Pay that motivates your medical practice staff

Physicians know who their best employees are — hardworking, competent, loyal and emotionally invested in the practice and its patients. They're essential to the quality care doctors provide each day and increasingly vital to ensuring a financially healthy practice that can withstand ongoing changes in health care expectations, technology and regulations.

So how can physicians continue to ensure that their practice is a place where valuable employees want to work and give their best effort every day? How do physicians know which benefits and pay increases are most likely to attract and retain quality staff and motivate other employees who may need an incentive to work harder, all while working within the financial realities of the practice?

The medical practices that do the best at human resources are the ones that can “make the most money and have the healthier bottom line,” said Reed Tinsley, a Houston accountant and health care consultant to physicians and medical practices. “You don't have the turnover. These practices have employees who are motivated every day to come to work.”

“As [Affordable Care Act] changes continue to be implemented, having a really good work force becomes really important,” said Kevin Haeberle, senior vice president and senior adviser at INTEGRATED Healthcare Strategies, a health care consulting company in Kansas City, Mo.

To keep and attract those employees, having competitive salaries matters. But how money is paid out matters in employee motivation as much as what is paid — both for the good of the practice and its workers.

“Traditional motivational tools” — across-the-board employee pay increases, for example — “may not work and may not be the best use of resources,” Haeberle said, especially given the evolving physician practice business model and changing employee demographics and priorities.

Merit incentives

Instead of straight pay hikes, thoughtfully planned and executed merit raises and benefits, which can provide financial and other rewards to employees for meeting specific goals and expectations, may be a better option.

“The problem with money is that it's hard to give big, across-the-board raises when reimbursements” are diminishing, Tinsley said. “Most physician practices are still very small. That's where you get into the merit raises. You are paying for a good performance, and that's where it all starts.”

Unlike cost-of-living or other standard annual raises, merit incentives give extra rewards to employees who are performing optimally and don't reward those who aren't. “It's hard to give 100% when you're sitting next to someone earning the same and giving 50%,” Tinsley said.

Haeberle said merit incentives can be distributed in addition to, or in lieu of, a standard, across-the-board raise. They also can be based on a “fairly basic” or highly sophisticated structure.

“The most effective methods are more sophisticated,” Haeberle said. “They tend to go beyond, 'I'll give you a 1% increase if you meet specific expectations.'”

First, a merit raise or bonus needs to be at least 2% of an employee's salary “to alter their behavior,” Haeberle said. You want to provide “concise expectations of what you expect the employee to achieve and how you expect them to do it.

Instead of just saying, “I want you to file the records properly,” a better goal would be: “We need to get the bills out in 25 days. If we get them out in 20 days, that helps our efficiency. If you do that, I'll provide you with an additional incentive.”

There should be a limited number of expectations. “We recommend less than five on which you are going to measure their performance,” Haeberle said. For example, “they may have 50 job duties, but we're going to look at four or five that are really important. If you excel at these, we will give you extra value.”

Employee-specific incentives

Haeberle suggests offering an individualized merit program for each employee, or allowing them to choose from a “cafeteria plan” of various incentive options.

“To ensure fairness, you want the value of the options to be the same,” Haeberle said. “We're going to give everyone a 2% raise if they meet these expectations. But then offer different options” — continuing education, extra vacation or cash.

“Nonbenefit salary perks can work very well, understanding that all employees have a personal life outside of the work environment,” said Steve G. Takacs, the administrator at Nigro Dermatology in Houston, a six-physician, two-location practice that uses these incentives. “Perks must be consistent across the board, avoiding favoritism at all costs.”

Generational changes in the work force demand that physicians offer a broader range of incentives, Haeberle said. Younger employees may be motivated by different incentives, and the physician “may have to get out of his or her comfort zone” and be open to alternative benefits.

For example, “We find that a lot of younger people are not motivated by money,” Haeberle said. “But they could be by a conference, a class or time off. … If you can afford it in your practice, someone having an extra week won't be too taxing on other staff. What you're trying to do is to get people to achieve at a higher level.”

Perhaps a staff member would like to become a certified coder, and the practice could agree to pay for an education program if the employee meets established goals, Tinsley said. “It's hard to invest in staff training if collections are going down, and there's always the risk that you could invest in someone who then goes somewhere else for more money. But my philosophy is that you have to roll the dice.”

Alternative incentives may be necessary for long-term employees.

“If you give constant raises, especially if you have longtime employees, at some point you've got to tell them that they've hit the ceiling.” Tinsley said.

He said other incentive options include providing a team bonus for improved processes and outcomes. For example, “if you collect so much money this month, everyone will get a piece of that.” Or, patient surveys with specific outcomes could result in an all-staff bonus or other incentive.

“Maybe it's $5,000 divided up among employees,” Tinsley said. One doctor Tinsley worked with gave his employees a four-day cruise.

Activities and outings that “create camaraderie among the group,” such as sports teams, happy hours and lunches, are valuable. “Something to decompress and also to create that sense of team, which I find that you don't always get in medical practices,” Tinsley said.

Haeberle said: “Sometimes the incentive can be as minimal as casual Fridays.”

Employee-designed bonuses

If physicians don't know what will motivate employees, there is one sure way to find out: Ask them.

Research may be needed to determine the incentives that might best motivate employees in your practice, or what to include in a cafeteria merit incentive program, or both. For example, offering educational reimbursement may not motivate some employees, while others might embrace it. “For some people, these incentives don't make a difference to them,” Haeberle said. “If you provide it universally as a benefit, it loses its incentive component.”

A survey, either paper or electronic, can determine employee incentive priorities or employee views on benefits, office work flow and procedures, Haeberle said. “With a survey, you're taking an emotive response and turning it into something tangible.”

Haeberle said anonymous surveys “tend to provide a more honest response. Most people are designed to please, especially in the workplace. If it was an anonymous survey, and you had a really tough day, you might respond much more accurately.”

A survey can be short yet still provide “a detailed response,” he said. For example, a survey could ask staff to rank or to pick the top three out of 10 proposed options for an employee incentive plan. It's usually better to ask employees to rate their feelings on a scale rather than ask open-ended questions about salary and incentives.

An outside consulting or research firm may be beneficial for large practices to gauge and articulate more specifically employee feelings about work processes, salary, pride in employment, motivation and other issues.

In the end, consultants said, retaining and motivating employees often comes down to the golden rule.

“If you look at surveys about what motivates employees and provides job satisfaction, money always comes in second,” Tinsley said. “What always is first is recognition. You have to give that recognition. You have to tell people that you appreciate them, that they're doing a good job.

“When was the last time a physician took a group of employees — lower-tier employees — out to lunch” to thank them for their contributions to the practice? Tinsley asked. “And then during lunch, asked these employees, 'By the way, what doesn't work well in the practice, and tell me how you would propose to fix this?'

“I met with a physician last week who said he didn't know the names of many of his staff,” and “that doesn't bode well,” Tinsley said. “A lot of this is basic leadership. If you create that atmosphere where people feel appreciated, you can minimize the turnover and increase retention.”