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Helping team members be their best: Skill based compensation plans (CVC Proceedings)

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Aug 01, 2009

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
A/R 0.50
A/P 0.50
Etc. ___________

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.