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Dental Office Bonus Systems – A Full Guide

One very important goal for all businesses is to hire and keep high-performing employees, and this applies to dental offices as well. A dental office bonus system is one way of achieving this. Bonuses raise spirits, motivate workers, and make sure that employees feel recognized and valued. In this guide, you will learn about specific benefits, the types of bonus systems that you can implement, and how to implement a bonus system in your practice.

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Why Should You Implement a Dental Office Bonus System?

According to a study from the Incentive Research Foundation, these are some of the reasons why you should set up a bonus or reward system:

  • Performance of employees: A well-structured reward system can increase performance by 44%.
  • Motivate employees: Incentive programs can motivate up to 66% of employees to stay at their jobs.
  • Customer loyalty: Positive employee attitude can make 41% of customers stick to a company, but a negative employee attitude can make 68% of customers leave.

Well-designed dental office bonus systems should: 

  • Eliminate employee complaints for the occasional extra workload.
  • Help employees autoregulate by giving them a common objective to work towards.
  • Reward staff for their hard work and help them keep the momentum.
  • Reflect on the total practice earnings by a difference superior to the cost of given bonuses.

Characteristics of a Good Bonus System

To work as good incentives, bonuses need to be achievable, fair, straightforward, and understandable, and they should make staff feel like they are sharing the success when the practice is financially healthy.

The bonus needs to be impactful enough to motivate people to work for it, but don’t overdo it. An experiment performed by behavioral economists where they issued high, medium, and low bonuses to people for doing the same task showed that the groups of people perceiving low and medium rewards performed on the same levels, whereas the group with the highest bonus performed poorly as they felt an extra pressure that was counterproductive.

The goal must be realistic and increase over time to keep employees challenged. If the goal stays the same for too long, it loses value to the staff and becomes a part of the payroll. A good practice is to review the goal every three months; it should also be aligned with scheduled raises.

It’s also important for the person in charge (the dentist, practice owner, or manager) to demonstrate being enthusiastic when the employees receive a bonus for achieving a goal. You can also consider making the distribution of the bonus checks a ceremonial event inside the practice to give the staff a sense of excitement. It’s important not to delay the payment of the bonuses, as it can give the impression that the owner is not happy to share the growth of the practice, and employees might stop trying to reach their goals. In other words, associate the bonus system with keeping the morale high among your staff.

One idea that falls on the side of these guidelines is to give surprise bonuses. Research from behaviorists found that random reinforcement is a very strong motivator, often more than a reward program, which sometimes can be seen as impersonal and have the potential for disappointment. Surprise bonuses given by the boss as a sign of appreciation for hard work have a more powerful positive impact, especially if accompanied by a personal note thanking the employee. This can also be implemented as an “extra bonus” besides the standard reward system. Even if only a symbolic amount, it is proven to keep the spirits up among employees.

And a golden rule is that your bonus plan should work to motivate people, not to complement poor compensation or substitute scheduled pay raises. Make sure you are fairly paying your staff before considering a bonus system as it can look like a poor attempt to throw them a bone to keep them content.

How to structure an employee bonus plan?

To start a bonus system, the first step is to choose the approach you will be taking. The most common ways to bond goals to bonuses are at the individual or practice level, or both. The goals should be specific and measurable and avoid any vagueness.

An individual goal program sets a series of goals for each role that are linked specifically to their job. For example, a hygienist can have a goal number of cleanings per quarter, or the front desk can have a goal of zero unreturned calls. These goals are very simple and allow the employee to autoregulate to reach an objective, i.e. “If I achieve X, I will get an extra $X”.

Practice level targets are based on the production or growth of the business. This can encourage self-regulation between employees and also a sense of team play.

  • For example, if your target is to have a 35% growth in a year, and your team reaches 37%, you can give them a fixed amount for achieving the goal and divide the extra between the team. 
  • Another approach is to set a fixed bonus amount for a set of tiers, i.e. your first goal is making $80K in the next month and the bonus is $2K  to be divided by all; but if they reach $100K, then the amount to be divided becomes $3K; and if they go all the way to making $120K in production, then the bonus is of $4K to be divided among the team.

Once you decide on your approach, you need to keep a few things in mind when you are setting a target number:

  • Any bonus incentive must be achievable to be a motivator. 
  • Make it independent of the doctor’s vacation days or equipment purchasing, or review the target when these events happen.
  • You can set the goals on a monthly, quarterly, or yearly basis, but it is recommended to make the reward feel as immediate as possible. The annual bonus takes a lot of time to be seen by the staff so they might lose their motivation on the way.
  • Make sure the bonus is significant for the employees, but it doesn’t create a hole in your newly increased income. 
  • Be clear as to when the staff is going to receive the bonus.
  • Be fair with all the team members. If one of the employees starts missing workdays and therefore collaborates little on achieving a goal, keep them out when you distribute the bonuses. However, make sure that you are clear about this issue beforehand.
  • Set an amount of time that new team members need to wait before they enter the bonus system.
  • A good tip is to involve the staff in the economic performance of the clinic before setting a goal to implement an incentive plan, like asking them to get a daily report of the collection and production value. This way they can get around the idea of the monetary value of their work.
  • Part-time members of the team should be included in the bonus program but with the adjustments necessary to make it fair with full-time workers.
  • Members of the team that work on commission should be left out of the reward plan.

It is important to consider taxes when you think about a bonus. When you’re picking a number, be sure to take the amount your employee will ultimately take home into account. A bonus might be taxed in several ways because it increases the compensation for your staff. The most popular approach directly taxes the incentive at a flat rate of 22%. So, if you give a $1K bonus, $220 of it will be paid to the IRS. This strategy is popular with businesses since it is simple to implement and takes less from the bonus than other options. The aggregate approach is another strategy in which you combine your employee’s bonus and wages and then deduct taxes based on the bigger sum.

When setting a goal based on the money generated by the practice, it is important to consider all the income channels. Insurance money should be accounted for in the bonus system because it’s part of the production value, even if it’s from months before, and the staff worked for it. Other sources of income are direct patient payments and even dental scrap recycling!

Did you know that if you work with the right dental refiner you can make a passive income for recycling your dental scrap that can even cover the value of your dental office bonus program?

As an industry leader in dental scrap refining, Core Scientific revolutionized the industry by bringing the highest returns to our customers. Our cutting-edge refining technologies and commitment to giving you full transparency give our clients a 200-300% increase in their revenue when they start working with us. 


You can start realizing the best returns for your dental scrap too! Request a FREE container now or contact us to learn more about how we have revolutionized the refining industry.

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