WRITTEN BY Amy Morgan
The definition of hijack is to steal (goods) from; to seize control of a vehicle, especially in order to reach an alternate destination.
Do you feel hijacked when giving staff compensation increases? Are you giving raises not because you want to and can afford to, but because you feel you have to? Do you believe that your team expects more than you can give? Sadly, too many dentists feel this way. In fact, most women dentists struggle with this because of their desire to be liked and to be fair.
"By compensation, I mean the salary, bonuses, insurance, pension, paid vacation, and other perks that the employer gives to the staff. Women who are good nurturers can be especially vulnerable to the team’s requests, pleas, and sometimes even demands for compensation based solely on their wants and needs, rather than on their contribution. Indeed, many dentists give salary increases every year - even when production drops - because they fear a mutiny otherwise. If you raise staff salaries when your practice collects less, you are guaranteed to decrease your own compensation. Where else can the money come from if your overhead rises and your production drops? If you give compensation increases that are undeserved or unaffordable, you will end up resenting your staff, losing control of your business, and causing yourself great stress. Let’s get back in the driver’s seat with a compensation model that works.
Who’s hijacking whom?
Your team can tell when a salary increase is given grudgingly. And this creates tremendous anxiety and stress about their present increase and insecurity about future ones. First, we must realize that the “hijacker” is NOT the staff, but the dentist’s own mindset and policies regarding staff compensation. Regaining control of the wheel means rethinking the way you handle compensation and learning to base it on facts and sound business principles - not on emotion and imprudent spending. Compensation needs to be competitive with the marketplace, fair and motivating to employees, and affordable to the practice. Pride Institute has a time-tested compensation model that takes the guesswork and subjectivity out of the process, resulting in reduced stress, greater control of the practice, enhanced profitability, and improved motivation and longevity of the staff.
What message are you conveying with your compensation practices?
Your way of compensating employees sends a strong message about the culture of your practice; i.e., the vision and values by which you do business. If you never give raises, even if your production keeps rising, you’ll convey the message that it’s futile for the staff to work harder because their efforts go unrewarded and they have no control over their compensation. On the other hand, if you give raises just because a year has passed and an annual increase is expected, you’ll convey the message that employees are rewarded without having to work toward new levels of productivity and excellence. Both of these approaches are de-motivating and encourage lack of accountability and substandard performance. In stark contrast is a compensation model that expects, recognizes, and rewards achievement, making a statement that you want employees who are hard-working, strive for excellence, and take your practice to new levels.
A sound compensation model
"A sound compensation system creates a climate in which employees are more enthusiastic and motivated because they feel they are treated fairly and can exercise much more control over their future. By establishing objective standards for a pay increase that are understood and agreed to in advance by the staff, you will clearly target your employees to the specific skills and behaviors that will earn them raises. If your financial administrator understands the importance of suggesting a new payment option to patients to improve collections, and she does so consistently, she will know why she has earned an increase. If she doesn’t become comfortable with the new payment option and fails to offer it to patients, she will not be surprised when collections do not improve and there is no salary increase. Through your coaching, she will know what to do to correct the situation to ensure a future salary increase. When employees clearly know where they stand, it reduces resentment, anger, or other negative reactions, which are triggered when employers make compensation decisions arbitrarily based on mood or gut feeling, without standards and facts to justify their decisions.
The Pride Institute Compensation and Recognition Model offers three essential signposts along the road to get your practice back on track. With these signposts, you will create a practice atmosphere in which employees know your expectations, believe you are treating them fairly, and have a real opportunity to influence their salaries through their performance.
Signpost #1.
Compensation must be competitive with what the market is paying.
Consumers are savvy in finding the best prices for things they want to buy. The same holds true for employees in seeking the best salaries they can find (although other factors are also very important in finding job contentment). If you pay below-average salaries compared to similar dental practices or comparable skilled jobs in your area, you will not attract above-average applicants. Therefore, find excellent people by offering a fair rate of pay as determined by local market factors.
In establishing a competitive wage rate, be sure to compare your practice to similar practices. Consider the case of the appointment coordinator who threatened to quit her job because she was not making as much money as her friend who held a front-desk position in a nearby practice. Rather than cave in to a hijacking, the dentist investigated. She found that the other office was a four-dentist specialty practice in which the front-desk employee’s scope of duties, the practice’s fee structure, and the work volume were vastly different from the front-desk functions in her small, solo practice.
Also, to correctly compare apples to apples, consider other benefits. The dentist in our example was offering a pension plan, CE courses, and more vacation time than the practice paying the higher salary. Benefits can greatly enhance a compensation package. Be sure to communicate all of the benefits you offer to your team so they will understand the full measure of their compensation when comparing the job in your practice to other options.
Your staff may also compare their salaries to that of other employees in your office. (Yes, salaries are supposed to be strictly confidential, but this is not always the case.) Your appointment coordinator may be unhappy because she is making less money per hour than your financial administrator. Your appointment coordinator, however, may not have the same level of experience, education, or skills as your financial administrator. The appointment coordinator may have a high school diploma, whereas the financial administrator may have a college degree, prior bookkeeping experience, and computer training. In establishing proper compensation levels, take into account how differences in skills, experience, and qualifications require that you pay different salaries. The key is to communicate your standards so that employees know you are fair. Your team will not feel blind-sided if you tell them proactively and clearly the reasons for your standards. If not, prepare to be hijacked.
Signpost #2.
The practice must be able to afford the compensation it offers.
