Creating the Right Compensation Plan For You and Your Employees

Jan 23, 2018 | Human Resources

Locking down your reputation as an employer of choice requires an effective compensation plan that aligns your business’s and your employees’ interests. So with constant competition in the industry for top providers and other key staff, how’s your plan looking?

Cement your place as the go-to employer and boost your bottom line with these tips from a recent Q&A with Audigy senior human resources manager Melissa Tang on crafting compensation plans that make sense for practices and staff.



At their core, compensation plans offer a mutually beneficial method for staff to commit to certain actions that help the business succeed and for the practice to reward employees when their efforts achieve certain outcomes.

The plans provide a way to understand what motivates employees, align those motivations with monetary rewards, and hold staff accountable. They also offer a mechanism for coaching, providing frequent feedback, developing a positive professional relationship, and managing performance overall.


What types of compensation plans exist?

More types of plans exist than people realize, with some paying out monthly or quarterly. For practices that don’t experience a lot of seasonality, monthly is best. For practices that do, a quarterly approach allows them time to even out their numbers.

There are individual compensation plans, team compensation plans, and combinations of both, along with spot bonuses, profit sharing, and more. Each plan may contain a specific key performance indicator that a given employee focuses on — whether inbound or outbound call conversion, patient-experience scores, return rates, effectiveness ratio, or another factor.

In addition to individual performance, some practices have a unit or net-revenue target that the practice must hit, with a certain percentage pool paid out to each staff member. The possibilities are endless.


What factors should PRACTICES consider in creating a plan?

  • Self-funded — Can the plan stand on its own financial feet? Ensure the plan covers all expenses before it pays out.
  • Mutually beneficial — Do both the practice and the employee directly benefit? In the best plans, the employees’ success doubles as the business’s success.
  • Targeted — Are the core activities focused on increasing the practice’s bottom line? Avoid investing in actions that don’t directly support business goals.
  • Linked to self-interests — What drives your employees? Link their personal, professional, and financial goals to the goals of the business.
  • Transparent — Does everyone understand their role in the plan? Choose transparency, including regularly communicating expectations, securing a commitment from everyone involved, and soliciting periodic feedback to tweak the plan as necessary.



The best way to determine compensation rewards is to speak with each staff member individually. Focus on the employee’s personal, professional, and financial goals for the year. Ideally their goals will be realistic and aligned with the practice’s, and specific plans can be developed to give the employee the opportunity to reach them.

Most cases, however, require some give and take in which the employer works with the employee to develop alignment. Restate the practice’s goals for the year, and discuss how the employee can contribute to them.

Sometimes the employee’s goals may not be possible or cannot be aligned with the practice’s goals. It’s still important to talk to the employee and determine what rewards would motivate them. This helps ensure the employee buys into the plan and will work to achieve the reward.


What three steps can help ensure a successful compensation plan? 

  • Check in often. It’s important to coach, counsel, and motivate when employees aren’t meeting their goals and to celebrate, congratulate, and keep motivating when they are. Hold frequent meetings to discuss goals, targets, and results, and solicit feedback regularly.
  • Ensure accountability. Hold people accountable for their work, asking open-ended questions such as “What happened?” “What challenges are you facing?” “What will you do differently next time around?” and “What did you learn?” when employees fall short of success.
  • Rally the team. Use the goals and targets to motivate staff, reminding them “We’re only two appointments away, and the reward is so close — you can do it!” and “We had a rough go last week, but if we really push it this week, we can get back on track and closer to the reward!”


Want to motivate your staff and boost your bottom line at the same time? Contact Audigy’s business experts for help with team alignment, leadership training, compensation plans, and more to achieve results you never thought possible.



Whether failing to manage the plan, understand what motivates employees, make payouts when staff meet their targets, or cover expenses before distributing compensation, pitfalls abound and can torpedo your momentum.

Audigy can help. Our experienced experts include finance and human resources managers who:

  • Work with various practices and understand what makes sense for a business’s individual needs
  • Offer guidance and platforms for identifying and understanding what motivates employees

Can provide a road map for successfully implementing and managing a compensation plan