The Problem with Bonuses: Why Incentives Can Backfire in Your Orthodontic Practice
Bonuses and financial incentives are a common way to motivate teams in orthodontic practices. On the surface, they seem logical—reward hard work with money, and performance should improve. But what if I told you that bonuses might actually be hurting your practice rather than helping it?
Charlie Munger, the legendary investor and business thinker, described a concept called the Incentive Super-Response Tendency—the idea that people will often respond disproportionately to incentives, sometimes in ways that are counterproductive or even destructive to the broader mission. In other words, if you set up an incentive system, you must be absolutely certain that it aligns with your ultimate goals, or you risk encouraging behavior that benefits the individual but harms the organization.
Why Bonuses May Backfire in an Orthodontic Practice
At first glance, rewarding staff with bonuses for hitting production targets or patient conversion rates seems like a good idea. But here’s why this can create unintended consequences:
1. Short-Term Thinking Over Long-Term Success
When employees are rewarded based on numbers—new patient conversions, collection rates, or production goals—they naturally focus on maximizing those numbers. But at what cost?
A treatment coordinator might push a patient to start treatment before they’re ready just to hit a quota.
A scheduling coordinator might overbook the schedule, leading to rushed patient care and a poor experience.
A clinical team might rush procedures to meet daily efficiency targets, increasing the likelihood of errors.
These are all examples of incentive-driven behavior that solves a short-term problem while creating long-term issues.
2. Gaming the System
Munger warns that when incentives are in place, people will figure out how to manipulate them—even unintentionally. This means that if bonuses are based purely on numbers, team members may naturally begin “playing the game” rather than focusing on what actually makes the practice better.
If a bonus is based on same-day starts, a treatment coordinator may pressure a patient into starting prematurely—only for them to later back out, leading to cancellations and refunds.
If the clinical team is bonused on efficiency, they may cut corners or compromise on quality to finish appointments faster.
This is exactly what Munger meant—when people are responding to incentives, they aren’t necessarily thinking about the bigger picture. They’re thinking about how to maximize their reward.
3. The Loss of Intrinsic Motivation
Munger wasn’t the only one who warned against over-reliance on financial incentives. Daniel Pink, in his book Drive, explains that people are more motivated by autonomy, mastery, and purpose than they are by money. When you dangle bonuses in front of your team, you shift their focus from internal motivation (“I love helping patients”) to external motivation (“I need to hit this target to get paid”).
This is dangerous because:
It removes purpose from the job and makes it transactional.
It kills teamwork because individuals focus on their own numbers rather than collective success.
It creates entitlement, where bonuses become expected rather than appreciated.
When people work for purpose, they go the extra mile. When people work for bonuses, they do what is necessary to earn the bonus—nothing more.
So What’s the Alternative?
If traditional bonuses can backfire, how do you keep your team motivated and engaged?
1. Shift the Focus to Purpose
Instead of setting rigid financial incentives, align your team with a bigger mission. People need to feel that their work matters. Make sure they understand:
How their role improves patient care.
The impact of their work on the success of the practice.
That their success is measured in patient experience, quality, and team cohesion, not just numbers.
A team that works with purpose outperforms a team that works for a paycheck.
2. Reward in Ways That Reinforce Culture
Instead of cash bonuses tied to numbers, consider:
Recognition-Based Rewards: Celebrate great patient experiences, innovative ideas, and teamwork.
Educational Perks: Invest in their growth—pay for CE courses, leadership training, or orthodontic conferences.
Team-Based Incentives: Reward collective success rather than individual metrics (e.g., a fully paid team outing for reaching a practice-wide goal).
3. Invest in Leadership Development
One of the best motivators isn’t money—it’s opportunity. When employees see a path to grow within your practice, they become more engaged. Train your office managers and clinical coordinators in leadership. Give them responsibilities that help them evolve professionally. People don’t leave companies where they see a future.
Final Thoughts
Charlie Munger’s Incentive Super-Response Tendency teaches us that people will always react to incentives—but not always in the way we expect. In an orthodontic practice, if you want long-term growth, satisfied patients, and a team that truly cares about their work, bonuses alone won’t cut it.
Instead, focus on purpose, leadership, and team-oriented rewards. When you do, you’ll build a culture where people don’t need a bonus to do their best work—they’ll do it because they believe in what you’re building.
