Removing an incentive is a decision, not an outcome study

A company can recognise a concern in its remuneration design without having proved that every person exposed to the incentive acted on it. That distinction mattered when we examined a paid-visit-linked component for eighty-two therapists. I did not want the discussion to begin by accusing clinicians or to end with an unsupported claim that changing pay had improved patient outcomes. The decision concerned a commercial signal and the way it sat beside professional responsibility. Its effects would require their own examination.

We removed the component and revised fixed remuneration, increasing annual compensation expense by ₹1.35 crore. The people team managed the staff process, finance examined the cost and the medical director retained authority over clinical standards and professional review. The board approved a business choice with an explicit financial consequence. We did not call it cost-neutral, and we did not use a decline in visits as proof that care had become more appropriate.

## Examine the signal without accusing the staff

Incentives communicate what an organisation notices and rewards. A visit-linked payment can sit beside other messages about professional judgement and appropriate care. The task is to examine how those messages interact, including the pressure created when a centre's financial performance is difficult. That does not establish that a particular clinician made an improper decision. Conflating the structural question with an allegation about individuals can make a useful review defensive before the organisation has understood the design it is asking people to work within.

I wanted clinical leadership involved from the beginning. A chief executive with an administrative background should not decide what constitutes appropriate treatment or infer it from a commercial count. Qualified leaders could explain where professional judgement belonged and how staff were expected to exercise it. The people and finance teams could explain the remuneration mechanics. Bringing those accounts together helped us discuss the signal without allowing one function to claim authority over the whole question.

Staff also needed a clear explanation of what was changing and why. If management says only that it is improving alignment, people may reasonably wonder whether they are being blamed or whether their income is being reduced through language that avoids the practical detail. We had to explain the revised structure, the implementation and the financial effect. Listening to staff questions was part of making the decision workable, rather than a communication exercise after the design was already considered complete.

The concern did not require us to invent a historical misconduct finding. We could decide that the commercial signal was undesirable in the context of the service and change it. Where a genuine concern about individual practice arose, it would require an appropriate separate process. I wanted that distinction preserved so that a policy decision did not become a substitute for professional review, and a lack of individual findings did not prevent management from examining the system it had created.

## Put the cost and responsibility into the decision

The additional ₹1.35 crore annual compensation expense belonged in the board's decision. It could not be hidden inside a general statement that the policy supported better care. Management needed to explain how the cost affected the business plan and what other choices it constrained. A worthy rationale does not remove the need for a funded implementation. Equally, a visible cost is not evidence that the change is commercially irresponsible; it is a fact the decision-makers need to weigh openly.

Responsibility also needed to be explicit. The people team owned staff terms and implementation, finance maintained the cost account, clinical leadership retained professional standards and I was accountable for the executive recommendation and its execution. The board's role was to consider the material business choice and oversee management's response. Without that division, a change can attract many sponsors while leaving nobody clearly responsible when an unresolved question appears during implementation.

We did not replace one simplistic measure with another. A reduction in visits would not by itself show that clinical decisions were more appropriate, just as a rise would not automatically show the opposite. The meaning depends on the individual circumstances and qualified assessment. I did not want management to remove a visit-linked incentive and then celebrate a visit-count movement as though it were a clinical outcome. That would preserve the same confusion in a different form.

The revised remuneration also did not remove every possible organisational pressure. Staff still work within schedules, budgets and service expectations. A company should be cautious about describing any single policy as resolving a broad ethical question. The immediate change was specific: one paid-visit-linked component was removed and fixed remuneration revised for eighty-two therapists. Keeping that description precise gave us a defensible account of the action without pretending that the surrounding management responsibilities had disappeared.

## Ask separately what happened afterwards

The reason for a decision and the evidence of its effect are different parts of the story. We acted because the incentive conflict deserved attention. To make a later claim about patient outcomes, staff behaviour or service quality, the company would need an examination suited to that question and the appropriate expertise. Funding a policy change does not supply that evidence automatically. I want executives to be able to say what they have decided without filling the space after the decision with an outcome they hope will follow.

There may be several useful questions after implementation. Did staff understand the terms? Was the revised pay applied correctly? Were unresolved questions handled through the agreed process? Those are different from whether a particular clinical outcome changed. Management should identify which owner can answer each question and avoid combining them into one reassuring score. A successful administrative implementation can be acknowledged while more consequential effects remain uncertain or require further work.

Directors can help by distinguishing a responsible response from a proven result. They should ask why the incentive was changed, what it costs, who owns implementation and what management can currently substantiate. They should also be alert when the account jumps from a policy announcement to a broad assurance about quality. That jump can make a board feel informed while leaving the central evidence question unanswered. Oversight becomes more useful when it keeps the missing question visible without demanding that directors run the professional process themselves.

I would describe our action as a deliberate change to a commercial signal, with a known compensation cost and retained clinical authority. That account does not need to claim that all earlier care was wrong or all later care was better. Its value lies in showing how management identified a concern, made a funded decision and kept the limits of its knowledge intact. The next task is to examine the relevant effects responsibly, rather than reward ourselves for a conclusion that the decision alone could never establish.