7/27/2019 1-October 2005 Dental Newsletter

1/2

October 4, 2005

CERTIFIED PUBLIC ACCOUNTANTS

TOWNEBANK CENTRE

SUITE 305, 984 FIRST COLONIAL ROADVIRGINIA BEACH, VA 23454

TEL. (757) 422-4445 FAX (757) 491-8431

E-MAIL EDITOR@JWBCPAS.COM

Web Site www.jwbcpas.com

MEMBER, ACADEMY OF DENTAL CPAs

As you well know, there are as many bonus plans out there as there are dental consultants. Yknow the old saying, Everybodys got one!

It seems like I go through an unending discussion at least once a year with a dentist on the merof a particular bonus plan that he or she has recently heard about. My fellow Academy members hathe same experience. The majority of us are not crazy about bonus plans. The core feeling is thadoes not make sense to pay a bonus for what the employee has been hired to do anyway.

However, that is not to say that all bonus plans are a bad idea. Sometimes they can be very effetive if the right plan is installed in the right circumstances.

Diane Glasscoe wrote a very good article on this subject for the February 2005 issue of WomDentist Journal. I would think that PennWell would be happy to send a reprint upon request.

The first thing that Ms. Glasscoe expounds upon are four myths about bonuses:

1. Bonuses always motivate . Not true. Bonuses that motivate are achievable. If you set the btoo high, the bonus plan will backfire on you, causing morale to drop and motivation with it.

2. Extra pay for extra work. Most employees have full lives outside of work and resent fringement on their time. They do not feel the same way about the practice as the dentiowner. If you expect them to work into lunch or after normal hours on a consistent basyou will create resentment.

3. Staff wont expect the bonus because it has to be earned each month . Ha! That iswrong. Staff expects the bonus to kick in every month. When it does not, the blame gam

starts. Why did the dentist take a vacation? What is wrong with the scheduling assistant? Ysee, there is an assumption that this is a team and that the good staffers will force the bastaffers up to par or insist that be discharged. What happens when the dentist disagrees wwho is good and who is bad? What happens when the staff decides that it is the dentist whothe bad guy? I had a situation where the staff was going nuts because the dentist was givisubstantial discounts to his pet patients.

4. If I have a bonus plan, I wont have to give raises . Potential employees may be turned off the low pay scale, even though the history of the bonus has been above average. Exceptionemployees could be turned off by offers that seem low and unstable, especially when thlearn the bonus varies from month to month. Dentists earn a good living and can suffer throudown times. Some staff live from paycheck to paycheck and need a guaranteed amount to sutain their lifestyle. Many cannot justify the risk that comes with a bonus plan and low pay.

Bonus Incentives

7/27/2019 1-October 2005 Dental Newsletter

2/2

Page 2Bonus disadvantages include:1. Once the plan is set, it needs to be attainable. The plan must be monitored and adjusted.

2. Bonuses do not compensate for poor schedule control.

3. Staff members come to expect the bonuses every time.4. Bonus incentives should not be a way to prop up weak pay.

5. Some doctors become unhappy when the financial impact of a bonus system becomes a reaity (I have seen this happen and heard the howls of outrage when the doctor wanted to adjus

to make it less costly to the practice).

6. When production, collections, or both are part of the bonus formula, scheduling coordinatormay delay certain procedures or delay posting payments to the next month if the goal ha

been met.According to Ms. Glasscoe, a properly designed bonus plan should:

1. Eliminate complaining about occasionally working into lunch or after hours.

2. Cause employees to police themselves and work for the common good. Slackers are out!

3. Bring immediate gratification for hard work.4. Ease difficulty in establishing raises each year (Note that the bonus plan is not a substitut

for giving raises)!

5. Keep the schedule full.

Sidney L. Jacobson

JULY

2005

JULY

2004

Year-to

2005

-date

2004

Net

production

$48,077 $56,550 $420,870 $402,717

New

patients

17 24 154 172

JULY 2005compared toJULY 2004

Year-to-

date

Fees collected Down 11.36% Up 4.37 %

Operating

expensesUp 8.77% Up 5.56%

Net before

owners costsDown 40.74% Up 3.37%