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Rename performance bonuses — call them severance

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CALGARY — Last Tuesday board chairman Stephen Lockwood defended the decision to proceed with bonuses for senior managers at Alberta Health Services. As might be expected, the bonuses have produced considerable protest from the public as well as concerns from the government currently facing fiscal constraints.

But people have missed the point concerning executive bonuses or pay-at-risk at AHS. Pay-at-risk is not part of executive’s regular salary. Rather, it serves as an incentive and reward. This isn’t money paid out just for showing up. Executives must earn it by producing results. And produced they have. Here is a small list of accomplishments:

  • Failing to meet a single performance target for the year. Thus, a tradition that goes back to the creation of AHS in 2008 is maintained. Has it been five years already? Time flies.
  • Successfully hiding the failure to produce any improvement in hospital occupancy rates demanded by the health minister in March. AHS spent enormous effort pursuing this objective, eventually accomplishing nothing. So instead, AHS issued a press release claiming progress was being made and hoping no one would check the numbers. Never before has a health care issue been resolved in such a cost-effective fashion.
  • Continuing the successful program of closing small efficient facilities delivering great service to Albertan’s, such as the Little Bow facility in Carmangay, in favour of large inefficient, bureaucratic behemoths. Thus securing the strategy of providing declining service at increased cost.
  • Consolidating emergency call services, including the recently announced closure of these services in and around Red Deer. This will provide no end of fun to those suffering a heart attack explaining to operators in Edmonton just where Rainy Creek Road intersects with Range Road 31A. "You know, where Tom’s old barn used to stand." Further costs efficiencies can be had by outsourcing the emergency call centre to India. No word on this, however.
  • Successful construction of South Calgary Health Centre, setting the record as the world’s most expensive health care facility. This wasn’t easy. AHS had to spend $1.2 billion more than planned, eventually delivering a 300 bed facility for $1.7 billion. But the results were worth it, easily eclipsing the $115 million for 315 beds spent by those masters of constraint in Dubai.
  • Successfully getting the public to buy into junk-science satisfaction surveys designed to convince people that everything is fine. The only blip in this record was using satisfaction survey results to defend food quality at selected seniors facilities even as food critic John Gilchrist described it as: "of such poor quality it was un-cuttable, unidentifiable and overcooked beyond edibility. Food that had no aroma, little texture, no eye appeal and no life. Appalling food, much of which went back to the kitchen, untouched by those dining around me."

Outside of that, however, AHS and the Health Quality Council of Alberta continues to successfully use junk-science in selling the story that things are going well.

  • Implementing a new continuing care funding model that will ensure the decline of continuing care. Continuing care facilities are already downsizing in response. Managers of these facilities are making plans to reduce service levels to those in care. The nature of continuing care should make it easy to hide these service declines from the public.
  • The failure of the much daunted early childhood flu immunization program to come anything close to performance targets gave AHS representatives an opportunity to appear on radio and TV earnestly expressing concern for children. Here again, AHS successfully transformed an operating failure into a public relations triumph. Kids will still get sick, and some will suffer horrendous complications, but everyone will know that AHS cares.
  • Continued application of a capacity planning process designed to manufacture access issues and increase wait times. It’s official now, these wait times are killing people.

You can’t get results like this without ‘incentivizing’ people. Bonuses are an essential part of the performance management process. Why, one might as well go back to the old days when someone collapsing on a hospital sidewalk in Lethbridge would actually receive help from hospital staff. Now, thanks to the extensive performance management process at AHS, hospital staff understand that sick people on the sidewalk aren’t their department.

I could go on. But the point is we will only continue to get these kinds of results if we continue with the current performance management model. So let’s stop complaining about these bonuses. Rename them perhaps. Severance pay comes to mind.


Troy Media columnist Robert Gerst is a partner in charge of operational excellence and research & statistical methods at Converge Consulting Group Inc. He is author of The Performance Improvement Toolkit: The Guide to Knowledge-Based Improvement and numerous articles in peer-reviewed publications.


—Troy Media

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