$80K Plus Benefits Isn't Cutting It Anymore: Rethinking Bonuses And Compensation

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$80K Plus Benefits Isn't Cutting It Anymore: Rethinking Bonuses And Compensation

A quick heads up for all the audience, if you've been tuning in to the show for a while you know that it took me at least ten years of grinding in my own clinics before I finally figured out how to scale and sell my four practices for seven figures, and about three times the national average. The biggest shift wasn't some secret marketing hack. It was how I thought about profit, systems and my role as the owner. That's exactly what we're going to be working on together with you at the High-Performance Practice Conference in San Antonio, Texas from October 15th-17th.

Adam Robin and I are hosting a three-day hands-on event for PT, OT, speech, mental health, peds, pelvic floor, and medical practice owners who want to build clinics that are profitable, scalable, and best of all don't depend on them 24/7. We’ll dig into simple profit and KPI frameworks, real leadership and culture work and practical systems you can take home and plug in with your team.

If you're doing roughly 6 to 7 low figures a year and you want your client to feel more like a real business and less like a job/cage, I'd love to see you there. Frankly, I'd love to see you bring your leadership teams as well because we will have breakout sessions for them, too. You can get all the details and grab your seat at the link. Let's get into our episode.

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We’re talking about bonus incentive programs. Adam and I were talking about this before we started, and it's not a strength of either of ours. We have some bonus and incentive programs that we've used in the past. What we’ll say is they're a lot of ways to get a bonus. There's 1,000 ways to do it. All of them could work. All of it depends on tracking your metrics and seeing if it's creating the response that you want. Since we're being a little bit honest, we're not the best when it comes to bonus and incentive programs, but we can talk about them. We've used some in the past.

If you want to learn more from other people about what they're doing for bonus and incentive programs, then come to the October event. Come to our High Performance Practice Conference on October 15th-17th in San Antonio. Go to PPOClubEvents.com in order to register. Bring your leadership team with you so you guys can divide and conquer as we're doing breakout sessions. We won't have one main stage like we've done in previous years. We're going to have multiple presentations going on at the same time.

You'll want to bring other people to join you so you can make sure you get the most value out of it. Also, help your leadership teams, administrative teams give you support that you need so they can see what you're learning, see what you're learning about and what you want to implement and have opportunities to discuss how you want to improve your businesses. Most importantly, you get to talk about or talk with other owners who are going through some of the same issues that you're going through and see how they've overcome those things.

That networking aspect is one of the most important ones. As we're talking about bonus and incentive programs, the overarching thing is we're looking for ways to incentivize people to be productive more than just clocking in, clocking out and seeing the number of patients that we're expecting you to see and go from there. Also, giving them some excitement, fulfillment, some target to reach for or to shoot for so. That's the overarching aspect.

The other thing I would say is, it doesn't always have to be financial. When we're looking at bonus and incentive programs, I remember we had some bonus programs for our providers if they hit certain metrics. There are also goals that we had as a team. Say for example, we hit a certain number of visits in a certain month and I left it up to the team to decide, “If we hit a certain number of visits in a given month, what do you guys want? Do you want a TV in another room? Do you want a bigger TV? Do you want snacks in the fridge? Do you want lunch at X, Y, or Z or certain drinks or protein drinks? Whatever.”

You see how we can make up anything. If you talk to one of our coaching clients, one of her bigger incentives was everyone gets Hokas. That's what the team decided. It was like, “If we hit this goal for the quarter, we want Hokas.” That was their goal, and they met it. That was a team incentive. The first thing I would say is that it doesn't have to be an individual goal and incentive program. These could be things that you're also doing as a group and as a team. Have you done anything like that? Have you done any group or clinics specific incentives?

We've done some stuff and we've had success with some and not so much with others.

I'm glad you said that because it's important for people to say or people to know that we've tried stuff and sometimes it doesn't work and that's okay.

We’re not great at everything.

We're great at a lot of things, Adam, but just not everything.

I'm great at one thing, especially my mom. She thinks I'm great at everything. I can tell you. I do believe in a few basic principles that are worth mentioning. Number one, at the end of the day, why does the bonus exist? Maybe that's a good place to start. You alluded to it, which is we're trying to align incentives with the human behavior that we were after. The one that is beneficial to our patients and our customers and also to the business. If we can align incentives, then that will create motivation and behavior change.

