Tip of the week: Avoid retention bonuses that pay out after a few years

Some hospital medicine practices implement retention bonuses. For each year of service, the practice puts away a predetermined amount of money to be paid out at the end of a predetermined period of time. For example, if the practice puts away $20,000 for each year of service that is paid to the physician in a lump sum at the end of five years, there is a $100,000 motivation for the physician to stay on for at least five years. Of course, this plan begs the question, what happens at the end of five years? Does the plan guarantee turnover at the five-year mark? Many hospitalist practices would be very happy with five years of service from a physician, but this type of retention bonus is not advisable. You cannot buy loyalty because you never know when it is paid for.

This week’s tip is from Practical Guide to Hospitalist Recruitment and Retention by Kirk Mathews, MBA, and foreword by John Nelson, MD, FACP, SFHM.