SMART Guidelines for a Good Compensation Plan

One of the most important things to consider when adding new staff to your practice is how to attract and retain good employees.  A defined compensation plan is where you should start!

Have you considered how you compensate your employees?  Do you know what your competitors are offering their employees?  Here are some guidelines for a good compensation plan:

All good compensation plans will incorporate ‘SMART’ goals:

SMARTState exactly what you want to accomplish.  (Who, What, Where, Why) Set forth clear and concise guidelines and communicate to your staff.  For example: “Employees can participate in compensation after 90 day of employment.  Part time staff will be pro-rated in group goals.  Employees need to be employed for the time specified to participate.”

How will you demonstrate and evaluate the extent to which the goal has been met?  For example, “we want to increase Radiesse sales 30% over the next quarter” leaves the measurement component vague.

Put stretch in the goals but be sensitive to the ability of your staff  to achieve outcome. For example, a gross sales increase of 25% over the previous year may be difficult for anyone to achieve.  A gross sales increase of 10% may be more realistic.

How does the goal tie into your strategy?  For example, if your practice wants to increase laser procedures by 20% this year will you base the commission on gross sales or laser procedure growth?

Is the plan going to be paid out daily, monthly, quarterly, etc.?

Examples of clear and concise could include:

Medspa would like to achieve a 20% reduction in its patient no-show rate within 90 days.


Medspa would like to increase Laser Hair Removal Revenue 10% in the 3rd quarter.


Medspa will pay a commission of 5% to the team for each day in the first quarter that revenue per day exceeds $7500.

Once you’ve set measurable goals that are relevant to both your strategy and what your employee expects to achieve in his or her new position, you’ll maintain a staff of motivated employees who contribute to the overall success of your business!


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