[The story you are about to hear is true. The names have been changed to protect the guilty.]

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The Case of "Show Me the Money!"

By Lynn Homisak, PRT

This article was reprinted with permission from Podiatry Management Magazine


This is the city...Fairbanks, Alaska. It was ironic that the city name in some small way reflected currency; for we were called in to this practice after a desperate cry for "compensation-woes help". The simple facts were laid out for us on the table. Every time the staff cried "Show me the money!"...the doctor would give them another raise, without pause or cause. They were certainly worth their weight in gold, but at this rate, a fool and his money are soon parted.

For those doctors who are fortunate enough to have dedicated employees who have stood the test of time, it becomes a challenge to regulate their salary and still express appreciation for all that they do. Many times, number of years worked becomes the main criteria for an automatic salary increase. That's what happened to Dr. Walkalloverme. He had a moderately thriving practice, 3.5 staff people who have been with him for 10+ years. He was thankful for their loyalty and years of service, but as a result, fell victim of habitually increasing each of their wages $1.00 more every hour every year and it was starting to add up. In the beginning, it seemed a logical annual increase, but now he is reaching levels he never anticipated and starting to wonder where it all ends. How much longer he could continue this cycle before it seriously started affecting his cash flow and perhaps even the security of their jobs? Dr. W. confessed he felt trapped in quicksand and if he did not take action soon, he would surely be sucked in. That's where we come in. We are SOS...we carry a computer.

Salaries are probably the most subjective, misunderstood element of a podiatry office. The fact is that compensation is:
 rarely analyzed or structured according to job description or performance;
 often created without influences, strategies or outcomes;
 currently without a podiatry-specific "market" value to draw from or measure up to..

As a result base wages are established mostly via "word of mouth" comparison. There are conflicting complaints: from the doctors (that they pay their staff too much) and from the staff (that they don't get paid enough.) Where is the imaginary center line drawn?

Very often, this battling mindset occurs due to a number of considerations that are NOT addressed before setting a salary structure; length of employment being only one of them. Dr. W. ignored almost all of them and that's when his predicament turned criminal. It was up to us to educate him. First lesson...before he could decide on an appropriate salary, he must decide what the job is worth. This is accomplished via job analysis.

Job Analysis and Definition

What about this job? Well Dr. W. had an idea of what each of the staff jobs entailed, but when asked to describe it, he omitted most of the criteria....so in essence, he really didn't know the details. In far too many instances this alone, can lead to confusion and improper training and as a result, could result in an incorrect fit with inappropriate compensation for a new hire.

Before conducting a job search, it is important to determine what specific skills are required, how much education/knowledge is needed, experiences, physical limitations, training...and finally what personal characteristics or behaviors are necessary to fulfill this position?

A good job analysis outlines certain expectations required of an employee that would allow them to effectively perform. A well thought-out job analysis should take into account levels of:
 Accountability (the financial impact on the practice, degree of employee latitude and monitoring, creativity)
 Knowledge (experience in the "field", hands on patient care, medical language, technical processes, policies, identify and ability to deal with non-routine situations)
 Decision Making (definition of parameters [routine, defined, standard, strategic] and the consequences of these decisions)

Other dynamics that impact analysis include comparisons to similar positions in other podiatry (or healthcare) offices, comparisons found it published literature (if available), observation of employees on-the-job, actually performing the duty to determine the degree of difficulty and finally and a work-activities log listing all the tasks performed.

Once the job description is outlined, it is matched to a certain salary and anyone applying for this position must accomplish the obligations/duties as listed in order to get the pay linked to it. With a base pay put in place, we needed to determine if Dr. W.'s current staff met the standards as defined and in order to do that, we recommended he conduct individual performance reviews.

Performance Reviews
Dr. W. explained that over the years his staff had developed their own idiosyncratic manner of doing things and he "just assumed" the jobs were getting done. His admitted lack of concern did not allow him to differentiate between "productivity" and "producing quality work." This was a big clue towards solving the crime.

Typically, a good quality review will rely on such work characteristics as job knowledge, technical skills, problem solving, work organization and time management, service orientation, attitude and cooperation, dependability and the ability to follow direction, initiative, judgment, communication, attendance and professionalism. Outstanding performance should be recognized and a rating scale of each category should be executed to determine if the employee's activities fall in the marginal, acceptable, above average or outstanding range. Now raises linked to performance (not just on how many years they worked) can be reasonably awarded.

