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Anatomy of an Employee Bonus

Chelsea Rice, for HealthLeaders Media, February 11, 2013

Regardless of your politics around our nation's fiscal problems, we can probably agree that January and February are financially sobering for many of us. The holiday parties are over and the bills are coming due. 

In late January, just as credit card bills started to recover from end-of-year holiday spending, the FICA tax holiday expired, and paychecks contracted accordingly. The timing wasn't great for American workers, as salaries have plateaued over the past few years, only increasing 2.8% on average in 2012. They are projected to increase just 3% in 2013.

Financial conditions favorable
But in Miami, Baptist Health South Florida executives saw an opportunity to reach out to employees and show support. Baptist Health executives say they are sensitive to their employees' financial pressures, especially after reviewing Baptist's "better-than-expected" performance at the end of 2012.

So the nonprofit health system rewarded each of its approximately 15,000 employees in non-leadership positions with a $1,000 bonus. Baptist's HR department says it knew this change would have "a significant impact on the disposable income of the employees, especially the lowest-compensated staff."

Corey Heller, corporate VP/chief human resources officer at Baptist Health says this bonus emphasized its pay-for-performance philosophy. Called "The Valentine's Day bonus" in the announcement, it was a strategic effort at employee appreciation.

"There were a number of things we wanted to recognize," says Heller,  "The change in the FICA tax rate was certainly something we had no control over, but we had an obligation and a responsibility to do what we can to help minimize the impact on our employees."

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