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Are Holiday Bonuses Passé?


The best way to reward a job well done is to simply treat staff members right and value each person’s contribution to your practice.

It’s that time of year again, and everyone is asking “Should we give holiday bonuses?” My answer remains the same -- why? The best way to reward a job well done is to simply treat staff members right and value each person’s contribution to your practice. This philosophy can create a culture of respect, where providing a great work environment and a top-notch salary reflects your appreciation and concern.

Personally, I am not a proponent of holiday bonuses. Too often staff view the holiday bonus as an entitlement rather than a gift that the practice elects to provide. I think there are more effective ways to provide a bonus, such as an incentive plan.

So how do you broach the topic of change if you’ve been in the habit of giving bonuses every year? First, don’t spring the surprise on your staff abruptly; I guarantee it will lead to disappointment and resentment. Talk about changes to the holiday bonus far in advance, and give your rationale for your decision. Also, make sure to let your staff know you will be replacing the bonus program will something else.

Here are some ideas for replacing holiday bonuses with incentive plans that will be a win-win for both your staff and practice:


  • Start the New Year off by assessing last year’s performance. Are accounts receivable better managed, are people more productive, and is revenue up? Perhaps you went through a major change in 2008 such as converting to an EMR system where everyone put their best foot forward and the results were amazing? If so, these are all valid reasons to recognize staff by offering a financial bonus.



  • Work with staff each year to set new annual goals. And revisit your practice’s achievements when the year ends to determine how much of a bonus pool has been earned for distribution. This can be tricky, so develop a formula that makes sense -- one that you can support without giving away the store.



  • Give each person a half day off in December to do their holiday shopping, if this is the first year the holiday bonus is being dropped. Perhaps you can further soften the blow by giving each employee a $100 gift certificate for the local mall. Another bonus that employees really like is getting the day off for their birthday (with pay). This doesn’t cost the practice additional revenue but provides a great expression of appreciation for staff.



  • Acknowledge individual achievement at the annual performance review. If merited, you can advance employees’ base salary and have an honest discussion about what you would like them to achieve during the following year.



  • Setting group goals should be based on whatever is important to the entire practice. Goals must be measurable and should be tied to specific performance areas whether it’s better teamwork, implementing new services, reducing costs, improving customer service, or financial accomplishments that improve stability and profitability for your practice.


Using these approaches to tie employee/practice performance to financial bonuses benefits both staff members and your practice by encouraging teamwork and personal excellence. Being rewarded for a job well done will ultimately mean much more than the typical holiday bonus that is given regardless of performance or your practice’s financial health.

Judy Capko is a healthcare consultant, speaker, and author of the popular books “Secrets of the Best Run Practices, 2006” and “Take Back Time, 2008.” She is a popular speaker at national and regional conferences. Judy is the owner of Capko & Company based in Thousand Oaks, Calif. She can be reached at

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