Building Culture Before Financial Incentives

That will create a shared win across the board. In order to create behavior change, there's a few layers to that, but we want to create the intrinsic motivation. If we're going to build a bonus program, it's important to, first, make sure that you have a strong culture, strong mission, vision, and values that are foundational elements of intrinsic motivation within your company. That's more important than trying to hang an extra few dollars in front of people who aren't fully bought into the mission and vision values.

If they're not already bought into the purpose and the values of the organization, they'll probably be temporary changes just to get the carrot lasting.

Money is a tool but you can't just hang your hat on that like it's going to solve all your problems.

Not everyone's incentivized with money.

Establishing Baseline Metrics First

Correct. There's all the extra motivation. As you said, it could be financial or some type of reward. That reward is the behavior. That's number one. Number two is, you have to make sure if you're going to create a bonus program. That's awesome but also, you have to know your numbers. You got to know your metrics. Otherwise, it's going to end up costing you more money. There's a foundational element of knowing your numbers, knowing your Breakeven, what's your average reimbursement per visit, and what are your productivity standards.

Having those things buttoned up is a prerequisite to even considering a bonus program. You have to have a strong culture and strong metrics. Those are two things. Otherwise, don't talk to me about bonuses. Number three, you taught me this, Nathan. Sometimes, as PTs or rehab professionals, we tend to have self-sabotaging behavior. We want to give and give.

if I give more, they will do more.

Rewarding Abundance Beyond Minimum Expectations

Maybe they'll like me and maybe they'll care a lot. I get it. I'm with you. That's an expensive behavior, though. When you have your numbers dialed in, what you want to try to recognize is that bonuses are only meant for that, which is exchanged it in abundance to the minimum expectation. Establishing that that floor first. Only because they barely picked their head over the floor, doesn't mean they're in bonus territory yet. You want to create a 10% buffer for a rainy day. It's called savings. You got to have that buffer built in before the bonus kicks in. Only the abundance of exchange becomes bonus territory. I think those are three principles that are worth considering.

I'm glad that you've broke them down like that because you're absolutely right. It's necessary that we have those things in place before we even consider what bonus structures we would want to offer. I talked a little bit about the team incentives that we could offer. Those are pretty straightforward. They give us some focus and some energy if we do it right. Say for example, arrival rate is 75%. Horrific. You want to get it to 90%., In that situation, maybe the initial bonuses come as we move up the ladder. I'm just speaking off the cuff, so don't take this as the gospel truth.

Maybe there are small bonuses along the way until we get to 90% or above arrival rate. At some point there, whatever we did to get to 90% arrival rate, now needs to be the new expectation going forward. We're not going to bonus you now. that you stayed at 90% forever. If you stay above 90%, you get to keep your job. If you get above 95%, that's when a bonus can kick in and maybe you spike occasionally and get above 93% or 95%. We can get bonuses on that.

Keeping Bonus Calculations Simple

That's one way to look at it when we're looking at group incentives. It's the same case for individual incentives. If I will say when it comes to provider incentives or even front desk incentives, my number one rule is to make the bonus as simple as possible so they can calculate it at any time and how it's going to impact them. If there are some formulas that they have to navigate, put down on paper, use AI to help them figure it out once they put in the data to pop out an answer. That's too complicated and it loses its luster a little bit or its impact and its power. The number run rule that I have is, it's going to be something that is pretty simple. That goes back to rule number two, for you, which is to know your metrics.

When we did it back in the day, we recognized that every provider had hit a certain number of visits per week. We went off of visits per week. You can go off of say utilization, I think would be a proper KPI to go off of if you want to. Some people go off of the number of build units per week. It’s fine. I'm cool with that as well. If they get above a certain number of build units, then they get a bonus. It's all the same thing, but pick your KPI and go with it. What we found and what everyone needs to find no matter the KPI is, what is the baseline expectation.

We've done episodes on this before. What is the breakeven? What do they need to generate? What do they need to produce in order to not only cover their expenses, but cover more than their expenses because we're going to build in 10% profit on their expenses because there are fluctuations in our businesses. What they produce plus 10%. We agreed that it was an X number of visits that they needed to see per week. That was the baseline expectation. If you fell below that, we had conversations about what you needed to do in order to get above it. If you consistently fell below that, you were invited to leave.

