9.30.16 Issue #760 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter
 

5 Benefits of a Two-Tier Hygiene Salary System
By Sally McKenzie, CEO

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You’re always looking for ways to keep your team members happy and motivated. You know the more driven they are to excel in their roles, the better off your practice will be…which is why it doesn’t make sense to pay your hygienist a guaranteed salary like you would your other employees.

Hygienists are producers, and the more they produce, the more revenue your practice brings in. But if you pay hygienists a guaranteed wage no matter how much or how little they produce, they don’t have much motivation to improve. This leads to a real problem if their salaries rise above 33% of their production, causing your overhead to go up while revenues go down.

To get around this, some dentists opt to pay their hygienists a straight commission. Seems like a good idea, but not if your hygienist is willing to trade quality for quantity to enjoy a bigger paycheck. Fortunately this is rare, but it’s not the only drawback. Hygienists actually don’t like the idea of straight commission. Why? They have no idea what they’re going to make each month, which can be pretty nerve racking when you have bills to pay.

As I said in last week’s article, there’s a better way. The two-tier hygiene salary, in my opinion, is the best payment structure for both the dentist and the hygienist. Here’s why.

1. It will boost production and revenues. Through the two-tier system, your hygienist gets a base pay plus commission, giving the security of knowing the minimum amount that will be made each month. The best part is, the hygienist will also have the opportunity to grow earnings just by increasing production numbers. And of course this improved production benefits your bottom line. It really is a win/win.

Still not convinced? Here’s what the two-tier system looks like. If your hygienist works 10 days a month at $300 a day, he or she brings home $3,000 a month. That means $9,000 needs to be produced each month to meet goal. Let’s say hygiene produced $10,000 last month. With this model, you can pay the hygienist a commission of 15-33% on the $1,000 brought in over the monthly goal.

Trust me, unlike with the guaranteed wage, this structure will motivate your hygienist to produce more than three times his/her base salary, and your practice will reap the benefits.

2. It makes it easy to figure out raises. When your hygienist earns a raise, it’s easy to determine exactly how much that raise should be if you use the two-tier payment structure. You simply base the bump in pay on a percentage increase on the commission, as long as it’s less than the 33% maximum.

This isn’t the case if you opt to pay your hygienist a straight commission. With this system, every time you implement a fee increase, your hygienist gets a raise. That’s right, every time – even if it hasn’t been earned. It doesn’t matter if the hygienist is underperforming, coming in late every day or just not completing tasks – that bump in pay will still be received. This won’t exactly motivate hygiene to improve performance. In the hygienist’s mind, if you’re giving out a raise, the department must be doing something right. Why bother to make any changes?

3. You don’t have to worry about your hygienist asking for a higher commission rate. Think about this scenario. You pay your hygienist based on straight commission. Susan, who’s been with you for years, just asked you to raise her commission rate to more than 33%. The patients love Susan and you really can’t imagine the practice without her, so you give in. Susan leaves the office happy, but she has no idea the damage she’s done to the practice.

While you value your team members and want to compensate them fairly, you’re also not in the business of losing money. This isn’t an issue if you implement the two-tier system. This structure rewards hygienists for good performance. They get more money when they earn it, not when they ask for it.

4. It keeps salaries under control. With the two-tier system, your hygienist will be happy with the base pay and earning potential, while you don’t have to worry about salary creeping up above the industry benchmark. If you pay a guaranteed salary, there are plenty of circumstances that could send that salary soaring, including a high cancellation and no-show rate, the lack of a periodontal therapy program and a nonexistent recall system. If these types of problems are holding your practice back, you might want to consider investing in a professional analysis of your hygiene department to get back on track.

5. Your hygienist is no longer paid for down time. Like an associate, your hygienist should really only be paid for time spent producing – not for time spent sitting in team meetings or attending CE. With the two-tier system, the hygienist is only paid for producing.

As the practice CEO, it’s your job to motivate and guide your team members to success. When they’re successful, so is your practice. Implementing a two-tier salary system will encourage your hygienist to boost production numbers, helping you grow both your practice and your bottom line.

For additional information on this topic and more, visit my blog: The Lighter Side

Interested in speaking to me about your practice concerns? Email sallymck@mckenziemgmt.com
Interested in having McKenzie Management Seminars speak to your dental society or study club? Click here.
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Jean Gallienne RDH BS
McKenzie Management
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The General Dental Practice
By Jean Gallienne, RDH BS

So you are a general dentist, and you recently bought a new practice. You have been there a few years now and are contemplating adding more to the list of services you provide to your patients of record and new patients. Or perhaps you have been in practice for many years and are considering making some changes. Either way, there are some things you may want to look at before making changes to your practice.

The first thing to ask yourself is, will the change be cost effective? This applies to hiring a consultant, adding new treatments, taking continuing educations courses, buying equipment, or training your staff. This article will focus on adding new treatment to what you already offer your patients.

In addition to the cost, you should also consider the following: will you get a return for the money you invest? The manufacturing companies selling the new program to you will paint the best picture possible. They are not going to tell you about the offices that have implemented the new treatment into their practice with little or no success, as that would put them out of business.

