I learned a long time ago a basic principal of human resource management that has served me well: Don’t take anything away from employees that is perceived as a benefit. At least, not if you care about employee morale and about preventing turnover. In spite of what seems like common sense to me, I talk with optometrists fairly often who are in the process of implementing a change that takes something away from staff.
The office policies that are in place now become the norm that employees understand and work from. It does not really matter if those policies were not originally intended or designed to be the way they are. Once they become common and accepted, even with the passage of time, they are the policies.
Here are three ways that I see ODs and managers make negative changes to employment policies. With a little creativity, the backlash from these changes could be avoided with little or no cost to the practice.
Drop a bonus program
I indicated in last week’s tip article that I would address this. If you have a staff bonus program that has been in operation for some time, but does not seem effective to you or it has become an entitlement, realize that employees see it as part of their normal compensation. You have two options, replace the current program with a different one that offers similar opportunities for rewards or buy the old program out and replace it with higher wages.
The first is best if you still believe in bonus programs. I recommend that you announce the new program rules and indicate that it will run for one quarter only and then it will change again. It works well if you pay the bonuses after the end of the quarter with a separate check from the normal paychecks. Changing the bonus programs frequently allows you to focus on different specific goals and it keeps the staff from taking it for granted. They have to change their behavior to earn the bonus.
The second method works much better than it sounds. Tell the staff that the bonus program is ending, but the practice will give each employee a raise in their hourly wage equal to the average bonus they earned in the past. Calculate that amount for each employee individually based on their actual bonuses paid over the past six months or more, and based on their usual hours per week. Some employees will have a bigger hourly wage adjustment than others, so keep this confidential. This raise does not cost the practice anything; you will still be paying the same amount you always have, but you got rid of a bad program once and for all. As new employees are hired, it is no longer a factor. As you give raises to existing employees, you can decide in each case if a raise is deserved and continue to normalize the wages.
Begin to charge employees for a benefit
A good example of this is in the situation where a practice provides health insurance to full time staff members as a full benefit, but due to ever increasing premiums, this becomes too big of an expense. This happened in my practice many years ago. When employees do not contribute at all to their health insurance, they will take the insurance benefit even if they don’t really need it and they are resistant to changing the insurance plans or moving to higher deductibles in an effort to lower the premium.
I wanted to change the policy to requiring a 20% contribution from the employee toward their premium. The practice would cover 80% of the premium. We already charged the employee the additional premium cost if they wanted to add dependents. When I announced this change, which would have reduced take-home pay for the staff, I also implemented an off-setting raise in each employee’s hourly wage. This raise did not cost the practice anything because I was basically compensating for the increase by getting some help with the health insurance premiums. The staff accepted the change quite well because they did not see a change in their pay.
Cut pay or charge a penalty
There can be many variations in this category, but they amount to cutting an employee’s pay or cutting scheduled hours (in a punitive way) or charging staff a financial penalty for errors made or poor behavior (like punctuality problems). It should be noted that some of these actions could be against state department of labor regulations. I don’t worry much about those state laws as I would not take these actions in any case, because I think they are a poor human resource strategy.
I think if we cut an employee’s pay, and if the employee does not quit, we end up with an unhappy staff member who resents that action and will likely retaliate in some way, even if it is just with a poor attitude. The practice owner may think the move was quite fair and justified, based on the facts of the situation, but it is very unlikely that the employee would agree. If I have an employee who makes errors or does not follow procedure very well, I take the responsibility to retrain and rehabilitate the person. If that process does not work, I’d rather fire the employee than cut his or her pay.
I realize the playing field can seem uneven in favor or the employee in many cases, but realize they are individual people and your practice is a company. It is not the employee vs. you personally, it is the employee vs. your company. We need to develop a great staff to reach your practice goals. Start by never taking anything away.
Best wishes for continued success,
Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week
Dr. Gailmard's new book, Practice Management in Optometry: A Blueprint for Success Based on the Optometric Management Tip of the Week, is now available on Amazon.