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Production-Based Bonuses: Best Practices

Production-based bonuses incentivize your team to produce at their highest level. Consider these best practices when designing a bonus structure for your dental practice.
Portrait of smiling co-workers standing in a line in dental clinic

Offering production-based bonuses is a great way to promote employee retention without committing to pay raises. Once you give a raise, you cannot adjust wages back down without torpedoing morale. However, if done right, production-based bonuses benefit both your practice & your employee retention.

Production-based bonuses incentivize employees to produce at their highest level. Here are some best practices to consider when structuring & implementing a bonus plan at your practice.

Clearly Define

Make sure to document the details of the plan. Explain to your team how & why you are offering bonuses. Base the bonus on specific, quantifiable results. Align these results with performance standards & job descriptions. Tie the bonus to these specified outcomes & make sure everyone understands how and why they should strive to meet these results.


Talk one on one with your employees. Have them define their personal financial goals & tie the bonuses to these goals. Intrinsic motivation is far more powerful than extrinsic motivation, so they must have buy-in to generate results.


Make sure that all your employees can earn a bonus. Tie higher bonuses to more challenging outcomes. Make sure the reward is not nominal. It does not have to be huge, but it needs to be large enough to incentivize effort.


Bonuses are treated as wages. As such, they are fully taxable. The best practice is to pay bonuses through payroll as an additional line item. This way, the bonus is taxed correctly, and the employee can see the amount on their paystub as an additional amount to their regular pay.


Make it a big deal when goals are met & bonuses are reached. If everyone hits a goal, consider a celebratory lunch or cake at the office for the team. Show your team that you are proud of them & that their additional effort matters. You don’t want bonuses to be viewed as purely transactional & part of wages. They are special & should be recognized as such.

Are you considering production-based bonuses but don’t know where to start? Talk to us today & we can help you design a structure that works for your practice.




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