Unlike Moses, my list of the 10 Commandments (changing exec & physician compensation) was not handed down directly from God, and probably had very little to do with divine inspiration.  This list is largely the result of the bumps and bruises that I have earned over my career.

1. Assume nothing. The only assumption that will be true in the work of changing compensation plans is that your assumptions will differ from the assumptions of others. Communicate early, communicate often, and communicate through multiple means.
2. Calculate everything. When you have it calculated, calculate it again. Even simple theories and formulas become complex when put into practice. Use real data to build models, and try to break them while still in the modeling phase.
3. Identify alternative models. It is much easier to discuss many options with decision makers than it is to argue in support of one. Different assumptions will lead to different preferences.
4. Small rounding can translate into big dollars. This is especially true concerning calculations for incentive plans and production plans. Always use precise, pre-determined formulas to calculate incentive and production payments.
5. Even the most rational people can become emotional about their compensation. To understand this point, you need to change an executive or physician compensation plan once.
6. Reach agreement/understanding on the details before implementing the plan. This might seem to be a no-brainer, but how many committees must a strategic plan, quality plan, or project plan go through for approval? Get all plans tied to compensation finalized before implementing the incentive compensation components.
7. Put everything in writing. If it can be debated at the time of calculating payments, it probably will be.
8. Keep it simple. If you can’t explain the compensation plan to a new physician/executive in 5 minutes or less, and without their eyes rolling up into their forehead, then it is too complex.
9. The best practices of others will probably become your worst headache. There are no shortcuts to designing a compensation plan that aligns with your organization’s strategies. Comp and benefits are the most expensive components of operations for most organizations – spend most of your money in a way that drives the behaviors you need to be successful.
10. It is always about the money. While money may not be a “primary motivator” for many physicians and not-for-profit executives, inequitable or unclear compensation practices will cause the best people to assume the worst, and they will often times act accordingly.