Dollars and Sense
Compensation programs should accurately match performance with salary

By Carol Bradley, MSN, RN, California Editor
July 30, 2001

Hallelujah! With increasing frequency, I have been hearing good news about some healthy nursing salary increases. Given the stagnation of nursing salaries in the mid-'90s and growing RN vacancy rates, we are overdue for a major salary adjustment for our bedside caregivers.

Many believe that improving the economic position of registered nurses also will further efforts to increase enrollment in nursing schools. I believe that this is reflective of the growing realization that our hospitals cannot succeed without a demonstrated commitment of optimum resources for a quality nursing staff.

However, history teaches us some important lessons about how salary adjustments can have a positive effect on retention and recruitment. Some basic but key principles should beat at the heart of any successful compensation program.

Bedside nurses should be actively involved in the development of compensation strategy and salary administration decisions in the workplace. Understanding the nuances of salary administration will help give nurses the knowledge to astutely assess what is in their best interest. Whether you are firmly rooted in your job or out in the market, let me offer some thoughts on salary for you to consider.

In any salary program designed for true professionals, education, experience, credentials and certification should count for a lot. Compensation programs should recognize what each nurse brings to the workplace. As we know, all nurses are not created equal. Years of tenure alone no longer are a relevant consideration in effective salary determination.

Demonstrated performance should count for a lot as well. While no measurement system is perfect, a performance-based system in which nurses have a say in personal and peer evaluation makes a lot of sense. Being involved helps everyone have a sense of ownership in the process and the retention outcomes we would like to achieve.

Incumbent staff should be honored and recognized financially, especially when salary levels are rising. It is a travesty when nurses can resign and be rehired at a higher wage by the same employer. In previous RN shortages, incumbent nurses often lost out on the double-digit increases that applied to the salary range and to newly hired nurses.

Even if a starting salary quote is high, remember it is the breadth of the salary range and the opportunity to move through it that will result in long-term financial benefit.

On another note, if you are tempted by a hiring bonus, first take a look at the full financial impact of changing jobs, such as your retirement benefit loss. Although in some cases these hiring bonuses are appropriate, it seems a far better investment to pay a retention bonus than to pay someone to leave their job.

It also is important to realize that special pay practices such as shift and weekend differential, standby and callback are significant additions to overall income. Be savvy about understanding the total compensation package, not just your hourly base wage.

Also, don't forget to consider the other perks that your employer offers, such as support for continuing education, tuition reimbursement and career development programs. All of these aspects represent true value to a professional nurse.

At times, hospitals have learned that efforts to be creative and flexible have backfired. When benefit packages were created to promote part-time employment over full-time, many nurses reduced their work hours accordingly. Maybe we need a financial incentive for the core full-time staff. Think how nice it would be for full-time staff to be guaranteed no cancellation.

Having trouble getting nurses to work longer hours? Why not pay some healthy quarterly bonuses to nurses who contribute the most work hours? I suspect that it could be easily funded based on the huge premium rates being paid to registries that provide nurses to hospitals at a cost more than double that of their own incumbent nurses. Having worked registry, I know that it is not the nurse who takes home the profit.

Although it is great that nursing salaries finally are getting the boost they need, nurses should play an active role in using the new dollars in the most effective manner. While I know that money isn't everything, it still is important to be smart about it. Make sure your dollars make sense.

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