The price of gasoline won't get you a raise
Whether you're interviewing for a new position, got a promotion or it's just time for a raise, making a plan before you approach your superior about compensation plan or a pay raise is crucial. This includes bringing industry data, such as peer benchmarks, to the negotiating table.
“Your position won’t be ‘you know, the cost of gasoline has gone up, so I probably need to make more money,’” says Ken Hertz, FACMPE, principal consultant, MGMA Health Care Consulting Group. “But rather, ‘here’s what my colleagues in this profession are earning’.”
Before requesting an increase in salary, there are a few things you should know and be aware of.
Know your local market
How difficult is it to find people with your education, background and skill set? This may depend on where you work (a large city, suburb or rural area) and the organization in which you work. If a position like yours is in high demand, take that into consideration when asking for a new salary.
It’s also important to know your organization’s raise and bonus practices. Hertz says it’s appropriate to ask about this in the interview process. Some questions to consider:
- How is compensation handled for this position?
- Is there a board evaluation involved?
- What is the typical range for bonuses or raises?
- What have the raises been for this position in the past three years?
Know your benchmarks
“Whether your boss is an accountant or a physician, they always want data to back up what you’re asking for,” says Jeff Smith, MBA, CPA, CMPE, CEO, Pottstown [Penn.] Medical Specialists Inc.
The MGMA Management Compensation Survey: 2011 Report Based on 2010 Data (look out for the new survey report this summer) provides national compensation benchmarks for medical practice executives and senior managers. The report also gives data on the differences in compensation among titles, such as administrator vs. CEO, and how they vary across geographic regions and years of experience.
For example, a CEO/executive director of a single-specialty or multispecialty practice with 25 or fewer full-time equivalent (FTE) physicians in the eastern section of the United States has a median compensation level of $180,110 vs. an administrator of a single-specialty or multispecialty practice with seven to 25 physicians in the same region who earns $104,600, according to the MGMA Management Compensation Survey: 2011 Report Based on 2010 Data.
Additionally, taking a close look at your organization’s overall financial situation will give you a better idea as to whether a raise is possible based on revenue and other factors.
The Management Compensation survey report also takes education level into consideration when determining median compensation. If you’re education level is not reflected in your compensation, this is something to bring up with your superior.
“This gives you a much better case to present to your doctors,” Smith says. “It provides you some ability to move from the median to the 75th percentile.”
Read Title is just one factor in determining compensation from MGMA Connexion magazine for more management compensation comparisons.
MGMA members, use our Management Compensation Finder Tool to find median compensation based on region, education and experience.
Negotiating your salary may include determining performance incentives in addition to a new salary. Your physicians or supervisor may ask you to create your own incentive plan, which is often based on practice revenue or profit. Other incentive plans include:
- Maintaining accounts receivable days below a certain number
- Employee retention
- Reducing patient wait times
For more advice on negotiating your salary using MGMA survey data, download our new on-demand webinar, Management Compensation-Using MGMA Data to Negotiate your Salary, which is free for MGMA members.