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Helping team members be their best: Skill based compensation plans (CVC Proceedings)
One of the most difficult parts of managing a veterinary practice is setting wages and salaries.
One of the most difficult parts of managing a veterinary practice is setting wages and salaries. We must juggle the desire to be fair with the desire to hire the best people. So we hire a new person for more money than someone in the same position who has been working there for 3 years, the news leaks out and the experienced person quits. Or we pay two people the same wage even though one works hard and the other is lazy. Or we pay team members who work in the back of the hospital more than we pay those at the front desk, though each requires a lot of skill.
Having a system for determining someone's rate of pay avoids some of these pitfalls. Large companies have wage scales and charts that determine who gets paid what – engineers make $25-30 per hours, secretaries $12-15 and so on. Seniority, responsibility and knowledge can all be factored in to determine exactly what someone should be earning. Why shouldn't we be able to do that as well?
I started many years ago with this premise and came up with a system that worked well for a few years, while I had a relatively small staff. It worked like this: A person's base salary was calculated by taking the minimum wage, or what McDonalds was currently hiring at, and adding to that depending on education, experience and responsibilities. Tasks performed in addition to regular duties were classified into 3 tiers, level I, II or III, based on degree of difficulty or responsibility. For example:
Add all amounts that apply to base salary of $5.45 (minimum wage)
Bachelors degree $2
Vet Tech degree/Level III asst. $2
Other schooling (secretarial school, associate degree) 0.50
Level II/III assistant/receptionist ($.25 for each level) _______x 0.25 =
Annual increase per year of employment in the veterinary field or a
related health care field, years x 0.30 _______ x 0.30 =
Management Team 0.50
Supervisor/team leader/trainer 1.00
Kennel staff supervisor 0.50
Inventory manager 0.50
Inventory assistant 0.25
Food ordering 0.25
An individual's pay, including health insurance, was supposed to be approximately equivalent to the total when we added all the amounts that applied to that person. We added the disclaimer "As previously stated, salaries will be based not only on this chart, but also on the job performance of the staff member, the financial health of the practice and individual negotiation with your supervisor. These values are approximate, not absolute, and are not a guarantee of salary."
A job description was set up for each individual task, just as we have them for job positions. Employees performing these extra tasks were expected to perform them according to these descriptions. There was a 60 day probation period when an employee took on a task. This allowed the employee to learn the task and iron out any problems.
Inevitably, whenever you start a new system or protocol, you'll find it has a few bugs. Situations come up that you didn't think of and you have to figure out what to do about them. So language was added to our manual to address some of these problems:
"We will make every effort to allot time on the schedule for the task to be performed - in other words, a receptionist will not be scheduled to work the front desk for 40 hours a week if she needs four hours per week to perform assigned tasks. She will only be assigned to the desk for 36 hours per week, with four hours allotted to extra tasks. Time will also be allotted for team members to train other employees to new tasks. Recognize that it takes more time to train someone than it does to perform a task on your own. Reshuffling tasks and incurring extra training costs time and money. Tasks will be assigned with care and thoughtfulness to be the best and most workable fit.
Tasks will be assigned by the management team according to desire, ability and seniority. Regular duties must still be performed as needed - if we need you for 40 hours a week for your regular duties, you have no time for extra tasks. However, that the philosophy of the clinic is to encourage employees to be the best they can be and to expand their skills with time.
Salary increases will only be given for permanent or long term task assignments, not for temporary ones while another employee is ill or on leave, or while we are seeking to hire another employee to perform that task.
Overtime should not be used to perform these higher level tasks. Overtime should only be used to perform regular job tasks that are necessary to the functioning of the clinic. In other words, overtime may be necessary to treat an injured animal but employees should not incur overtime to print reminders or order medication."
We found that for an assistant, inexperienced receptionist or kennel person our formula shown above worked great. For CVTs, who are in great demand everywhere, we had to go somewhat with the prevailing wage and add extra for experience, management expertise or special skills.
However, the system becomes problematic when we are hiring a middle-aged person as receptionist. Someone who had worked in offices before and had been earning $13 an hour isn't going to settle for $9 per hour as an entry level employee. Yet they take the longest to train when they come to us knowing nothing about veterinary medicine, and it's insulting to the ambitious college student-assistant earning $10 an hour to have a novice receptionist earning $13 who can't even schedule an appointment or get medications ready. We found we had to also give credit for customer service experience, maturity level or reliability, or to not hire that person at all.
There are many ways to contribute and be valuable, and many things that a person brings to the practice. These include:
- Knowledge and education – plus the ability to study and learn, and to apply what they've learned.
- Life experience – customer service and communication skills, supervisory or management skills.
- Technical skills, including medical skills but also phone and computer skills.
- Personal attitude, including enthusiasm, commitment, maturity and self-restraint.
- Productivity – some people get more done in a day than others.
Unfortunately, along with bringing skills and knowledge to the job, some employees bring headaches. We found ourselves adding caveats to the office manual like this one:
- If you have 3 incidences of absence within a 6 month period of time, you will have an attendance review with the practice manager. You will be evaluated to see if BFVC can help in any way with your absences. At this point, you will also be put on probation for 3 months. If you call in sick during this 3 months period, you will need to provide BFVC with a doctor excuse. If you do not provide BFVC with a doctor excuse, you will be suspended for 1 week (5 business days) with no pay. After suspension, if you call in sick without a doctor excuse, you will be fired.
This sort of employee management is what every human resource director dreads. Nobody wants to manage problem employees yet all of us have them and have to come to terms with how we will address problems. We'll talk about that more in the next lecture.
