Executives at This Hospital Just Set an Amazing Example for Employers Everywhere


Talk about leading by example.

Executives and board members at the Parkland Hospital in Dallas decided that they needed to increase the minimum wage for their entry-level workers to try and narrow the continuing pay gap. 

The increase in current wages for around 230 employees in linen, dietary and environmental services starting next month — from $8.78 an hour to $10.25 — will cost the hospital about $350,000 a year. So where will that money come from? 

In an inspiring move, the hospital affirmed its commitment to a living wage by asking its executives to agree to share part of their bonus funds in the upcoming quarter. The plan was recommended by a hospital committee made up of top executives.

Jim Dunn, the hospital's executive vice president and chief talent officer, told Modern Healthcare that the decision was made in the hopes of improving workers' morale and to provide a living wage.

"We're looking to show our commitment to all levels of talent in the organization," Dunn said. "We really want, in any way possible, to break down any gaps or anything between the top leaders and those who are closest to our patients."

This is not to say that executives won't be compensated for outstanding work, however, notes the Dallas Morning News. The committee also approved a pay-for-performance plan that makes the top 60 hospital executive eligible for between $750,000 to $1.2 million in bonuses, tied to performance over the next three months. If the executives don't cut enough costs to cover the living wage increase, the difference will be made up using this bonus pool.

This step from the hospital will make sure that everyone in the Dallas county would be earning above the state and federal minimum wages, both of which are $7.25 per hour.

Image Credit: ThinkProgress

Minimum wage has long been an issue of debate in the U.S., with some conservatives arguing that the minimum wage needs to be kept low to encourage competition, while others argue increases help alleviate poverty. Meanwhile, the International Monetary Fund suggested this week that the U.S. government consider increasing its minimum wage in order to increase its GDP.

"[G]iven its current low level (compared both to U.S. history and international standards), the minimum wage should be increased," the IMF wrote. "This would help raise incomes for millions of working poor and ... ensure a meaningful increase in after-tax earnings for the nation's poorest households." This marks the first time that the IMF has endorsed raising the U.S. minimum wage. 

Executives being forced to give up their bonuses during economic downturns is not unheard of. Last year, 40 senior Sony executives didn't accept their annual bonuses as the company's main electronic business posted losses for the second straight year. Decline in sales also prompted the IBM's top brass to forgo their annual bonuses, they announced in January. But Parkland's decision to take the initiative set an important example.

While the top personnel at the hospital are unlikely to feel much of a sting, the increase will have a much more tangible effect on those it helps at the bottom of the payscale. Brittany Florence cleans floors at Parkland and is now expecting a $1.50 an hour pay bump.