Communicating with team members about not giving raises

Owners want to be flush with cash and free to give raises to deserving employees year-round. When owners can't boost salaries-and employees expect them to-it can make for tough conversations. Here are ways to handle these discussions in groups or individually, courtesy of Veterinary Economics Editorial Advisory Board members Drs. Dennis Cloud and Jim Kramer. Dr. Cloud owns practices in St. Louis, and Dr. Kramer owns a small-animal practice in Columbus, Neb.

> Show the data. You might not pass profit-and-loss statements around the meeting room, but consider showing team members and associates some year-over-year or quarter-over-quarter comparisons in new client visits, wellness exams, vaccinations, or special procedures. “If clinic revenue is down, your team needs to see that big picture,” Dr. Cloud says.

> Explain that even is down. If you've seen consistent growth the past few years, and now the numbers are flat, that's down. Your costs have gone up, but your revenue hasn't. “We normally have 7 percent to 8 percent growth,” Dr. Cloud says. “For us, even is down.”

> Ignore that feeling of shame. Don't be afraid to share business information because you feel you need to be the “top dog” to your team all the time, Dr. Cloud says. Businesses struggle in a recession. Veterinary clinics resist recessions, but they're still affected by them. There's no shame in a down month-or a down year. Stay positive, ask for suggestions to boost visits, and create an atmosphere of trust and caring among your team to boost loyalty and a feeling of shared ownership in your work.

> Ditch expected raises and bonuses. When people expect a raise with their annual evaluation or a bonus at the holidays every year, they'll inevitably be disappointed if the extra cash doesn't come. Dr. Kramer uses a different tack: He offers quarterly bonuses based on projections he developed with his accountant. Team members are pleasantly surprised when bonuses come. Every quarter is a new chance to do better, and that boosts morale.

Dr. Kramer tells his staff they get raises and bonuses based on their improved value to the practice; it's up to them to make that happen, with guidance, of course. And even in this economy, he's still delivering bonuses and raises to specific team members. “Nothing says thanks like $100,” Dr. Kramer says. “If you tell your team members they're more valuable and they're improving, you ultimately need to follow through.”