Bonuses Start With Profitability

Let’s talk about how bonuses actually work in a group practice.

Because you can’t bonus your way out of an unprofitable business.

Before we ever talk about individual performance,

we have to look at the practice as a whole.

Is the practice profitable?

Do we actually have the cash to support a bonus?

Because bonuses don’t come from intention.

They come from profit.

This is the part that often gets skipped.

Practice-wide profitability comes first.

Always.

If the practice isn’t profitable,

there is no money to pay out.

And pretending otherwise just creates confusion and resentment.

This is why KPIs matter so much.

Those KPIs drive revenue.

They drive retention.

They drive predictability.

And all of that drives profitability.

When the practice is profitable,

now we can plan.

We can intentionally set money aside.

We can decide what portion of profit is available for bonuses.

And we can do that before anyone is expecting a payout.

Only then does individual performance come into play.

At that point, the question becomes:

Who met the KPIs we set?

Who consistently did their part to help create that profit?

Bonuses work best when they follow this order:

Profitability first.

Performance second.

That’s what keeps bonuses fair.

That’s what keeps them sustainable.

And that’s what keeps them from becoming emotional or reactive.

When everyone understands this,

bonuses stop feeling arbitrary.

They become a shared outcome

of a profitable, well-run practice.

And that’s exactly how they’re meant to work.