We did exactly what she did, which is, you get 10% above that, now you're getting $50 per visit or something like that. We gave them X number of dollars for the visits above that to recognize their work that they took on. Not for the ones that got up to that. Maybe they stayed a few couple extra hours. Maybe they filled in and did cover vacation times for people. We wanted to recognize that they worked harder as long as they hit certain metrics.

The second part of it was, you can't just do more in sacrifice elsewhere in order to hit that metric. What do I mean by that? Our KPI was visited. That meant they needed to hit a certain number of skilled units per visit in order to get that bonus as well. You couldn't see the number of required visits and only build two units at a time. We're shooting ourselves in the feet. We're not making any money at all. You had to hit at least the four skilled unit metrics per visit.

Those were qualifiers that we had in there. By the way, if we went off of visits, we counted initially viles is 1.5. I know some account initially the viles is two. They hit that metric, they hit the number of skill units per visit and we were good to go. They got their bonus and got paid out by weekly. Here's the other thing that we decided to do. We wanted to give this bonus program, but we don't want to do a lot of work to get it. Here's the spreadsheet. You fill in your numbers and calculate what your bonus should be.

You turn it into your clinic director. They verify it sign off on it turning into payroll in time if you want that bonus at that for that payroll date and the bonus was done. I never saw it. It was between them and the clinic director. Occasionally, we check in on it, do an audit, but they figured it out. It was no more work on my end. That's how we did it. I don't know if you have questions or anything to add to that.

It sounds good. That's good as well. Getting your team to hit those minimum baseline expectations is a job in itself. If you're trying to roll out a bonus program just to get them to hit expectations, that's a good sign that it's not going to work. Something's off. Either, there's a scheduling issue at the front desk. It could be a systems issue. It could be a cultural issue.

Maybe you didn't do the work ahead of time to match up their salary with what they needed to cover and visit.

You have to get that model. You have to get that foundational piece right. That can be a heavy lift. It could be a heavy lift.

It takes some work, especially if you're not a numbers person. You're doing yourself a disservice if you're not leveraging like a bookkeeper or a CPA. Reach out to forums like ours on the Facebook group to see what other people are doing. There are ways to do it out there. I'm sure there are plenty of ways that people share their metrics or their spreadsheets and whatnot. Our bonus system has been going on almost ten years now, so you can't reach out to me personally. Otherwise, I would be happy to share that spreadsheet, but it was rather simple.

You just have to make sure that goes it back to your knowing the metrics. You have to make sure that whatever they're doing is above and beyond the expectation to just make a margin of profit that you expect. If you're having to incentivize them to see 40 visits a week and you're paying them $120,000 a year. Going back to your example, there's something fundamentally wrong at that point. It's going to be hard.

The puzzles are not going to work there. We're piecing things together with duct tape. It might get you through a season but it's not going to be a long-term solution for you. That's coming from somebody who's tried that before. That's probably a big reason why some of us have failed. You have to get that right first.

I know there are some people. I won't say these are the only ways to do bonus programs. There are some people who will do some profit sharing. That usually comes about on a quarterly basis. People might know that they have a certain percentage of whatever they produce. That's above a minimum expectation that is shared. You get above a certain point and then the owners will share 10% or 15% of what you generate your revenue with you and a quarterly check. That's another option. There's 100 ways to do it and none of them are wrong. You just want to make sure it gets you the behavior that you want.

You have to understand the type of team that you have as well. Another thing that I've seen people do and you probably know where I'm going with this but for the people who nailed this down. At least the way that I've seen it or described it is, they're shifting a little bit more of the risk over to the employee. They'll maybe pay a smaller base pay. Maybe you don't get a $90,000 per year salary. It's like, “If somebody shows up or not, I'm still going to get paid $90,000.” I've got a level of comfort. There's not as much urgency there, but if I say, “Why don't we shift that down,” to let's say $70,000 or even $65,000 a year or even less and say, “That's going to cover your first 20 visits a week or 30 visits a week. After that, you can get paid by the visit. We could split it,” or however you want to do it.

