If your practice is like mine, time feels like it’s moving at warp speed, leaving us wondering how another year has passed. Unfortunately, sometimes this time warp can lead owners, managers, or both to forget the importance of yearly raises for their staff. Below we’ll discuss why these raises are important and strategies for deciding how much to award.

Do We Really Need to do Raises Yearly?

I get this question often from colleagues, and the short answer is yes. There are a few reasons for this. First, it encourages team morale and loyalty. An employee who is constantly wondering when or if they will receive a raise can often become checked out and begin to look elsewhere for employment. Having a set cadence in which they can expect a raise gives them a timeframe to focus on and reassures them that they will, with time, earn more. They will want to take care of you and the practice if they know you are going to take care of them. It also encourages a feeling of appreciation vs feeling forgotten about or taken for granted.

Secondly, it allows the employer a set time to complete a performance review. Performance reviews are imperative for continued growth, problem solving, and goal planning, and they provide a perfect time for encouragement or addressing behavioral or other issues.

Finally, it’s simply the right thing to do. As inflation and cost of living continue to rise, your staff can quickly begin to struggle. Giving a yearly raise helps them maintain a livable income so they can focus on being their best for you, not making ends meet.

How Much Should I Give?

There are a couple of ways to make this determination. The first is a common and easily calculated method in which the increase is based on a percentage of current pay. According to the March 2025 Mercer QuickPulse US Compensation Planning Survey,¹ the health care industry’s increases came in at 2.9%, below the 3.5% average of all organizations surveyed. When using this method, you use a set percentage to work off of and do not have to arbitrarily decide what raise to give. Of course, a high performer could be given more or vice versa if deemed necessary.

Another approach is to have a set minimum annual amount with room to do more based upon performance, instead of a percentage. For example, setting a $0.50 annual raise baseline allows staff to know the minimum they can expect and where their performance stands compared to simply surviving. An employee who merely meets expectations but doesn’t exceed them would receive the guaranteed $0.50, while a shining star might get $1.00. I personally like this approach for my practice because staff know how much they will receive as a base and are aware that anything above that is due to their performance. This encourages motivation for staff to elevate their performance because they can see direct translation to their paycheck and it gives them reassurance of an increase that they can predictably budget upon.

Regardless of how you choose to design your raise protocol, having a process will benefit your practice, your staff, and yourself through stability and order. Make sure to embrace the process and don’t let time get away from you. OM

Reference

1. Mercer. March 2025 Mercer QuickPulse US Compensation Planning Survey. April 23, 2025. Accessed June 30, 2026. https://www.imercer.com/articleinsights/march-2025-comp-planning-quick-pulse

Patricia Fulmer, OD, FAAO opened her practice, Legacy Vision Center, in Huntsville, Alabama, in December 2020. She also serves as the President-Elect of the Alabama Optometric Association and the Optometric Advisor on the Board of Directors of HEALS, Inc., a local nonprofit organization.