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Why incentive programs fail and what you can do about it

March 12, 2022
Nervous about implementing a new incentive program in your dental practice? David Lohmann shares some potential pitfalls and offers practical solutions to make sure your program succeeds.

Instituting a new incentive program can make doctors a little apprehensive. Some might ask, “If I’m giving out bonuses, won’t that hurt my bottom line?”

That’s certainly possible.

However, a well-conceived incentive program is in the best interests of almost any practice. It can raise productivity, lower turnover, improve morale, and ultimately create a better experience for the patient. Even practices with tight margins can benefit from the right incentive program.

There are good reasons for caution, though. If an incentive program is poorly conceived, it could hurt both morale and your bottom line.

Here are the top five reasons incentive programs fail, and what you can do about it:

1. Problem: It’s not a win-win.

A win-win incentive program means it’s structured to benefit all parties involved—the doctors, patients, and your team. If you feel that giving out bonuses is not in your best interest, you might give them out so begrudgingly that you hurt team morale, even though your team benefits financially. On the other hand, if your team thinks the bonus structure isn’t in their best interest, they are unlikely to improve their performance, which would be a loss for the doctors and your patients.

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Solution: Before you implement a team bonus program, make sure you design a structure that truly aligns the incentives. If your production has plateaued, consider a bonus that is tied to revenue growth over the prior year. A program structured in this way helps ensure everyone is working toward a common goal and allows your team to share in the growth and success of the practice. In other words, it’s a win-win.

2. Problem: You’re not giving out bonuses frequently enough.

Awarding bonuses annually is unlikely to motivate your team on a week-to-week or day-to-day basis. When the reward is so far off in the future, it’s easy for your team to lose sight of the end goal and think their efforts today might not matter in the long run. Even quarterly bonuses may not be frequent enough to make rewards feel tangible and immediate to your team.

Solution: Consider giving incentive bonuses monthly or even weekly. Every time you give out a bonus, you’re reminding your team of the connection between outstanding patient care and their own financial benefit. When your team earns bonuses frequently, they will appreciate how their actions today will affect their finances tomorrow.

3. Problem: The incentive is not tied to a metric within your team’s control.

In certain circumstances, basing goals on profitability can make sense. However, keep in mind that your team may have little say about the new staff you hire or the marketing budget you set. If these expenditures decrease profitability in ways that offset the outstanding performance of your team, they will feel as if they are not receiving the rewards they deserve.

Solution: Consider tying your bonuses to other goals, such as production, collections, or even patient experience (e.g., online reviews). This places the success or failure of bonuses more squarely on the shoulders of your team and the quality of their service to patients. Good goals should also foster an opportunity for communication and teamwork. Making sure your team has as much power as possible to meet goals gives them the extra incentive to overperform.

4. Problem: The reward structure isn’t consistent.

If you find yourself adjusting rewards or struggling to calculate drastically changing incentives every month, then you probably weren’t ready to implement an incentive program. Your team may become disillusioned and lose interest if they feel as though the goal line is constantly changing. So even if bonuses are earned frequently, morale and your team’s confidence in the longevity of the plan can take a huge hit.

Solution: It is better to be safe than sorry. Wait until you are absolutely ready before implementing an incentive program. Try tracking your numbers for a few months before sharing the plan with your team to ensure the goals are reasonable and the structure makes sense for your practice.

5. Problem: Your team is frustrated or confused.

If your team doesn’t have a crystal-clear idea of what goals need to be met and the parameters set to measure progress, it’ll be impossible for them to feel motivated. And if your incentive program is unattainable, your team will lose interest and possibly faith in your leadership.

Solution: Make sure you set clear, measurable, and reasonable targets. For instance, if your team is incentivized to increase the number of online reviews, then you’re headed for problems. That is a vague and confusing goal. Will you count all online reviews, even those written on very obscure sites? What about reviews with four stars or less? How much of an “increase” would you like to see? And what kind of increase is achievable during the measurement period? Be specific and make sure your answers to these questions are objective and without room for misinterpretation.

Remember, a good incentive program can benefit almost all practices. A well-conceived program should be a win-win, benefiting doctors, teams, and patients alike, as long as you avoid the major pitfalls along the way.  

Editor's note: This article appeared in the March 2022 print edition of Dental Economics. Dentists in North America are eligible for a complimentary print subscription. Sign up here.

About the Author

David Lohmann

David Lohmann is the CEO of Apex Dental Partners, a leading dental support organization providing nonclinical, administrative support services to dentists focused on long-term relationships and high-quality care. Through its nonbranded model, Apex offers supported dentists an increased level of personal and professional flexibility, world-class business support, and a fun and patient-centric culture. Lohmann leads the company’s business development efforts and oversees clinical human resources. Learn more about Apex Dental Partners at ApexDP.com.

Updated February 7, 2022

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