March 2007

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Creative Compensation

Compensation is a vital component in building a loyal team. In order to attract and retain highly qualified team members, it’s important to recognize quality job performance and to compensate your team members in a manner that is both equitable and competitive.

 

Competitive Pay

Don't assume you have to outspend your competitors in order to build a great team. Competitive pay does not mean that you have to pay the top dollar. There are offices that pay the top dollar because nobody would work for them otherwise. These offices gain the reputation as the top paying office, but not necessarily the best place to work.

Wouldn’t it be great to act as a magnet, drawing people to your practice because you are known as the best place to work? Know how you want your office to be perceived, and then structure your office, including your compensation package complete with intangible benefits, accordingly.

 

Job Satisfaction

Morale and job satisfaction are affected by compensation. There is a balance that must be reached between the monetary value the employer is willing to pay and the amount the employee feels they are worth. In an attempt to save money, employers at times decide to freeze salaries at the expense of satisfaction and morale. The reverse can also be true, an employer that wishes to reduce employee turnover may seek to increase salaries.

Keep in mind that it’s possible to have a better compensation package than your competitors, yet have your employees unhappy. The opposite can also be true, your pay and benefits may not be as good as some, but your employees may be absolutely delighted to work for you.

 

Compensation Negotiation

Salary levels are typically the starting point in compensation negotiations, but there are other vital components in creative compensation packages. Get to know your employees needs and interests. Ask them what you can do to make them feel valued at work. With some creative thinking, your practice can develop a customized benefit plan that doesn’t have to add a lot to your budget but can mean a lot to your people.

Your menu of benefits could include:

  • Dental care for team members, significant others and children

  • Assistance with professional development such as Continuing Education courses and onsite training

  • Parking

  • Uniforms

  • Onsite laundry

  • Bonus program

  • Insurance

  • Membership at a Health Club
  • Unexpected gifts and rewards

In addition to regular benefits, be sure your office also offers an amazing work experience they will never forget. One way to do this is by offering attractive intangible benefits.

Intangible benefits include:

  • The chance to work with people they like, respect, and can learn from

  • Open communication – where they feel safe to say what is on their mind and they feel listened to

  • A culture where people can succeed

  • Being asked for their advice

  • Above all, remember to say thank you often, both verbally and in writing

 

Bonus Systems

Bonus systems can be used as a great reward for exceptional job performance. Everyone likes a challenge and being rewarded for hitting a goal. The intelligent addition of goals with bonuses can get people excited to create powerful results.

Use caution when considering bonus plans though, as they can cause anxiety if they are not administered well.

Tips to consider:

  • Don't give bonuses to get a job done. Give bonuses for doing jobs exceptionally well.

  • If you decide to offer a bonus plan, be sure your compensation policy clearly states that it will be reviewed every six months, or at least annually, to ensure it is mutually beneficial to continue.

  • Some practices like to use an incentive plan when they are in a high growth phase, but as things level off they prefer to pay the average amount the employees were making with the bonus. Many employees like to be able to count on a set level of reimbursement each month.

 

Salary Envy

Talking about your salary with co-workers may be among the touchiest of office taboos. Often, such private matters don't stay private.

Finding out that someone with the same job description is making more than you can be infuriating. Even the slightest discrepancy is enough to affect morale and divide otherwise harmonious teams. Know that the word may get out, and be sure you have structured your compensation in such a way that it will make sense if you are questioned… or be prepared to deal with the consequences.

Compensation packages that are creative, fair and competitive will go a long way towards keeping long-term, loyal and
happy team members. Be sure to give your team
reasons other than just money to work for you.

 

Points to Ponder:

  • Monitor your employee’s salary arrangements on a consistent basis to ensure that the wages you pay are competitive within the dental industry, reasonable for current economic conditions and reflective of overall job performance.

  • Don’t make your employee’s have to come to you to ask for a raise.

  • If an employee hands in their resignation because they were offered a position with more money, their decision to leave was likely accompanied with a shift in attitude. So, even if you offer them more money, they may not be the team player they once were, which could negatively impact patient care.

  • Beware of the ‘Wage Entitlement Syndrome.’ People suffering from ‘Entitlementitis’ feel life owes them more than they have.

  • Pay on ability, not seniority.

Our next PracticeProsperity newsletter will take a look at recognition and retention.

 

About the Author

CoraMarie Clark, BSDH MBA is recognized as a highly effective dental practice strategist. She works with dentists that want to optimize their potential both personally and professionally. Her collaborative approach has helped teams develop dynamic competitive strategies and achieve high impact sustainable results.

If you would like to explore the possibility of having CoraMarie work with your Dental Practice or speak for your Association or Group, contact us today.

CoraMarie Clark
phone 403.686.6136
email coramarie@strategix-ltd.com
web strategix-ltd.com

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Link:
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Quote:

“The purpose of a compensation system should not be to get the right behaviors from the wrong people, but to get the right people on the bus in the first place, and to keep them there.”

- Jim Loehr and Tony Schwartz, authors of
The Power of
Full Engagement

 

"Decades of research and dozens of studies show again and again that while money can be a de-motivator, it is rarely a good motivator. Money always shows up as fourth or fifth on any list of motivational factors. Pay gets people to show up for work. But pay doesn't get many to excel. More important is interesting, challenging, or meaningful work, recognition and appreciation, a sense of accomplishment, growth opportunities, and the like."

- Jim Clemmer's article, "Weak Leaders Try to Use Money as a Motivator"

 

“Managers tend to use compensation as a crutch. After all, it is far easier to design an incentive system that will do management's work than it is to articulate a direction persuasively, develop agreement about goals and problems, and confront difficulties when they arise.”

- Michael Beer,
Harvard Professor of Business Administration, Researcher, and Authort

 

If you are interested in more information on how to put together a Creative Compensation package for your team, you may be interested in the TeamLogix manual, a complete human resource system. TeamLogix provides the information, concepts, tools and methods that will make your journey of building a top performing team easier, more enjoyable and more rewarding.

For more information, please contact us at: info@strategix-ltd.com or phone 403.686.6136.