Playing on the Same Field

What’s in it for your staff to work harder and smarter? Even fabulous staff can feel a bit left out of the financial loop when they see the revenues increase without any return to them. You are simply on different playing fields.

Ever wonder why staff sometimes do not do their job functions in the same order of priority as you would? They file charts instead of doing the recalls or marketing or confirms. Wouldn’t you do the easiest part of your job first if you got paid the same either way?

From an owner’s perspective, there is a concern about constantly increasing wages without the revenues necessarily following. Profit sharing is an old, old concept in use by a significant number of large corporations. It was designed to include all employees in the success of the company. It’s an incentive system.  When your practice does well, the employees do well too.

One client who told his staff that if they hit a certain financial target three out of the next four months, they would all get raises. The financial targets were met and the raises were given, and the practice revenues dropped back to the previous levels. But the raises couldn’t be taken back.

Moral of the story — give your staff incentives on a monthly basis so that they have to work hard each and every month to get that increased remuneration.  Share the wealth! If you have it, you don’t mind giving your staff more and more — as long as it is growing. If it sags, they don’t earn their bonus. There is a direct incentive for staff to work hard each and every month.

What we found very workable with over 700 clients is establishing a baseline for the practice and when the revenue surpasses the baseline, the staff get bonuses. To establish the baseline, examine two criteria:

  1. Is the practice viable? In other words, is the income greater that the expenses for the month combined with a reasonable draw for the owner?
  2. What are the highest months of production in the last year? In other words, what is the realistic potential of the practice?

The practice must be viable to consider any form of incentive program. If the practice is viable, then the baseline should be around the previous highest months of production. For example, the practice had a $30,000 month once in the last year as well as a $25,000 month and a $24,000 month. However the practice is typically doing around $20,000 a month and that is above the viability point. A reasonable baseline would be $24,000 per month. In any month where you exceed $24,000 therefore, the incentive program would kick in.  The incentives are often based on a tiered system. Using our example above, staff would each receive a $100 bonus for the month if the production was over $24,000. They would receive $200 if it was over $29,000 and $300 if it was over $34,000, and so on.

As part of any bonus system we put in place, wages are frozen. All increases is staff remuneration are through the incentive system. This rewards a continuing increase in the production but only adds to the expenses when there IS increased production.

The baseline amount is not pro-rated or reduced during months when the owner works fewer days as the expenses of the practice generally do not go down significantly and the staff are not working as hard if the denturist is not there.

When additional staff are needed and added, your expenses will increase and so will your expectancy of higher income levels. Therefore, staff should be told that when a new staff member is added to the team, the bonus system will be reviewed and revised.

A while ago, we had a client that told us that her staff gave her 110% every day and, as a result, she had reservations about implementing an incentive system.  They can’t work any harder or do any more. Her words. However, we worked out a baseline and she decided to give it a try. Four months later she came back and told us that her staff now gave her 150% every day!

Call us at 416-466-6217 for a FREE Practice Assessment!


Creative Commons Attribution: Permission is granted to repost this article in its entirety with credit to The Art of Management Inc. and a clickable link back to this page.


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