Think about what has made your practice successful. Is it your hygiene department, cosmetics, orthodontia, periodontal treatment, or implants? If you are a newer dentist to the practice, ask your staff (if you have maintained some of them). You may also be able to run a report to see what the production by provider was in the past, based on the American Dental Association codes.

In many software systems, you are able to enter specific dates that you want to base the report on, whether you want to look at five years prior to you starting or only two years. However, keep in mind the economic changes that have happened in the last few years.

Once you have this report you can determine where the highest percentage of revenue came from in your practice. This may be where you want to concentrate your expertise. If it is cosmetics, even if you are good at them, you may want to hone your skills and become even better. There is always room for improvement. The same is true with implants or any procedures. You might not even need to become better at the procedures themselves, but you may need to improve your verbiage and case presentation to the patients.

If periodontal treatment has been a big producer in your practice, you may want to send yourself and even your staff to some courses to help understand the disease even more and become better at presentation. This can be particularly important if you have had recent staff changes and existing team members are taking on new responsibilities to their job descriptions. Perhaps you and your team are not completely comfortable with presenting periodontal disease – it can certainly help case acceptance to implement specific verbiage regarding periodontal disease.

You do not want to spread yourself too thin with what you offer patients. It’s important to look at what you currently offer in your practice before adding more. Is the product you are looking at really within the scope of dentistry, or should it be in medical? If you are using a lot of medical codes rather than dental codes, this may be one of your first clues that it won’t be a good fit. Or it may be that you’re sitting on a gold mine and just don’t know it! Looking back at the past history of the practice will give you a great place to start.

Interested in improving your hygiene department? Email hygiene@mckenziemgmt.com and ask us about our 1-Day Hygiene Training Program or call 877-777-6151

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Elizabeth Brackin, PsyD
Leadership Coach
McKenzie Management
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Motivation vs. Performance
By Elizabeth Brackin, PsyD

How do I motivate my employees? Why aren’t they willing to go the extra mile?

Do you believe that most people want to do a good job? If this is the case, then why do so many leaders struggle with employee motivation and performance? First, we must understand what “motivation” is before we can understand performance and how to motivate others to achieve peak performance.

Motivation is the combination of a person's desire and energy directed at achieving a goal. It is the cause of action. Influencing people's motivation means getting them to want to do what you know must be done. Motivation can be intrinsic, such as internal satisfaction and feelings of achievement; or extrinsic, such as recognition, compensation, and goal obtainment. Not all people are motivated by the same thing, and over time their motivations might change. Often an employee knows how to perform correctly, the process is good and all resources are available, but for one reason or another, chooses not to do so, which normally means it is a motivational issue. While many jobs have problems that are inherent to the position, it is the problems that are inherent to the person that normally cause us to lose focus from our main task of getting results. These motivational problems could arrive from family pressures, personality conflicts, a lack of understanding on how the behavior affects other people or processes, etc.

If an employee is motivated, what does he/she NEED to perform well? Performance is focused behavior or purposeful work (Rudman, 1998, p. 205). That is, jobs exist to achieve specific and defined results (outputs) and people are employed so organizations can achieve those results. This is performed by accomplishing tasks.

According to Rummler and Brache (1990) there are three levels in an Organization: 1) Organizational level, which is what you have already accomplished by starting your practice by developing the design and structure of the practice; 2) Process level, which is the process improvement and reengineering interventions of what is working and what needs tweaking; and 3) Job/Performer level, which is where more time and attention is required by most dentists, including coaching, performance management/feedback, and training interventions. 

While managing performance may seem less important than caring for patients, it is critical to a dental practice’s success. It serves the dual purpose of 1) arranging situations (environment) so employees can do their best by setting clear expectations and providing adequate resources, and 2) growing the employees by educating, properly training them, and providing feedback about their performance. Its purpose is to achieve specific and defined results from people so the dental practice can achieve its goals and objectives.

It is much easier to fix situations by making structural changes to the organization, rather than trying to fix or change people. These include items such as enlarging or expanding the job, improving a process, or opening lines of communication.

Once performance barriers have been removed, employees can be educated, trained and recognized for their efforts. This assumption is based on the premise that most employees try to do their best. They prefer harmony over conflict, action over inaction, and productivity over delays (Farson, Crichton, 1996).

When something breaks the psychological contract between the employee and the organization, the leader must find out what the exact problem is by looking beyond the symptoms, finding a solution, focusing on the problem, and then implementing a plan of action. One of the worst situations that a leader can get into is to get the facts wrong.

Start by collecting and documenting what the employee is not doing or should be doing, such as tasks, assignments, patient interaction, billing reports, etc. Try to observe the employee performing the task. Try to find out if it is a pattern or something new.

Once you know the problem, work with the employee to solve it. Keep it at the forefront of your mind that most employees want to do a good job. It is in your best interest to work with the employee, as long as the business needs are met and it is within the realm of organization to do so.

If you are struggling with how to motivate your team, contact me at ebrackin@mckenziemgmt.com. I will help you to create and sustain a highly motivated team who optimally performs. 

Dr. Brackin provides training for leadership effectiveness, interpersonal communication, conflict management, and team building. If you would like to learn more, contact her at ebrackin@mckenziemgmt.com

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