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A Bonus Plan: winner or loser?

Discussion in 'Business Operations' started by MowJo, Mar 3, 2002.

  1. MowJo

    MowJo LawnSite Member
    from KY
    Messages: 70

    I'm developing a team leader bonus plan and want to see what you guys think. The numbers are examples and subject to change.

    Team leader bonus plan:
    $40.00 per month maximum ($400.00 per season maximum).

    Each team leader starts a month with a potential monthly bonus of $40.00. The $40.00 maximum bonus is maintained by having (2) or less violations of the "Bonus Criteria."

    Bonus Criteria:
    1. On time each day.
    2. Following and enforcing the company standard operating procedures (SOP).
    3. Quality work-No callbacks
    4. Assigned work done on time.

    Bonus deductions:
    If a third (3) violation occures in a month $25.00 is automaticaly deducted from the original $40.00 bonus. For each aditional violation that occures in the same month $5.00 will be deducted (4 violations =$30.00, 5 violations=$35.00 and so on). A sixth violation would result in no bonus for that month.

    The plan would include documenting each viloation and notifying the team leader when it occures, so he's aware of where he stands during the month. It (the plan) would also start over each month with a clean record.

    The goal is to motivate and reward team leaders for consistantly meeting the company goals.

    If something here isn't clear or doesn't make sense, just let me know...Thanks.
  2. PAPS

    PAPS LawnSite Senior Member
    Messages: 404

    sounds like a good plan... but for only $40.00? thats not to tempting to me if i am a crew leader.... thats only $10.00 a week... maybe up that bonus to like $75.00 - $100.00 a month... $40.00 just seems to little to get motivated over... just my .02
  3. Looks like a good plan. I'll side with Bryan on the $ seeming a little low, but we got to do what makes $ sense. Hope the plan works out & the guys get their bonus every month.
  4. Craig Turf Management

    Craig Turf Management LawnSite Senior Member
    Messages: 354


    Why pay a bonus for something that they should be doing routinely? If they aren't on time, dock 'em.
    Won't follow your SOPs, street 'em.
    Call back for poor work, give them the choice of making it right and not being recompensated, or being let go.
    Tell them the expected time fot the job. It should be done on time if there are no extenuating circumstances, or they should explain to you the extra time spent on the job.

    No bonus for me unless they go over and beyond>

    Bill Craig!
  5. gene gls

    gene gls LawnSite Gold Member
    Messages: 3,213

    I'm with Craig Turf on this one. I don't advertize any extra $$ for anything. I do slip a few $$ to my help now and then when things go just right. This way they know they have to strive for a higher level all the time.

  6. MowJo

    MowJo LawnSite Member
    from KY
    Messages: 70

    Guys, I agree that $40.00 is low and in the "real world" probably needs adjusting. I picked it out of thin air as a starting point to develope the system...I guess any amount could be plugged in.

    As for those that disagree with giving a bonus for just doing what your suppose to do...I agree with you too. However I'm interested in motivating team leaders to strive for the best they can do and thought establishing a bonus system might help do it. The thing about alot of people that have worked for me is that they generally do "just enough" to get by.

    I was thinking a bonus system would reward team leaders for "stepping up" as opposed to doing "just enough." Maybe the bonus criteria should be changed...any suggestions?
  7. Tim Canavan

    Tim Canavan LawnSite Member
    from Houston
    Messages: 218

    I'm with Craig and Gene

    No bonuses for work they allready get paid for. You pay them for being on time and working. If they can't do that, they shouldn't be there. You're even giving them chances to screw up and still get a bonus. Although an "attaboy" just won't be the answer either. Maybe you could start by including your crew leaders in on some of the decision making or just making suggestions while you take them out to lunch.
    The only way my foreman gets a bonus is if they get work done the way it should be done and earlier than expected. I pay them better than most crews around my area, so I expect alot out of them. There's no free rides here. When they get done earlier than expected, it saves me money. I'm just spreading the wealth. Great idea, but I'd give it some serious thought first.
  8. Craig Turf Management

    Craig Turf Management LawnSite Senior Member
    Messages: 354

    For those that perform, there is extra incentive. More resposibility, more decision making ability, and along with the added responsibility, a raise in pay. Knowing there is light at the end of the tunnel (the added responsibility and pay increase) may keep them from just doing enough to get by. I don't know how large your company is, but if a guy busts his but and gets a new title(foreman) etc. and a little more money, that will motivate him and his co-workers to acheive greater things. I believe that throwing money at the problem will be a short term fix. Your employees might will do just enough to get the 40 bucks. Teach them that they and their work ethic control their destiny within your organization. Just my thoughts here. Good luck in making your decision.
    Bill Craig!
  9. LawnLad

    LawnLad LawnSite Senior Member
    Messages: 738

    My $.02 is that "cash" bonuses become expected over time and really are a part of compensation. Which they are already getting paid to complete the job. I agree with you guys that bonuses should not be paid for doing work that is already a part of the SOP's, their job description, etc.

    However, handing out unexpected bonuses can be a plus. Just don't make it common place. If a guy did a great job one week, you get a call from a customer telling you about his customer service super story - give the guy $50.00, tell him to take his wife to dinner. Give 'em a $100.00 if you really like 'em. The amount isn't important.

    Once I stuck a $50.00 in a Kit Kat bar - gave it to the guy when I dropped him off - he said he didn't like chocolate. Had to force him to take it. Told him I appreciated the referral for a new employee. The next day he thanked me for the "little" extra bonus in the kit kat.

    If you're going to give out a bonus... try using Charles Vander Kooi's suggestion of a point system.

    In summary, it goes along these lines. Take a sum of money that you predetermine to give out as a bonus. Everyone knows what it is - since you announce it at whatever point you want. Hypothetically, the $5,000 in bonus money is then split up among all the employees through a point system. Either through manager or peer evaluation or a combination of the two, grade the employee on performance (granted it subjective - but aren't all evaluations to some degree?). Attendence, they score 10 out 10. Attitude 9 of 10. Quality of work 8 of 10. And on. Out of 100 possible points, the guy scores 90. The other five guys score x, y, z, etc. Add up the awarded points, which might then total 535 points. Divide the $5 K by the awarded points... and each point is then worth $9.34, multiply this by their points, and you get their bonus.

    It's fair since everyone knows what the basis is for the award. The amount of the bonus may vary depending on the type of year you had. Further, if you allow the guys to evaluate each other, they're fair. You can take the average of three scores, or simply do one evaluation. Whatever you do, just don't get bogged down into the details.

    One other one I heard about from the "Pond Guy" at Aqua Scapes. Each one of his guys starts with a $500.00 bonus at the beginning of the year. He expects to pay this bonus to each guy. However, if they are late, don't bring their lunch or are out of uniform, he deducts either $25 or $50. At the end of the season, they get the balance of their bonus. As long as you accept it as a part of compensation, then I suppose a method like this might work.

    A bonus plan should be simple, straightforward, not open to debate, and easy to adminster. I would avoid month to month or week to week evaluations as you'll most likely spend way too much time tracking the little stuff that will become debatable all to quickly since the employee's money is at stake... or at least they see it this way.
  10. Stonehenge

    Stonehenge LawnSite Bronze Member
    from Midwest
    Messages: 1,276

    MowJo - look for a thread called "positive and negative incentives". It follows some similar ideas.

    I agree, $1.30 per day would not be enough for me to change what I'm doing.

    And being on time for a crew leader should be a given. If it's not, they shouldn't be leading a crew.

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