BUSINESS

  PERSONNEL POINTERS

CREATE STAFF BONUSES

CONSIDER PERFORMANCE-BASED COMPENSATION TO INCENTIVIZE EMPLOYEES

REBECCA L. JOHNSON, C.P.O.T., C.O.T., C.O.E.

AT FIRST glance, one might assume that providing any bonus structure will encourage employees to work harder and increase the business’s bottom line. However, this is not always the case.

An effective bonus structure will be:

• Credible. Individuals believe it is achievable and fair.

• Effective. All team members understand the effect of their individual contributions to the team goal.

• Competitive. Share results with the team on a regular basis.

QUARTERLY BONUS POOL

I am a strong believer in quarterly performance-based bonus pools. How it works: Employees are given a quarterly team goal that must be reached for the bonus pool to exist. Then employees are given measurable, individual accountabilities that contribute to the team goal and the success of which dictates his or her eligibility for a bonus. The pool is divided among employees based on their individual results.

To determine the amount in the bonus pool, consider what amount you would want your employees to receive, if all performed equally. For example, if you have five employees, a potential bonus pool could be $1,500, or $300 per employee, if all is equal.

ACCOUNTABILITY

Let’s say the quarterly revenue goal is $90,000. The goal is met and the $1,500 bonus pool is in play. The optician, for example, has the key accountability of increasing the average patient-paid optical revenue per exam. With each accountability, provide the employee with result ratings. Continuing the example, the optician could receive a one for a patient-paid optical revenue per exam of $130. A one rating should correspond to your current average in that area, indicating no change has been made. For the optician, a two could be an average of $140; three could be $150; four could be $160.

Based on the measure of the average patient-paid optical revenue per exam at the end of the quarter, the optician receives a rating of two. This number is added up with her other key accountability ratings and divided by the total number of key accountabilities to arrive at her average rating of two.

This process is completed for each employee at the practice. If an employee receives an average of one, he or she is ineligible to receive a bonus. Otherwise, the eligible employees split the bonus pool, with extra weight given to those who received higher ratings. For the example, if all of the optician’s colleagues also receive a rating of two, they all go home with a bonus of $300, splitting the pool equally. But if, for example, the biller received a rating of three, he or she would receive a greater portion of the bonus pool.

SHARE RESULTS

To keep excitement around the bonus structure, share weekly progress toward the company goal either at a team meeting, or on a whiteboard in the break room.

ALL NOT EQUAL

Some doctors believe that to be fair, everyone on the team should get the same amount of money if the goal is met. However, the problem with this structure is that not every employee works hard to get the bonus, which leaves some people floating on the backs of those who are motivated to meet the goal. This scenario actually creates what was trying to be avoided — resentment and team division. OM

MS. JOHNSON is the founder and president of Eyetrain4you and the executive director of business services for GPN. Email her at Rebecca@GatewayPN.com, or visit tinyurl.com/OMcomment to comment on this article.