PART 5 of 6: Making sense of salary increases —for the first time

The link between Pride Institute management techniques and their direct effect on production, collections, and practice success.

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by Dr. James R. Pride and Amy Tuttle-Morgan

The link between Pride Institute management techniques and their direct effect on production, collections, and practice success.

This group of articles chronicles the year-long, true story of a practice undergoing management improvement. So far, authors have discussed:

  • how preblocking the schedule to meet production goals boosted doctor production
  • how the dentist and team dealt with an obstacle to controlling the schedule and reaching higher production goals — the doctor's habit of socializing with patients
  • tense moments when the doctor blew up at the staff and later successfully performed "damage control," with everyone learning important pointers to better communication
  • how collections fell to 75 percent and what they did to discover the unexpected source of the problem, to correct it, and to implement sound financial systems

© Gary Buss at FPG International - Photo

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In Dr. Johnson's annual plan, we had budgeted for staff salary increases to occur in the third quarter of his management-improvement program. By the end of the sixth month, daily doctor production had risen from $1,959 in the year prior to beginning the program to $2,426 in the sixth month, and $2,300 year-to-date. The third quarter brought higher doctor-production goals in our efforts to reach $2,800. The staff had already done an excellent job in attaining the sixth-month goals, so it was time to reward their success.

Dr. Johnson's total employee expenses — which included salaries, benefits, and taxes — were running 29 percent (with a goal of 30 percent), so they were already within the range norm we use of 25 percent to 32 percent of collections. Our model for giving staff increases would keep the salaries in range and tie compensation to the growth of the practice.

By the end of the second quarter, Dr. Johnson's practice had increased collections by $48,350 over the same six-month period a year prior. We used approximately 20 percent of the increase in collections, or $9,800, as the compensation pool for staff salary increases. This money then was divided among the staff according to individual performance and paid out as salary over the next six months, based on the Pride Institute Compensation Formula. All employees felt their efforts had been acknowledged. In addition, they had benefited from their shopping-spree game (described in May's article) and also would profit from an end-of-the-year "Olympics," which we will discuss next month. The team was working more effectively and being compensated better; everyone was happier.

Dr. Johnson, who had always given raises by gut feeling, had never before felt in control. We introduced a new way to approach staff salaries that placed him in control and satisfied everyone.

"In the third quarter, I did salary reviews, and my staff members were happy with the increases. They all felt acknowledged," says Dr. Johnson, "and I felt good knowing that what I gave was affordable."

His wife (we will call her Mary), who is the bookkeeper for the practice, agrees. "Before, we did things by the seat-of-the-pants. Now, the management training has taught Bob how to give raises," she says. "He knows how much he can give without cutting into his own pay.

"I think that helps the employees too. They know you have a plan, and you're not just giving money away. They understand that there's an actual factual basis for raises, and diligence is rewarded. So the dentist is not just saying, 'Oh, I feel that you deserve this.' It's based on their performance, and that makes them more responsible." (For a discussion of how to give raises, see "Compensation and Bonuses: It Pays To Pay Wisely!" by Dr. Pride in the August 2000 issue of Dental Economics.)

At the end of the ninth month of the management program, the year-to-date figure for doctor production per day was $2,342, a sustained increase of over 20 percent from the previous year's average of $1,959, but short of the year-to-date goal of $2,470. Hygiene production, however, exceeded its goals, so total office production was above goal. Year-to-date hygiene production per day after the ninth month was $798, 17 percent above the goal of $680.

We had not yet given serious attention to increasing hygiene production, because we were concentrating on doctor production and wary of overwhelming the practice with too many changes at once. The hygienist, however, was a self-starter and made great improvements with little coaching. Once management-improvement efforts began, she wanted to be part of the process.

To do that, she focused on becoming more productive. She performed more needed treatment, such as three-month maintenance visits, scaling and root planing, and on-time periodic X-rays. As mentioned previously, she also was aided by periodic exams, which had been credited to the doctor's production the prior year, but now were being credited to the hygiene department. Comparing apples to apples, the doctor's production increase, if we include periodic exams, would be higher. The practice was brilliantly accomplishing its production goals, despite doctor production falling short.

Pride Concepts: Many practices tend to feel deflated when they fail to meet goals. It was important to constantly remind Dr. Johnson and his team of their success, despite the doctor's production falling short of the goal. The team had come so far that the consultant needed to make sure that they kept their achievements in sight. Praise, recognition, and success are the best motivators. Never underestimate the power of communication through effective meetings and huddles that empower employees to take an active role in practice growth. In virtually every one of the more than 3,000 dental offices that Pride Institute has worked with, leadership training and successful interpersonal communications have proven to be key factors in changing and improving practice systems. The dentist cannot just say to the staff, "Do this." Team members need to feel that they are part of the process in order to be motivated to achieve the goals. The motivational environment comes directly from the dentist.

What happens when, going into the fourth quarter, you realize that your team will likely meet its annual goals and maybe even hit higher ones? Do you change the finish line? More on this next month.

For more information on improving your practice using these methods, call Pride Institute at (800) 925-2600.


Pride Concepts

  • Praise, recognition, and success are the best motivators.
  • Never underestimate the power of communication through effective meetings and huddles that empower employees to take an active role in practice growth.
  • Leadership training and successful interpersonal communications have proven to be key factors in changing and improving practice systems.
  • Team members need to feel that they are part of the process in order to be motivated to achieve the goals.
  • The motivational environment comes directly from the dentist.


The Morning Huddle
Early in the program, we introduced another tool that proved indispensable in boosting production: the morning huddle. Many offices hold a morning huddle, but they usually do it without proper planning and specific goals ... and sometimes without the doctor being present. Instead of improving ineffective huddles, some offices have stopped holding them altogether and, consequently, have lost this invaluable team-building tool. For Dr. Johnson's practice, this brief, daily gathering of the doctor and staff became the primary planning tool for the day. In keeping with our policy of initiating change slowly while implementing what we introduce to its full benefit, we began with a "mini-huddle," consisting of:

  • a review of the preceding day's production to identify successes and rough spots
  • a review of the day's schedule, pinpointing trouble spots and strategizing solutions
  • brainstorming as a team about how to fill the next open preblocked appointment
  • designating efficient times for emergencies, with the doctor agreeing to perform palliative treatment only
  • coordinating effective hygiene checks, with the doctor entering and leaving the hygiene area on time

"Having everyone work as a team makes everything so much more comfortable," says Dr. Johnson's front-desk coordinator. "The huddle and our common goals pulled everyone together. Now we have input to and from each other on how to make things work."

Weekly staff meetings also are essential. "I used to feel a lot of stress about staff meetings," says Dr. Johnson. "It would be me talking all the time. Getting the staff involved has helped a lot. Now they take turns facilitating, and they keep a close eye on who's talking too much and who's talking out of turn. Occasionally, they'll ask me to wait my turn."

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