Do Incentive Plans Really Work?
Consider the inevitable cons before you implement
one in your practice.
BOB LEVOY, O.D.
incentive plans are meant to increase practice revenues, collections or the sales
of contact lenses, eye wear or multiple prescriptions. But do they really work?
It's a two-way street
At first glance, it would seem that incentive
plans are a one-way street to greater profitability for both O.D.s and employees.
But there are also some negative aspects that advocates seem to be ignore. Simply
put, there is an unfavorable risk that employees may take the short-term approach
rather than the path that provides more long-term benefits. Examples of this type
of behavior reported by O.D.s include:
►Employees, understandably motivated by the opportunity to earn extra money, often
become over-eager and begin to pressure patients for eye wear that's more expensive
than they can afford (or their insurance plan allows). Savvy patients detect and
resent such overtures. Those who succumb may later have "buyer's remorse," want
a refund and potentially never return. Either way, an office that develops a reputation
for "high pressure" tactics loses both credibility and patients.
►Employees eager to earn extra dollars for timely collections may put undue pressure
on good patients who are slightly late in making payment. Such patients may pay
their bills faster (short-term profit) but they also may not return to the practice
►Some patients learn (perhaps from a former employee) that they were urged to purchase
eye wear, contact lenses or prescription lens add-ons because the staff member helping
them was paid an incentive to do so. These patients may be distrustful of future
recommendations from staff. And if they pass the story on to friends, the damage
►If incentive pay is distributed equally among full-time employees, there is frequently
one person who believes he or she works better or harder and perhaps deserves more
of a reward than the others. In such cases, team spirit deteriorates.
►Employees are reluctant to relinquish incentive pay on which they've become dependent,
especially if a slow-down in business is caused by outside forces, such as a managed
care plan dropping the practice, or an increase in competition.
►One of the stickiest situations occurs when staff members are paid for bringing
new patients into the practice and two staff members claim to have referred
the same patient. How is that resolved? Let them argue it out? Pay them both? Either
way, you lose.
►How about a staff member who neglects her duties to concentrate on persuading patients
to purchase a year's supply of disposable contact lenses, or making appointments
for family members?
Reality check: Our research
indicates that employee incentive plans sound good on paper but often create more
problems than they solve. In some cases they are later abandoned, leading to additional
problems (including, in one case, a staff mutiny).
Alternatives: There are many things
an astute practitioner can do to motivate employees other than initiate incentive
plans. These involve addressing employees' job-related needs, a subject I've often
addressed in this column. The result will be infinitely superior (and longer-lasting)
to any that money alone can buy.
BOB LEVOY'S NEWEST
BOOK, "201 SECRETS OF A HIGH PERFORMANCE OPTOMETRIC
PRACTICE" WAS PUBLISHED BY BUTTERWORTH-HEINEMANN.
YOU CAN REACH HIM BY E-MAIL AT B.LEVOY@ATT.NET.
Optometric Management, Issue: April 2006