Bring Out Their Best by Jay Geier

Bring Out Your Best 

Steps and metrics that help create effective incentives for your team

by Jay Geier

When I ask practice owners why they don’t use incentives as part of their compensation packages, these are the typical responses I receive:

  • “I can’t afford to right now.”
  • “They’re too complicated and consuming.”
  • “I’ve tried them, and they don’t work.”
  • “Incentives are for salespeople and don’t apply to a orthodontic team.”
However, with proper planning, communication and execution, incentives work extremely well in orthodontic practices. If done right, incentives bring out the best in your people, and are win-wins for both business and employees because everyone comes out ahead.

Why incentives?

Incentives drive behavior, and not just in the sales arena— they create a performance-based culture throughout an organization.

Today’s best talent is attracted to the opportunity to do more and get more while also improving themselves and contributing to the success of the business. Incentives attract attention from—and create intention by—those in the areas that matter most, so you’re no longer the only one focused on meeting business goals.

In addition, incentives allow dentists to manage their largest fixed overhead expense—payroll—more effectively and profitably. The typical practice averages 95% fixed payroll with only 5% variable incentive-based pay; in contrast, the ideal office averages about 70% fixed payroll and 30% variable incentive-based pay. This ensures overhead increases only as business increases.

Good incentives are properly structured, well-communicated, easily tracked and willingly paid out. Keeping these few pointers in mind will keep you from making any part of the process overcomplicated.

Creating incentives

Effective incentives are healthy for a practice, and if they’re structured to ensure a win-win, they also motivate team members. Just to be clear: I’m not talking about occasional short-term contests, such as everyone on the team winning a one-time bonus if they increase the number of new patients by a certain amount in a single month. The following is how you create a true incentive-based compensation plan, which does require some up-front analysis and planning.

Step 1: Tie the incentive to a consistent, quantifiable metric the person has control over and can influence, so they can be held accountable. Incentives should be applied to everyone on your team.

Step 2: Determine the historical average you’ll use to calculate growth—e.g., the average number of new patients or average hygiene production.

Example: Determine the average number of new patients over the past 12 months, six months and three months. Then take the average of those three figures to calculate a useful weighted average.

Step 3: Set a baseline goal above the average, which is where you would begin to make incentive payments. We advise clients to set the baseline 10%–20% higher than the average.

Example: If your weighted average new patients is 25, the baseline should be 30–33 to drive growth while setting an attainable target.

Step 4: Set incremental “stretch targets” above the baseline as a tiered incentive plan that allows your team to make more money as the business grows. Assign a dollar payout for reaching each tier without underestimating how what may seem to be a small dollar amount to you is a motivating factor. For a sample breakdown, see Table 1.
Bring Out Your Best

Example: Incentivize team members to recruit other talented team members by paying $500 if the candidate is hired and another $500 after six months of solid performance.

Step 5: Pay out the incentive after the additional revenue has been collected. Only pay for achieving the target and never for an effort that fell short.

Communicating objectives

Even good incentives will fail if they aren’t communicated clearly, understood fully and bought into by team members.

  • Make it about the team rather than about you and your business. Explain that you’re doing this because you appreciate them, know you couldn’t run your practice without them, and want to incentivize and reward their continued hard work. You’re excited to provide them with opportunities to increase their total compensation by helping you grow the business! In short, if they help you make more money, they’ll make more money.
  • Get them excited about the concept by emphasizing why performance-based incentives are a win for the practice and for them. Assure them you’re there to help them learn, grow and be successful so they earn more.
  • Then explain the mechanics. If necessary, meet with team members individually to ensure they fully understand their particular incentive and baseline, and to earn their buy-in, and get them to take ownership and accountability.

Tracking progress

Incentives based on metrics that can’t be reliably and easily tracked are doomed to fail.
  • Performance data must be accurate, timely and impossible to manipulate.
  • Stats must be easy to track so people always know their status in relation to their goals. People are motivated when they know they’re on track or ahead of their goal, which gives them a reason to celebrate along the way. And if they’re falling short, they’ll have time to adjust their actions to get better results.
  • Increase ownership by having each team member create and submit a simple report that shows the final result and payout due.

Pay for results, build on success

Hand over incentive checks with a big smile and a huge “thank you” for a job well done. By this time, you’ve already collected the additional revenue from which payouts are made, so celebrate the win-win.

Set the stage for continuous improvement. Build on momentum by involving the team in setting new targets that will continue to drive business growth while providing opportunities for even higher compensation. This communicates that increased pay has increased expectations, and preempts any misunderstanding that fixed salaries have risen to a new level.

If payouts weren’t earned, don’t allow the team or yourself to feel defeated! Show appreciation for their efforts, motivate them to build on what you all learned in the process, and rerun the incentive with adjustments, if warranted.

Investing in the bottom line

With proper structure, communication and execution, incentives are an investment with a guaranteed return. If you’ve had disappointing experiences in the past or think incentive s don’t work, determine where you went wrong. Learn from your mistakes and try again—and commit to creating an incentive-based culture that motivates team members to partner with you to achieve your goals.

Meaningful incentives inspire people to go above and beyond their daily performance and give strong performers the opportunity to earn more than ever—all while boosting your bottom line.
Author Bio
Author Jay Geier  is an authority on growing independent practices to keep for a lifetime of revenue or sell for maximum value. He is the founder and CEO of Scheduling Institute, a firm that specializes in team training and doctor coaching. To hear more, subscribe to Geier’s Private Practice Playbook podcast at
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