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Profit From a Performance-based Pay Structure

By: Denise Dubois
Posted: November 29, 2012, from the December 2012 issue of Skin Inc. magazine.
performance-based spa pay structure

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Starting points for each individual are based on current numbers and clearly show everyone how they can earn more income. Working backward from the end goal, set their monthly and daily goals.

Goal-recording. Many professional software programs are available in the skin care industry that can help you customize reports, and track the growth and progress of each of your service providers and departments. Look for a software program that offers thorough reports and marketing abilities. Some also provide online booking, e-commerce integration, gift card sales, inventory, point-of-sale and much more. At the very least, you can simply put a binder together with a daily tally sheet of goals for each person. It should include a space for each day worked to track all the mentioned items and a space for the monthly totals to be tallied. You also can have a yearly tracking sheet that tracks only monthly totals for easy comparison.

Goal-recording sheets should be updated daily by each participant, and reviewed monthly with a department manager or owner. Monthly meetings help troubleshoot and provide an opportunity to enact action plans to ensure success.

Monthly goals. Monthly goals should be broken down by the number of days worked, so that service providers begin each day with a daily goal that will allow them to succeed within a reasonable amount of time. Once all monthly goals are achieved and maintained for three consecutive months, service providers advance with a pay increase and a new set of goals. It typically takes a year for service providers to hit the goals and advance.

New client retention rates

New client retention rates are a measurement of how many new clients a service provider has during a specific time period, and what percentage of them return to that service provider or even to the facility. Tracking new client retention rates can help a service provider and your business. If your skin care facility is gaining new clients, but isn’t maintaining them, then knowing the retention rate for each service provider or department will help identify why, and provide you with an opportunity to coach less successful service providers and help them grow individually.