Compensation methodology has always challenged physician groups. The highly complex system of reimbursement for the physician's services in the rapidly changing environment of health care makes the choice of a compensation model even more problematic. Any methodology chosen should reflect the underlying philosophy and culture of a group , and have the flexibility to accommodate the variability of interests, expertise, energy levels, and practice styles of its members. Further, compensation models must strike a balance between the financial viability of the practice and fair compensation for all physicians. This article describes the most common compensation structures and addresses the strengths and weaknesses of each.