Using team member benefit statements to enhance perceived value

Dental practice owners and operators obviously wear many hats – chief clinician, chief executive, chief financial officer, head of human resources, and many others. In performing the human resources role, aside from meeting the compliance aspect of making sure paychecks are cut, handbooks are in place, and handling the hiring, firing, and annual reviews, there is one other element that can benefit your practice – an annual compensation review. The compensation review can be a part of an annual performance review or it can be done entirely separate, depending on when compensation adjustments are made.

The complete 2012 RDH eVillage salary survey for dental hygienists
Asking for a raise when I feel a raise is due

You cannot underestimate the power of a good working relationship between you and your team. A huge factor in employee satisfaction is knowing that your employees know or feel they are being compensated fairly. A compensation review is a designated time to have a straightforward discussion regarding the team members’ compensation. It not only provides your employees an opportunity to address questions they may have, but it also provides the dentist/owner an opportunity to present a summary of all of the compensation and benefits provided to the team members individually over the past year. This presentation can be done well using a compensation benefit statement.

The dentist/owner, of course, knows that the value of the total compensation package for their employee is more than their base pay. However, does the employee know this? Do they recognize and see all of the financial value of their employment? Typically not. It will most often be in the benefit of both, then, to show this to them. The compensation benefit statement summarizes all of the compensation paid to the employee during the past year as well as previous years. It also reflects a sum of all other paid benefits, including employer-provided insurances, retirement plan contributions, bonuses paid, the value of provided or discounted dental services, vacation and holiday pay, and any other benefits received by the employee. In addition, to appropriately provide a comparison and frame of reference, the total hours worked for the year should be included on the statement. And finally, a total compensation per hour and benefits per hour should be reflected by dividing the total of compensation and benefits by the total hours worked for the year.

There are numerous benefits to using a compensation and benefits statement:

1. It provides a simple and illustrative mechanism to easily reflect and discuss with your team member what his or her total compensation package is worth.
2. It provides means to clearly and easily compare annual compensation changes. For example, if an employee’s base pay doesn’t go up because the cost of providing benefits increases, this tool makes it easy to illustrate how their total compensation package has increased.
3. It provides an archive to track annual pay increases throughout the employee’s employment period.
4. It provides a realistic rate for comparison against industry benchmarks.

If you need more reasons to consider the use of employee benefit statements in your practice,let us know. Your team will have even more reason to appreciate you!