When Bonuses Work... and When They Don’t

By

One of the issues that always comes up is should I bonus my staff, or should I just pay a flat salary. There are two different sides to this argument. One side says just pay a healthy wage and they'll do everything that you ask of them. The other side, which is the side I tend to think about more, is that we all work on bonuses. We all work on incentives. We all work to be rewarded for what we're doing, and especially when we do extra. So therefore let's drill into this a little deeper.

When do bonuses work? Bonuses work when you've got a task involved that doesn't require thought and creativity but is simple repetition. For example, we know that with the job of recall, the more patients that are called, the more patients will respond. The more that you work recall, the more patients will be scheduled and the more patients that will be seen. That's a situation in which a bonus works.

Where it doesn't work is where you have a creative component, where you say to somebody, "I want you to re-do my dispensary, and I want you to re-do it so that our marketing is better. That will take some creativity. That will take some thought. That process is not bonused in a way that's going to be effective. In fact, some of the research shows that if you try to bonus that situation you'll actually negatively impact it.

The majority of what we do inside the practice, the number of second pair sales, the number of sunglass sales, the number of patients actually coming into the practice and being seen for appointments, those kinds of activities function very well with bonuses.

 

Mark Wright, OD, FCOVD, is clinical assistant professor at The Ohio State University and a member of the faculty of the Management & Business Academy (MBA). This article is excerpted with permission from an MBA video in which he is featured.