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A Team Bonus System that Works by Michael Kesner, DDS

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Having the right team bonus system in my practice has been one of the major catalysts to my success. One of my practices’ annual production grew from $675,000 to $4 million in six years. I started a scratch practice in 2010 that went from zero to $200,000 per month in less than five months. I started another scratch practice in 2011 that went from zero to $160,000 per month in seven months. None of this would have been possible without a team bonus system.

Have you ever gone to a restaurant and been served by the owner of that restaurant rather than one of the employees? Maybe they were shorthanded that night and the owner had to pitch in. Didn’t you notice a higher level of service? Of course you did. The reason is because the owner has a high level of vested interest in the restaurant, and therefore your level of service was higher than from the non-owner employee.

The same is true for your practice. You have a higher level of vested interest in your practice than do your employees. What if you could increase your team’s level of vested interest and their feeling of “ownership” in your practice? What if your team became more like business partners than employees?

What if your employees worked together as a team to make sure Mrs. Jones’ treatment was worked into the schedule today instead of waiting until next week? What if they spent time explaining to Mr. Smith what was going to happen if he didn’t get that broken and decayed tooth fixed with a crown?

What if they were excited as they showed Mrs. Smith the veneers on their own teeth, and talked to her about how great her new smile would look if she got veneers too? What if your financial coordinator figured out a way for the patients to afford their dental work with a combination of financing, insurance and treatment in stages?

How would this impact the amount of dentistry that patients decided to do in your office? If you did 50 percent more of the dentistry that you recommended, then wouldn’t that mean 50 percent more revenue on the same number of patients? How would that impact your monthly income? How would this lower your stress level? What would this be worth to you?

The right bonus system will incentivize your team and give them a sense of ownership in your practice. The right bonus system will lower your stress because it brings a willingness of your team to take on more responsibility. The right bonus system is a win/win for the team, the patient and can make you wealthy. The right bonus system will not cost you money, but will make you money. The right bonus system can change your practice, change your life and the lives of your team.

The wrong bonus system can actually do harm to your practice and even be a disincentive for your team. Many dentists have tried bonuses in the past that didn’t work for them.

The team rarely, if ever, made bonus – or if they did bonus, the amount of money was so small that there was no incentive value. This is typically due to other issues limiting growth in the practice, which need to be fixed before implementing a bonus system.

We have also had to “unravel” many bonus systems in practices that were put in place by a well-meaning dentist or consultant, but that bonus system was actually costing the doctor thousands of dollars. The staff was taking home a great bonus while the doctor’s income was suffering.

Implementing a bonus in your office can be a bit of a “catch 22.” Your practice will have growth with a bonus, but the practice needs to be in a growth mode first before implementing a bonus. In other words, if the practice is not turning a profit then the bonus dollars will just come out of the doctor’s salary.

A bonus system is also not a “magic bullet.” Most dental offices have several other issues that need to be cleaned up first before a bonus system is put into place. For example, a bonus system will not fix the wrong employee, or weak or non-existent systems, or poor case presentation techniques.

We typically start working on several aspects of the practice first, like systems, organization, hiring the right people, efficiency, case presentation, phone techniques, etc., to get the practice revenue up so there is now income available for the bonus to draw from. Once everything is “firing on all cylinders” in combination with the bonus we very frequently see practice revenue increases in the 50-100+ percent range.

We also like to see some financial benchmarks that are close to being met before implementing a bonus system. These are production at $25,000-$30,000 per doctor and hygiene treatment room per month. The practice should also be producing around $25,000 per employee per month.

For instance a practice with four treatment rooms and four employees should be producing around $100,000 per month. We also want to see employee payroll expenses (bonus included) around 25-30 percent of collections. Payroll employee expense below 25 percent is typically an indication of a capacity blockage, and the resulting cost in lost production far exceeds the perceived savings.

Below are the basics of the bonus system I use in my, and my clients’ practices. There are obviously many nuances and variables that cannot be covered in an article, so please get some help implementing a bonus system so you get it started right. Starting off a bonus system wrong can cause some real problems.

The bonus needs to be based upon the collections of the practice, not the production. To do this we establish a base overhead figure, which is typically an average of the last three months overhead. Any revenue above that base overhead amount is profit.

We then take 15 percent of the profit for the month, which becomes a bonus pool of funds. We then take 10 percent of this pool of funds and put that in a CE account, and the practice matches that amount. This allows the funds for the team to take nice CE trips throughout the year.

The remaining pool of funds is then split up amongst all the team members based upon their hours worked that month. Typically the front desk team members stay a little longer every day than the clinical team members, so they will receive a larger portion of the bonus.

The bonus must be calculated and paid monthly. Anything beyond that makes the team wait too long. Your team needs instant gratification. It is also important that everything is open and “above board.” Each team member needs to see how the bonus was calculated each month and how much of the bonus each team member received.

Here are some of the pitfalls I see with bonus plans that don’t work. One is having a revenue goal that is too high and the team doesn’t believe it can be reached. The result is a feeling of being defeated before even getting started.

Another pitfall is reaching the bonus, but it is such a low amount, it is not motivating to the team. For instance a bonus of $50 a month doesn’t carry much incentive, but a $500+ bonus does. This is a substantial amount of money that makes a meaningful impact in their lives, and therefore incentivizes them to go the extra mile.

One problem that I see often is when the team makes bonus, but the doctor begrudgingly gives the bonus. Or even worse, the doctor doesn’t pay the bonus as promised. These are the quickest ways to shut down your team and kill practice growth.

A concern that I hear often from doctors about implementing a bonus system is… “If my team gets the bonus too often then won’t they come to expect it?” Of course they will! They should expect it every month if they keep working hard. If someone expects it without working hard, then you have the wrong person working for you.

Doctor, if your income increases in 2012, aren’t you going to expect it to continue in 2013 if you keep working hard? I want my team to expect their bonus to continue and to grow. This causes them to work hard to keep the practice growing.

Another incentive that I do for my team is shopping sprees. When we meet a new goal I rent a limo, fill it with champagne, take the team to a shopping mall and give them money to spend on themselves. This is a blast for everyone, keeps the team excited and motivated, and makes them continue to push the practice to the next level.

Let me leave you with this principle. In life you have to give in order to receive. If you give excellent dentistry and service to your patients then you will receive referrals and the good feeling of doing your best. If you give to a charity or to people in need you will receive back more than you give. These are laws of the universe.

The deal is that you receive after you give. You give first then you receive. So, when I give my team their bonus then I receive many times over what I gave. Because I give 15 percent of the profit, my profit margin is much higher than if I did not give. I also receive lower stress, a smoother running practice, a happier team, better patient care, a rapidly growing practice, wealth, etc. The key is to give to the team first.

Want to double your revenue in 2012? The right bonus system is one of the major keys to get you there.

Author's Bio
Dr. Mike Kesner is a full-time practicing dentist and creator of PracticeSMARTS, a comprehensive method of practicing dentistry that creates wealth. He is the author of Multi-Million-Dollar Dental Practice, and founder and CEO of the consulting company Quantum Leap Success in Dentistry. Call 480-282-8989 or visit www.qlsuccess.com for more information.
Dentaltown Magazine
September 2025
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