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BY DIANNE GLASSCOE WATTERSON, RDH, BS, MBA
Dear Dianne,
Recently, the doctor I work with asked me if I’d like to work on commission, and I’m not sure how to answer. I’ve always been paid an hourly rate, but I haven’t had a raise in three years. With the economy so bad, I haven’t made an issue of it. At times, it has not been easy to keep my schedule full, so I wonder if my increased downtime was the reason he offered to change my compensation arrangement. I have worked in this practice for 10 years and enjoy my job. My benefits include paid medical insurance, $500 per year toward continuing education, uniforms furnished, paid holidays that fall on my regular workday, and two weeks of paid vacation. What are your thoughts on commission-based pay?
Michigan RDH
Dear Michigan,
With our declining economy affecting businesses large and small, business owners are seeking ways to improve their efficiency and decrease their overhead expenses. It is probable that the amount of downtime on your schedule is driving the doctor to consider an alternate compensation method for you whereby you are not paid when you do not have a patient in the chair. The fact that the doctor came to you and asked if you’d like to try something new says to me that he values your input. He could have just made a unilateral decision without giving you a choice.
There are positives and negatives with straight commission compensation. The positives are:
- You have an opportunity to make exceptional wages.
- You have flexibility during the day to leave during periods of downtime.
- You have no obligation to do anything other than chairside dental hygiene.
- You get a raise with every fee increase.
The negatives are:
- You can’t earn money if there is no patient in the chair.
- Teamwork suffers.
- You have to accept that some days will not be as productive as others, and that affects your pay.
- Money-driven hygienists might be tempted to sacrifice quality for quantity.
- Commissioned hygienists often receive no fringe benefits.
- You can legally be paid a differing (lower) rate of pay for mandatory staff meetings and continuing education courses.
- Offices with multiple commissioned hygienists often see competition and “stealing” of patients, which fosters resentment and bickering.
- The absence of a dedicated scheduling coordinator may spell “low priority” for the hygiene schedule, leading to increased downtime.
In talking with hygienists across the country, they are usually satisfied with commission-based pay. I’ve seen hygienists make exceptional wages on commission. I have also received several complaints about lack of benefits from commissioned hygienists. In one situation, a commissioned hygienist related to me that her employer expected her to come in on her day off and fill her schedule without being paid. This is blatantly illegal, as no employer can require people to work with no expectation of compensation. If the hygienist is required to fill his or her own schedule, wages must be paid for that work, typically at a predetermined hourly rate.
In another situation, a doctor hired a new hygienist and paid her a straight commission of 35% of her production. This same doctor shared with me that he was very concerned about the quality of care being delivered, as she was scheduling patients every 30 minutes in order to maximize her production. (She worked out of one operatory with no assistant.) Evidently, the hygienist was so motivated by money that she was willing to cut corners in order to keep production high. This doctor had to accept the fact that he had allowed this situation to develop, and the only way to correct it was to start a quality-control process; i.e., checking for debris, requesting to see periodontal probing, etc. If he expected the hygienist to deliver high-quality care, he needed to lay some ground rules.
Working on commission changes one’s perspective about efficiency. Hygienists who work for an hourly or daily rate don’t usually get too upset about the occasional open time in the schedule. An occasional no-show is often welcomed as an opportunity to sharpen instruments, call patients, or just catch one’s breath! However, commissioned hygienists are “temporarily unemployed” when they don’t have a patient in the chair. It’s a different feeling. Downtime affects the size of the paycheck, so there’s more pressure on business staff to keep the schedule full.
In most dental practices, the hygiene department drives the rest of the practice. If the hygiene schedule is full, the doctor schedule will be busy as well. Sometimes, business assistants do not understand how important it is to keep the hygiene schedule filled, and plugging hygiene openings takes on a lower priority than other office duties. Downtime in hygiene ultimately results in downtime on the doctor schedule.
My favorite pay arrangement for hygienists is a base rate plus commission. The base protects the hygienist in those instances when the schedule falls apart, and the commission above a set production goal incentivizes the hygienist to work efficiently. For example, let’s say the base is $250 and the production goal is $900. On Monday, the hygienist’s production was $1,100. That’s $200 over the goal. In this example if the hygienist gets 30% of the amount over the goal, that’s $60. So the pay for that day would be $250 + $60 = $310.
Hygienists should track their production daily. They should be interested to know how their production contributed to the overall daily success of the business. One of the most important metrics to track is salary/production ratio. The industry standard is that salary/production ratio should be around 33%. Here’s an example for two hygienists being paid an hourly rate:
May, 2012 – Hygienist A
Production – $20,000
Gross pay – $6,600
Salary/production ratio – 6,600/20,000 = .33 or 33%
May, 2012 – Hygienist B
Production – $17,000
Gross pay – $8,000
Salary/production ratio – 8,000/17,000 = .47 or 47%
In this example, it is clear that Hygienist B is well above the accepted salary/production ratio. It could be that she had lots of downtime on her schedule, which lowered her production. If her salary/production ratio is consistently high, a pay increase is not feasible. However, if the salary/production ratio is consistently under the 33% standard, a pay increase is reasonable.
So, what should you do? First, you need to run some numbers. Go back six months and figure your salary/production ratio monthly to get a history. What percentage is the doctor willing to pay? What about fringe benefits? What about pay for meetings? Is keeping the hygiene schedule full a priority at the business desk? What about adjunctive products that are sold from your operatory? Will the doctor want to exclude anything from your production, such as X-rays or products? By carefully weighing the data and obtaining answers to the previous questions, you should be able to decide if this is a good move for you or not. RDH
All the best,
Dianne
DIANNE GLASSCOE WATTERSON, RDH, BS, MBA, is a professional speaker, writer, and consultant to dental practices across the United States. Dianne’s new book, “The Consummate Dental Hygienist: Solutions for Challenging Workplace Issues,” is now available on her website. To contact her for speaking or consulting, call (301) 874-5240 or email dglass coe@ northstate.net. Visit her website at www.professionaldentalmgmt. com.
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