Issue 6 - May 2003

Share the wealth with team-based incentives
By Lynne Sullivan, DC

If you want your office staff to work as a team, reward them as a team! A fair and equitable team-based incentive program can go a long way to move everyone to achieve practice goals.

During my 16 years of practice, I have offered various bonus and incentive programs to staff members. I have found that an effective incentive program should:

• Be performance-based. Each person should have a stake in the outcome and be able to influence it by their work performance.

• Be easily administered. Apply the KISS principle: Keep it simple, stupid!

• Pay out regularly. Ideally, payouts should occur monthly but no later than quarterly. Staff members are then able to relate their efforts to the payouts.

• Be fair. Using a formula that everyone knows ahead of time removes the opportunity to reward one person more than another because you “like” him.

• Provide meaningful rewards. The incentives have to be big enough so that they can make a difference in a person’s paycheck – and life.

A team incentive program I have successfully used is based on collections. The program is designed to share the wealth. As the practice makes more money, so does the team.

Here’s how this program works:

1. Determine the average monthly collections for the past six months. For example: $29,385. Round this number to the next highest thousand to establish a baseline collection figure. In this example, $29,385 becomes $30,000 for a base figure.

2. Compute the month’s increase in collections over the base, to the nearest $1,000. For example:

• Round the month’s actual collections to the nearest $1,000. If January’s collections were $40,450, this would be rounded to $40,000.

• Subtract the base from the month’s actual rounded amount: $40,000 – $30,000 = $10,000 increase in collections. $10,000 is ten $1,000 increments. Ten (10) becomes the operative number in this example.

3. Determine the bonus calculator. In my practice, I have used a bonus of $65 per each $1,000 above baseline for salaried team members and $.30/hour per $1,000 above baseline for hourly-paid employees.

4. Calculate the bonus. A salaried team member with a base pay of $2,000 per month would earn a bonus of $65 per each $1,000 collected above the baseline. The month’s incentive would be $65 x 10 or $650, which results in a total paycheck of $2,650!

An hourly team member would receive $.30 per hour increase for each $1,000 increment. In our example, an hourly employee would earn an incentive payout of $.30 x 10 = $3.00 per hour. An employee earning $12 per hour would then earn a total of $15 per hour for that month.

5. Adjust for new team members. Team members added after the start of the incentive program have their base pay adjusted to the average collections for the past 6 months.

This plan makes it very simple to administer and is motivating and rewarding to all involved.

Dr.Lynn Sullivan graduated from Life-West as the class valedictorian in 1986. Since that time, she has developed a high-volume, family-oriented practice focusing on wellness care. She is a coach with Ward Success Systems. She can be reached at 925-855-1635