Incentive programs: The good, bad and ugly

Incentive programs: The good, bad and ugly

Capitalize on incentive programs, but avoid their pitfalls
Jul 01, 2004

Incentive programs are important to motivate and retain staff. Like the title of the classic Clint Eastwood flick intimates, incentive programs can be good, bad and ugly.

The good is that motivated staff likes to be rewarded.

The bad is there is a dark side to virtually all incentive programs.

The ugly is that we see questionable services being pushed unto unsuspecting clients.

Incentive programs show us that even veterinarians are human after all. Human nature is, human nature. The carrot and the stick do work; and therefore you need to address the positive and negative consequences of including incentive programs.

Looking at results Certainly it is a known fact that productivity when rewarded - happens. Without any incentives in the workplace, activity levels drag. While motivated leaders in the practice are clearly excellent role models, many times incentive programs can help fill voids or augment management styles.

We must also consider the unintended consequences of intended actions. If we reward taking X-rays, more films will be taken - even if "clearly not indicated."

If we reward more stool specimens, more will be collected.

It has been written that when an incentive program exceeds 25 percent of the total salary, human behavior will be affected.

We also know that with incentive programs we often get more than we have bargained for, specifically the dark side.

When teamwork is rewarded, we get teamwork.

When individual work is rewarded, we get more productive individuals.

So, in team concept practices, rewards must be to the team.

When we provide incentives to "upsell" specific services, we get upsold services. When we reward growth, we get growth.

Some additional thoughts A typical practice that is growing can put up to 10 percent of growth into incentive programs.

Consider programs based on:

  • Transactions: The number of transactions per month can be identified.
  • Tiered pool: The gross income can be divided up into levels - the first 10,000 per month say at 1 percent, the second 10,000 at 2 percent and on up.
  • New patients: Offer an incentive for each new client. The new client can come from multiple sources - individual staff finding and referring in friends and acquaintances, or new clients generated by good front office telephone skills.
  • Special projects such as paying out 2 percent of the revenues collected by accounts receivable.
  • A doctor's discretionary fund can be earmarked based upon the gross income and doled out to the team.
  • Christmas in July. Set an annual budget for Christmas, and then split the Christmas pool into 12 months. On the 25th of each month have a Christmas party for all. The items offered might be gift certificates, cash, toys or computer software.
  • Strange hour bonus. Evening hours, holiday hours, weekend hours or late night checks can be rewarded to encourage and reward staff for coming in. If Saturdays are an issue - give them, say $10, just to show up on Saturdays.
  • Overtime bonus. Some employees love overtime, others hate it. Keep track of the staff that love it, and use it as an incentive.
  • Employee of the month: Many businesses have a variety of "Employee of the Month" programs. Sometimes the clients select the employee, sometimes the staff selects the person, and other times the practice managers/owners might select the employee.
  • Beware bonus. Targeting preventive healthcare issues is a reasonable tact. But, if you offer a bonus based on the numbers of endoscopic procedures, cardiac ultrasounds or abdominal exploratories, then you may get these procedures recommended with limited consideration to a patient's need.
  • Negative incentives can also be enforced, like subtractions for tardiness, consumer complaints and incomplete worksheets.
  • Smorgasbord pool. One might elect to use some or all of the incentive programs at one time. When this is desired, a pool of money is generated that can de divided.

Share the wealth The distribution of bonus funds can also be flexible. Consider these methods.