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 By Neil B. Gailmard, OD, MBA, FAAO, Editor April 11, 2007 - Tip #273 
 Contact Dr. Gailmard | Subscribe | Archives | Print this issue Visit: optometricmanagement.com 
 
Staff Bonus Programs


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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. I'm 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 behavior.
  • 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 it's 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 can't accurately predict future performance. There are many other factors influencing practice revenue other than the bonus program.
  • I'm 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 patient's 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 they'll take the sales effort too far. I'm 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 don't really like the change in staff attitude that seems to accompany bonus programs. It's 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 - someone will think it isn't. 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. I've 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 can't 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 don't 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 person's 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 it's 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 that's bigger than any individual and that system creates sales.
 


Best wishes for continued success,

Read Past Tips Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week


A Proud Supporter of

Send questions and comments to neil@gailmard.com.

Dr. Gailmard offers consulting services to eye care professionals through Prima Eye Group; information is available at www.primaeyegroup.com.

Please Note: The views expressed in Management Tip of the Week do not necessarily reflect those of the sponsor.

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