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
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