Why Compensation Means So Much More Than Money

Compensation is not just about the money. It’s profoundly personal and at the core of how valued we feel by our employers, regardless of our role. While physicians are no different, they face unique challenges due to the lack of transparency around physician compensation methodologies and benchmarking data. Considering the documented shortage of physicians now and in the future, this disconnect around physician compensation is contributing to burnout, fostering distrust, and fueling physician turnover at an alarming rate that is costly and disruptive to the U.S. healthcare system.

In a recent webinar I recorded with MGMA, I urged Healthcare Leaders to challenge current compensation strategies and models. I emphasized that fostering collaboration with physicians is not just a suggestion but a crucial step toward creating transparent and dynamic compensation plans. This inclusivity is key to boosting physician satisfaction and engagement.

In my experience working with physicians and consulting on compensation and negotiation, many physicians are hesitant to negotiate because they are concerned that others may perceive them as greedy and difficult. They are worried about “rocking the boat,” angering others, and causing conflict. The act of asking questions about compensation, meeting with administrative leaders, or even the mere thought of negotiation causes a great deal of anxiety and a pretty profound stress response.

The NeuroLeadership Institute, through which I have trained in Brain-Based Coaching, has done fascinating work delving into what motivates people at work and drives them on a human level to stay long-term, feel engaged and satisfied, and achieve excellence in productivity and performance. I have found the SCARF Model (Rock, 2008) to be an excellent tool for developing successful physician compensation.

The SCARF Model is built on three central ideas…

• The brain processes social threats and rewards with a very similar intensity as physical threats and rewards (Lieberman & Eisenberger, 2008).
• The capacity to make decisions, solve problems, and collaborate with others is generally reduced by a threat response and increased under a reward response. (Elliot, 2008).
• The threat response is more intense, more common, and often needs to be carefully minimized in social interactions (Baumeister, Bratslavsky, Finkenauer, & Vohs, 2001).

In “Your Brain At Work,” Dr. David Rock shares that “SCARF rewards go a long way toward making employees feel valued, engaged, and inspired to commit to their work, whereas threatening these domains has the opposite effect.”

Here is how the five SCARF rewards create a reward response (e.g., dopamine, oxytocin, serotonin) and reduce threat responses (e.g., cortisol) in the brain…

1. Status: Feeling valued, that we make a difference, and are recognized for our achievements
2. Certainty: Feeling safe, having clear expectations, no surprises, commitments are met
3. Autonomy: Having flexibility, independence, and control over work
4. Relatedness: Experiencing a sense of community, connection, communication, and belonging – psychological safety
5. Fairness: Treated with respect, equity, honesty, and transparency

When you apply the SCARF rewards to compensation, it becomes clear why compensation for physicians, for all of us, is about more than just money.

For instance, a well-communicated and transparent compensation plan can address the ‘Fairness’ reward while offering flexibility in the work schedule can create an Autonomy reward. The bottom line is that how employers choose to design, implement, update, communicate, and distribute compensation is a leading driver and core opportunity to encourage employee reward responses and foster long- term engagement, productivity, and satisfaction.

For Physicians, beyond money, compensation as applied to SCARF means…

• Status: Feeling respected, recognized, and rewarded for your achievements, your value to the organization, your patient care and outcomes, years in specialty, contributions to productivity, quality, teaching, research, and/or leadership.
• Certainty: Understanding your compensation plan is crucial. It’s important to have clarity regarding your job expectations, guaranteed salary, productivity, quality, and leadership incentives. Regular pay, on-call pay, and bonuses are disbursed on time and in accordance with your Employment Agreement—no surprises. You know whom to contact if you have questions, concerns, or encounter changes. There are regularly scheduled reviews and updates on compensation and productivity to ensure your compensation remains up to date.
• Autonomy: Having some flexibility and input around your guaranteed salary, productivity targets, quality incentives, on-call pay, medical director pay, leadership pay, continuing education time and allowance, and volunteer opportunities. Compensation options that reflect your work-life balance priorities and incorporate flexible or part-time roles if needed.
• Relatedness: Open-door policies that promote communication with administrative leaders, welcome physician input and collaboration, and foster a culture where psychological safety and accountability are valued.
• Fairness: Knowing your organization strives to ensure your compensation and that of your colleagues is fair, equitable, transparent, easily communicated, and benchmarked with current market data. Having a compensation plan that is clear and easy to understand and incorporates thresholds and metrics that are attainable is important.

Incorporating data analysis, physician compensation benchmarks, and advocacy around engagement is at the heart of my work to empower physicians around compensation and negotiation. Compensation is one of the “key physician motivators.” However, a culture that rewards your status, provides certainty, encourages autonomy, cultivates relatedness, and promotes fairness is where you will ultimately find rewarding, satisfying work, dynamic engagement, and long-term professional impact.

Customized Compensation Consulting for Physicians

At SCC, we specialize in this important work, helping physicians navigate compensation opportunities and verify fair pay. We would love to work with you on your professional journey!

Contact us for one-on-one coaching support around physician compensation and negotiation. We can review your current compensation, provide analysis, benchmarks, and recommendations for negotiation, review LOIs or Employment for a new job, compare existing and new job offers, or create a customized consultation plan based on your goals.