Merit Pay, Variable Pay and Bonuses
How one chooses to design their basis of compensation is also built on a set of criteria which includes:
 salary philosophy of the practice (e.g., does it want it's pay scale to be ahead of the current range, therefore attracting a more qualified individual or is it satisfied paying little and expecting little in return?);
 the performance of the practice (is it flourishing or barely surviving?);
 what the specific (podiatry/healthcare) market bears;
 current economic indicators; and of course
 their own internal pay structure (hourly, salary).
Merit increases add to the base pay and are sized proportionately with the excellence of the employee performance during the past year. Whatever method is utilized... staff should be made aware of these guiding principles.

Variable pay describes an alternate pay option (e.g., profit sharing) that ties employee productivity to the practice's profitability. This is a win-win for both the practice and the employee as it can offset cash compensation. Giving the employee a "stake" or "ownership" in the success of the business incentivizes them to improve their individual productivity which, in the end, puts more money in their pocket.
Base pay generally reflects the value of the work itself and does not necessarily take into consideration individual efforts, whereas bonuses (or a lump sum payment) offerings allow recognition of a unique or exceptional employee performance or goal achievement. Bonuses are attractive as they can fairly reward an employee's work behavior without getting locked into a fixed salary increase.

Estimated Market Values
Dr. W. stated he is no "tightwad"...but admitted that he had nothing to substantiate that claim. He wondered what statistics were available to put him in touch with the rest of the podiatry pay force. Unfortunately, podiatric medical assisting is not a prototypical job. PMA's have no scope of practice, no formal education and as such, there has never been specific studies done to determine the fair market value for this undefined position.

Podiatry Management Magazine has made the only effort in our profession to at least determine a general benchmark for staff salary by integrating it into their Annual Survey; however, the problem that still exists (through no fault of their own) is that the responses do not directly correlate to a standard job analysis. In the world of podiatry, "assisting" is currently not a measurable criterion and those taking the survey response to podiatric medical assisting as they know it. The "title" can describe anything from setting patients in a chair to removing sutures and more. Because of the job diversity, PM's well-intended point-of-salary reference gets lost.

In addition to time and experience, some other market factors that can influence compensation are geography, and whether or not a search for the position (clinical, receptionist, management) is selected from a certain pool (local, regional, national) of candidates.

Normally, the internet, a virtual library at our fingertips, would be a likely resource to investigate; however, after visiting several wage-related sites, the same response appeared...there is no description for podiatric (medical) assistant. Even the Dictionary of Occupational Titles came up a blank; therefore, until a more defined process is developed, the next best market value resources (after PM Magazine) are local colleague comparisons and medical assistant salary surveys (the closest criteria to identifiable pma duties)

Communicating the value of the entire compensation package
The biggest gap between employees and employers interpretation of salaries exists due to a lack of communication. In Dr. W.'s case, he felt his staff was over-compensated and they felt they were under-compensated. Why the disconnect? (The $64,000 question!) Was it their observation of a steadily increasing profit margin in spite of his reluctance to give them a raise? Or was it the fact that the staff did not fully understand the value of their entire compensation package? It is necessary that doctors discuss the possibility of having to reign in or temporarily freeze salaries with their staff so that serious financial concerns can be understood and rationalized in their minds.

What else can be done to bridge that gap? Dr. W, discovered that his staff's confusion was directly centered on their cash compensation; but like most employees, they thought that compensation and base pay were one in the same. They certainly are not and it was up to their doctor (at least once a year - most logically during their review) to break down and communicate to them exactly what their total compensation package is worth.

Unfortunately, added benefits such as medical health insurance, workers compensation, disability, social security, flexible hours, 401K and paid time off (holidays, vacations, sick, jury duty and bereavement, etc.) are oft times not directly visible. They tend to become disregarded and (probably unintentionally) taken for granted. This information should be organized into an annual Compensation and Benefits Statement; then presented to and signed by the employee as a written acknowledgement of benefits received for the previous year of employment.

Clearly, our work here was done. Dr. W. knew what he had to do to get back on a cost-effective track and seize better control of his finances. He now has a more informed, accepting staff thanks to their enhanced communication, a solid salary structure linked to performance and a newly revised compensation package that is not only practical, but equitable. His crime was no small potatoes but the lessons learned were rich. Money makes the world go around all right, but sadly, it still doesn't grow on trees.

Another day...another dollar...another crime solved by SOS.