Employers and employees most always disagree on compensation. Optometrist owners feel they are paying fairly–or even generously–to keep staff members happy and motivated. The optometry staff members believe they are working harder than ever, and deserve to be paid for extra effort.
A bonus system that rewards increased team production can alleviate this tension. A team approach replaces the “us vs. them” mindset as everyone works together for the additional compensation.
Below is the formula for an incentive where staff members are rewarded for increased production for the optometry office.
Production Incentive Formula
1. Calculate your annual staffing costs
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This would be all costs for staff in 1 year (hourly wages, taxes, social security, IRA, health insurance, etc.)
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Example: $240,000
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(Staffing costs 2013) / (Total Collected for 2013)
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Example: $240,000 / $1,200,000 = .20 (20%)
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Use 20% as your constant (keep staffing costs at this %) to determine the production incentive.
2. Calculate baseline from last year’s monthly gross
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October 2013 = $100,000
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After the practice gross reaches $100,000 for the month the production incentive starts
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Everyone in the practice should be aware of the current month’s collections
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$100,000 is the collected amount, not the charged amount
Each eligible staff member gets a percentage of the difference as extra money above and beyond his or her normal pay.
Example
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The month gross collected totaled $110,00; ($110,000 – $100,000 = $10,000)
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Staff share = 20% of $10,000 = $2,000
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Production Incentive = $2,000 /# participants
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If 10 staff members are eligible for Production Incentive, each will receive $2,000 / 10 = $200
The Equation
End of month gross collected* – $100,000) x 20% / # of staff eligible = Your Production Incentive
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*If this amount is less than $100,000 then the total is defaulted to zero (0)
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Each month will vary, you need to average your months
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% will vary by # of employees eligible (CEO determines eligibility)
Creating incentives for your team to work together and win together encourages group effort. Too often traditional bonuses divide the office into partitions because they are seen as subjective or unfair. The production incentive allows the owner to motivate the team together during staff meetings. When the office wins, the staff members win. Rewards are directly related to team production.