Dentists create affordability problems for themselves when they give raises, purchase new equipment, or otherwise spend money based on emotion, without analyzing the costs or expected return on investment. Although most dentists may earn a good living despite making these financial mistakes - because of the great demand for their services - they still will pay a price. Many dentists will be unable to accumulate the savings needed to retire when they choose. Or, their emotional spending habits may de-motivate their employees. For example, pity the poor dental team who can’t meet profitability goals for their salary increases because the dentist must purchase every gadget known to mankind! There needs to be soundness and agreement between dentist and team on what spending is affordable, with money set aside for staff increases should the employees meet their objectives. The team needs black-and-white standards for increased compensation that they can attain and a clear action plan to do it.
We use the standard of a percentage of the increased collections over the prior year to award compensation increases. You may use other parameters; however, they must be clearly defined, challenging to achieve, doable, and acknowledged as fair by the staff. In this compensation model, dentists set aside a portion that ranges from 10 to 20 percent of the increased collections over the previous year to allocate for compensation increases. Then the increases are awarded to deserving staff members based on their individual achievement of preset job expectations, as described in Signpost #3.
Signpost #3.
Compensation and recognition must be of INDIVIDUAL staff members and based on DEMONSTRATED knowledge, skills, and abilities.
This requires defining your expectations for team members and then communicating these expectations to them so everyone knows his or her role. Establish clear expectations of job performance, and provide training and feedback so your team can meet those expectations. If you want your team to go postal, wait until a salary review to tell them that because they have demonstrated no additional (undisclosed) skills or abilities, they haven’t met your (unstated) expectations. This third signpost is the most challenging one to implement because it requires leadership.
For the past two decades, large companies have been shifting their compensation models. There are fewer “safe havens,” where employees get automatic cost-of-living adjustments, annual guaranteed wage increases irrespective of profitability, or entitlement to a job based on seniority instead of performance. Some major corporations have even asked their employees to take salary cuts due to economic downturns. This compensation model encourages the team to build their skills so that they earn salary increases based on performance. Employees actually like this because of the control it gives them in influencing their compensation. They are inspired to be excellent, knowing that they will be acknowledged and rewarded for it. This compensation-based-on-performance model inspires people to be self-starters, a tremendous asset to your practice.
The important point is that performance must be demonstrated - not wished for or hoped for. Performance is measured through “competencies.” These competencies are the specific kinds of knowledge, skills, and abilities that employees need to do their jobs.
Your team members must be completely aware of the competencies that you expect them to meet. Then you can collaborate with them to create specific goals for growth and action steps to achieve them. Employees need to receive feedback and support from you regularly during the year on how well they are accomplishing their goals. Then when salary review time arrives, it should not be a surprise to them that they either met the agreed-upon goals and earned an increase, or that they fell short and need to try again.
Evaluate your staff’s competencies by using these three categories*:
➊Job-specific competencies are the knowledge, skills, and abilities the team member needs to perform his or her particular job. This includes technical, procedural, communication, and problem-solving skills. For example, a dental assistant must demonstrate competencies in taking radiographs, entering notations in the patient’s chart, greeting the patient, handling anxious patients, etc. An appointment coordinator must possess competencies in answering the phone, welcoming patients, making appointments, handling emergencies, etc.
➋Practice-management competencies support the practice’s clinical, philosophical, and financial goals. These include statistical analysis, goal setting, action planning, organizing, and coordinating activities either independently or as part of the team. For example, each team member must be able to understand and support the practice's production and expense goals through his or her actions. The appointment coordinator must be able to arrange the schedule to meet goals for quality care and daily production. The hygienist must be able to support restorative care by discussing the doctor¿s diagnosis with hygiene patients and addressing any objections they may have. This is one way in which this team member contributes to meeting production goals and fulfilling the practice¿s philosophy of giving the finest care for optimal oral health.
➌Teamwork competencies include collaborative problem solving, participation during team meetings, interpersonal conflict resolution with other team members, serving one’s turn as a facilitator at team meetings, etc. For example, team members must actively participate in all meetings and help other team members when the practice is understaffed.
Using the specific competencies that you have developed for a job position, you and your team can create an action plan by which each employee can reach a new level of achievement in his or her job. The team member’s reward for accomplishing the goals set out for him or her is a merit increase. This is the scientific model: Give team members specific benchmarks to aim for, and then give them a merit increase when these benchmarks are achieved.
For example, you may expect your assistant to learn a new digital X-ray system and to acquaint other team members with the technique. Or you may give your appointment coordinator an incentive to learn new models for customer service by reading the book “Knock-Your-Socks-Off Service,” designing a plan for implementing the teachings in the practice, and presenting the plan to the doctor and team.
By offering your employees salaries that are competitive in your area and by challenging them to earn raises affordable to the practice through specific, demonstrated growth in their jobs, you will bring out the best in them - namely, excellent performance with measurable, increased profitability for the practice. Then you’ll be in control of your practice; your employees will be in control of their future; and the hijackings will come to an end. Have a safe and happy journey! ■
*Due to the confusion dentists have about compensation, Pride Institute created a new training program called “Take Pride in What You Pay,” based on 11 years of teaching this material in its flagship course, “System, Staff & Numbers.” To order the four-module handbook with two accompanying CDs, call (800) 925-2600.
Amy Morgan
Ms. Morgan is CEO and lead trainer of Pride Institute, a dental management consulting firm serving dentists nationally and internationally. A speaker at major dental conferences, she conducts seminars and workshops for dentists and their teams. Contact Ms. Morgan at (800) 925-2600.
