Is productivity in your practice inconsistent? Do you know whether you're overpaying or underpaying your hourly employees? Does every staff member know exactly what his or her job is supposed to entail? Do your employees complain that some staff members receive "special treatment?"

These problems are often the result of a poorly organized and managed wage and salary administration program. However, avoiding (or resolving) these problems isn't difficult if you do a good job of five things:

• define your organizational structure
• provide clear operational rules (and stick to them)
• specify each employee's duties
• define wage and salary guidelines for all hourly employees
• provide criteria-based performance evaluations.

Here, I'll explain the reasons these strategies are so effective -- and provide specific instructions to help you implement them in your own practice.

According to a show of hands at a course I taught at the May 2000 meeting of the American Society of Ophthalmic Administrators (ASOA), fewer than 10% of the attending doctors had prepared and posted a practice organization chart. In fact, this kind of basic information about the practice and the employees' place in it is often poorly communicated when staff members are hired (or not communicated at all).

Employees have a right to know what their primary duties are and who they report to. Besides, working without this information leads to misunderstandings and lower productivity.

This is an easy problem to avoid: If you haven't already done so, develop and post an organization chart for your practice. The chart, which doesn't need to be larger than one page, should clarify reporting relationships and succinctly describe every employee's primary function. It's a simple, inexpensive and effective way to help ensure staff productivity.

Employee manuals are critical to the health of any business. They serve two purposes:

• They establish ground rules so staff and employers don't have to debate protocol every time an unusual office situation arises. Without these guidelines, your practice could experience hours of lost productivity every day. (For an example, see "No Employee Manual: An Invitation to Trouble," on page 64.)
• Employee manuals also help protect employers against violations of the law. Because this is a concern, let your attorney review your employee manual to make sure it's current with respect to both federal and state laws.

Although creating an employee manual may sound like a lot of work, there's no need to "reinvent the wheel." ASOA published a pamphlet titled The Personnel Manual in the late 1990s. Three ophthalmology practices volunteered copies of their employee manuals for this publication. It's a great resource for developing your manual.

One word of caution: Once you create an employee manual, adhere to the established guidelines. Otherwise, the net effect will be the same as not having a manual at all.

Detailed job descriptions are essential to a well-managed practice, and most practices do have some kind of written job descriptions. However, don't underestimate their importance.

If you don't already have job descriptions for all staff members, follow these steps to create them:

• Download and print sample job descriptions from the ASOA Web site.
• Provide copies to staff as a reference point for developing their own job descriptions.
• Instruct staff to record all the duties their jobs entail, along with related tasks and instructions, over a 1-month period (to ensure that most of the duties they perform are included). For example, one front desk tech's "duty" may be to answer the telephone. "Related tasks" might include answering within three rings, never placing a patient on hold without asking if it's okay, and so forth.
• Have supervisors review the job descriptions with staff and modify them as required.
• Print copies of the completed job descriptions and place them in a binder for reference. Be sure to give copies to all staff members.

Many doctors are reluctant to make wage and salary guidelines available to their employees. However, in my experience, doing so has a very positive effect on a practice. When employees can see that their wages are based on marketplace standards, and that everyone is being paid according to a fair, universally applied system, productivity and morale increase -- and rate of staff turnover drops. Clear guidelines also prevent overpayment for a particular job or skill set, which can help your practice's bottom line.

To define wage and salary guidelines for your practice, I recommend creating a "salary matrix" -- a chart that lays out your practice's pay ranges, by position. It specifies the lowest and highest wage you'll pay for a given set of skills.

To create a salary matrix that's specific to your practice, start with a "Non-Exempt Employee Salary Matrix" format sheet like the one above. This chart has 14 rows of salary "grades" representing increasingly higher paid salary ranges as you move down the chart. Each row contains a range of pay appropriate for a person at that earning level.

As an individual stays with a particular job description and progresses in salary, certain conditions may change. (For example, as the individual approaches the upper wage limit for his job description, the percentage of merit increase available from year to year has to decline somewhat to avoid surpassing the wage maximum for that position.)

To make sure changing conditions like this are applied consistently and fairly, the range of possible pay for each salary grade is divided into four "quartiles" as you move across a given row. These quartiles make it easier to assign pre-set conditions affecting wage increases in a fair, consistent manner.

Next, to make the chart specific to your practice, you'll need to replace the job descriptions in the left column of the sample with job descriptions relevant to your practice. Each job description should be placed to match the wage range that's fair and competitive for that job in your particular area. (Your salary ranges could be different from those in the example.)

To help you determine what salary range is appropriate, I recommend obtaining a copy of ASOA's Salary and Benefits Survey. This invaluable publication not only provides national ophthalmology wage and benefit statistics, but also identifies average wages by position, classified by practice size (from one to more than 10 ophthalmologists).

Once the Salary Matrix by position is completed, list all staff within their grades and identify employees who are over- or underpaid.

• Underpaid employees' wages should be immediately adjusted to fall within the established range.
• There's no simple solution for overpaid employees. Each instance will require individualized attention.

