This article is more than 5 years old. Information may no longer be current.
BLOG: Rational staff bonuses, part 4
Experience shows that the best administrators are those who are motivated by their personal bottom lines as much as by the practice’s rosy financials. It’s useful to align the interests of your executive director, administrator or office manager with the interests of the doctors. That needn’t just be a profit index. For example, if the practice is seeking in the next year to add new technology, bring a new satellite on line and recruit a new partner-track surgeon, chances are that profits will actually falter, perhaps sharply. In such cases, I would index to the achievement of measurable operational and perhaps revenue goals, and not resort to profitability indexing until the development work is done and the metric of success reverts back to raw profit.
It’s likely that your practice’s payroll costs as a percentage of revenue will rise inexorably in the years ahead. Bonus systems, used intelligently, can keep baseline payroll costs as low as possible. By shifting relatively more staff compensation to a bonus for performance — both theirs and the organization’s — you can at least mildly buffer to the highs and lows of the practice. A well-crafted bonus program allows you to rationalize payroll costs down seasonally and motivate your most important staff.
A final thought: Bonus programs are not a substitute for verbal praise from managers and providers to staff. Indeed, the most valuable and motivating reward for most of your workers is simply a few moments of your time each day citing their most obvious accomplishments.
John B. Pinto is president of J. Pinto & Associates Inc., an ophthalmic practice management consulting firm established in 1979. John is the country’s most-published author on ophthalmology management topics. He is the author of John Pinto’s Little Green Book of Ophthalmology, Turnaround: 21 Weeks to Ophthalmic Practice Survival and Permanent Improvement, Cashflow: The Practical Art of Earning More From Your Ophthalmology Practice, The Efficient Ophthalmologist, The Women of Ophthalmology, Legal Issues in Ophthalmology and a new book, Ophthalmic Leadership: A Practical Guide for Physicians, Administrators and Teams. He can be reached at email: pintoinc@aol.com; website: www.pintoinc.com.