A model for compensation

We are at the end of both the academic and the fiscal year, and as with every year, this has set in motion the review of the current year’s plans and goals, and planning for the next fiscal year with many targets to define. This work raises many questions: How many new faculty members will we recruit, and what will be their contribution to our missions and to our growth? How will their clinical activities impact expenses and revenue? And how can we adjust salaries for the next year given the many uncertainties in our assessments? How do we carve out support for research and education?

Building the department’s budget has been a monumental lift every year, and I want to start by thanking division leadership and our administrative teams for their contributions, including responding to numerous data requests and to preparing, editing, and re-editing drafts of Excel spreadsheets and Tableau reports. This task is a blend of analyzing past performance, forecasting future developments, and checking in with our larger strategic priorities. Plotting those priorities on our departmental road map and aligning them with our college and health care system’s plans are honestly pleasurable parts of this annual task.

There are many intricate details to think through and difficult choices to make, which are critical and inextricable from the process. But thinking about what matters and where we should grow, hearing from the divisions and the centers and from many of you as it relates to who you want us to be, and blending all that together every year is an honor and a responsibility that I take very seriously. This is the third time that I have led the budgeting process since my appointment to this role. This year is also the first time our compensation plan is implemented in all aspects, which has added some novelty to the work. In previous years, some elements of the model were not applied, but that ramp-up period has ended. Given this fact, it is perhaps time to restate some of the foundational principles and address some misconceptions.

First, productivity expectations and salaries are measured against our peers to be nationally competitive. In a department as large as ours and with as great a variety of activities, the plan must also be flexible enough to accommodate the scope of our practice and our diversity. Each division has been given room to adapt elements to fit their needs, based on their director’s vision and what best fits their division’s culture. Regardless of division-level adaptations, at its heart, the department’s compensation model rests on the ideas of transparency and equity and also on the idea that each faculty member has the freedom to define the shape of their career. Depending on their decision, certain benchmarks and expectations determine in part how each individual is compensated. At year’s end, according to this plan, not only are incentive payments calculated and paid based on this, but salaries for the next year can be increased for those who surpass expectations.

With those goals in mind, how is the plan performing? I am pleased to report now that we have reached the end of the salary setting process that about 85% of faculty members in the departmental comp plan have earned an increase for next year. This is due to numerous factors, including productivity that exceeded last year’s, as well as an increase in the national benchmark to which we are aligned. It is worth noting that incentive payments are linked to the financial situation of the institution and, more specifically, of the department where profit—for any department of medicine—is difficult to generate. Despite these difficulties, we have succeeded in being able to recognize high productivity through incentive payments.

I believe that because such a large majority of faculty earned their increase, and that the department has been able to recognize their work, that the model has proven successful. To make a model like this viable in the long term, however, there must be a balance. By the end of the “productivity measurement period” (a period defined as April 1 to March 31), if someone does not meet the minimum benchmark, instead of an incentive payment, they will face a reduction in their salary. In a very small number of cases this year, approximately 3%, reductions to base salary will be implemented. We will offer opportunities throughout the next fiscal year and measurement period to help those individuals identify and overcome the barriers preventing them from meeting their benchmark targets, with the goal of ensuring future year success and increases to base salary.

One of the ways department and division leadership help is by making data available to everyone at their convenience, by regularly keeping them informed about their standing and their progress toward productivity benchmarks, and by helping identify any potential risks as early as possible. This information sharing was an essential part of the ramp-up phase to build these tools and to equip each faculty member with the information necessary to build the career they desire. These data are always accessible on AskIM. We are always available to help you review this data and make adjustments based on the insights AskIM provides.

If we are truly stronger together, and I wholeheartedly believe it, then our success depends on each of us relying on each other to give their best. Each of us has a responsibility to know what the impact will be on our shared future if we do not. As I always have, I welcome your feedback and your input. I want to thank you for a remarkable academic and fiscal year and I believe our next one will be all the more successful because of what you did in the one just completed. Your efforts are putting us on the sound path forward so that we can continue to meet the missions to which we are dedicated.