The Right Way to Incentivize Your Staff

While the idea of putting a carrot on a string (or a couple extra bucks) gets a bad rap, having something ahead of you to strive for can be a very powerful motivational tool.

Plus, a good incentivization plan will reduce your risks as an owner while still giving your employees a chance to reap the rewards of their efforts.

That’s why today we’ll discuss the right way to incentivize your employees and keep them motivated to work hard.

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There is no universal standard

In regards to pay, most private practice owners feel that there has to be some universal standard per position.

While this would certainly simplify things, in my experience, it just isn’t true. In fact, it may actually be beneficial that this isn’t the case.

Keep reading to find out why.

Fixed vs. Commissions

Fixed pay

Fixed is exactly what it sounds like; stuck at one number. While this may seem like the easiest approach to take with your payroll, it is not one that provides much incentive for your employees to keep growing. Why put in the extra time if there’s nothing to show for it, right?

Commission

On the other end of the spectrum is pay by commission. Commission pay is essentially creating a self-employed mentality. This means that people are required to produce more to make more money, thus creating greater motivation to work hard.

While the ideal situation is 100% commission, (and often preferred by many employees) it is not always a realistic option for all positions in the clinic.

A clinic director may love 100% commision pay, while a receptionist may prefer a fixed pay rate.

A great solution is to create a gradient to move employees from fixed pay to at least partial pay by commision. What this might look like is having a fixed salary or hourly rate, with an incentive bonus if certain standards are met.

An example from our clinic’s reception staff was if we hit an attendance rate of greater than 91%, they received a $40 weekly bonus. This bit of incentive led them to try different methods for increasing attendance, including performing callbacks on Sunday for that week’s appointments. Without prompting, they came up with a solution to increase attendance and received an increase in pay for the effort they put in. This not only helps the reception staff make more money but also helps the entire clinic improve our numbers!  

Just remember, a commission has to have a cap on it somewhere. Your total employment costs (including your pay) should be about 40-45% of the clinic’s total gross income. If you’re spending over 50% of your clinic’s income on employment, you’re going to find it hard to keep your head above water.

Alternatives to cash bonuses

So what happens if you’ve reached your max in cash incentive bonuses? Don’t worry; there are plenty of other ways to motivate staff without even mentioning money.

One of the best ways to find out what motivates your staff is to just ask what they want! If you’ve got a patient number you want to hit, take a clinic poll and see what the majority of people want as a reward.

In our clinic, we wanted to hit 450 visits in a week and as a reward, the staff wanted a dress down day. Other alternatives might be an extra paid day off, or even a company provided lunch.

This ensures everyone is working toward a common goal and helps build team morale in the process.

Things to Look Out For

Fixed Bonuses

When I first started out I used to offer fixed bonuses. I’ve found this isn’t a great idea, as people will often try to work the system so they can obtain their bonus with as little work as possible.

For example, we offered a $100 weekly bonus to PTs based on patient visit numbers alone. What happened was a couple of our PTs dropped the number of units per treatment so they could get more people in and out the door. This lead to short treatment times with only one to two units billed, actually costing us more money even though we were seeing more people.

What we’ve learned to do instead is offer bonuses based on the employees’ contribution to the company’s profit margin.

Contribution-Based Bonuses

We’ve calculated that when our PTs do a killer exam, perform test/treat/retest for objective measures, and utilize high-quality manual therapy and education to make meaningful changes during a patient visit, it usually comes out to around 4.25 units each visit. From this, we are able to calculate the amount of income we can expect per patient visit.

This allows us to predict what we can expect to receive in billing for each PT. If we know how much each PT is adding to the clinic’s income we can then determine how much they are contributing to the profit margin. You can set up guidelines stating that the more they contribute to the profit margin, the higher the bonus they will make!

Calculating profit margin is simple.

Income – expenses = profit margin

Expenses = your pay, your benefits, your reserve, and clinic expenses

You then get to determine how much of the profit margin you share with your staff. Most private practice owners share around 20% of the profit margin with staff.

I personally share a significantly larger percentage with my staff, which keeps my employees happy and motivated, while I’m still very comfortable with what I bring home. This is really more of an art than a science, so the decision is up to you and what works for your employees.

Using this model of incentivizing my employees, our PTs are making around 20-30% of their annual salaries through commission based pay. This ultimately leads to self-motivated, solution-oriented staff members who continue to increase your profit margins over time!

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Final Wrap Up

Hiring amazing staff is no easy task, but it is one that will pay off in the long run.

When you’ve hired the right people, you’ll be able to cut down on your treatment hours and finally step into the role of a true business owner.

Of course, one of the best benefits you can offer your PTs is a reliable (and repeatable) way to attract patients and fill their caseloads.

Click here to download a free cheat sheet that reveals a unique “Patient Attraction Engine” system that I use to bring in 60+ new direct access patients every month.