Under Pressure to Raise Salaries? Do This First
No question about it, money matters can make for messy business in any workplace that is dependent upon teamwork and trust - which would be virtually every dental practice. Reward some and you seemingly punish the rest. Reward all and you send the message that average effort pays the same as excellent. It's a management minefield for most dentists who struggle with balancing the financial needs of the practice with the financial desires of the staff. How do you navigate this tricky issue? With clear leadership and specific salary guidelines.
Certainly, it's imperative that employees understand how their roles fit into the overall success of the practice. And it's critical they have a clear understanding of the financial health of the business. But above all else, effectively handling the matter of money with your staff requires that you manage their expectations from the outset. It starts day one - not six, eight, or twelve months after the employee comes to work for you. Explain when raises will be discussed and under what circumstances a raise will be given. Implement the following four rules of staff compensation and start managing payment expectations immediately.
Rule #1 - Establish a Clear Compensation Policy
Rule #2 - Conduct a Salary Review
Consider this example: If your current monthly collections are $48,325 per month and your existing salaries are $9353, then a $2 hourly raise for your assistant from $15 to $17 who is working a 36 hr. week will increase existing salaries to $9665, which is within the 20% industry benchmark. However, if your current monthly collections are $39,000 and existing salaries are $9353, that puts you at 24% of gross production and well above the standard.
Rule #3 - Make More before you Spend More
Rule #4 - Job Description
Finally, hold employees accountable for their systems. And remember, pay increases should reward excellence and dedication to advancing the practice - not another year on the calendar.
For more information on this topic and for additional Dental Practice Management info, visit my blog: The Lighter Side.
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