Bonus systems can also vary in whether they’re open-book, and whether they disclose reward amounts to the entire staff. “I tend to like bonuses to be very clear and defined to each individual,” Zanola says, because it creates a desire in the person to take ownership of performance and outcome.
Savings come largely from job efficiency. Before implementing the bonus plan, Lane found that his staff would spend a lot of time visiting with homeowners or idling while trade contractors did their work.
“Now they’re consolidating the jobs into a shorter time frame and making their own time more productive. While they’re supervising the electrical contractor, they could also be outside putting up the siding,” he says.
Before introducing his bonus plan, Bryan’s production staff “would clock in and do their eight or nine hours and not be as aggressive about leveraging every hour.” They paid little attention to budget, worked without daily goals, and didn’t use suppliers effectively. Now Blackdog’s production teams approach jobs from the perspective of knowing they have so many man-hours, and it’s up to them to figure out how to do it in that amount of time or less.
“The bonus program does not exist to encourage you to run to the truck or split wood faster,” Bryan emphasizes to his staff. “That doesn’t make us money. What makes us money is between your ears.”
Leveraging Your Equity For all the good of bonus systems, they’re not cure-alls. Bryan, who teaches classes about bonus systems, notes that they won’t solve problems involving disgruntled workers, for instance. Here are some tips on how to make bonus plans work for you:
“Make sure you have some equity in your employees’ eyes,” Bryan says. Show them that you are a reasonable employer who deserves their trust. They’ll be more open to the empowerment and potential increased earnings that a bonus plan can give them —and to returning your goodwill in kind.
Leah Thayer is a senior editor for REMODELING.