Do you have a staff bonus plan for your practice? Have you considered creating a bonus program but aren’t sure how best to implement it?
Today’s episode will answer both of these questions, and so much more. In this show we discuss some of the benefits of having a bonus program, both for you and your staff. We also go into some ways to structure a bonus program if you are looking to get one going.
More About This Show
When I first opened my practice I didn’t have a bonus program for my staff. It seemed like it was not feasible then, my sole focus was on covering the operating expenses to keep the doors open. But looking back I wonder if I wasn’t mistaken and if a bonus program would have actually helped me increase productivity, grow revenue and generate more profits faster.
Whether you’re just opening your practice or have been in business for decades, a bonus program can be a beneficial addition to your office. Today we’ll discuss what those benefits are and I’ll share how I’ve created a bonus program in my own practice.
1. Common goal.
The first benefit is a common goal. If you set up a bonus offering for everyone it gives your staff a common goal, something they can focus on and shoot for together. It’s a tangible, visible number for everyone. The number becomes a destination point for your staff, and they know where they want to go. Bonuses give structure and goals for your team; they are a win for your team and your business.
You can create a single tier or a triple tier for your bonus. For example tier one could be achieving $80k in collections in a month, tier 2 would be $100k, and tier 3 would be $125k. As the business owner you get to set this number or numbers, and decide what is the right structure for your program.
2. Increased productivity and efficiency.
If your staff knows the specific goal then they know how to reach it. And they do so by becoming more productive and efficient in their workday. This bonus gives the staff incentive to work harder, become more efficient, and improve productivity so your practice can see more patients in the same amount of time.
A bonus program shows that you as the business owner appreciates your staff and their hard work. It shows you are willing to share the wealth and the success of the business. Doing so gives your staff a chance to take ownership in the business, they become rewarded as a result of their efforts. This is a terrific way you can let your staff know you know you can’t run your business without them – because you can’t!
4. Builds your team.
A bonus program can be a way that builds teamwork and cooperation among your staff – or it can divide them. It all depends on how you structure the program, so be careful.
If you create staff bonus programs that aren’t even across the board you can set yourself up for division in the staff so make sure all are on equal footing. If you create bonuses that are evenly distributed you avoid favoritism and avoid divisiveness.
You can also use your bonus program as an incentive when interviewing new prospects; it’s a way to make sure you are attracting the highest quality talent for the role and is something used by many companies (dental industry or otherwise).
There are many different ways to set up your bonus program, and today I explain how I have done this in my practice. I break this down in greater detail but a quick snapshot of it looks like this: if our monthly bonus goal is $80k in collections I have told my staff they will receive 1% of that $80k.
So that works out to $800. I look at each person’s individual contribution and weigh it accordingly. For the full-time person who contributed 20 hours I consider their contribution to be 20%. For the part-time person who contributed 3 hours I consider their contribution to be 3%. Therefore the 20% person receives $160 of the $800 (20% of 800 is 160), and the 3% person receives $24 (3% of 800 is 24).
Also on today’s episode I share whether you should use collections or pure profit as the goal of your program, and how to be completely transparent with your staff and why it’s important to do so. Listen in for all of that and more on episode 21 of the Business of Dentistry podcast!
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