One of the most common topics coming up on our social media pages and inbox is employee bonus programs.
Employee Bonus and Benefit Levers
Retaining critical key employees is a secret weapon of uber-successful pharmacy owners. One of the best ways to keep your employees happy and therefore your patients happy is to adjust the employee benefit levers to fit your employees’ needs. Your employee bonus program is one of these levers. Here are the areas you control when it comes to providing complete benefits to your employees:
- Paid Time Off
Customize The Levers
The best time to adjust these levers is during the hiring process. You can ask questions to find out what benefits are most important to the candidate. You don’t have to offer all employees the same mix of benefits. Not only will this enable you to make more competitive offers on what matters most to a candidate but it also creates diversity amongst your employees so they aren’t just comparing who makes more.
While every employee is going to be different, I have found some generalities in my employees. Single-childless employees want the highest salary. Parents are often looking for insurance or more paid time off. Pharmacists often appreciate perks like paid CE courses or licensure payment. While in a perfect world you would push all the levers to their highest and bathe employees in amazing compensation. In the real world, that isn’t possible. If one gets pushed higher then another will need to be lowered.
Secret To Success For Retaining Employees
Many pharmacy owners are concerned about keeping their current staff. I have heard horror stories of owners losing half or more of their staff to another pharmacy because of a pay differential. The current state of the employment market can have technicians being offered $5, $10, or $15 more an hour to change jobs. Often times those places will have a terrible culture, poor operations, no perks, and will burn through employees. If you want to retain your employees you should begin to have conversations with them about which of the levers are most important to them.
Employee Bonus Program Benefits
A great way to add more compensation to current employees is through an employee bonus program. Implementing an employee bonus program brings a bounty of benefits to your pharmacy over just raising salaries incrementally every year. Indiscriminate salary increases often create employees who are rewarded only for their tenure rather than their performance or impact on the pharmacy. We all know those employees that become highly compensated and then lose their drive to continually be better.
When you give employees a way to earn their way up continuously, they benefit with better compensation and you benefit by getting the higher performance and a more profitable bottom line.
Pharmacy Employee Bonus Guidelines
Whatever performance metrics or tasks that you ask employees to achieve in order to receive a bonus, I recommend they follow these guidelines:
- The employee directly controls the metrics they are responsible for. Don’t give an employee a goal that they cannot control because of their title, position, or schedule. An example of a bad match of a metric to an employee is giving your compounding tech a goal of selling more OTCs. While selling more OTCs is a great goal, the chances are that a typical compounding technician isn’t going to have a lot of opportunity to impact that goal.
- The metric must be easily measurable. If your metrics need complicated calculations or hard to get reports, you and your employees won’t have clarity and transparency into the numbers. Ideally, your employees should be able to track their progress to the goal at any time.
- Achieving the goals should bring additional profit. While there are always outliers in everything, you should be bonusing on tasks and goals that generate additional tangible results for the pharmacy. An example is profit. That is generally fairly easy to determine. If employees sell more OTCs, then you make more profit. Some other examples of outcomes are improving patient experience, increasing cash flow, improving efficiency, or protecting assets.
- Don’t bonus for basic performance. Showing up for work on time or not calling in for 2 weeks straight is not something you should be bonusing employees for. Those are basic performance metrics to just keep their job. You should be looking for performance that is above and beyond.
- Ensure employee bonus tasks are aligned with your goals. If all employees accomplish their goals, then you should achieve your goals for the pharmacy. Everyone should be moving together in the same direction in order to produce dramatic results.
- They should be realistic. Don’t make a goal that is impossible. If you want to increase OTCs sales don’t make a 50% increase goal the first month. You will discourage your employees. Instead, aim for 10% a month.
- Let employees overachieve. I love metrics that are percentage driven rather than binary (yes or no) for bonusing employees. Here’s an example using OTC sales. Increase OTC sales by $1,500 this month. You could look at this as a yes or no. Did the employee increase their OTC sales by the goal amount. Yes or No? Or you can look at it as a percentage. As a percentage employees can overachieve. If an employee sells $3,000 worth of OTCs, instead of getting the original $200 bonus, they can now get $400. This puts the power with the employee to be as good as possible.
- You can’t get it all done at once. Employees will have a thousand things to do each month. However, only 2-4 should be items that are bonus able. For me, bonus tasks are the big hairy important goals. You want them to be significant and not overwhelming. You also don’t want to dilute the impact of success of achieving a goal.
Pharmacy Employee Bonus Ideas
Now that you have some guidelines, I bet you are asking well what are some ideas for employee bonus tasks. It probably comes as no surprise but I love to use key performance indicators (KPIs) along with other tasks as employee bonus ideas.
Here are some ideas for common positions that you may want to use for your pharmacy.
- Clinical appointment performed
- Employee overtime usage
- Number of mistakes caught
- Vaccinations given
- Prescriptions left unfilled
- Inventory turns
- Number of input mistakes
- Number of sync patients
- Number of follow up calls completed
- OTC dollars per hour
- Number of supplement recommendations
- Customer service score
- Quantity of ‘item of the month’ sold
- Deliveries per day
- OTC dollars sold
- Birthday surprises given
- All active formulas updated
- Follow up calls completed
- Average compounds per day
- Total margin dollars from compounds
- Net profit dollars
- Net profit percentage
- Total expenses
- Dollars per transaction
- Number of new prescribers per month
- Number of new patients per month
- Doctor visits completed
- Worker’s compensation prescriptions
- Thank you cards each day
- Patient referral program
- Non-PBM revenue percentage
- Inventory value returned
- CBD sales
These are just ideas. You can bonus on anything that is important to you and for the success of your pharmacy. You can track the bonus tasks along with their regular tasks using a controlling calendar. Learn more about those in Employee Management Made Easy article.
An Employee Bonus Bridge Program
When transitioning to an employee bonus program and you are concerned about retaining your employees, you can consider a bridge program. A bridge program is where you can guarantee the bonus for an initial time period. It may be 1, 2, or even 3 months. In one of my pharmacies, to attract an amazing pharmacist, we guaranteed his bonus for the first full year. He will still have performance metrics to meet, but this way we could offer more compensation without it being a base salary that will continue in perpetuity.
It’s Not Set In Stone
Don’t forget this rule – you can change your employee bonus program at any time. Whatever you start with probably won’t be the perfect program. You and your employees get to create this together. What you think might work, might not.
Also, don’t start out with too much complexity or too much to track. It is completely fine to hand out only 1 bonus task for each employee. Start small and get bigger and better over time.
If you want help creating your bonus program or want to learn profitable strategies to boost your bottom line feel free to contact us at email@example.com or check out our Pharmacy Badass University membership.