Some kind of profit sharing or revenue share.

There's a trade-off. There's pros and cons there. You don't have to do it that way. For the right person, let's say you have a therapist who's in your practice, who's got an entrepreneurial spirit. They want to earn money. They are money motivated, which is not everyone, but there are some people. That might be perfect for them. They're like, “Let's get paid. I want to try this value,” and they're willing to absorb that risk and willing to bet on themselves a little more for a higher earning potential.

With that shift and risk, you don't have to track and put production on this person as much. You don't have to harp on them as much. There's a lower administrative burden or leadership capital that's going to have to be deployed on this person. It's almost an independent contract for your field. With that shift and risk, you would want to give them a bigger upside potential. Maybe their cap is not $90,000 at that time. Maybe it's like $100,000. Whenever the clinic has to shut down for a snow day, they're not getting paid.

Shifting Risk For Higher Earning Potential

They're absorbing some of that risk as well. I've seen that work too, different levels of that. The main principle there is, at least the one that I've tried to wrap my head around is, the more risk you shift over to the employee, the bigger the upside. The more pressure they're going to feel and the bigger the upside that they should be able to achieve. There can be a level of that as well.

I've done a couple episodes because we talked about this in our group call with our coaching clients and shared those episodes via email. It goes back to like 2021 or 2022. I talked to Jason Wambold of OnusOne. They've since been acquired by Prompt. If you're a Prompt user, you can talk to Jason and see what they have to offer, but Ryan did it on his own. Again, he went back to doing some metrics.

He was like, “What if I gave these guys a $40,000 base salary and then I pay them $35 a visit above their 20th visit?” I'm throwing numbers out there. He did the metrics, so it worked out, then their earning potential is unlimited. It’s like, “You want to work Saturdays?” “If we find the front desk people.” “I'll cover the front desk. Let me work Saturdays.” Go to it. If I recall, don't hold me to it, but Ryan takes paid time off the table. More risk, but what do they end up doing? They end up stacking their schedule the week before and the week after.

They can take a day off to go to the doctor or the dentist or spend time with their kids, and they'll stack the day before and the day after to make up for that because they know that if they're not working, they're not earning. Whereas in a typical salary situation, if they're not working, they're still earning. The same thing. They're almost disincentive. They're not incentivized to see as many people as possible. That's another way of considering. Is it a bonus?

It's just an alternative compensation model that can allow people to make more money. I appreciate that you said it doesn't work for everybody, but what my friend did was he did the performance. He did the extrapolations and said, “If I give you this base salary and I give you this dollar amount per visit,” and this is all okay with him. He's still generating the margins that he wants to see.

He worked that all out and showed them, “Instead of making $80,000 on this alternative compensation model, you would have made $87,000 last year. I'm cool with either one. If you want to stay at $80,000, fine but these are my minimum expectations for you. If you want to go to $87,000 or if you want to earn more, just put in a little bit more effort, maybe you make $90,000 or $92,000.” This is an opportunity for you.” That is a way to also incentivize with different compensation models.

If you want to get creative, it might go with your principle of simplicity. I tend to be somebody that over complicates things. I know what you're saying about if you have to formulate and all that. It could backfire on you. Even if you created a thing where it was like, “You've got a small base.” Maybe everything after that number of 30 visits a week, let's say. Visit 30 through 60 with paid at $35 dollars an hour right, but anything over 60, might pay $50 per visit or something like that. They're even more incentivized to be more productive.

If you're going to start doing some of these things, I would reiterate that you might want to bring in a financial person to help you out like bookkeepers or CPA, someone who knows numbers on how to project, extrapolate, how these numbers are going to affect you and your business and the team member that you're talking about. Now, have you done any front desk bonus programs?

Yes, and my experience has been, those are way easier. We have a front desk team that are killers. They're so good. They're very driven by the numbers. We did one where we created a formula. I went up to the front desk and said, “If we were to hire like a rockstar front desk person and they were everything that they needed to be. They had to have skills. How many visits a week could they independently manage in this front desk?” They were like, “140 or something like that.” I don't remember exactly what it was.

One person, full-time, 140 visits a week.

