Anyone who is a reader of the Sunday comics knows that Dagwood Bumstead has been trying to convince his boss, Mr. Dithers that he needs a raise. He has been working diligently on this, to no avail, since before any of us were even born.
How do you give raises in your office?
A common question among OD's. And I have learned after several years of working with eye care practices is that we are all over the place in how we compensate our staffs. Hiring them and agreeing on a starting salary doesn't seem to be the big issue, but knowing how to continue to adjust the salaries seems to be the challenge.
It seems there are two basic schools of thought on adjusting staff salaries:
1) The Grid Method
is very objective and ranks each area of the office into various levels of expertise. As you earn increasing levels of expertise in different areas of the office, you become more and more valuable to the company. Therefore, your pay rate increases.
2) The Merit Method
is more subjective because it ranks the staff member on levels of performance and rewards going above and beyond expected levels of service. Performance can be graded and evaluated in a number of ways, but must be defined beforehand.
So which is better? It depends.
Performance Based practices gravitate toward the Grid Method and Relationship Based practices lean toward the Merit Method. In our practice, we have merged the methods to fit our Practice Personality.
It reflects what matters most to us, it is systematic and allows for flexibility to reward excellence. We have Salary Adjustment meetings yearly, every summer, and meet with each employee. Arguably, that is not often enough, but it assures we give it the attention it deserves. And it is clear that no one is guaranteed a raise, they are "Salary Adjustment" meetings and sometimes salaries are adjusted down.
Like everything, we need some kind of system that we can manage well, is responsible and is fair to the team members. Those offices that do not have a system in place to adjust payroll wind up doing it as a reaction. In other words, when morale is bad and things seem to be going badly, they consider giving everyone a raise or a bonus - to boost morale. This works for a minute. It also teaches staff that weak performance leads to increased pay.
There are also two schools of thought on when to make these adjustments:
A) On the anniversary of the hire date - Good because it spreads out the increased expenses but difficult to keep up with.
B) At a predetermined time of year - Easier to keep up with but can bump up expenses faster than you like.
Take home points about Salary Adjustments:
- Look at your budget and your current expenditures to see what you can afford.
- Utilize a system that fits your practice - it can always be adjusted
- Decide how often this will be performed
- Communicate the system to the team - set the expectations
- Meet with each team member to adjust pay - if needed
- Evaluate the system - make changes for next time
- Schedule the next Salary Adjustment
Getting started is the hardest part.
Sincerely yours, Mike Rothschild, Leadership OD
p.s. By the way, I don't think it is a good idea to get a raise for just not getting fired.