STAFFING SOLUTIONS
Paytime!
Still giving raises the old-fashioned way? Try this approach instead.

BY ALAN N. GLAZIER, O.D., F.A.A.O.

When and how should you give a "raise?" In my practice, staff never get "raises." I know what you're thinking -- "How can he build reliable staff without rewarding them based on their performance?" Read on to find out.

Up the ladder

I give my employees "promotions." I never use the word "raise." If you're not prepared to give an increase in salary or a bonus, but you want to show appreciation for a job well done, a promotion is an effective tool. It can buy time until you're in a better position to increase your cash output for salary.

Remember that employees usually aren't working just for money -- they want job satisfaction too. They want respect. They want to go home and feel good about what they achieved that day. Like you and me, they want to tell their families about things that happened at work -- about what they did that day to make the world a better place.

Sure, employees appreciate raises, but in my eyes raises aren't as effective at showing gratitude as are promotions. Raises provide financial rewards, but promotions provide increased job status and boosted self esteem.

ILLUSTRATION BY GARRY NICHOLS

Paint a picture of a promotion

One of the best skills you as an employer can possess is the ability to recognize employee talent and reorganize duties to maximize it. A promotion may simply consist of a change in everyday duties. I decide who's a good candidate for a given duty change by recalling who helped in different areas of my practice and enjoyed or excelled at it. I also ask who'd like to get involved in specific duties.

If the new duties require a learning curve or offer the potential to specialize, present the "promotion" as a way to increase the employee's knowledge and become more valuable within the practice.

Salaried staffers often don't think about where they'll be within your business in 5 years. Show them. Explain that the promotion is a stepping stone to a higher-level position that will evolve as your practice grows. Explain how to make the most of the position, and paint a picture of her managing entry-level employees as your practice grows and she gains seniority. Reinforce this picture periodically.

When there's money in it

If you give someone a raise, they'll be planning when to ask for their next one 3 months later. If you do decide to include money in the promotion, follow this advice:

• Plan salary increases carefully within your goals and limits for the year. Always include a cushion of extra money. If you plan to spend 18% on staff salaries, it's inevitable that an unforeseen situation will make it necessary to spend more. Set goals for percent gross you pay out in salary, and try to meet or spend less than planned.
• Avoid more than one raise per calendar year. Be conservative; offer a total raise conditional on performance over a period of time.

For example, tell your receptionist that you'll increase her salary by up to $1 an hour; start with 66 cents, and increase by 34 cents if she demonstrates an excellent quarter at the new salary level. This gives the impression of two increases in a calendar year instead of one, and buys time before the staffer asks for another raise.

If she wants to negotiate for more money 1 year from the date of the initial increase, explain that it's only been 9 months. When 1 year arrives, make the next raise contingent on another quarter of great work and buy yourself time before committing to the raise.

DR. GLAZIER IS IN PRIVATE PRACTICE IN ROCKVILLE, MD., AND IS A MEMBER OF OUR EDITORIAL BOARD.