Commission vs. Profit-sharing
Commissions should be paid whenever you can show how someone has generated revenue for the company on a consistent basis. So much that is violates the law of common sense to not have it as a commissioned role. All other positions can have a profit-sharing plan attached.
In How To Do Profit-sharing and How To Do Profit-sharing Pt 2 , I explain how to implement a system that works. The whole goal is to incentivize your team to cause expenses to go down and revenues to go up, which, in turn, creates profit. As the team starts to take responsibility for how the company is run, they begin to see increased paychecks. This creates buy-in and ownership by team members.
In a medical practice, you can easily point out the areas where the team can cut expenses. But finding increased revenues is a little harder. In pediatrics, the most effective way to increase revenues, in my mind, is to absolutely super serve the customers. There’s probably not a single parent who doesn’t know other parents with kids the same age as theirs.
Therefore, as you go over the top serving your little patients, parents will spread the word on how well you take care of their children. Like a great mechanic, every parent needs an excellent doctor, and they have no problem referring one to their friends. The more referrals, the more revenues. Super serving = happy parents = referrals = profit-sharing in their checks. The more profit-sharing, the more incentivized the team becomes.
However, profit-sharing can only go so far. The rest of the incentive comes when you consistently show your team that they are doing work that matters. They are doing something that is bigger than them. As they begin to understand, your team will work more from passion rather than just working a J.O.B. That’s when you will really start to see your business take off.
Question: How do you incentivize your team?