Designing Front Desk Productivity Incentives

Anything beyond that, you're going to need a VA. I was like okay, great. I had 10%. Anything above that, we're going to start a bonus program. Our bonus started at 150. Anything above 150 per FTE, we created a pot of money for that front desk to be distributed down. That became very motivating for them.

If we did front desk bonus programs, it’s usually tied to arrival rate. Unfortunately, that can get manipulated different ways. If they tend to delete someone off the schedule, then it doesn’t count as a negative against their arrival rate. It worked but there was a way to manipulate it, unfortunately. It would be a lot easier to track over the counter collections rate and bonus them.

There's another guy that I know that does one where he says like, “Anytime you collect over the counter collection payment, you get $5. Whatever it is.” It’s because he knew his average over the counter collection. He had it, and that works for him. He's got like 30 clinics, so he knows what he's doing.

I would hesitate on that particular metric because my expectation is you're going to be collecting 99% of your over-the-counter collections every day anyways. There's not a lot of wiggle room to bonus off of that. If one of their key metrics is total visits per week, like based on our number of providers, one of their key jobs is fill the schedule, then that's totally in play. If have the capacity to see 150, that's if everyone's running at 100% utilization rate. Maybe the baseline expectation is 80% of that. If you hit 90% of that, now we can talk about bonuses. Maybe it's a just a flat $100. Sometimes, it's a little bit easier to incentivize them.

We had $50, $100, and $150, which is three different tiers. If you were 10% above expectation, you got $50 or if you were 15% above it. That's how we do that. One other thing that I want to speak to, which is important, is that I feel like we've had conversations about the necessity of the way that private practice works is going to have to change. The way that we compensate our team is a part of that. It may not be today, but within the next couple years, especially as it's becoming more challenging to attract clinicians to your practice with like, “$80,000, plus benefits.” That’s not cutting it any more.

We have to do a few things. We have to create compensation structures that allow people to earn more. In order to support that, we have to create revenue streams inside the practice that can support that. Also, we have to have programs that train are providers on how to leverage those revenue, how to get the most. We have to teach them how to sell, sell a plan of care, and how to build. We have to train them on how to be good at their job so that they can earn more. We have to help them earn more. In my opinions, that's that I'm focused on in my practice. I'm like, “How can I help my providers earn more? What do I need to teach them? Think about that.

Boosting Revenue per Visit to Pay Teams More

It goes back to what we were talking about, is, how can I generate more revenue in my clinic? If we can generate more revenue on the whole, not just by seeing more patients. That's not what I'm saying. These bonus opportunities are significantly greater. There are many more opportunities to earn more, do more, and become more. That just opens up the opportunities. It goes back to what we were saying. A lot of doors open up and the way we can incentivize people is when we can figure out as owners how to generate more revenue per visit.

I would say that's probably the most important thing that we want people to walk away with at the conference in San Antonio 2026. I had this conversation with my team. You have two options, and you sent me a cool video that highlighted this. You can keep playing this game of, “Keep taking all the insurance is, cut costs and raise production.” You can keep playing that game. There's nothing wrong with that, but you will hire less and less therapist every year over the next 5 to 10 years until you were the only one left.

You are running around by yourself with a bunch of texts in a building full of patients. I've seen it happen. It will happen. It's going to happen. Maybe you can decide, “I need to shift. I need to learn some different skills. I need to learn how to market, sell and create more revenue streams and build a landing page and sell high ticket like sell cash pay services.” It's going to be vital for your team and your company. You should consider coming to the conference.

We'll talk about it definitely, so come to the conference. Go to PPOClubEvents.com, the High Performance Practice Conference. We’d love to see you guys there. We'll have some awesome speakers and great discounts. I said bring your team leaders. There is a $100 off discount if you bring your team members. There is a spousal discount. After you personally register, you'll get an email with other discounts to register the other people. Make sure you look out for that but join us October 15th-17th in San Antonio. Good talk, Adam. For a couple guys that don't know much about bonus incentives program, we spent a lot of time on it.

We're on the journey of learning.

We have something to share at least.

That's right.

It sounds good. Talk to you later.

Important Links 

• Adam Robin on LinkedIn
• Nathan Shields on LinkedIn
• PPOClubEvents.com
• Jason Wambold on LinkedIn
• OnusOne
• Prompt