Sharing Profits with Employees

Healthcare companies have a lot going on these days. Between constant technology breakthroughs altering the game on an almost daily basis, and ceaseless government debates threatening to change the basis of how that game is played, it can be difficult to manage the morale of your team.

This week, I’m thrilled to welcome Scott Arant and Dan Balentine from American Health Imaging, one of the largest imaging companies in the United States. American Health Imaging runs independently owned outpatient-imaging centers. Much of their business model is focused on providing top-tier imaging care that is affordable, with a customer experience that steps outside of the sterile, impersonal experience that many of us associate with healthcare today.

We talk about weathering changes in their industry, succeeding despite vicious competition, technology in healthcare, customer experience, and keeping your team engaged.  In the case of American Health Imaging, team engagement involves a profit sharing program for all employees. We talk a lot about culture on CEO Exclusive, but we haven’t talked much about profit sharing as an option. I thought this would be a great week to discuss this topic.

Determine if Profit Sharing is a Fit

Profit sharing is a fitProfit sharing isn’t for every company. It’s a nice thing to do, sure, but as with anything in business, it’s there for a reason. And, that reason is to lower costs and increase profits.

Profit sharing is distinct from a more direct bonus program in that profit sharing is essentially equal among team members. It may vary from position to position, or based on how long you’ve been with the company, but it’s less performance based than a bonus program. So, if there are two administrative employees who have both been with the company for five years, they will likely both get identical checks from the profit share – even if one of them is fantastic, and the other is barely scraping by. Profit sharing makes sense in more of a team environment where happy employees and great customer service are key – but less so in highly competitive environments.

American Health Imaging is a medical company, but much of their model for differentiation has to do with great customer care. I had a procedure recently at one of their centers, and I was blown away by the care I received. The atmosphere was cozy, appointments ran on time, the tech gave me a blankie, and I got to choose the music (Enya) that was played during the procedure. And, the cost was far below what I would have paid at a hospital owned center. My experience at AHI had everything to do not only with the model, but mostly with the center staff and how I was treated.

For businesses like American Health Imaging, keeping employees happy by sharing in the profits, whether they directly connect it to their performance or not, is a great fit.

Connect the Dots

One of the problems often cited with profit sharing programs is that employees don’t necessarily connect their performance to the increase in profits that results in their share. So, in those cases, itConnect the dots doesn’t do a lot to directly influence employee effectiveness. That doesn’t mean it’s not a good idea, but do make sure you know what results you want, and, where needed, connect the dots for your team, and create the sharing program as something separate from their salary.

In the case of American Health Imaging, profit sharing is not part of job negotiations. Employees agree to come on board based on specific salary and benefits. It’s not until after they start that the profit sharing program is introduced. It’s a nice surprise, after employees have made the emotional commitment to AHI.

Another way to make the program effective is to ensure that it actually matters to your team. Says Arant, “We have people here that their income goes up 20, 30, 40% when we give that to them, because they’re fairly lucrative plans. I believe, as I have from day one, in sharing the success of the business. This is not a company whereby, in my case, the founder and owner is the one that’s cashing all the checks. We really put it back to the people that make it happen; because again, it is the people that make a company great.”

Even if team members don’t connect the dots between performance and reward as directly as they might with a more traditional bonus program, profit sharing in customer service organizations still has a positive effect on the outcome. It is a piece of making the employees feel happy and taken care of, which translates directly into better customer care. And, that does make your business more profitable.

Keep People Engaged

Keep people engagedParticularly in an industry that relies so heavily on great customers service, keeping your team engaged in the company values, and in the effect that those values have on the bottom line, will make a profit sharing program motivational for the team.

American Health Imaging relies heavily on leadership to communicate their message. Regional managers understand the core philosophies of the company, and work to keep them alive in their region. Arant says, “It’s easy to forget (the values) over time, but our guys do a great job of keeping that alive, and going forward. So any company, I don’t care what industry you’re in, is built on the people. It is not the founder, it’s not the product really, in most cases, it is the people that deliver it every day. So we’re just lucky we’ve got great people.”

In the early days, Arant and Balentine spent considerable time with their team members. As the company took off on a fast growth trajectory, that became impossible to do on a consistent basis. Now, they host an annual employee appreciation party each year in Atlanta. They pay to bring in every member of the team, along with their spouses, to reconnect with the values, and celebrate employees that make the business a success.

They also bring all new-hires to Atlanta for two days of training, insuring that the indoctrination into company culture stays true to the values at the core of the company. Activities like this serve to keep employees engaged with their contribution to the company – which in turn makes the profit sharing hit closer to home.

Says Arant, “You’ve got to have great people, and you’ve got to take care of those great people, and make them always believe, from my position down, that they’re appreciated and that they’re a part of the team.” Profit sharing can be an important piece to that puzzle.

 

By | 2017-11-06T10:41:20-04:00 October 5th, 2017|0 Comments

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