4 simple steps to follow to decide whether or not to give a bonus in the dental practice

November 19, 2015

As the holidays approach and the calendar year comes to a close, one word begins entering conversation: bonuses.

As the holidays approach and the calendar year comes to a close, one word begins entering conversation: bonuses.

Bonuses should be awarded for work that goes above and beyond the norm. They should not be given as a "bribe" to encourage employee performance, a way to appease your team or a thank-you to staff for doing their jobs correctly.

Sometimes, dentists substitute team-building with bonuses. Instead of putting in the effort to mentor and encourage employees, they try to motivate them to peform well with bonuses. While this can provide a short-term increase in performance, the incentive typically fizzles quickly.

Dental hygienists: I want a raise!

While giving a bonus to a select few as a reward for increased production or product sales may seem like a good idea, I caution this practice. Each member of your team performs a function that benefits the whole. As a result, bonuses need to be offered across the board. 

When you are ready to implement your bonus plan, start by calculting your bottom line. You need to know what it costs to operate your practice on a monthly basis so you can determine whether you can afford to provide bonuses.

You also need to establish each staff member's responsibilities and communicate these along with how those duties contribute to the practice. Examine each position and determine whether any require additional training or cross training. Create practice goals and decide how each position contributes to those goals. Effectively communicate your expectations for each position and the collective team.

Related reading: 3 questions dentists should ask before giving raises

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Follow these four steps to implement your bonus plan:

  • Determine the production level necessary to award bonuses. For example, if you've calculated $100,000 is your base and set a goal of a 10 percent increase, the required production level to pay bonuses is $110,000.

  • Decide how you will determine each employee’s bonus amount. This can be based on salary, position, years with the practice or a combination. Just make sure the process is fair.

  • Communicate what must be done to activate bonuses. For example, the practice must collect X number of dollars, re-activate X number of patients and/or keep lost production from cancellations and no-shows to X.

  • Monitor your progress monthly, and make any necessary adjustments. For example, you may meet your necessary production level but have one team member who has not contributed to the goals. You need to talk with this employee sooner rather than later. Bring the issue to his or her attention and suggest ways he or she can improve his or her role. Possible consequences may include removal from the bonus program and even termination.

Related reading: The 3 big reasons why your team members are quitting

While the above example can make for an uncomfortable conversation, the entire team should benefit from the bonus plan, and it is not fair to the rest of the team if you reward those who don't pull their weight.

In addition, if you follow the above steps and decide your practice is not in a position to offer bonuses, don't feel guilty. You should not offer bonsues out of obligation. And, remember, bonuses need not be lavish. Even if you can't offer money, consider occasional gift certificates, event tickets or even time off.

Whatever you decide, make sure to clearly communicate the bonus plan and how to achieve it. Include your team in the decision-making process. Set up a bonus plan that is right for you, your team and your practice so all parties are happy with the end result.

Sticky situations: How does a dental hygienist or dental assistant ask for a raise?