Does your staff take an annual pay raise for granted, an entitlement they should get just for coming to work, no matter what? There might come a time when you simply can't afford to give an annual raise. Here are some creative ways to get staff through the hard times and, who knows, maybe make them happier as well.

Other perks besides cash
If you know your staff well, consider more personalized rewards such as movie tickets or gift certificates. If you or your physicians have season tickets to sporting events or theater tickets and can't use them, have a ticket drawing for your staff. Make sure, though, that your rewards fit the individual. If you have a staffer who never goes to movies but has a long commute, consider giving a short-term gas allowance instead of movie passes.

You can also give a paid personal day to someone who doesn't get a raise. Paid days off, as long as you don't have to pay someone extra to cover for the absent employee, don't add to operating expenses.

There can be such a thing as a free lunch for your employees. You can ask vendors to bring pizza to an in-service education session or you can ask surgeons (on a rotating basis) to spring for lunch for staff meetings.

Perhaps the best perk of all is free: praise and recognition. Praise your people whenever praise is due. When you catch someone doing something well, be quick to point it out publicly and give specific details on why it is praiseworthy.

The bonus route
One way to handle a salary freeze is to institute a bonus system. You should tell your staff - well in advance - that instead of raises this year, they'll be eligible for bonuses. You can't promise that you'll give everyone, or even anyone, a bonus, but bonuses will likely cost your center less than giving everyone raises, and they can be paid a year later when, hopefully, your cash flow has improved.

Your bonus system should be fair and based on goals and other specific criteria. Tempting staff into manipulating numbers to get their bonuses cna result in perverse incentive.

• Making a bonus dependent on scheduling a certain number of patients per day could backfire. How? Staff could hold patients from the schedule on brisk days when they've already met their quota and backfill the schedule with these patients on days when booking is slower.
• Making a bonus dependent on increasing revenue alone could also boomerang. This can lead to abusive practices that will inflate revenue but sap profit. For example, accounts payable may not get paid or accounts receivable may look good because of indiscriminate write-offs.

If things go from bad to worse
If you have to cut payroll, talk with your staff. Would they be willing to keep their current hourly rate but work slightly fewer hours per week? You might find that adding a benefit - such as a small tuition reimbursement - will make an employee just as happy. Others might be happy with a trade-off that gives them increased autonomy in the workplace (for example, you could ask them to head a task force that examines the supplies kept in the work areas with the aim of reducing the supplies that are stashed "in case of emergency").

Ask for other volunteers as well. You might be able to reduce a full-time-equivalent employee down to a 0.8 FTE (40 hours down to 32 hours). Others might work seven hours instead of eight hours. Still others might like to leave work whenever volume drops off. If this creates a significant hardship on the staff, rotate the decreased time among all the staff. (Don't offer this to an employee you can't do without; for example, a billing clerk or collections person whose job isn't based on fluctuating surgical volume.)

Even if things are going great now, look at your payroll and consider imposing a salary cap to keep longtime staffers from getting paid significantly more than their market value. Salary caps are market-driven. If you can find out what nearby hospital and ASC caps are, you'll better judge what yours should be. Let your people know well in advance what the cap is, so they know when the no-raise years are coming. You might reward them with a bonus instead (warning: Employees don't remember cash bonuses over the long term, so this isn't a permanent solution to a raise-less year).

After the crisis
Be open with your employees in showing how their sacrifices are solving problems. If the cuts mean that payroll costs as a percentage of expenses have decreased, show your staffers how this has helped cash flow. If your staff is glum because a position has been eliminated and they've had to pick up the work, show them how this is helping.

And announce any good news: Have you negotiated a better managed care contract? Have new surgeons agreed to use your center?

Movie tickets and free gas will only get you so far. But if your employees feel that they've helped in making the situation better, most will support the decisions to suspend pay raises - for the short term. As soon as the situation improves, reinstitute raises, but try to make some of your reforms stick. After all, nobody's entitled to a raise just for showing up.