Is Your Bonus Program Working For or Against You?
Human resource managers told Corporate America in years past that if they dangle a financial carrot in front of their employees, they can expect a tremendous increase in their performance. We have observed dentists paying out bonus monies when total employee costs are already beyond 27% of practice income (gross salaries 19.22%, payroll taxes and benefits 3.5%). Not only is this fiscally irresponsible, but it jeopardizes the life of the practice and the employee's job security. While some management consultants continue to tell dentists to use bonus systems, McKenzie Management believes dentists should stop using them and use non-monetary techniques that are more effective at getting desired improvements. Bonus plans are unfair because they usually reward people equally, but the contributions to the business are not equal. What your employees give to the success of the business is different for each employee, and many times the success is just good fortune. Bonus plans cause employees to focus on money. It takes the focus away from the performance indicators of a particular job. However, employees should be “rewarded” for performance that exceeds the performance indicator of their job description.
Step 1 - Daily Goal
Step 2 - Determine a Budget for your Goal
Step 3 - Establish How to Calculate the Goals
Step 4 - Reward Plan
Step 5 - Keep it Simple, Sir
The Ping Pong Reward
At your morning meeting, it is announced by the Schedule and Hygiene Coordinator how many providers (doctors and hygienists) reached their daily production goal on the previous day. If 2 providers reached their goal, then 2 balls are drawn from the container. As each ball is drawn, the value of the ball is entered on a log that is used to keep track of the dollar amount that is being drawn. Be sure to replace the ball once it is drawn so the chances of drawing the balls with the higher face value are always the same. If no providers made goal, then no balls are drawn. At the end of the month or when the pool reaches a pre-determined value, the pool is paid out, dividing it up among the team based on their hours or days worked. If there is a part time employee that works, they will receive a proportional amount.
As you can see, this is not a large amount of money to the office but it provides a way to celebrate each day that the practice reaches the goals established for the providers. Many dentists are not good “motivators” so this allows the doctor to participate indirectly without having to be a “cheerleader.”
The “mystery ball” is placed in the container at the doctor’s discretion and can be taken out at any time, as well. For example, let’s say that for the entire week, each provider made their production goal. The doctor may assign a value to the mystery ball Monday morning and state that the value is $100. It is placed on the container and if it is drawn, the $100 is added to the pool. The doctor may then remove the ball and use it at another time. Some offices elect to leave the “mystery ball” in if their doctor is not as participatory as they would like!
Have Fun! That is what rewards are all about.
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