Business Essentials Jobson Research
A Monthly Update on Day-to-Day Management Issues for Optical ECPs and Retailers November 2006
Made possible by an unrestricted grant from Jobson Research
It's Your Business

Hedley LawsonNo doubt you have heard the contemp-orary business adage, “Our employees are our most important asset.” Without question, it is especially true in the eyecare business and in your professional practice.

Managing ‘human assets,’ however, requires considerable knowledge and know-how that is not often part of one’s undergraduate or graduate school education. It certainly is not a part of the core curriculum for students of optometry or ophthalmology or for students studying to become opticians.

You will note in this edition of Business Essentials articles on human asset management, including HR policies, incentive plans, employee pay, turnover management, and federal benefit compliance. We hope that you will find in each article practical and useful insight into better managing your ‘human assets,’ and consider Business Essentials as your educational and informational source for running your practice effectively and competitively.

It will continue to be our goal to provide you with current and relevant information on targeted topics essential to the success of your practice and to those of you who are business owners. Your feedback is important ( Click Here), so do take a moment and let us know your ideas on articles and subjects of interest to you and your colleagues.

Hedley Lawson, Jr. is the managing partner of Aligned Growth Partners, LLC, a strategic, operational and organizational consulting and executive search firm ( www.alignedgrowth.com). Lawson also serves as consulting editor for Jobson's Business Essentials monthly e-newsletter. To read current and past issues of the newsletter go to www.visonmonday.com.


 
Ask the Experts

Principles of Effective Incentive Plans

Q: I want to establish an incentive plan for my practice, but don’t know what things I should consider. Do you have any suggestions that I can use in developing an incentive plan for my employees?

A: Here’s a short, but helpful checklist for you to use in developing a new incentive plan for your practice.

1. The plan and its goals must be simple and straightforward:

  • Easy to understand and document
  • Easy to administer
  • Easy to “buy into”

2. Goals must be fair and meaningful:

  • “Fair” means that they relate to past performance and a realistic assessment of what can be attained
  • Goal achievement must result in something everyone can relate to – and in something that is important to each one’s sense of accomplishment

3. Goals must be clearly measurable:

  • The measures should be, as much as possible, quantifiable
  • If hard numbers (sales, revenues, profits, etc.) are not appropriate, then clear definitions of quality or performance need to be included

4. Rewards should be appropriate to the achievement and the level of accountability:

  • The bigger the result, the bigger the reward
  • The more direct the impact on the results, the greater the reward

5. Line of sight:

  • At a management level, it’s clearly the unit or department managed
  • At lower levels, there needs to be a clear understanding of how one’s actions impact the overall end result (everyone should feel a relationship to the goals of the practice)

6. Timeliness:

  • Be responsive to performance highs and lows as soon as they occur
  • Payouts should occur as soon as possible after an event or a predetermined time period (action = result)

If you have a question you’d like answered by one of our experts click here

--Hedley Lawson, Jr.

 
Resource Corner
Easy-reference to web resources about human resource policies and rules
Mouse-Art

The Health Benefits Advisor
Click Here

U.S. Department of Labor
Click Here

Department of Health
and Human Services
Click Here

Bills in Congress
Click Here

Career Voyages
Click Here

 

From the Top

Focused on Business Goals

Writing-PoliciesA major challenge facing today’s business managers is keeping employees focused on the business goals at hand. As a manager or owner of a practice, big or small, it’s always a stretch to find new ways to help your employees keep their eye on the ball. If this is a problem in your practice, you might want to consider establishing the Parking Lot process to help your employees focus on your business’ organizational goals.

Think of the Parking Lot as a staging area for projects that are not purposefully being addressed in your practice. These projects can run the gamut from upgrading computer technology to improving customer service needs or launching new products. Hopefully, the Parking Lot process will help employees stay focused on current projects while gently reminding them that other projects are not to be actively worked on at this time.

Here’s how project Parking Lot can work for your practice. The Parking Lot needs to be visible so people can refer to it easily. A bulletin board is a good tool to illustrate your Parking Lot and remember to position it somewhere prominently so all your employees have easy access to it.

You can start out by listing the percent of time and effort that your practice is allocating to the basic, day-to-day business at hand. For arguments sake, let’s say this comprises about 75 percent of your business activity. Next, list the projects that the practice has prioritized to be actively worked on and enumerate the percent of time and effort planned for these initiatives. If 75 percent represents your base business activity, then that leaves 25 percent of the practice’s resources planned for your Parking Lot projects.

Next to the approved goals, start the Parking Lot for projects and ideas that do not have a “driver” (project leader) to lead the effort which will begin once the current projects are completed. This way, people can see that their project is in the Parking Lot and will be considered when resources (people, time and money) are available.

Once those resources come online, review the Parking Lot to determine exactly which projects your practice should focus on next. This exercise helps reduce the number of personal pet projects associates like to work on and often do not align with the overall goals and objectives of the practice.

If used correctly, the Parking Lot process can help improve your practice’s ability to execute by being purposeful and keeping everyone focused on the base business and the most important projects at hand. So if you’d like to get your practice in gear, consider this management tool. Here’s an example of how you can set up your Parking Lot.

