The Christmas Bonus Conundrum
It’s that time of year when the team are wondering if they will get a bonus. Many of the team may be relying on this, as for some it is common place.
There is no doubt in my mind that this causes stress for some practice owners. No-one wants to be left feeling like Scrooge but if you do not have the cash in the bank how can it be possible to give out a bonus?
Lets face it, December is a short month for production and sales. Cashflow is often at its worst.
Most of you still pay your team before Christmas rather than on the 31st or last Friday like usual -what effect does this have on your bank balance and why are you still doing this? As per a previous blog I stated that this was so very retro.
Here are a few of my thoughts:
- Bonuses should only be given when it is win-win. The practice has made a profit so you are going to share some of it with the team.
- Bonuses shouldn’t be given just at Christmas, why not give the team the opportunity to get one every month?
- Bonuses are subject to NI and tax – never give cash. If you do not have a Christmas party then £150 of it can be tax free but check with your accountant.
- If you do not pay your dental nurses ARF then why not plan to do this for them in July 2017?
If you are a principal or manager who is under pressure to find money from nowhere, do not go into your overdraft to give a bonus. It is simple. No cash in the bank means no payment of a bonus for anyone.
What can you do to soften the blow?
You could reward the team with an extra day of holiday if they haven’t had a day off sick in the last 6 months, and 2-3 days if they haven’t had a day off in 2016.
This will act as a nice surprise for those who have struggled
in when ill.
Write up T&Cs such as; this has to be taken with a dentists holiday. This could mean an extra day off over the holiday period too.
Now is the time to create a plan for 2017 that is win-win. One that gives the team the opportunity to get a bonus monthly or quarterly and for you to be in profit when giving a bonus.
Laura (no Scrooge, but a major fan of bonuses when it’s win-win)