Navigating Compensation Formulas: Eat-What-You-Kill vs. Lockstep Models

Dental practice owners face a critical decision when structuring compensation for associate dentists and partners—choosing between an “eat-what-you-kill” or lockstep model. This choice impacts not just financial outcomes but shapes practice culture, staff motivation, and long-term growth potential. The compensation structure you select will fundamentally influence how dentists collaborate, whether competition or cooperation dominates, and ultimately how sustainable your practice becomes.

At SBDP, we understand the complexity of dental practice compensation decisions. Our specialized accounting team works exclusively with dental professionals to develop customized compensation strategies that align with your practice values and goals. With our practice management advisory services, we help you implement compensation formulas that drive growth while maintaining the collaborative culture essential for modern dental practices to thrive.

The eat-what-you-kill model, also known as production-based compensation, ties dentist earnings directly to individual production. This approach appeals to many practice owners due to its straightforward nature and perceived fairness.

How Eat-What-You-Kill Works

Under this model, dentists receive a percentage of the revenue they personally generate through patient procedures. The percentage typically ranges from 25% to 35% of collections or production, depending on practice overhead and market conditions. Some variations include tiered structures where the percentage increases after meeting certain production thresholds.

Advantages for Dental Practices

Eat-what-you-kill compensation creates clear financial incentives for productivity. Associates know exactly how their efforts translate to income, which can drive higher production volumes. This model:

• Rewards high performers appropriately for their contributions
• Provides clear metrics for performance evaluation
• Simplifies accounting and tracking processes
• Creates natural incentives for dentists to expand their skill sets
• Aligns individual compensation directly with practice revenue generation

Potential Drawbacks to Consider

While production-based compensation offers strong incentives, it can create unintended consequences in practice culture. The individualistic approach may foster an environment where collaboration takes a back seat to personal production goals.

This model sometimes leads to competition over patient assignments, particularly those requiring high-value procedures. Additionally, dentists may feel less inclined to spend time mentoring colleagues or contributing to practice-wide improvements when such activities don’t directly increase their compensation.

The lockstep model takes a fundamentally different approach by basing compensation primarily on experience and tenure rather than individual production metrics. This system creates more predictable income progression for associates and partners.

How Lockstep Compensation Works

In a dental practice using a lockstep approach, associates or partners advance through predetermined compensation levels based on years with the practice. Each “step” represents an increase in compensation, regardless of individual production variations. Some practices incorporate hybrid elements, with a substantial base salary plus smaller production bonuses.

Benefits of the Lockstep Approach

The collaborative culture fostered by lockstep compensation offers distinct advantages for certain practice models. By removing direct competition for procedures, this system encourages knowledge sharing and mentorship. It often results in:

Team-Oriented Atmosphere

Lockstep compensation naturally encourages cooperation among dentists. Without the pressure to maximize individual production, practitioners tend to focus more on overall practice success and patient outcomes. This collaborative atmosphere often extends to better relationships with auxiliary staff as well.

Predictable Career Progression

Associates appreciate the financial stability and clear advancement path in lockstep models. They can confidently plan their financial futures knowing exactly when and how compensation will increase. This predictability becomes a powerful recruitment and retention tool, particularly for practices in competitive markets.

Selecting between eat-what-you-kill and lockstep compensation requires careful consideration of your practice philosophy, goals, and culture. Both models can succeed when properly implemented and aligned with your practice vision.

Practice Philosophy Considerations

Your compensation structure should reflect your fundamental values about dental practice. If you prioritize entrepreneurial spirit and individual achievement, production-based models align well. Conversely, if your practice values emphasize collaboration, work-life balance, and shared responsibility, lockstep elements may prove more effective.

Hybrid Approaches

Many successful dental practices implement hybrid compensation models that combine elements from both approaches. These customized systems might include:

A moderate base salary with production bonuses after reaching threshold goals Primarily production-based compensation with shared pools for practice-wide performance Lockstep progression with accelerated advancement for exceptional producers

These hybrid approaches aim to balance individual incentives with collaborative culture, creating compensation systems that motivate providers while maintaining team cohesion.

Whichever model you choose, clear communication and consistent implementation prove essential for success. Associates and partners need to fully understand how compensation works and what behaviors the system incentivizes.

Transparency builds trust, particularly when transitioning between compensation models. Document formulas clearly, provide regular production reports, and ensure everyone understands exactly how their compensation connects to practice metrics and performance.

Navigating dental practice compensation formulas requires specialized financial expertise and industry knowledge. At SBDP, our team brings decades of experience helping dental practices implement effective compensation strategies. Our RISE values—Relationship Focused, Inspired Performance, Service Above Self, and Excellence—guide our approach to every client relationship.

We work closely with dental practice owners to analyze overhead costs, production capabilities, and market conditions to develop compensation formulas that drive practice success. Partner with our team of CPAs who understand the unique financial dynamics of dental practices. Call us at +1 (904) 241-8176 or complete our contact form to discover how we can help your practice ascend beyond your financial goals.