How Would You Address This Bonus Brouhaha?

FOR DECADES, UPPER Valley Vision Care had been a tight two-doctor operation, but in the last five years the office moved to a larger building, added three more optometrists and over a dozen staff members, bringing the company head count to 30. Owner Dr. Hyde and office manager Nicole found themselves dedicating a huge percentage of their time to staff needs: scheduling, training and coaching, meetings, interpersonal conflict resolution — but the biggest task was monthly evaluations and bonuses.

Dr. Hyde relied on his comprehensive reviews and carefully weighted reward systems to boost staff engagement, document performance issues and consistently communicate expectations. Over the years, whenever a team member would fall short in an area — attitude, attendance, use of downtime—it was briefly addressed, then added across the board as a metric.

At the end of each month, Nicole crunched data from the practice software, surveyed the doctors and supervisors, collected self-evaluations as well as anonymous peer reviews per department, read patient feedback forms, audited charting and observed staff in action. Mid-month, when she was finally finished, Nicole and Dr. Hyde sat down with every team member to deliver a calculation explanation and suggestions on how to improve before sharing the bonus earned that month. The final coefficients balanced hours worked, individual effort, department output, company growth and seniority, but the strongest factor was practice growth in collections over the same month last year. On average bonuses were $200-300, with shining stars receiving closer to $600.

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A few months ago, Dr. Hyde had announced that one of the new hires, Dr. Ng, had run out of time on her visa application and was returning to Canada after only a year. It was the first time the office had “lost” a doctor. During the first month without Dr. Ng, production was down across the company. Dr. Hyde worked more patient hours to temper demand, but it wasn’t close to compensating for Dr. Ng. The following month, growth in collections was down enough to drop bonuses by 40 percent.

Nicole provided evaluations mid-month as usual, taking care to explain the shortfall. She got enormous pushback: Dr. Hyde was always emphasizing the ways in which staff could influence the outcome of a bonus, but what can be done about a doctors’ lost production? Hiring a replacement would take many months.

Nicole continued to emphasize individual and team metrics but as collections remained lower than last year’s numbers, the office culture changed. The department supervisors had been trained to utilize monthly reviews as both carrot and stick, but some team members were resigned to this new normal—and they were dragging everyone else down.

Kimberly M.
Great Bend, KS

Our bonus is based on gross optical sales for the month and attendance. We have a goal of X percent over the same month, prior year. Then Y percent over that goal amount is allocated to full time staff. They can only have A hours of unplanned absences before they lose half or all of their bonus. (Pre-arranged absences are exempt from reduction calculation.) Any reductions (staff receiving only half bonus) are then added and split between the remaining full bonus eligible staff, equally. Works really well, but also sucks when you’re short a couple $100 at month’s end. Definitely boosts morale and gets all the departmental teams thinking as one big team. And the doctors get to enjoy the overall increase as well. Everyone likes a few extra dollars in their check — sometimes it’s small and sometimes it exceeds regular paycheck gross. Our optical department are rock stars!

Rick R.
Girard, PA

1. That detailed of an evaluation every single month would be a huge demotivator, because it’s every single month. What a waste of hours.
2. If it’s based off profits, sure. That should be upfront from the beginning.

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Yen N.
Dallas, TX

For someone who values their time incredibly, a detailed evaluation only makes sense from an owner/business standpoint. Performing well at your job should be the standard. Bonuses should really increase morale and sales, because over-exceeding is when you earn that extra compensation or prize. The bonus formula could be scaled down to fit the number of ODs they have, especially if the structure intertwines with that factor. Spiffs are a great motivator to target a specific type of boost in sale. Though, again, it should ideally exceed the base line goal in order for it to be effective.

Judy C.
Virginia Beach, VA

Good grief! This system has so many moving parts, I wouldn’t know where to begin to evaluate my own performance, much less anyone else’s. Simplify everything. What are your practice goals and are they being met or exceeded? Establish some benchmarks and are they being met or exceeded? Every staff member has (hopefully) been hired to perform a specific job. Evaluate that.