Jennifer,
I would like to roll out an employee incentive bonus. If I plan on paying a base, how do you recommend I think about establishing a threshold?
Thanks,
Dr. N
Answer:
Good question, and one with a varying answer….The threshold you establish will, of course, impact the percentage you pay on the bonus. A rule of thumb I see is 2.5x the Base as a threshold and thereafter a generous bonus percentage (30-50%), speciality and experience dependent. With a lower threshold (1.5-2.0x the Base), I expect to see a lower %, perhaps 15-25%. Of course what you are paying off of makes the world of the difference also…are we talking gross collections or net collections? If net collections, then, collections net of what? What are you taking off the top? Refunds? Repayments? Consumables? Labs? Practice expenses? Malpractice? The devil is in the details. Let’s be thoughtful before roll out. Hope the above considerations start you on the right track.
