Many practices today are attempting to control escalating payroll costs by developing incentive programs in lieu of cost-of-living raises, and making salary increases strictly performance-based.

Your challenge is to move employees from a psychology of entitlement, to one of earning.

Richard E. Gable, Ph.D., M.B.A, CEO, suggests using variable pay plans to link rewards to business goals and competencies. These plans may include any combination of the following:

• Special recognition award
- a one-time award paid to individual employees or small teams for extraordinary contributions or for consistently exceeding expectations.
• Individual variable pay
– an award paid to individual employees for achieving or exceeding individual goals.
• Group variable pay
– awards funded by achievement of predetermined team or organizational goals and paid out on a group, individual or combined basis.
• Lump sum award
– am award for performance effectiveness, paid in a single lump sum that doesn’t roll into base pay.
• Profit sharing
– sharing a percentage of the practice’s profit with each employee on a nonqualified basis.