Your billing clerk wants to talk. She's been with you for nearly a year and it seems she expects a raise. Trouble is, she drags in late, her customer service skills are lacking, and her performance thus far has been unimpressive, at best. You can help her set new goals or throw a cost-of-living adjustment her way, but you can't reward her work ethic if you hope to effect change. "Giving a raise every year for the sake of giving a raise is a bad idea because people come to expect it and they don't feel they need to do anything to earn it," says Vicki DeLeonardo, office manager at Monmouth Family Health Center's medical pediatric division in Long Branch, N.J.
Doling out pay raises is a delicate business, indeed. Reward too little and you risk losing your best and brightest, which creates costly turnover. Approve an across-the-board raise, on the other hand, and the employees who help drive profits might lose motivation. "Why should your top performers continue to give 110 percent effort when they get the same raise as those giving 90 percent?" says DeLeonardo. To maximize the impact of a merit-based raise, you'll have to take steps to ensure your system is both transparent and fair.
It goes without saying, of course, that your pay scale must be competitive. To confirm it is so, conduct informal polls at local networking events, and review national salary surveys like those conducted by the Medical Group Management Association and our annual staff salary survey (http://bit.ly/Staff_Salary_Survey).
If your compensation package is up to par, set some parameters for who gets what and when — and communicate those benchmarks clearly to your staff. Employees must know where your priorities lie, so they can aim to please, says Sheila Margolis, president of Workplace Culture Institute in Atlanta and author of "Building a Culture of Distinction."
To determine these parameters, consider your practice's priorities. Do you wish to reduce billing errors, or patient wait times, by 20 percent in the coming year? Is customer service your No. 1 goal? Will you reward financially for educational attainment, including continuing education classes? "Many organizations do not define the principles and values expected in the culture so when it's time to give pay raises, the leadership knows there's a problem with the employee, but they don't have a clear way to communicate it," says Margolis.
Most practices conduct a performance review on the anniversary of each employee's start date. That's the time to measure their progress against previously discussed goals, and assess their strengths and weaknesses. It is not the time to address new concerns, says Margolis, noting pointers and praise should be given as needed throughout the year so your staff has a chance to develop. "Individuals must be crystal clear on expectations for their performance and receive ongoing feedback so there are no surprises during their review," she says.