As times change, so do notions of bonuses

Practice Management. By Mike Norbut, AMNews staff. Nov. 24, 2003.

With the end of the year approaching, your employees might have that certain look of expectation. The holidays traditionally mean bonuses, and physician employers in the habit of handing out extra checks every December probably know the look well.

But as profit margins shrink, bonuses of a size to which workers are normally accustomed might not be in the cards this year or in the future. However, health care consultants have said changing the notion of the bonus, either by not tying it to a specific time of year or by using alternative methods of showing appreciation, can maintain high office morale and encourage employee loyalty.

"Our feeling is, if bonuses are expected, they're not appreciated," said Mike Fleischman, vice president of Gates, Moore & Co., a consulting firm based in Atlanta. Fleischman told of an Oklahoma practice that used to give employees a $500 bonus every year, but one year physicians could afford to give only $100.

"Now you're a bad guy," Fleischman said. "And the next year, it got really bad. One of the doctors killed one of his cows and handed out beef to the employees."

Often, a physician will have a good idea of the practice's financial performance before the last few months of the year, and consultants said being honest with employees as early as possible helps soften the blow of missing or reduced bonus checks. If that news is coupled with a different, less expensive perk, like a holiday party, and explicit plans for the upcoming year, it can help ease the transition to bonuses that are less time-dependent, said Helen Hadley, president of VantagePoint HealthCare Advisors, a firm based in Hamden, Conn.