Should You Give Your Staff Bonuses? How Much?

Greg A. Hood, MD


November 29, 2018

In This Article

Christmastime, Bonus Time?

The end of the year often means the start of anticipation—both among medical practice employers and their employees—of holiday bonuses.

While the majority of larger firms do give bonuses, it's less common in smaller offices. In 2016, a survey by American Express found that 80% of small business owners and 87% of middle-market companies across industries were planning to give bonuses. And the majority of small business owners (54%) said their employees could anticipate something equivalent to "a small stocking stuffer," or less than 5% of their annual salary.

Last year, another study reported that only 63% of US human resources or hiring managers indicated that their company planned to give monetary holiday bonuses, down from 75% in 2016.

Of note, where this ritual is practiced, it is essential that this time-honored tradition be more than just a perfunctory expectation upon the part of employees. Done properly, it is an important way of demonstrating to employees that their services are sincerely valued and remembered.

Bonuses Show Respect, May Help Quality

Running a medical practice has been getting tougher and tougher for many years. There appears to be every reason to believe that this will continue to be the case.

It is therefore essential that the employees who help make the delivery of care through your practice effective perceive that the physicians recognize, respect, and honor their efforts. With a relatively greater proportion of practice revenues being tied to physician performance as measured by patient outcomes, it can be wise and appropriate to tie employee bonuses to their own performance-based measures.

In so doing, a holiday bonus program can further the practice's quality goals and objectives. If your practice is not in an economic condition at this time to give bonuses, it may be an appropriate time to announce the structure and details of a bonus structure for next year. Doing so can be a major step in refocusing the staff on practice priorities.

There are enough difficulties involved in finding the right gift for family. Making the right impression on your "second family" is no less difficult. It is essential that giving bonuses does send the wrong message to marginal or uninvested employees, in contrast to those that are given to productive employees.

Although it would be greatly destructive to office morale if any employee is entirely excluded, it is essential that a reward not be based merely on the lack of having been fired, nor upon the consecutive streak of years within which one has avoided being fired. Certainly, employees receive compensation every payday for their efforts, but extra attention at this time of year, done correctly, "means a little bit more" (to quote Dr Seuss in a Boris Karloff voice).


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