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Issue: 43 - Jul 16, 2012
Bonuses Don’t Work and Here’s Why…
By: Jan Miller
Veterinary Best Practice

I’ve worked with many practice owners who have instituted bonuses for employees in an effort to improve total revenue to the business.  Mostly their thought process is something along the lines of “What can I do to motivate my staff to do their jobs better so the practice makes more money?”  The bonus calculations typically run the gamut from a percentage of current gross income to a percentage of increased gross income over last year’s income to a percentage of the month by month growth of income over the previous year. 

Why do I think bonuses in veterinary medicine are ill conceived ideas?  Two reasons:

·         It’s not motivating

·         It targets the wrong things

Studies have shown us (think Maslow’s Hierarchy) time and time again that for most people money is not a motivator.  Sure, all of us like a surprise or a gift of cash every now and then, but the way most veterinary bonuses are structured it’s not about individual effort or the practice mission or even accountability.  It’s about gross revenue.  How much impact does the receptionist or tech really have on gross revenue? 

STOP.  I know what you’re thinking and I know what I preach all of the time:  Your front office can make or break a practice.  Absolutely true!  But what they do every day to build or break the business isn’t about gross revenue.  In fact, when you start linking performance to practice revenue is when you start hearing things like “All this practice is about is the money!”  You’ve actually created a perverse incentive of sorts.[1]  You get a backlash from staff because they don’t want to be “sales people” and they do not support your efforts to make more money.  That backlash comes through in a variety of ways involving client interactions.  For example, when an expensive dental cleaning is recommended/needed and the appointment isn’t scheduled because the receptionist suggested to the client they might want” to go home and think about it”; or when shoppers call and appointments are not even offered; or when a follow up call is intentionally made at a time that is most likely to get voice mail.

Lack of buy in promotes undermining actions.

Why do most people get into the veterinary industry?  It’s certainly not to get rich.  Typically it’s for the love of animals and their welfare.  If you are paying a fair and competitive wage, money is not going to be a motivator.

A sense of purpose will be a motivator. 

If you have hired good people[2] and you have created a culture that embraces and supports a strong mission and your staff believes in that mission, establishing incentives around that will get you much farther than any financial bonus.

Of course, if your entire mission is “We treat your pet like family”, this won’t work for you (unless your reception desk is a big sofa and you have an open door policy with the restroom so patients can follow you and drink out of the toilet…)

If your mission includes language about extending life through preventative care or eliminating suffering and treating illness, you are good to go.

How many lives did we extend today? What a great metric for improving the number of prophys?  We all know that regular dental cleanings can extend lives and in some cases eliminate suffering.  We also know that a staggering number of patients do not receive regular dental care or even a recommendation for dental care!  If your average number of prophys per month has been 5, set a target for 10 and record your efforts as they happen on an EXTENDING LIVES graph. 

The same can be said for heartworm prevention.  What a cruel and avoidable condition that is.  Establish a target for heartworm prevention on the EXTENDING LIVES board.  The same can be said for flea and tick products.  What must it feel like to be infested with fleas or ticks?

Don’t forget spays and neuters.  Just think animal shelters.

When the practice comes together around its mission to treat and care for animals everybody wins and everybody has a direct and legitimate role in achieving these goals:  the doctor with diagnosis and recommendations, the tech with education, and the receptionist with completing the cycle of compliance when they schedule the appointments and sell the product.   And lastly, the business wins because good medicine will always improve the bottom line.

There are so many opportunities for creating an environment that promotes and celebrates the reason most of you got into veterinary medicine in the first place.  Instead of a perverse incentive linked to revenue you can create a willing incentive that brings the team together for a common purpose. 

Does achieving your target mean you will be dispensing cash bonuses?  No, because it’s not about the money.  A group celebration is definitely in order however.  And then set your next goal.

AAHA’s report on compliance is a great resource for additional ideas. 

[1] Perverse incentives are unintended consequences.

[2] Isn’t it interesting how everything comes back around to hiring good people?  What have you done lately to improve in this area?