25th Jan 2008
Associate pay - What is the best way to be paid?
A soon-to-be grad brought me an interesting dilemma the other day. Here is the choice he was given:
Pay Package #1. Base plus 35 percent incentive on the monthly collections of the entire office.
Pay Package #2. Base plus 50 percent incentive on his collections each month.
In other words, is it better to get a greater incentive based on your own work or a lower incentive, but based on the work of the entire office?
After quite a bit of thought, I figured out that it is a classic investment dilemma: Are you willing to take more of risk for a higher reward or less risk for les of an award? Another way to state it is: Would you rather take the sure thing (getting paid based on the office as a whole), or take a chance (what if you can’t produce enough to get the incentive each month?)?
The risk, of course, is in what you think you can do to bring in patients on your own. If you can bring in a lot of patients every month, you can do really well. But if one month you are sick, or have a family issue that takes you away from the office or prevents you from marketing, you will only receive your base.
There may be other considerations I am missing. I would like to know what you think - which would you take? I will tell you what this doctor decided and why, in a later post.
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