As we grew, staff members became more specialized and the old system didn't work any more. The receptionist who did A/R as a side job became office manager and does A/P, payroll, office supply orders and other bookkeeping tasks. Her pay is now based partly on a bookkeeper's standard wage, according to published sources, and partly on the hours she still puts in as receptionist. We now have an office assistant who keeps handouts and stickers stocked, pulls files, runs errands, etc. I don't pay her by adding up 15 little tasks she does, but rather according to the going rate for an office assistant.
So what are we doing nowadays? Well, some things still work out well, including the skills levels. Each time an employee accomplishes an increase in skill levels they are eligible for a raise. Again, You must have a disclaimer and state clearly how the system will operate.
"The following lists of skills are meant to be used as a training tool, and to help determine an employee's salary level. They are not a substitute for job descriptions. They also are not a substitute for the mission statement or the values of the practice. It makes no difference how many laboratory tests an employee is capable of performing if he or she treats customers, patients or other staff members poorly. Regular employee reviews and performance planning, using these lists, job descriptions, task descriptions and the office manual, will help encourage and foster job satisfaction, expansion of skills and knowledge, and contributions to the clinic as a whole."
We also developed a tiered system of management levels, so we could base pay not only on technical skills but on personal responsibility. In the same way as with management levels, we also base compensation on skill level. Entry-level employees start at level 0 while they are in training. Level I employees perform basic tasks according to their job description and the office manual lists. This level should be achieved by the end of the first year on the job. Level II tasks require more skill and training, and thus moving to level II usually merits a raise of $.25-.50 per hour. Level III tasks are high skill level, often requiring a degree or certification. Getting to this level requires years on the job or college level study, and merits a $1-2 per hour raise. Obtaining a CVT certification or passing the hospital managers exam would be examples.
Our employee development system takes into account two major things, which will be measured on a point system and determine whether an employee achieves an annual merit raise or not. These two areas are support for the goals of the hospital, and achievement of their own goals. We have broken each down into small pieces in order to determine an overall score. 100 points for their own goals are listed on job review forms that they fill out for their review. The other 100 points come from the evaluation of their work by the management of the clinic. The combined score will be used to calculate their raise, to a maximum of $.30 cents per hour.
There is a ceiling to how much can be earned for any given position in the hospital. To go beyond this number you would need to acquire additional skills or move up in management levels. We also provide for an annual cost of living raise, which is based on the CPI.
Here's the conundrum we had to deal with when we started to use the system - what if they score only 60%?? Do you keep them or let them go? Rehabilitate them? Improve your coaching? Set more realistic goals?
In order to help employees focus on their goals, we have developed a couple of different forms that they can work with before their reviews, so they have something concrete to show us. Ambitious employees who are trying hard to do a good job are the ones we want to reward with a merit raise. If they come to their review with a long list of accomplishments, goals met and examples of how they saved or made money for the practice, they deserve a raise – unless they are chronically tardy, have interpersonal problems or other negatives as well.
For example, one of my receptionists sends out a letter to clients who have scheduled an exam for their senior dog. It asks them to bring in a urine specimen and explains why that's important. She tracks how many wellness U/A's we do from those letters. She encloses a fecal baggie when that is due as well, and tracks that, too. If she comes to her review and tells me she can account for $800 worth of urine and stool samples for her extra efforts I am much more likely to give her a raise. My office assistant is supposed to be monitoring our expenses for office supplies and trying to reduce the amount we spend on that. She is not organized and hasn't actually done this. Therefore, she probably won't get a merit raise this year.
Other things you can factor into your compensation plan:
Ambitious employees who are trying hard to do a good job are the ones we want to reward with a merit raise. If they come to their review with a long list of accomplishments, goals met and examples of how they saved or made money for the practice, they deserve a raise – unless they are chronically tardy, have interpersonal problems or other negatives as well. Do you find yourself creating policies to address particular employees' problems? Should they be on your bus?
Shift differentials – do you want to offer higher pay for the shifts you find more difficult to fill? EAP's – employee assistance plans. Are you willing to give advanced pay if an employee has health problems and needs some extra help? How much will you allot for uniforms for each type of employee? Who will monitor this? What about CE benefits? Pet care for employee's pets? Health insurance vs. cafeteria plans? Each of these issues needs to be discussed and decided upon, and will probably be a little different for each hospital.
Things to keep in mind when developing your program: there are many ways to contribute and be valuable, and many things that a person brings to the practice. Knowledge and education – plus the ability to study and learn, and to apply what they've learned, if we're lucky; Life experience – customer service and communication skills, supervisory or management skills; Technical skills, including medical skills but also phone and computer skills; Personal attitude, including enthusiasm, commitment, maturity and self-restraint; Productivity – face it, some people just work harder than others. Is it possible to utilize all these factors to determine someone's rate of pay? Yes, but it gets complicated! For a small staff it probably isn't worth the effort to quantify each of these, but for large practices hiring multiple people each year, setting up a system that calculates their starting wage and where they go from there might be a necessity.
Lastly, are you getting the employees involved? They are much more likely to buy-in to the plan and support it if they had a say in developing the plan. We set up a "Compensation Plan Work Group" that met for about 20 hours over a two-month period of time. We included one associate, 1 technician, 1 receptionist, the bookkeeper and the practice manager. It was great to get everyone's input and ideas. If you choose responsible, experienced employees for the group, or let them choose themselves, don't worry that they'll give away the farm. They have a vested interest in making your practice successful, and would love to help you reach your goals, including keeping staff costs under control. They know who the hardworking employees are who deserve to get paid more and who should not get that merit raise, and they don't like to see coworkers abusing benefits (e.g. falsifying time cards, taking inventory items home for their own pets, etc.) any more than you do. Committed employees are your best asset, so let them contribute – you'll be glad you did.