Do Monetary Incentives Motivate Physician Office Staffs?

from Practice Update, Spring 2007

By Elizabeth Woodcock, MBA, FACMPE, CPC

Considering an incentive plan for your staff? Offering staff extra cash for increasing time-of-service collections or pitching in to handle extra tasks on busy days may sound like a good idea. But is it really?

In the vast majority of cases, I’d have to vote no. Monetary incentives can have negative consequences in both the short and long term.

Over the long term, these incentive plans can actually lead to underperformance and depressed morale. Here’s how: Let’s say you want to collect more cash at the time of service. You institute an incentive plan to reward front desk staff for improving collection rates. You decide to give the plan two years to produce results. That sounds very generous and suitably cautious. But consider that it may take staff a few months to understand the plan and figure out what they need to do to earn the rewards.

At the end of the second year, either collections will have improved or not. Regardless of the outcome, you may see no need to continue the incentive plan. Before long you notice staff grumbling and, perhaps, slacking off on collections. You may even get a resignation or two.

During the two-year incentive period, many staff will come to view the additional cash as part of normal compensation. They may even start depending on it. After the plan expires, they’ll ask if you have a new plan coming. If you don’t come up with one, morale could suffer as staff perceive you have taken something away. The higher the rewards were, the harder their attitudes will fall.

It’s not uncommon to see some staff leave after a practice pulls the plug on an incentive plan. In other words, once a plan is in place for a period of time, you’ll be on the hot seat to either keep it or replace it.

Consider goals

Take a step back. Why did you initiate the incentive plan in the first place? Was it to motivate behaviors that would result in better customer service, fewer errors, more effective collections, better teamwork on busy days? Most, if not all, of those outcomes are what you should expect of staff in the first place without having to toss them “extra” money.

Stop looking at cash incentives as a way to produce desirable behaviors. If you have to pay someone extra to act pleasant with parents and patients, or be a better team member, then you’ve got the wrong person. Respect and teamwork should be part of an individual’s construct before you hire them, not something you have to try and pull out of them. If you give staff the tools and resources they need to do their jobs, and you pay them fairly, then you should not have to offer bonuses for expected behaviors.

Often, our own hiring practices are at the root of the problems that make us want to pay incentives. For example, when hiring a new receptionist which one would you favor? The applicant who has worked in another pediatric practice? Or the one with superior interpersonal and technical skills, but who happened to come from a dental office or a car dealership?

In most industries, savvy organizations define the best “fit” employee before advertising the position. Even when hiring employees, who might never speak to a customer, many companies carefully consider whether the candidate will fit with the work team and company culture.

Other options

Hiring the right employee is only the beginning. You also have to maintain the energy and enthusiasm that will drive staff to higher levels of service and productivity. Instead of a fancy incentive plan, try these ideas:

• Make some popcorn, bag it and tie two movie passes to each bag. Pass the bags out one Friday afternoon while personally thanking each employee. Tell them you hope they’ll take time to relax this weekend after putting in a hard week.
• Don an apron, and push around a cart stocked with ice cream and fixings for sundaes.
• Choose a charity project that you and your staff can do together.
• Close the office for a special 90-minute surprise “staff meeting.” Hire a limo to drive your staff out to lunch. Better yet, hand out mall gift certificates and ask the driver to chauffeur staff to a nearby mall for a midday shopping spree.
• Take over for the telephone operator one day during lunch. Tell staff you are grateful for their teamwork and that you want to be part of the team, too.
• Send a bouquet of flowers to each staff member’s home.
• Host a barbeque at a local park or bake homemade casseroles for staff to take home and share with their families.
• Hand out gas cards for $20 to each employee during a staff meeting. As you do, point out something special that each employee has done during the past month.
• Write a thank you note to each employee as a way of demonstrating your appreciation for a job well done; alternatively, send a note of appreciation to each employee’s family expressing your appreciation of their hard work.
• Most importantly, take the time to say “thank you.”

When choosing incentives—and there are as many as you can imagine—opt for the ones that best fit your management style. You’ll find that hiring right and offering simple-but-sincere rewards are far more effective in the long run than fancy (and expensive) incentive plans. And, a splash of creativity never hurts.