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Locums deserve to earn more than principals

GPs are setting up performance-related bonus schemes for staff, to reward new contract work but also to keep a lid on pay rises – accountant Ian Condie explains

However you choose to set up a bonus scheme, it must focus team effort on areas that will benefit the practice.

First you will need to decide which members of staff should participate. It could be all of the practice staff or simply key members. What will the rewards be – monetary, time off, a combination of both, or some other benefit? They must be sufficient to motivate but not so much that they make the scheme too expensive.

You will need to ask yourself what objectives each member of the scheme will have to meet to earn a reward. These will be linked to the areas you want to focus on. Each member should be given a range of say five or six objectives. It is imperative that every objective is SMART – Specific, Measurable, Achievable, Relevant, and Time-based. If an objective doesn't meet every one of these criteria, don't put it in.

Decide on what maximum level of bonus you want a staff member to earn. For example, you may decide that a staff member on £20,000 can earn a maximum extra 10 per cent of salary through the scheme and you may have set them five objectives to achieve this. Allocate the amount of total reward among the objectives to further focus effort. Of those five objectives, you may decide that two are vital and three are minor.

So, you may decide to allocate £625 each to the first two objectives, and £250 each to the remaining three to demonstrate their relative importance. It's up to you.

How will the rewards be achieved? You will probably want a sliding scale of achievement for each, so that just missing a target is not penalised with complete removal of any reward. For example, you may make it one of the practice manager's objectives to achieve a 10 per cent saving in stationery costs. Rather than awarding say £250 for a 10 per cent reduction, and nothing for anything less, you may decide to award £25 for each

1 per cent reduction achieved, with a maximum of £250 being paid for this particular objective.

This should provide better motivation for staff to strive towards reaching targets that are designed to be stretching, with less risk of results being manipulated to indicate achievement.

Finally, how will achievement be checked? You will want to avoid constant monitoring and so a self-assessment process may be attractive, with review on a reasonableness basis. You will of course retain a right to audit, and the review of the results (and the setting of next year's targets) can be built into the annual staff appraisal process.

To sum up, setting up a bonus scheme involves a fair amount of work and it is advisable to consult your accountants for their input. However, a properly thought out scheme will enable staff to share in the success of the practice, ensure they focus on what you want, and with luck result in a better-performing practice with more motivated staff. Quite a reward all round!

Ian Condie is a partner in

The Financial Health Centre, the specialist medical division of Condies, chartered accountants,

Dunfermline, Fife

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