Today, your leader in internet marketing for dentists, Roadside Multimedia, brings you an exciting guest blog post written by Dr. Brad Larsen of DentistCEO:
Bonus Systems that P.O.P. (Produce Outstanding Production)
I have always been a firm believer in the value of a bonus system to motivate the staff and improve the health of a dental practice. During my thirty years in private practice I had several systems. As a consultant I have been surprised at the number of clients who have not had a bonus system. As I am a strong advocate for bonus systems, it is generally one of the first recommendations that I make to clients. There are several requirements for a bonus system to positively impact the staff. Generally the bonus is given if specific goals are met. The goals need to be pertinent to the success of the practice. They also need to be achievable but require some extra sweat. If the goal is set too high the staff will feel little motivation to work to achieve the goal, so it needs to be reasonable. They should be easily tracked so that the staff can gauge their progress. Bonuses should be directly tied to the goal without a lot of extra requirements to receive the bonus. I have found that a bonus system not only motivates the staff, but can energize the practice. Typically I would have two components to the bonus system. I would offer a yearly bonus along with a monthly bonus.
The yearly bonus would be tied to a yearly production goal. The goal was set at the beginning of the year and the bonus varied. I would consider several factors in setting the yearly goal such as the previous year’s production, fee increases and desired growth. Sometimes the staff would receive a cash bonus; other times the bonus would be in the form of an office trip or a combination of the two. While I did take the staff to Hawaii a couple of times, I found that shorter trips could be just as rewarding. Even though taking a trip to Hawaii gets the staff’s attention, it also creates more difficulty for the staff as they have to arrange for extended child care and the temptation arose to have spouses tag along. Since part of the purpose of the trip is to build the dental team, a shorter trip without the distractions of spouses actually works very well. Each December as we approached the goal, the staff would carefully monitor our daily production and put the heat on the doctors to make sure the goal was achieved.
The monthly bonus would be based on three important practice monitors, new patients, patient retention, and production. Health care professionals track blood pressure, pulse and temperature to monitor the health of their patients. New patient flow, retention and production are a cursory indication of the health of a practice. Consequently, I advocate goals be set in each of these areas. Generally, I use a three month rolling average to set the goal in each area. Some of my clients tie the production goal to their daily production goal or the ratio of staff costs to the overhead of the practice. In any case, I recommend that there is a bench mark collection percentage that must be met in order to give the production goal. I believe that a healthy bonus system is an important part of the total compensation package for the staff. I found that a good bonus system not only motivated the staff in a positive way, it was also a great way to increase my bottom line.
Brad Larsen, DDS, MBA is a 30 year veteran of the dental industry. For decades, Dr. Larsen owned a successful dental practice in Washington state, and currently puts his expertise and MBA to work as a dental practice consultant serving the greater Portland, OR area. Dr. Larsen assists in practice transitions, team and practice building, can be booked for speaking engagements, and other consulting services. Contact Brad Larsen, DDS, MBA through his website at dentistCEO.com.
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