A typical day at a Medical Billing and Coding company is taxing because specialists have to complete tasks in the same series of areas every day regarding patients' billing. Medical billers are also in constant contact with insurance companies, collection agencies and healthcare agencies and the tasks performed each day by medical billers require top skills and talent. When designing a compensation structure, a business's compensation philosophy determined how private pay compared to external competitors (Mathis & Jackson 2011).
Risks and Benefits
Matching the market ensures employers set pay levels relative to those in the current marketplace. In matching compensations rates of competitors, a business ensures it remains competitive and thus a high ability to attract and retain talent. However, matching the market is risky because it places employers in a play catch-up position, needing huge financial adjustments in a tight labor market.
Leading the market sets an organization's pay levels higher than existing pay rates in the current market. This strategy is beneficial because it might increase the supply of candidates, boost morale and productivity, decrease employee turnover and increase selection rates of applicants who are qualified. However, this strategy is risky to a business because it increases overall labor costs thus having the company make fewer profits.
Lagging the market is a kind of compensation strategy that has a business offer low compensation to applicants because they do not have the financial resources needed to provide workers with higher rates. Employers willing to employ the strategy that lags the marketplacethe marketplace may choose to reward their employees in non-financial ways to minimize turnover and dissatisfaction. This strategy is beneficial because an employer aims at meeting employee satisfaction in other ways thus improving brand reputation because employees enjoy work-life balance. However, using this strategy could be risky because setting pay rates below the current marketplace exposes an organization to fluctuations in the labor market. It is also dangerous to adopt this kind of strategy because of the difficulty in attracting and retaining highly qualified employees. Poor pay will eventually lead to poor performance, reduced turnover and dissatisfaction.
Horizon billing and coding company is a company that seeks to attract experienced and talented individuals. With this mission, the best compensation philosophy would be to lead the market. As a company that aims at driving the market, Horizon billing and coding will set its pay at a rate anticipated for the following year. For instance, the market rate for a medical billing specialist by January the next year stands at $40, 000 but to lead the market, the company will age the salary to the start of the following year and pay ahead of the market. To attract top talent, we believe that pay is the most critical job characteristic for all applicants.
In leading the market, we intend to have a recruiting advantage from the lead the market approach. Currently, the US market is a tight labor market, and the only way to survive in a competitive industry such as the medical industry is by offering higher compensation for specific positions that prove difficult to fill (Randstad North America 2018). This is the chosen strategy because of the need to ensure that the approach matches our vision, mission, and culture of being at the top of the industry.
Mathis, R. L., & Jackson, J. H. (2011). Human resource management (13th ed.). Mason, OH: South-Western.
Randstad North America. (2018). Want to retain me? U.S Workers say 'show me the money' Retrieved from https://www.randstadusa.com/about/news/want-to-retain-me-us-workers-say-show-me-the-money/
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