practice management Timothy A. Brown Timothy A. Brown specializes in dental practice appraisals, brokerage, consulting, locum placements, associateships and practice financing across Canada. You can reach Timothy at timothy@roicorp.com.
Embrace the random
When it comes to employee bonuses and incentive plans, a little unpredictablility is best
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n the course of appraising thousands of dental practices, I’ve uncovered numerous complicated bonus systems and structures. Most bonus plans are wellintended but the calculations are unecessarily stressful and onerous. And, inevitably, a bonus plan that was designed to incentivize will backfire and foster a sense of entitlement or, worse, “sour grapes” amongst staff. After more than 20 years as a business owner, my solution is simple: make bonuses random and immeasurable. “Random” just means that there’s no established, predetermined time when staff expects renumeration. Most owners implement bonuses on a monthly, quarterly or annual basis, tying the bonus
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system to some mechanism of time. But random timing is best. When your team is working cohesively and efficiently, they know it. The office is in a flow state. Everyone senses the momentum—in busyness, productivity, collections and office culture. And that’s your moment to strike at random with bonuses! No need to say it’s because they’re doing a great job; just say you appreciate everyone and reward them—out of the blue. Be generous. That’s the magic of random. It’s like getting flowers from someone when you least expect it. And make your bonus system “immeasurable.” Staff doesn’t have to know what metrics you used to calculate that bonus. When offices set a productivity or
Just For Canadian dentists March/April 2020
collections goal or a new patient count for a specific period of time, there’s always a way to cook the books to make those metrics come true for a bonus. And such bonus systems are usually an all-or-nothing calculation. If the goal is to collect 98% of the projected production that month and 97.9% is collected, does that equal zero bonus—even if an employee did 99.9% of the work? I don’t think so. With immeasurable bonuses, you also keep your metrics to yourself. As the owner, only you need to know the numbers. This isn’t the kind of information that all staff members should be privy to. Too often, highly sensitive information is being casually distributed amongst staff members when this data should stay within a very tight circle. And, again, don’t forfeit the power of random. If you have a great month or first quarter, wait a couple of weeks or another month, and then randomly bonus, simply saying “We’re off to a good start this year.” Don’t enter a staff meeting and say, “The March 31st numbers are great, here you go.” No measurement is necessary; make the calculation in your mind however you want, but make it immeasurable. As a business owner, you’ll love the flexibility of random, immeasurable bonuses—and so will your staff. The “want to give” versus “need to give” has a direct reflection on your generosity. Most studies on reward mechanisms for employees show that money sits somewhere in the top five; for many, it doesn’t even make the top three. Staff desires recognition and wants to be rewarded with praise for a job well done. As leaders, we need the same. In my case, the paycheque and dividends at the end of the year are not enough. I seek recognition from clients and, yes, also look for it from my team. By making your bonus system random and immeasurable you get back to a more organic way of providing recognition and reward. I dare you to look back at the last month or two for something impressive about your team and to now do something both random and immeasurable for them. Today. You’ll like the results.
