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Apr 17

Incentives And Compensation Plans For Medical Groups And Healthcare Businesses

I dictated the first draft of this post on a Monday as I was driving to work.

I know a lot of people hate Mondays. I can’t tell you how much I want to slap somebody when they call a Wednesday a “Hump Day”, or when they say “it’s almost Friday!”

I just don’t think like that. I don’t understand why anyone does. That is, unless they hate their job. But, if that’s the case, why are they still working there, or doing that job at all?

Don’t tell me that they don’t have any choice, or that you don’t have any choice. No, we each have a choice. Our choices have consequences. We just might not like those consequences.

A lot of my clients, medical groups as well as other healthcare-related businesses, have a compensation plan that the owners think is simply a way of paying. That is, they think that the compensation plan is just about money.

Sure, compensation plans are about money, but they’re certainly not only about money.

Instead, compensation plans are tools for social engineering within your medical group, business, or organization. If there’s something that you want your colleagues or team members or employees to do, then compensate them for it. And, just as, or even more, important, ask yourself if you’re also compensating them in a way that causes them to do something that you don’t want them to do.

For example, let’s use the fast food joint that I just passed as I was dictating the first draft of this post as an example. The owner could give bonuses to the employees for quick services in the drive-thru lane. Sounds good, right? Let’s get the time per car down to 30 seconds!

But if you do that, are you disincentivizing your employees to take the time to speak with each customer? Will they take the time to make sure that the order is right and that the correct bag is given to the customer? Will they make sure that the mayo-free burger doesn’t come out with double mayo?

Understand that your compensation plan is just another piece of the puzzle. It works together with an employment agreement, an independent contractor agreement, a partnership agreement, and so on. Think about how it works in your context.

What are you paying for? How does that vary from what you’re currently getting?

It’s time to consider the incentives and the messages that you’re sending with each check.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

www.advisorylawgroup.com

 

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