Some Points About Salaries

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In helping physicians during their hunt for a new hire the subject of salary always arises.  I find it interesting that 80% of the time the employer wants to hire someone who will do an excellent job, but they want to pay them lower than the going rate.  When I ask them why? they usually come back with “I have been burned before paying someone the going rate or more” and then they turned out to be a poor employee.

They think if an employee is willing to take the position at a lower rate and then prove themselves they will in return get a raise.  I do understand this thought process somewhat. If you start an employee out at the higher end of the pay scale where will you go from there?

A colleague of mine, Dr. John Guiliana is an expert in Medical Office Practice Management.  He has written hundreds of articles on the subject, lectures nationally and internationally, and has written a book as well. Dr. Guiliana has an interesting take on hiring and salaries that I want to share with you.  His employee hiring and salary strategy can be used in any field.

Some points about salary:

Never negotiate salary with prospective employees.  Know what your pay range is, then ask them what they think would be a fair wage to be paid for the position which they are applying.  Let’s say, for example you are prepared to pay $40 to 50,000 a year for a quality office manager and their answer is $45,000.  You have three choices:

1. Agree to pay $45,000.  You are both happy.  You have someone to do the job for a salary that is within your range.

2. Offer a little less – say, $42,000.  They will probably accept this, but they may be somewhat disgruntled.

3. Counter with $50,000.  Yes, this approach might be a bit unconventional, but the offer does fall within your range – and your new employee already loves their new job!  They are eager to start work.  You have offered them more than they asked for, and they will probably give you more than you ask for by being a very productive, hard worker.

What if the employee says that their salary expectations are $55,000?  This amount is outside your range and you should discontinue the interview.  Thank them for their time.  They likely have other interviews to go to and one of them may be better suited to them.

I found it very interesting as I have never thought of having a range and then upon finding the perfect employee offer the higher end when they do not expect it.  I know personally how it would make me feel if a prospective employer gave me more than I anticipated.  I would work so hard to prove to them that they hired the right person and they were going to get their monies worth out of me.

Have you hired someone paying them higher than they asked or been offered more than you asked?  What do you think about doing this, does it make sense to you?

I sure hope if I ever need a job that Dr. Guiliana has an opening!

 

5 thoughts on “Some Points About Salaries

  1. I’ve always thought we should pay what people are worth. When considering tradesmen for our home, I always consider what would I want to be paid for doing that much work? For instance somebody may quote £150 to fix an electrical problem that takes them half a day (including travelling). I ask myself is £300 per day too much to ask if you’re running a business with all the costs involved with that? If I think it’s reasonable then I accept, if not – I ask someone else.

    • Stu, I use that same rule of thumb for a lot of contracted jobs that we hire out. I also look at what it would cost me in time if I were to do it and that helps me make the decision whether I pay someone else.

      When it comes to hiring an employee, I always like to have a high-low scale and depending upon experience and attitude I pick which I will offer. Sometimes it has been hard to offer top dollar, because I do not know where I can go from there.

      At our office recently we have implemented an incentive program for the employees to earn extra money each month by doing extra job tasks or marketing to bring in more business.

      This has worked well and we do not have to always be thinking about giving raises, they determine how much more they will get by their effort in increasing the office revenue.

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