Tips for Calculating Staff Raises at Pediatric Practices

As my pediatric private practice expanded, I found that I needed to develop criteria for awarding staff raises to make this task simpler and more consistent. That need showed up about the time I reached 50 employees and was learning to pass along some management functions to others. I wasn’t doing all the personnel reviews myself anymore, so I needed criteria that I could pass along to others on my team.

Before I developed the criteria, I had clinical managers doing reviews for their juniors and they were constantly coming to me saying, “How much raise can I give this person?” 

I was having the same meetings over and over and I realized, “Oh my gosh, I’m repeating myself in every meeting.” When you’re finding yourself doing that about anything, you want to get your thoughts as the group’s leader down on paper.

Build an Excel Spreadsheet to Help You Calculate Raises

I developed a list of raise criteria and turned it into an Excel spreadsheet. There’s a tab for a 1% pay raise and under the 1% tab, it lists one and one-and-a-half percent. There’s another tab for a 2% pay raise, and that tab lists criteria for raises between two and 2.5% The tabs go all the way up to 5%. Five percent is usually our highest raise. You can pick any number that you want to pick. If you want to pick 10%, that’s great. Give 10% raises. But we typically keep our raises between 1% and 5%.

We might occasionally flip above 5%. That could happen if a leader comes to me and we sit down and have conversations about this employee. That person should just be off-the-charts-amazing. You must not lose them.

Alternately, you might not choose a percentage for a raise but make a market adjustment in their salary. Or you could make a lump sum adjustment and a percent raise. There’s lots of different ways that you can do it.

When to Award a Staff Bonus Instead of a Raise

You can also give a one-time bonus. Why? If you give a person a larger percent raise, that’s now their salary year after year. Maybe they went above and beyond. I give them a lump sum, they’re rewarded but the raise isn’t exponentially bigger in the future.

When Not to Award a Pay Raise in Your Pediatric Practice

There are also negatives to consider when calculating staff raises.

• Were they away from the clinic for a chunk of time? 
• Was there a maternity leave? 
• Was there a family leave for some other reason?
• Were they part-time most of the year and went full-time towards the end of the year?
• Were they not with you the entire year or were they prorated because you hired them later in the year?
• What other considerations might affect the amount of their raise?

Even though one of your staff was amazing and you would have given them a 5% raise, you might consider a bit of adjustment if any of these caveats were present.

Take Disciplinary Actions Into Account When Giving Raises

The other thing you definitely want to define is your disciplinary action policy as it relates to raises. If anybody has been on a disciplinary action during that calendar year, it affects their raise. They may not be eligible for a raise.

Here’s how we explain this: Let’s say someone was on a disciplinary action for the first quarter and they’re doing great now. For that first quarter of the year, they were sucking up time and energy from your leadership, whether it was you or the person directly above them. That costs the company time and money.

Therefore, we have a policy. If you’re on a disciplinary action program at any time during the year, you’re not eligible for a raise.

When to Make Exceptions to Your Disciplinary Policy

You can decide how to apply a disciplinary policy for yourself. Maybe by the end of the year, they’re killing it. They really improved. Maybe you give them just a one-time lump sum, not an increase on their whole salary, which is going to continue year after year.

Think with your disciplinary policy. You definitely want that policy clearly defined. Be really clear with all your staff on what makes them eligible for a raise and what makes them ineligible for a raise.

Always Keep Your Raise Criteria Private

I do not release my spreadsheet of raise criteria to my staff or managers. Only those who write annual reviews and make decisions about raises have my raise criteria. They are not allowed to share them, and that’s made very clear.

One thing to note: My spreadsheet is not a checklist so if you check all the boxes, you get a raise of 2% or you get 3%. It’s not that, it’s a guideline. In fact, we call it a guideline and I make it clear to anyone using it that it is only a guideline.

How to Improve Your Staff Management Skills

I know it can be difficult to develop guidelines, train everyone in using them and keep their application consistent. That’s where training for you, the Private Practice Owner, comes in. Visit our Lemonade Library any time of the day or night. You’ll find webinars there on every subject. Choose one and start watching. You can find that your management tasks become a little simpler, one webinar at a time!

About Diane Crecelius

Diane Crecelius is a physical therapist and founder of a multi-million-dollar, multi-location practice with well over 3,000 visits per week and 200 staff! In the past several years, Diane has worked tirelessly to support Peds-A-Palooza® Community & Conferences and the success of Private Practice Owners. Diane has presented at nearly every Peds-A-Palooza live and virtual conference since the first sold-out conference in 2018. Her extensive knowledge derives from her decades in practice and from being trained and consulted by Survival Strategies, Inc. She uses this training to help Private Practice Owners learn how to thrive and expand while keeping their stress low.