NOTE: Once you've created a salary matrix for your practice, make it available to your staff. It's probably a bad idea to post it or hand out copies, but do let your employees know that such guidelines exist and can be accessed in your personnel manual or by speaking to the practice administrator.

Finally, I recommend rethinking how you perform employee reviews. Traditional employee reviews cover fairly standard questions, or "job standards," divided into sections such as Job Skills, Attitude and Personal Attributes.

In my experience, there are two problems with this traditional system:

• ratings are seldom based on quantifiable measurements (which leads to highly subjective reviews)
• reviewed items are generally treated as equally important in the evaluation process. Is attendance really as important as interpersonal skills for back office personnel?

Criteria-based performance evaluations with quantifiable job standards greatly reduce these concerns.

Here's a step-by-step procedure for creating these forms. (You can develop them using your current review form.) The form you create should have three sections: Job Skills, Attitude and Personal Attributes.

• Step 1:
Modify the form shown on page 59 for each position by adding the appropriate job description. (Many practices go to great lengths to specify employee duties, but don't rate performance by how well the duties are managed!)
• Step 2:
Using a 100-point scale, have all employees in similar positions prioritize the three review sections (Job Skills, Attitude and Personal Attributes). For example, a certified ophthalmic assistant (COA) might rate the "Job Skills" section as representing 50% of her patient-based job value, "Attitude" 30% and "Personal Attributes" 20%.
• Step 3:
Have all employees in similar positions "weight" the questions within each review section, using a percentage scale, as in the form on page 59.
• Step 4:
Have supervisors meet with staff to review and approve all prioritizations.
• Step 5:
Type and distribute review forms to all staff. The more clearly staff members understand how they'll be evaluated, the more likely they are to do their jobs well.

Taking the next step in the evaluation metamorphosis -- quantifying each job standard -- will raise the quality of your annual reviews to an even higher level. Quantification establishes specific, measurable goals for each job standard. Doing this reduces the subjective nature of reviews, thereby minimizing the negative impact less skilled reviewers can have on the rating process.

For example, it's not hard to quantify "tardiness." You might define "below standard" as arriving at work late 12 or more times during the year. Likewise, you could define "exceeds standard" as being late three times or less during the year.

Armed with this information, not only will your employees know exactly what's expected, the rating process will stop being subjective (as long as tracking information exists).

The benefits of quantifiable job
standards include:

• clearly defined performance standards and goals
• reduced rating subjectivity
• more meaningful reviews because staff help to create standards
• easier identification of employee weaknesses and areas where training is needed.

Not every standard will be easy to quantify, so get creative. If it seems impossible to quantify a particular job standard, ask yourself the following question: If I can't define what constitutes good or bad performance, how can an employee's performance be rated good or bad?

Because these standards are quantified, completing the annual review process does require some math. (Sorry about that!) But the math adds to the consistency and uniformity of the evaluation process.

Look again at the form on page 59. As you can see, when completed, each job standard has a score that's the result of that standard's weight (prioritized point value) multiplied by its rating (1, 2, or 3). The first job standard in the sample form, "Prepare and close rooms," has been given a weight of 10% and a rating of 2. Multiplying 10% by 2 yields a score of .20. After filling in the rest of the form, adding up all the job standard scores yields a section score of 2.55.

All three sections are summarized on a "Criteria-Based Performance Evaluation Summary Form" like the one on page 62. Section scores are then multiplied by their prioritized values and totaled for a final review score. This review score is compared to the practice's own guidelines for what constitutes "below standard," "meets standard" or "exceeds standard." In this example, "below standard" is defined as a review score between 1.00 (the lowest possible score) and 1.89.

I strongly urge you to implement this evaluation system in your practice. The benefits far outweigh the investment of time and energy required to implement it.

The last step in the annual review process -- determining an annual wage increase -- should also not be left to the whim of the evaluator. To implement a fair, universal system for determining wage increases, I recommend creating a "merit adjustment matrix." This matrix defines the annual wage percentage increase an employee will earn, based on the employee's final criteria-based performance evaluation score. For example, in the form above, an employee rated as "meets standard" whose wage level falls within the first quartile of the salary matrix will receive a 4% salary adjustment.

Note that merit increases taper down from the first to the fourth quartile. Tapering slows an employee's merit adjustments as she approaches the maximum wage within a range, extending the number of years she can receive merit adjustments before reaching the maximum wage for her position.

The merit adjustment matrix serves several purposes:

• It takes the guesswork out of selecting a percentage increase.
• Employees in the same salary range with identical job descriptions and identical review scores will receive identical merit adjustments.
• Because the merit adjustment matrix is created by you, it allows you to define merit percentages differently each year (if necessary), reflecting economic circumstances in the clinic, the community and the nation.

A well-managed wage and salary administration effort can do a lot for any practice. Taking these steps -- developing a practice organization chart and employee manual, providing written job descriptions, creating a wage and salary matrix, and giving performance-based annual reviews using quantifiable job standards -- will result in fair compensation, improved morale and improved productivity. Your staff will focus their attention on patients, not inequities or uncertainties.

In short, your staff members will be happier, your patients will be happier and your bottom line will benefit. And that's a payoff worth working for.

(Wages expressed in dollars per hour)