The Benefits of Staff Bonuses
When patients walk into a medical group's office, the first people they meet are the staff members. Studies have shown that with today's managed care, patients spend most of their time in a medical practice interacting with non-physicians, from front desk staff to nurses. So it's important that staff members be motivated to provide the kind of quality service and care that keep patients coming back.
Paying a competitive salary and providing a basic package of benefits are a start but they may not be enough to ``incentivize'' your staff to go the extra mile for your patients. Some practice groups have set up bonus systems to help increase staff satisfaction in the hopes of reaching higher patient levels. Others have pegged bonuses to collections of past due bills, which adds directly to the practice's bottom line.
Such bonuses don't have to involve big outlays of cash. There are plenty of other ways to reward staff members that don't put a large dent in a medical group's profits.
In addition to keeping patients coming back, a satisfied staff can add to the bottom line by cutting down a practice's turnover rate. With the shortage of health care staff being forecast nationwide in the near future, as well as the cost of replacing an employee, it pays to hang onto every one of your experienced and talented staff members.
Motivated employees also continue to provide a steady source of patient referrals while keeping the existing patient list smiling when they show up in the practice's waiting room.
When deciding on a bonus plan, it's a good idea to ensure that all of the group's employees are eligible for the incentive. This eliminates any claims of favoritism or potential discrimination lawsuits. It also keeps all staff members motivated, which is the ultimate goal of the program.
The obvious way to pay bonuses is with cash. Such rewards can come in lump sums at review time or in smaller amounts throughout the year. Employees always appreciate it when their paychecks are unexpectedly larger than usual.
There are, however, tax considerations. Monetary prizes, awards, bonuses and gift certificates, including achievement awards, are generally considered taxable compensation subject to federal and state income tax withholding, unemployment tax and FICA taxes. Prizes, bonuses and awards that involve goods or services, such as a vacation trip, also generally result in taxable income.
However, "tangible personal property" awarded to recognize an employees' length of service or safety achievement is not taxable. There are strict rules to follow for tax-free treatment that are described in the right-hand box.
When to Give
You probably don't want to wait until the end of the year or an employee's anniversary to reward superior performance with bonuses. Recognizing staff members' strengths and weaknesses on a more regular basis can increase motivation and improve performance.
There are, of course, cheaper ways to recognize employees for hard work than just handing cash. Physicians can simply stop during their over-scheduled days and thank staff members for their efforts. A simple thank you or a handwritten note of praise makes employees feel appreciated and more likely to try harder in the future.
Other bonus ideas can involve free movie tickets, birthdays off with pay, staff lunches or weekends away at a bed & breakfast. Some practices have offered each employee a day off in December to do holiday shopping.
One way to decide what bonuses are most attractive to your staff is to ask them. It's possible that they'd rather have lower cost options that fit their lifestyles.
For example, one medical practice routinely provided gift certificates for dinner and a show as a holiday bonus for their staff. That put the strain on younger staff members, who had to pay for babysitters so they could take advantage of the night on the town. After staffers made their wishes known, practice managers replaced the dinner and theater with a staff lunch and mall gift certificates. The change saved the practice more than $1,000.
Bonuses are an easy way for owners to thank people who are integral to your practice's success. In today's competitive world of medicine, staff satisfaction can be as important as patient satisfaction.