means of improving cost‐effectiveness. In the health sector, market‐based contracts with for‐profit organisations can reduce equity of access and divert public funds to private gain. Such issues have prompted policy makers to seek alternative contracting strategies. This paper examines a primary health care policy whereby government contracts with private non‐profit organisations to increase efficiency and meet World Health Organisation ideals. The study found that the policy's implementation has not achieved these aims when for‐profit providers masquerade as non‐profit organisations. The implication is that governments may find it more effective to manage for structural diversity than mandate homogenisation.

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The Governance of CEO Incentives in English NHS Hospital Trusts

Cited by 12 publications

References 37 publications

Stewards in an “Odd” Kingdom: Performance and Remuneration of the Boards of Directors of NHS Foundation Trusts

Stewards in an “Odd” Kingdom: Performance and Remuneration of the Boards of Directors of NHS Foundation Trusts

Stress and resilience in a post‐Francis world – a qualitative study of executive nurse directors

Not Reporting a Profit: Constructing a Non-Profit Organisation

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