Methods of Compensation Flashcards
Most common method of compensation
Annual Salary
Annual Salary pros and cons
Pros:
* Simple and easily understandable
* Little risk and downside to employee
* Predictable, allows for budgeting of expenses
<><>
Cons:
* Slow to change, regular renegotiations often necessary
* Less reward and upside to employee
* Doesn’t adjust to workload
Annual Salary
- salary: revenue ratio typically
- Median 2023
- hours worked
- hourly wage
- help wanted ads amount offered
- Salary:Revenue 1:5ratio
- median 110,000
- median hours worked 1,700
- median hourly wage $64
- Help wanted offers $135,000
second most common compensation method
hourly rate
hourly rate pros and cons
Pros:
* Relatively simple and transparent
* Little risk and downside to employee
* Paid for staying late
* Pay often scales with amount of work
> Higher pay – fewer hours scheduled
<><>
Cons:
* Signals weaker commitment to practice
* Regular renegotiations to adjust hourly rate
necessary
* Rate held at sticky points (e.g., $75.00)
hourly rate data 2023
- median
- relief, part time, both: median rates
Median: $72
<><>
- relief only: 97.50
- Part time only: 80
- Both: 90
2 main methods of production based pay? which is more common? which is for more experienced vets?
- Guaranteed Base Salary + Production (ProSal)
- Percentage of Gross Billings (Production)
<><><><> - ProSal more common,
- Production for experienced veterinarians
ProSal and
Production
Pros & Cons
Pros:
* Pay scales with amount of work
* More reward and potential upside for employee
* typically higher pay ( recent research suggests pay gap narrowing)
* Little need for renegotiation (increased fees increases production) Relatively simple and transparent
<><><><>
Cons:
* More risk and downside to employee
* Increased complexity and administrative work
* Less predictable income, more difficult to budget
prosal median guananteed salary, median % of gross billings
salary: 113,000
% of billings: 22%
production based pay median
25%
Independent Contractor or Employee
- definition: 4 necessary things
Independent Contractor
* Has own tools and equipment
* Creates own schedule
* Can incur profit or loss
* Manner and consistency of payment
profit sharing - what is it? common?
Typically paid a base salary, and share in the profit of the hospital, after all expenses are paid
* Many different ways to approach, often paid as a percentage of the profit generated
* Not a common method of compensation
Profit Sharing
Pros & Cons
Pros:
* More reward and potential upside for employee
* Busier hospital and harder work often means more profit
<><><><>
Cons:
* More risk and downside to employee
* Increased complexity and administrative work
* Less predictable income, more difficult to budget around
* Profit can be manipulated
median profit sharing amounts:
- salary, % of profit, $ of profit
salary: 110,000
% of profit: 22%
$ of profit: $9,000
Base Salary plus Emergency Fees
- where is this compensation method more common?
- Common when responsible for on-call
- Mixed and large animal hospitals
