Optometric Management Tip # 273 - Wednesday, April 11, 2007
Staff Bonus Programs
Many eye care practitioners believe that a bonus or incentive program for
staff is a smart way to increase optical sales and improve performance. That was
how I worded misconception # 5 in my top ten list. My sense is that staff
incentive programs are becoming more popular than ever and are now widely
accepted as the best way to increase sales. I wish to challenge that thinking.
As with most of the misconceptions on my list, I tried this strategy in my own
practice and studied it closely before coming up with the opposite point of
view. Here are the main problems I have with staff bonus programs.
- I hate to pay more for something that would have occurred anyway. Iím
not convinced that bonus programs truly change staff behavior in the way we
want it to. I think staff members quickly take the bonus for granted and
revert back to an approach they are comfortable with. The actual dollars
received by any individual in most programs are too small to change
- Is there truly a cause and effect relationship? Are we measuring what we
think we are? There are so many factors that affect practice growth and
productivity that itís really very difficult to draw causal relationships.
Suppose you implement a new bonus program designed on reaching a goal that
you set for monthly gross revenue. The goal is reached and you happily pay
the extra compensation. How do you know you would not have reached the goal
anyway, even without the bonus plan? Suppose your revenue increases by 10%
after you start an incentive program. How much would your practice have
grown without the program? Practice growth is not linear, so past
performance canít accurately predict future performance. There are many
other factors influencing practice revenue other than the bonus program.
- Iím not sure I want so much pressure on selling. The professional eye
care practice is an environment where an educational approach with an
emphasis on the patientís wants and needs can be the best sales tool. I want
a long term relationship with the patient much more than I want a larger
sale right now. If incentives actually work with some employees, there is a
good chance theyíll take the sales effort too far. Iím pleased when a
patient asks someone on our staff if she works on commission and the
response is an honest no.
- It becomes an entitlement. I donít really like the change in staff
attitude that seems to accompany bonus programs. Itís one of always wanting
more and never being satisfied.
- It may cause a problem with morale over perceived fairness. As much as
you try to make the terms of the program fair to all Ė someone will think it
isnít. Including all employees in the bonus pool seems like a good idea, but
those who actually make optical sales may think receptionists are not
pulling their weight for the share they receive. They might have a point.
Many bonuses are based on achieving a goal set by the doctor to achieve a
sales increase over last year, but the amount of the increase is fairly
arbitrary and staff may think the goal is not realistic. Employees may be
unhappy if the doctor wants to take a few days off because that could reduce
the chance of reaching the goal.
- If a goal is not met and bonuses are not paid, employees may become
resentful. Iíve seen situations where staff will simply stop trying near the
end of a month when they can see that a goal will not be met. Or they may
sandbag the current month when they think goals canít be met and push
business into the following month. I hate game-playing like that.
- Many bonus programs seek to hold down overhead costs, but most employees
donít truly control these expenses. Even in larger practices, the owners are
generally quite focused on expenses and will instantly recognize an invoice
or statement that is out of line. Most staff members have instructions on
what to order and from which supplier. Paying a bonus for something that is
not really under that personís control is a waste.
One final reason that I question the effectiveness of staff bonus and spiff
programs is that I see in my own practice that optical sales and other revenue
can be excellent with no incentives at all. It is simply part of the job
description for our technicians and opticians to educate patients on eyeglass
and contact lens options. Staff members take pride in that aspect of their job
and itís just not necessary to pay extra for it. The doctors play a big role in
this process also, in the exam room. The practice can become a system thatís
bigger than any individual and that system creates sales.
Best wishes for continued success,
Neil B. Gailmard, OD, MBA, FAAO
Chief Optometric Editor, Optometric Management