As many of you have heard me say, I feel that a productive performance review should not be a bureaucratic “grading” process. Everybody hates that.
Instead, I feel that a performance review should be a cross between a “Wedding Anniversary” and “Let’s Make a Deal.” That is, the employee should be thanked and honored for their contributions for the past year. Recognition matters to high performing employees. So when you give a raise, it is helpful to give it with praise – in a bouquet. Then you’ll get more of what you want (happy employees). The “Let’s Make a Deal” part is where you outline 3 to 5 concrete things for the employee that you want their help with,
“So Debbie, I am very happy with how you’ve gone beyond the call to increase your skills this year, are flexible in working hours, always willing to lend a hand and always cheerful. That’s why I am giving you a 4% raise this year…
Now, for the coming year, here is where I need your help…”
Then outline to your employee what you’d like them to do. Examples:
- Get the Continuing Ed to add to their skills (for example, the front desk to learn more about theQuickBooks or Practice Management software)
- Flexibility in working evening hours
- More use of the intra-oral camera
- Better front desk collections
- Be more punctual
Be very specific and concrete. Note the requests and then the next year, if they’ve made progress in those areas, thank them. In fact, don’t wait until next year! Tell them right away if you see a change in behavior (or don’t!).
As practice owners, you have an automatic “incentive” program. You know your career, your livelihood is at stake. Employees are a step or two removed from the harsh realities and from the rewards. You don’t need anyone to motivate you to grow, to get better, etc. Create an environment so good employees can flourish. Valuable team members are always adding to their skills, always helpful, pleasant and hardworking. If you don’t recognize those qualities in an employee, they will go somewhere where they can be recognized!
Oh, and one more thing, an important part of the performance review process is to ask the employee, “What can I do to help support you in doing your job and in being happy at work?” and then really listen to what they have to say. You don’t have to grant everything that’s asked for but if you take what they say under consideration, they’ll know that. At the very least, you’re less likely to be surprised by having someone unexpectedly quit.
Smart Wage Decisions: I believe it’s best to take a look at staff wages as a percentage of collections at least once per year for the sake of determining how much will be available for wages and raises. If your total gross wages were running at about 25% of collections, for example, last year and they are 23.5% now (because your collections grew) then you are in a position to give raises. If staff salaries have crept up to 27% or 28%, then it’s time to hold off until your practice revenue catches up.
Using this very simple method, you can keep the biggest part of your overhead (staff wages) under control.