Staff Bonuses

April 1, 2007

I would like to be able to tie staff bonuses to quantifiable staff performance. Any suggestions?

Question: I would like to be able to tie staff bonuses to quantifiable staff performance. Any suggestions?

Answer: I love this idea.

Here’s a model I saw recently that I really like.

It’s a two-part system: Staff members receive a revenue bonus if the practice collects a preset dollar amount (or more), which goes up over time. Twelve percent of any amount over the goal goes back to the employees. Of that 12 percent, half is divided equally among staff, and the other half is distributed based on staff members’ anonymous evaluations of their coworkers. You can see how this approach keeps your staff focused on revenue collection and encourages a team environment.

The second part is based on patient satisfaction survey results. Each staff member receives $50 if all patients surveyed in a given period say they would recommend the practice to others. I like this because it also builds teamwork.

Other programs are geared to reward the success of specific staff members. For example, billers may receive extra cash or a profit share if collections are up.

Some general words of advice: You will get what you pay for, so be careful. I’ve seen practices give their billers incentives to work faster. As a result, more claims went out, but there were also more errors in those claims. So total accounts receivable actually dropped.

Reward your employees only for what they can control. For example, in the profit-sharing program mentioned above, the practice divides its top-line revenues or collections. The staff has little control over costs, so the practice doesn’t base the bonus program on net revenue.

Keep it as simple as possible, and keep it as public as possible. Competition works. Set the rules clearly, and then stick to them. You don’t want to change your plan halfway through the year. Although you can establish temporary programs for defined periods, don’t give your staff a goal and then move the goal line.