Article Date: 4/1/2006

staffing solutions
Do Incentive Plans Really Work?
Consider the inevitable cons before you implement one in your practice.

Employee 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 (long-term loss).

►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 compounds.

More roadblocks

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.


Optometric Management, Issue: April 2006