3 Reasons Raises Need To Be Earned
Long-time employee “Michelle” just asked you for a raise. She tells you she’s struggling to make ends meet and a small bump in pay would really help out. You say yes without even hesitating. You want to keep your employees happy, after all, and another dollar or so an hour certainly won’t hurt.
The problem is, that small raise really can hurt your practice, no matter how insignificant it might seem. Pay increases should be earned, not given out because another year has gone by or because an employee is experiencing financial troubles. That’s why it’s so important to give employees detailed job descriptions and clear performance measurements. That way they know exactly how raises can be earned and under what circumstances they will be discussed.
Still not convinced? Here are three reasons you should never give out raises unless they’re actually earned.
1. You’ll Send Practice Overhead Soaring
When you have high overhead, it keeps your practice from meeting its full potential. You’re worried about writing check after check each month rather than investing in top-notch equipment and practice upgrades that attract new patients and help you provide the best care possible. This could lead to lower patient retention and unnecessary stress on you and your team members.
To help reduce your overhead costs, create clear performance measurements and only give out raises when they’re earned. Trust me, this will go a long way in getting your overhead under control and growing your bottom line.
2. Your team members won’t be motivated to excel. Many dentists think if they give team members a bump in pay, they’ll work even harder and do their best to excel in their roles. Unfortunately, the opposite is true. Team members tend to think if you’re giving them a raise, they must be doing something right, so they don’t make any attempt to improve their performance. That means production rates stay the same while practice revenues remain flat.
If you want to motivate employees, give them clear goals. Outline performance measurements and let them know exactly what it takes for them to earn a raise. It’s also important to give them the training and tools they need to succeed. When they have direction from you, the practice CEO, they’ll take ownership of their systems and work toward the personal and practice goals you set together. They know they’ll be rewarded with a pay raise if they achieve those goals, which means they’ll work much harder than if they expect a raise no matter how they perform.
Conducting performance reviews will also help keep team members on track. Let them know what they’re doing right and where they can improve. Give continual feedback, both positive and constructive, and you’ll start seeing huge improvements in performance. Team members will not only earn their raises, they’ll start helping you increase practice production and revenues.
3. Team morale will suffer. In most work environments, there are employees who strive to do their best and there are employees who do the bare minimum to get by. If you give underperforming employees a raise every year no matter what, the other employees will notice – and they won’t be happy about it. This could lead to conflict among your team members and damage to your practice. Patients will feel the tension and might even opt to find a new dental home, while some team members might decide it’s best to look for a job elsewhere. If everyone has to earn their raises, this will help ensure the entire team performs at a higher level, reducing staff conflict and the problems it can cause.
Giving out raises no matter what can be pretty damaging to a practice. Even small increases can cost your practice big and push your overhead over that industry benchmark. To avoid this, set clear performance measurements and make sure both current and new team members are aware of your policy on raises and how they can be earned. Employees might be resistant at first, especially if they’re used to getting a raise every year without fail, but they’ll soon find having and meeting set goals will be more rewarding, both professionally and financially.
Need help establishing performance measurements or talking to team members about your policy on raises? Feel free to contact me and I’ll get you started down the right path.
Next week: The benefits that motivate employees more than a raise
For additional information on this topic and more, visit my blog: The Lighter Side
Interested in speaking to me about your practice concerns? Email firstname.lastname@example.org
Will 2017 Be the Same Old, Same Old?
People fear change. After all, if it isn’t broken why fix it? But many practice owners have trouble figuring out exactly what is “broken” – although they do know something isn’t working. Wanting to change how things are done is one thing, but executing the change can bring a halt to the best laid plans. Some things that require change involve selling or convincing the people involved to change behaviors or adapt new behaviors to bring about better results. Some things needing to be changed require money to pay for them, money that is not there.
Whether you need change to bring about modification in behavior of yourself and your staff or change that requires money like newer technology, you first must expand your belief about what is available in the areas of your life that can accelerate change.
One of the most difficult things to change is the old stories you play over and over again that help you disengage from change. Check the dialogue that you have with yourself for the following words: Can’t, won’t work, won’t like it, been there, done that, doesn’t work, tried already, patients will leave, staff will leave, it isn’t broke don’t fix it, it’s how we have always done it, it is too complicated…
It is really easy to kill change for the better when you don’t believe it will ever get better. How do you know you need change? Honestly ask yourself these questions:
1. Am I happy to come to the office in the morning?
1. Become a better leader. Get coaching or take classes. Revisit your practice Vision and Mission Statement. Don’t have one? It’s time to write it with your team.
2. Know your practice and the community better. Get a Community Overview report from Scott McDonald (https://doctordemographics.com/) and assess what is going on with your patient base. Has it changed? What can you do to improve the internal and external marketing of your practice?
3. Communicate regularly with your dental team. When was the last time you updated your Employee Policy Handbook? Do you have written job descriptions that are relevant to what people are doing in the practice and is there accountability and metrics for measuring employees’ work?
4. Show your team you care. Do you have productive, positive team meetings monthly and morning or evening huddles daily?
5. Giving feedback is critical to changing behavior. Are you doing regular Performance Reviews (not salary reviews) so you stay connected to your employees and communicate areas for improvement and work done well?
6. Look at your fees. Need money to improve your practice or pay bills? Are your standard fees current and are they going out on every claim? Have your fees analyzed if in doubt. Have you seen the latest outstanding insurance claim report? Have regular meetings with the people responsible for insurance processing and financial arrangements and collections. Stay connected to your business staff.
7. Address social media and respond kindly to online reviews and work to eliminate future poor reviews.
8. Get help from professional sources such as dental consultants and leadership coaches.
9. Identify your weak areas and put a plan of action in place to bring positive change in the New Year.
Need help? McKenzie Management has been helping dental practices with all of the above, with the goal of improving the practice by inspiring leadership and change for the better. Call today and start the New Year on a solid footing.
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