Your Complete Staff Compensation Strategy
First, why does compensation matter?
Compensation does three things:
1. Attracts the best employees.
2. Keeps them.
3. Incentivizes them to push beyond their current best.
That said, compensation is only a single piece of the puzzle — a big piece — but just a piece nonetheless.
Understand Your Staff Members’ Perspectives
It’s important to understand your employee’s perspective when you put together your compensation strategy. In some areas of the world, pay is a matter of life or death. Here, it’s not.
Compensation is a communication of value and standing in your organization and outside of it.
Do people need to pay the bills? Sure. But you can pay the bills flipping burgers. Your employees don’t work with the primary drive to survive — they’re working for a much higher brick on Maslow’s Hierarchy Pyramid. Self actualization; fulfillment.
That means that it’s possible to pay less than competitive standards and still get optimal performance.
But only if you’re a master of non-salary forms of compensation (recognition, training, gifts, etc).
For most of us (some might argue all of us), maintaining a competitive compensation is a must.
Now that you know your employee’s perspective, you can plan out the core of your strategy.
Know Your Goals
Attract. Keep. Incentivize. That’s what compensation does.
Your compensation strategy on the other hand, should:
1. Be financially feasible.
2. Provide competitive and incentivizing compensation.
3. Be built around your organization’s goals.
If there’s one thing most people don’t get right it’s this.
Like all of your goals, your strategy needs to be very organized and transparent. It should be built to complement and further your existing goals.
The reason people hate talking about compensation is because the pay and organizational structure isn’t clearly organized and communicated.
There’s no clear path for advancement. Pay rates are all over the place, with similar positions getting paid different rates. So when staff members bring it up, it’s an awkward, painful conversation.
With that in mind, let’s talk about what your organizational structure should look like.
Create an Organizational Chart
Your organizational chart should have clearly defined pay for each position. People in training should earn less than your trained people. Your managers should earn more than non-managers, etc.
A common mistake that many practices make is to make compensation negotiable during the interview.
If you do that, the people who negotiate better, or interview at a time when you desperately need to hire for their position, tend to get paid better, and when your staff members who hold the same responsibilities and rank find out…
Well, it’s a motivation killer at best.
This is the best way to give your employees a clear direction for advancement. They should know what, when, and how — what they need to do to be promoted, when they’ll be considered, and how they’ll be evaluated. The pay system should be transparent.
The members of staff who play a large role in patient relations are critical for practice growth.
One way to incentivize them is to bonus them on same day starts.
Then, once the team hits the total start goal for the quarter, triple the bonus for all additional SDS’s above the goal. That way, they won’t slouch on the starts they can’t get in same-day.
Because even though they don’t get the same-day bonus, it counts toward the quarterly team goal, which pushes them that much closer to getting the triple-bonus starts.
Let’s pause there.
This is a great example of performance-based pay that deserves a closer look. Because that triple-bonus isn’t just giving them an extra nudge of incentive — it’s also a long-term quality-magnet.
Strategic compensation like the triple-bonus kills three birds with one stone:
It encourages practice growth on a personal level.
It drives sales on a more unifying team level.
And finally, it keeps the best people driving your growth instead of someone else’s.
Office Manager Compensation
Every practice is different, but this is what might work. Pay the Office Manager a capped bonus based on gross.
The cap ensures a fair exchange between you and your Office Manager. Without this cap, for example, you could end up paying a massive salary as the practice grows.
Your associates are, of course, some of your most vital team members.
Associates must be aligned with your goals. You need to incentivize them to grow the practice. And not just for the short-term, but for the long term.
There’s two big ways to accomplish this:
1. Salary + a flat bonus per treatment start. This is a very common method — plus, it’s easy.
2. Salary + a share of net. It’s more complex, and difficult, but if you have a more entrepreneurial minded doctor and/or a higher volume practice, this might be the way to go.
Alright, let’s wrap it up.
One. Employees don’t care about the money so much as the perceptions attached to it, and the lifestyle they can achieve with it. What they really want is respect, acceptance, value.
Two. The right level and types of compensation will help attract and keep the best people, and incentivize them to grow the practice.