Case Analysis: Dr. Jack Perry, D.D.S.
Dr. Jack Perry had a meeting with one of his employees who suggested that there were several problems in the office. Some of the problems were low morale among the staff, lack of motivation to grow the business, filling cancellations, following up on collections, and engaging in cross-sell procedures. Dr. Perry had noticed these problems previously but felt unsure about his personnel and business management skills. Using his notes from a presentation made by a business consultant at a dental conference, he has to decide how to act in order to address these problems. This paper will attempt to analyze some of the problems and offer alternatives and a solution.
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The consultant gave the presentation on the topic of ways to motivate staff. One aspect of the presentation that Dr. Perry took an interest in was the idea of profit sharing and how it relates to motivating the team. Dr. Perry recalled the consultant outlined two approaches to the profit sharing program. One approach was to hire the dental hygienists as independent contractors and paying them a percentage of their collections instead of paying them a set hourly rate. The other approach the consulted discussed was making all the employees equally responsible for growing the business through a form of profit sharing by guaranteeing the team a percentage of the total collections. Dr. Perry is not formally trained in any business discipline such as accounting or management so it is going to be difficult for him to do this. If Dr. Perry takes the option to do away with the hourly rate and base the pay of the hygienists on the commission of the revenue that is generated from the services they provide, there would be an increase in pay. Based on the figures from the prior year, $304,000 would be multiplied by the forty percent which is common in the marketplace according to the consultant and divided by two since there are two hygienists. The result would be an increase in salary from $52,000 yearly paid to the hygienist to around $60,800, an increase of $8,800 which is significant. This would increase the salary and likely increase productivity if the employees