By Steve Sunder
August 12, 2020
Incentive plans work best when they are meaningful to both employees and practice owners. Eyewear capture rate is a key metric for most practices. With offices reopened and providing routine care again, here is a way to increase optical capture rates to drive practice profitability.
This approach is based on a strategy from one of the practices where I worked. We set capture rate goals, and then implemented a three-tier employee reward plan based on those goals.
Creating Known, Valued & Specific Goals
According to Expectancy-Value Theory, incentive programs achieve the highest return when the reward for achieving the goal is known and valued. You need to determine what you most want to achieve in your practice that employees can help you achieve. Be specific, because in compensation, it’s not what you wish for, hope for, or even plan for; it’s what you pay for.
Zero In On Most Meaningful Goals
The incentive plan will work best for you and your employees if you set goals that are easily understandable, and which will have the most impact on the practice. In one of the practices where I worked, the executive team and I identified a critical success factor of the business…that being the optical Rx eyewear capture rate. My financial models showed if we achieved 80 percent of our capture rate objective then we would meet our financial projects as set in the budget.
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All staff had a voice and an impact on directing patients to the optical, not just the provider…from the front desk to the technician. We established a baseline capture rate and calculated a three-tier capture rate objective that the offices were measured against. The lowest level of success received 1 percent of budgeted program monies, level 2 received 2 percent and level 3 had a big kicker for their success so that they received 4 percent. This kicker played well and fit the Expectancy-Value Theory so that staff performance was to always strive for the highest level.
Ultimately, the outcome of our capture rate incentive program was a success so that each staff member received additional compensation for their achievement each month and my budget projection was achieved.
Incentives on Monthly Basis Work Best
I have found that incentive programs work best when they are tied to monthly budget objectives, or goals like boosting capture rate. If the reward timeline is set too far in the future then the enthusiasm for achievement will flag.
Communicate with Employees
Doctors and administrators should hold meetings with staff members to go over the intricate details of a new compensation plan – when people are informed, they will be less likely to jump to conclusions or become irrationally upset about possible changes to their paycheck. The program must be presented in plain, easy-to-understand English, including what the plan is designed to do and what your expectations are for employees’ performance within the plan.
Use “SMART” principles (specific, measurable, achievable, realistic and time-bound) to set the objectives of the plan. These objectives should then be communicated in detail to staff so there is no ambiguity.
Don’t Forget Non-Monetary Rewards
Monetary bonuses tied to specific goals like improving capture rate are powerful, but non-monetary bonuses also can be effective.
Non-monetary incentives can be used if staff let you know that, in addition to money (or maybe even instead of money), they would be inspired by the chance to be rewarded with your practice paying for continuing education classes, sales training classes or a free trip to an off-site continuing education course. One of the practices where I worked extended the continuing education to highly performing employees with a certified speaker in an off-site meeting.
Other ideas for non-monetary bonuses: One pair of completely complimentary high-end eyewear for a highly performing employee or a family member, additional paid time-off or a gift card to one of the employee’s favorite local businesses, such as a restaurant or spa.
Steve Sunder, who is newly retired, was a health-care consultant with over 20 years of experience in the eyecare industry at a multi-location practice, and as a consultant to other practices. To contact him: steve@sundervisionsolutions.com
