Managing optometry practice compensation can be quite a daunting task. It involves a careful review and thorough analysis of finances, market salary, individual employee performance, overall business costs, and more.
As is with most businesses, compensation is one of the major expenses of all optometry practices. Unfortunately, many optometrists have a hard time managing their team compensation properly. And it’s quite understandable.
Financial planning and accounting aren’t normally taught in optometry schools. The good news is that you don’t even need professional business training to be able to manage compensation.
The following article outlines some of the simple yet effective ways to successfully determine optometry practice payments. Implementing these strategies can help you improve your business’s sustainability while optimizing team compensation at the same time.
4 Strategies that Every Optometrist Must Follow to Effectively Manage Their Practice Compensation
1. Profit Growth Review
You cannot spend money unless you earn it first. When making compensation decisions, you need to pay attention to the financial standing of your practice. What is your business’s fiscal health?
Take into account the annual profit growth and how it compares with the revenue earned during the year. Use the overall business revenue and profit growth rates as the basis for deciding performance-based bonuses and staff appraisals. If there is no profit growth or annual earnings have been lower than expected, it’s best to delay salary raises.
Some optometrists think that it is’ necessary or wise to give increments at regular intervals. They couldn’t be more wrong.
Giving salary increases or other similar rewards means you are likely to spend money out of your own pocket. Your team members must understand that appraisals and other monetary rewards are subject to the overall business performance.
2. Market Compensation Evaluation
You need to carefully analyze your optometry practice compensation to ensure that it’s proportionate with the market as well as the industry standards. You wouldn’t want your practice to be known for not offering competitive compensation. But it’s interesting to note that in a bid to retain ‘talent,’ many optometrists actually overpay their team members. On the other hand, those trying to budget their business expenditure often end up with an underpaid and thus, unsatisfied staff.
The key to avoiding these problems is to routinely research and review market wage trends. Pay close attention to the salaries and bonuses other optometrists are paying in your area. The
compensation for the front desk manager, hygienist, assistant OD, etc., varies by their practice hours, job responsibilities, experience level, and so on.
When you have this information, you can create the right payment plan for existing as well as new team members. Patient satisfaction and your practice’s long-term profitability are highly dependent on staff productivity. Paying fair and competitive wages allows you to optimize team performance and thus, ensure continued business success.
You can find reliable salary data at various online resources such as the Bureau of Labor Statistics and ADA. Or you can even refer to websites for job listings, such as Indeed and Glassdoor.
3. Team Engagement
Improving your employee buy-in is of prime importance when it comes to effectively managing compensation. Team productivity automatically increases when the members know that they are contributing towards a bigger goal.
Maintain transparency within the organizational structure. This will help the team members understand their payment plans and avoid unwanted surprises when the pay check is handed over.
Additionally, provide team members with the tools and training to improve performance and boost productivity. In order to increase compensation, the practice must perform well. And the practice will only succeed when each member puts in their best efforts.
4. Strategic Team Development
Almost every optometry practice has employees that don’t really deliver a stellar performance. But they are somehow deemed necessary for smooth operations. Mostly, it’s because they fulfill a particular role that others cannot. As such, the optometrist believes that member is ‘indispensable’ to the team. This can cause apprehension and lead to dissatisfaction within the staff.
To avoid this problem, you must detail the role and responsibilities of each employee. Make sure every team member is well aware of their daily duties and the contributions that are expected of them in the bigger picture.
Action Plan for Implementing the Strategies
Now, that you the best strategies for effectively managing optometry practice compensation, take a look at how to put them in action.
Identify the appropriate compensation for each employee
Conduct a survey for the salary scale in your respective industry and determine payment bands. Payment bands mean categorizing pay rates depending on the individual’s educational and professional background. Take into account their overall skill set and previous experience. Defining salary groups will guide your decisions about appraisals and hiring new candidates.
Outline job descriptions
Carefully think about what each individual member ought to contribute towards the practice. Create detailed job descriptions for every employee based on the required skills, number of hours of work, daily responsibilities, and so on. Explain everything in depth but keep it realistic. An overly detailed job description can overwhelm some members.
Conduct a meeting to explain the payment plan to your staff members
The best way to avoid problems related to the compensation process is to have a one-to-one meeting with all of your employees. This can help you answer any questions they may regarding their paycheck. The process may be time-consuming, especially if you have a fairly large team. But it’s essential for smooth administration as it will prevent hiccups down the land.
Managing optometry practice compensation can seem like a rather complex task. But it’s actually quite easy if you keep the aforementioned points in mind. Implementing these strategies effectively may involve some trial and error. However, once you get a grasp of these techniques, you will surely experience the difference it makes in enhancing your practice.