Pulling the plug on bonuses
Boy, when you talk to dentists, you hear amazing things! Take the bonus programs which dentists inflict on themselves.
B oy, when you talk to dentists, you hear amazing things! Take the bonus programs which dentists inflict on themselves. One dentist gives his hygienist 50 percent of the fee for every adult prophy she does (laudable, if you have zero overhead). Another gives $10 for every full-mouth X-ray series (so what is the employee’s regular salary for?). A third annually pays her staff a hefty holiday bonus - even in 2004, when her production dropped significantly and she had past-due bills. This is why we hear the question: How can I pull the plug on bonuses that no longer fit my practice strategy or motivate my employees, but my staff members have come to expect as part of their compensation?
Although a short-term bonus can be an excellent staff reward for implementing new skills or objectives - adding fun, excitement, and challenge to the job - we don’t support long-term incentives, especially for simply doing your job. As the novelty wears off, bonuses tend to lose their initial appeal as gifts and the staff begins to depend on them like a salary for paying bills. This makes you feel like Scrooge for pulling the plug, should you need to do that. We also see drawbacks in bonuses that focus exclusively on production increases, because there are many more factors that motivate employees. Excellent leaders have staff members who would go to the wall for them because these leaders provide an enjoyable, organized, low-stress work environment where employees feel valued, appreciated, acknowledged, and secure.
Compare this approach to dangling a carrot in front of a donkey. Ask yourself: What if the donkey doesn’t like carrots? What if you’re asking the donkey to carry a 2-ton load up a 20-mile hill? And what if your employees do not want to be treated like donkeys? What if they prefer to be viewed as professionals performing tasks, such as taking X-rays, because they’re the right things to do and not because they want an extra $10?
If you pay an unhappy employee $10 extra to do a task, you end up with a better paid unhappy employee. How can the $10 resolve the underlying problems causing the unhappiness? Is the $10 really what the employee wants, or is there something else that might be more important? Wouldn’t employees really like to have a chance to grow in their jobs, air difficulties, and resolve conflicts so there’s no tension among the players? How about having efficient systems to do a good job, being proud of the care they give, feeling their work has value, etc.? And, if you ask the impossible of your staff, will your bonus become meaningless? For example, if you normally produce $50,000 per month and you offer a bonus to reach $75,000, it will be unattainable without systems in place - i.e., staffing, financial arrangements, treatment presentation, etc. - to facilitate the higher production.
If you want to pull the plug on a bonus program without getting washed down the drain, here’s how:
1)Level with your staff on why you need to terminate the bonus. Fully explain the reasons so that your behavior is understandable and based on facts rather than on arbitrary, subjective judgment.
2) Fess up! As a leader, take responsibility for the expectations you created. Give the staff what it has come to expect by incorporating the bonus into the employees’ salary. In this way, you alter the system without punishing the staff for your change of heart. Your employees, who are doing nothing wrong, should not suffer a loss.
3) In the future, develop a fair, affordable compensation protocol which allows your staff to earn salary increases as individuals for performance that improves the viability of the practice.
Although there are only three essential steps to terminating the bonus, success lies in how you execute each step and communicate with the team. We should never be afraid to improve programs, follow our vision, and take responsibility for our actions. When we act in the manner of effective leaders, we can make smooth transitions in the practice and build trusting relationships with the staff.
For guidelines on how to compensate your staff, see Pride Institute’s new four-module handbook and CD set, “Take Pride in What You Pay.”
Amy Morgan is chief executive officer and lead trainer of Pride Institute, a national dental-management company which provides consulting services, educational seminars, patient charting, and staff training materials. To ask Amy a question for this column, visit “Ask Pride” at www.prideinstitute.com or call Pride Institute toll-free at (800) 925-2600.