4 steps to adjust staff salaries
“How do you give raises to your staff?” This is a common question among ODs. I have learned after several years of working with eyecare practices that we are all over the place in how we compensate our staffs.
“How do you give raises to your staff?” This is a common question among ODs. I have learned after several years of working with eyecare practices that we are all over the place in how we compensate our staffs. Hiring and agreeing on a starting salary doesn't seem to be the big problem, but knowing how to continue to adjust the salaries seems to be the challenge.
It seems there are two basic schools of thought on adjusting staff salaries:
1. The grid method is very objective and ranks each area of the office into various levels of expertise. As an employee earns increasing levels of expertise in different areas of the office, she becomes more and more valuable to the company. Therefore, her pay rate increases.
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2. The merit method is more subjective because it ranks the staff member on levels of performance and rewards him for going above and beyond expected levels of service. Performance can be graded and evaluated in a number of ways, but it must be defined beforehand.
Which is better? It depends. Performance-based practices gravitate toward the grid method, and relationship-based practices lean toward the merit method. In our practice, we have merged the methods to fit our practice personality.
We schedule salary adjustments for the summer of every year, and this is the four-step process we use.
Look at the budget (Don’t skip this step)
We budget 24.3 percent of our income on staff salaries. This is on the high side of most recommendations. Relationships are important to us. Having adequate, well-trained staff members who feel a sense of responsibility to the patient is a priority. Two percent of this budget is dedicated to staff training and staff development. We make up for the increased budget item with savings in other areas, mostly cost of goods sold.
Determine if staff salaries can increase and by how much
All too often, practices realize they are already over budget on staff salaries. It is better to find this out early rather than later. If we are over budget or at budget, a tough decision must be made. We have to increase income or decrease salary. Salaries can be reduced by decreasing staff size, cutting benefits, decreasing hours, or decreasing salaries.
My advice? Just make more money. In the past, we have been unable to increase staff salaries when scheduled. We told the staff and gave them a choice-no raises or let’s delay the process a few months and make more money. Guess what happened?
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