Does production pay undermine veterinary team well-being?

Veterinarian proposes other ways management can design a reward system

June 22, 2023 (published)
By Ivan Zakharenkov

Photo by Jordan Mattie
Dr. Ivan Zak believes there are better, more team-oriented ways to give veterinarians a stake in the financial success of a practice than paying production-based commissions.

One Christmas, I was working a night shift in a veterinary emergency hospital in Toronto. It was hectic, as you can imagine. A beautiful young Labrador presented with pancreatitis because he got turkey leftovers as a treat. A French bulldog who found his way into the gifts under the Christmas tree got severe poisoning after eating a huge Toblerone bar. A playful cat's curiosity led her to swallow a good foot of tinsel that was now cutting through her small intestine. Emergencies kept coming in, and the entire staff was hustling to help every pet the best way we could.

I treated a German shepherd named Scout who was brought in with a history of vomiting, diarrhea and lethargy for the past 24 hours. The owner had no idea what happened. The dog's condition was worsening, so I started my investigation. Bloodwork and radiographs did not reveal any abnormalities. There were no immediate findings on a quick ultrasound swipe. I had to run more tests.

During each step, I communicated with the distressed owner to explain the reasons and goals of these measures and discussed options and costs. After five hours of inconclusive tests and procedures, I sat down with the owner and told her that Scout might need exploratory surgery and a biopsy for further analysis.

The owner, exhausted from a night in a busy ER, frustrated by a lack of diagnosis and a looming bill, exploded with anger. "You are just adding tests to make more money!!!"

I was stunned. I was a relief vet on an hourly rate and I didn't make any commission. My heart dropped, but I tried to keep it together. "Look. I know this is a hard time. But I don't make more or less whether you are here or not. I am trying to save your dog."

"You are just doing it for the money" is something that probably every veterinarian has heard at least once. And yet, you probably won't find a vet who would say they chose this profession to become rich. Ever since that episode, I became confident that salary-only is the best compensation model. That way, veterinarians can never be accused of squeezing extra from the clients or prescribing unnecessary procedures.

I thought that production-based compensation was a wrong incentive for people — most of whom entered the field for altruistic reasons — to help animals. I thought that working on commission could pressure vets to take more cases, to skip lunches and breaks or even refuse vacations in order to meet "KPIs."

My theory was that the need to think about revenue while treating pets can deplete mental health. It is consistent with research in human medicine that shows that physicians with performance-based incomes experience far higher burnout rates than salaried physicians.

The nature of veterinary burnout has been an area of great interest to me for many years, as over a decade in emergency medicine let me experience it firsthand. From the depths of my own burnout, I found a new passion in developing a systematic solution to this chronic illness of our profession and implementing it on a large scale with Galaxy Vets — an employee-owned veterinary group I founded with a team of colleagues in 2021. The primary purpose of Galaxy Vets is to proactively prevent burnout by applying best practices from human health care and other industries, as well as learnings from our own annual burnout survey.

Recognizing the importance of effective reward systems in promoting overall well-being, we decided to test the hypothesis related to salary versus production-based compensation in a burnout survey last fall. Our goal was to develop a sustainable model for Galaxy Vets that would best contribute to compensation and culture satisfaction of the veterinary teams.

We surveyed nearly 2,000 veterinary team members in different roles: veterinarians, technicians, assistants, practice managers and customer service representatives. Veterinarians constituted 29.1% of respondents. The study used the Stanford Professional Fulfillment Index to measure the burnout level with additional questions about pay satisfaction to see how financial freedom relates to mental well-being.

Sixty-four percent of respondents reported that their income didn't sufficiently meet their needs, while 72% of respondents didn't feel adequately prepared for retirement. Expectedly, the less financially stable one felt, the higher the burnout score.

The surprise came when we didn't see any difference in the burnout level between veterinarians on salary (63% of respondents) and on commission (37% of respondents). Moreover, veterinarians whose compensation depended on production felt more financial security and more confident about retirement. (See full findings and takeaways.)

So does this mean that production-based compensation is better for veterinarians after all? I still think not. The veterinarian is the only one benefiting from taking on more cases. It can create a feeling of unfairness among support staff because extra work doesn't yield additional income for them. From this point of view, production-based compensation may have adverse effects on teamwork and a sense of community. Several respondents in our study indicated they would like to switch from commission to salary because taking vacations harmed their pay. This doesn't sound like a positive approach.

On the other hand, earning commission adds a feeling of more control over financial outcomes. It empowers individuals by showing how their performance directly impacts the reward. From this point of view, production is a positive model that potentially tackles two burnout triggers: lack of control and insufficient reward.

This insight suggests to me that some form of profit-sharing or employee ownership — if accessible to all roles in a hospital — can be highly effective for staff motivation, productivity and mental health. With proper design, implementation and communication, practices can unite their team around a common goal and give them a stake in its success.

One thing is clear: Veterinary professionals may not be in it for the money, but they deserve a share in the gains. We need to find a healthy way to democratize wealth in our profession.

What do you think about production-based versus salary-only?

Dr. Ivan "Zak" Zakharenkov is a veterinarian, entrepreneur and advocate for the well-being of veterinary professionals. After graduating from the Atlantic Veterinary College, he worked in various settings across Canada, from emergency to general practice. Twelve years in veterinary medicine inspired Ivan to create Smart Flow, a workflow optimization system, and Veterinary Integration Solutions, a consultancy serving consolidators. In 2021, he founded Galaxy Vets, a veterinary health-care system based in Vancouver, Washington, with more than 100 employees and an anticipated 10 clinics by the end of 2023. Ivan holds an MBA degree from the University of Cumbria in international health-care management. He serves on the board of Galaxy Vets Foundation and co-hosts Veterinary Innovation Podcast and Consolidate That!

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