your I.Q. for staff compensation.
BOB LEVOY, O.D.
or False? 1. To maintain staff morale, implement raises across the board. 2. Conduct
salary and performance reviews separately. 3. The key to attracting and retaining
loyal employees is to provide them with a good compensation and benefits package.
FALSE. Implementing raises
across the board, known as the "peanut butter approach," can make high-performing
employees feel slighted while the others, in essence, receive an unintended message
that their salary is dependent on merely "showing up." Provide an incentive that
is based truly on differentiated performance – not politics, self-promotion
or the peanut butter strategy.
"[Providing an incentive that
is truly based on differentiated performance] implies an organized way of deciding
whether performance has improved," says Jeffrey Denning, a consultant with the Practice
Performance Group, a practice management consulting firm in La Jolla, Calif. "Employees
who are good workers this year but who aren't materially more valuable than last
year, shouldn't be earning much more this year. And it may be necessary to bypass
raises for employees who are being paid above the market rate."
Combining the salary review and performance review compels you to justify a salary
increase (or lack thereof) in terms of the performance evaluation something
that can be difficult when other factors enter into the decision-making process.
To keep this problem from developing, conduct the salary review separately. The
primary advantage: During the performance review, the discussion can be about performance
only. When you conduct the salary review later, you can discuss more openly the
other factors that determine a salary increase.
If you set clear, agreed-upon
goals and benchmarks during performance reviews and have follow up discussions with
each employee during the year, salary reviews should simply be a wrap-up with no
surprises. Basically, the performance review is an assessment of how well employees
met their goals, demonstrated new skills and what raises if any are
appropriate for these accomplishments.
3) FALSE. "More
than ever, they [the old tools for rewarding employees with competitive wages, benefits
and incentives] are just the price of entry for hiring or retaining the employees
you value," says Dianne Michonski Durkin, author of The Loyalty Advantage: Essential
Steps To Energize Your Company, Your Customers, Your Brand. If you rely solely on
a compensation and benefits package to attract and retain employees, you'll likely
be caught in a price war for talent. When your only leverage is financial, you can
either choose to outbid your competitor, or let a good employee choose another home."
So, how can you reward good
performance without cash? Ask Price Pritchett and Ron Pound, co-authors of Team
Construction: Building a High Performance Work Group During Change.
"The intangible rewards you have to
offer are limitless," they say. "Words of encouragement, compliments, empathy and
understanding and a note of appreciation; stopping to share a cup of coffee, or
taking an employee to lunch; bigger titles or special assignments; more decision-making
authority; a sincere thank you; asking about the family, celebrating small victories;
soliciting opinions and suggestions. Listening . . . really listening; a mere smile,
or calling the person by name; a warm handshake or pat on the back; taking the person
into your confidence; even asking an employee for help – 'needing' the person
– is gratifying because it validates one's worth."
Psychological paychecks have an intrinsic
value that hard currency can never touch, these authors say.
DR. LEVOY'S NEWEST
BOOK IS 222 SECRETS OF HIRING, MANAGING AND RETAINING
GREAT EMPLOYEES IN HEALTHCARE PRACTICE IS PUBLISHED
BY JONES AND BARTLETT PUBLISHERS: 800-832-0034.
Optometric Management, Issue: December 2006