Example Parking Lot

  • Base Business 75%
  • Current Projects 25%
    • 2007 Annual Plan    
    • Test new systems upgrade
    • Implement new OSHA requirements
    • Review current leases for cost savings
    • Develop customer recall program
    • Purge old patient files
  • Parking Lot
    • Develop training materials for new software rollout
    • Update Web site     
    • Test direct mail campaign
    • Review commission and bonus structure
    • Reduce costs for supplies, phone and shipping
    • Remodel office/stores        
    • Benchmark best practices for health benefits
    • Training for new product launch
    • Customer satisfaction survey

 

Sandy LikesSandy Likes is president of GreenTree Capital, LTD.—a business advisory firm focused on helping companies increase productivity and improve retention.
She can be reached at slikes@greentreehr.com
or
(866) 315-4747.

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Shamir
 
People Management

10 Strategies to Limit Turnover

If employee turnover rates in your practice are high, it's probably time to focus on what Turnoveryou can do to increase employee retention.
Excessive turnover can have negative consequences for your practice, including lost productivity, costs associated with hiring a new employee, the cost of temporary employees or overtime to cover the workload of the person who left the practice, and new employee orientation and training. As well, high turnover can mean the loss of valuable skills, experience and patient relationships.

So what can you do to increase your employee retention? Here are a few tips.

  1. Describe the job accurately to applicants and make sure you hire job candidates who can best meet the job's requirements.
  2. Challenge employees in their jobs.
  3. Provide appropriate training and mentoring so workers are not over-matched for the work they have been hired to perform.
  4. Recognize exceptional employee performance.
  5. If you have a larger office or practice, have career paths, an important key to retaining talented and ambitious workers.
  6. Promote from within.
  7. Provide good mentoring and coaching.
  8. Make sure the lines of communication are open between you and your employees.
  9. Offer a range of traditional benefits and innovative benefits.
  10. Pay your employees competitively.

--Hedley Lawson, Jr.

Rules and Regulations

HR Policy Management

Check-ListWhile we might prefer to eliminate the need for bureaucracy and excessive policies to govern what one may call using good judgment and common sense in the workplace, written policies and procedures are necessary to keep businesses consistent, fair, and legal. And should an employee elect to file a complaint with a regulatory agency or a in civil court, one of the first items you're likely to be asked is whether you had a policy on the matter. Being able to say "yes" is the foundation of a strong defense.

While that may be true, we can also understand why policies may never be written in a small optical practice.

Because each word may be critical in a legal situation, just drafting policies is a challenge.

Prewritten policies are available through a variety of sources. On the other hand, you may choose to develop and revise your policies “in-house.”  In either case, look to these two key points before you select a path that best suits your practice:

  • If you choose to use an outside service or consultant, make sure your policies are periodically reviewed and updated. With the continuous changes in law, you should consider staying current with federal and state statutory changes, or developments that emerge from courts, to periodically update your policies. Information is readily available through federal and state web sites as well as through your local chamber of commerce or trade association.

OR

  • If you elect to develop and revise your policies “in-house,” make sure your policies are time-tested, current and complete. Ensure your policies are written for and comply with current legal circumstances. An outdated policy manual is as bad as not having one at all.

--Hedley Lawson, Jr.


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Jobson Research

Rules and Regulations

DOL Launches Web Site for Benefits Compliance

The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) has unveiled a new interactive Web site to assist employers operating group health plans with their compliance responsibilities under the various federal health benefits laws. The new Health Benefits Advisor provides information on these laws:

  • Consolidated Omnibus Budget Reconciliation Act (COBRA)
  • Health Insurance Portability and Accountability Act (HIPAA)
  • Newborns' and Mothers' Health Protection Act
  • Mental Health Parity Act
  • Women's Health and Cancer Rights Act

The Health Benefits Advisor is available at http://www.dol.gov/elaws/ebsa/health/

In this edition...

ArticleIt's Your Business

Article From the Top
Focused on Business Goals

Article Ask the Experts
Principles of Effective Incentive Plans

Article People Management
10 Strategies to Limit Turnover

Article Practice Insights
HR Policy Managemen t

Article Rules & Regulations
DOL Launches
Web Site for Benefits Compliance

Article Resource Corner
Links to Important Resources

 


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2006 Eye Exam Insight Survey
Money Matters

Are You Overpaying Your Employees
Money
You are hiring an office manager or dispensing optician ... or even an optometrist. You wonder, “How much should I pay to be competitive and manage my overhead costs?

If you make that decision on the basis of the broad national averages put out by the federal government or even your local chamber of commerce, you could be making a mistake. It is the kind of mistake that, if you're paying less than you should, can cost you your best employees, lost to competitors. If, on the other hand, you are paying more than you should, it could affect the operating margins and profitability of your practice.

Ideally, you should base compensation planning decisions on compensation analysis of your local competitive market and your competitors.  You should consider these three key factors in your compensation analysis:

Your Location:
Just as in real estate, money decisions need to be based on location, location, location. A dispensing optician in New York has a far different cost of living and compensation plan than one in Kansas. Compare compensation with the competitive compensation practices of others in your city or state, not in the nation.

Your Practice Size:
If you have 10 employees, don't compare your compensation with corporate giants who have 1,000 or more. Make comparisons on like businesses and like position responsibilities.

Your Business Sector: Supermarkets operate on a 1 percent gross margin, some high-tech firms make 30 percent or 40 percent. You should compare compensation and benefits for any given job with a comparable job in the optical industry with similar business and economic profiles.




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