Even in this economy, non-monetary factors such as commute, company culture, management team and job advancement, play a key role in job satisfaction. But beneath the desire for an ideal work environment lays the basic reason people work—to earn money.
Unless your staff can influence their opportunity to increase earnings, they won’t be motivated over the long run. We have found that properly designed incentive programs increase both productivity and profitability
The basic structure for an incentive compensation plan is a base salary that represents 80 percent of the overall compensation plan. The remaining 20 percent constitute the incentives.
To structure these arrangements, you must consider the salary range– based on experience, market and other factors–where you want the employee’s total compensation to fall. Once you’ve established the total compensation range, back into the level of base salary and incentives appropriate to the position.
Incentive programs need to be built around the business outcomes that position can most influence. For example, a therapist has more control over the intensity of treatment than the collections and billing staff. The clinic director has more influence over therapist productivity than the front office staff.
Here are some recommendations for measurable objectives:
Physical Therapy Director/Manager. Because their leadership has a direct effect on the overall office revenue, base their incentives on total clinic billings minus a predetermined disallowance, generally historical percentage of cash not collected.
Staff Therapists. While therapists do not have great control over the amount of cash collected from the patients they are treating, they do control proper coding, treatment plans and to some extent, the number of times the patient will return for treatment. Their incentive plan would be based on individual performance, i.e. the therapist gross billings less a predetermined disallowance.
Front Desk/Reception. The effectiveness of your Front Desk to properly schedule, register and follow up with patients affects the revenue of the whole clinic. Base their incentives on arrival rates, visits or co-pay collections.
Billing and Collections. This staff has a direct impact on the amount of cash you are collecting; therefore, it is appropriate to design their incentive comp plan around a percentage of collections recovered based on an objective cash collection target.
Our clients who have implemented incentive programs are seeing a more than 20 percent increase in productivity. For more information on compensation programs, contact us.