Insentive plan

Discussion in 'Business Operations' started by Landis Scaping, Dec 12, 2008.

  1. Landis Scaping

    Landis Scaping LawnSite Member
    Messages: 3

    I was wondering how to set up a insentive program so that my employees feel they are apart of a teem insted of a employee. Are company is ninty% hardscape and ten% maitanince. Any help?
  2. RLC12065

    RLC12065 LawnSite Member
    Messages: 179

    i do profit sharing. i make a budget as to what id like to gross and net for next year. i give out a performance bonuses based on net income at the end of the year.
  3. Mr. Vern

    Mr. Vern LawnSite Senior Member
    Messages: 632

    The key to profit sharing in my opinion is to provide an incentive for the behavior YOU want to see increase. When I was in corporate management, we had a saying "they'll hit what you measure". In other words; if you measure productivity, you will get better numbers, but you might not be getting hte behavior you were hoping for. Most often, quality will suffer if you focus just on productivity, or perhaps your materials costs will increase. The key to success is to manage productivity, costs and quality. We always used to say "anyone can get 2 of the 3". We have come up with a program we intend to begin using on Jan 1st. I think we have a good balance on productivity and quality, and I am working with my foremen to manage the materials costs. Time will tell if we need to include that into the mix somehow. Trying to keep it relatively simple.

    First, we will put a couple of dollars per estimated hour into a pool. The key here is that if I estimate 60 hours for a job, they will get $120 put into the pool. If they beat that estimate, they start adding dollars from the next job sooner, so they grow the pool faster. I am going to start by having a portion of rework or damages come directly from the bonus pool. My current thinking is that I will eat 50% of the rework/damage and they will eat 50%. The key here being that if they take short cuts in order to boost the pool, they will lose big because the rework and damage comes in part out of their bonus pool. Quarterly, I will take the total wages for the quarter and determine each guy's bonus as a percentage of their wages. In other words if an individual received 20% of the quarter's wages, he will receive 20% of whatever money is in the bonus pool. If a guy leaves during the quarter, his wages will not be factored in the percentage, which will make what would have been his bonus available for the rest of the crew. I am planning to do this on a crew by crew basis to start with, but it may get too complicated that way.
    The critical thing I have learned from experience is to be sure that your measure/incentive is truly driving the behavior you are looking for! You have to manage the details closely when you make a change to see if the metric is improving for hte right reason.
    We'll see how it works.
  4. Az Gardener

    Az Gardener LawnSite Gold Member
    Messages: 3,899

    First Vern is 100% correct. I see you asking for a company culture in the question but thinking giving financial incentives will create a company culture of teamwork and camaraderie. So I would first get straight what and work towards that. And its Ok to want both.

    If you want loyalty It dosen't cost money. You need to be loyal to them and illustrate to them they are more than another tool in the truck. You need to show a genuine interest in their well being. I start by letting new hires know that this work is not for everyone and should they decide to leave there is no herd feelings. I just ask them to be straight with me in return I agree to teach them the trade, provide them with a career path that can keep most people happy for their working career. I also commit to mentor them any way I can. It could be as simple as providing a stable adult male role model. Teaching them how to use credit and not get in over their heads. Guide them through that first new vehicle or house purchase. Give advise in women and child issues, family in general. I have made a lot of mistakes in my life and I think I have learned a lot from them. Its a shame not to share that information to younger guys who are going through similar things.

    Don't get me wrong its not a friendship thing, its not like we are having BBQ's or going to a bar after work. I have employee development meetings where we discuss work issues and I make myself available to discuss any personal things going on. I ask them to set goals both professional and personal and I do what I can to help them reach those goals. I believe all these things help build loyalty
  5. Grasskeepers

    Grasskeepers LawnSite Member
    from Alberta
    Messages: 108

    buy them beer

    DLAWNS LawnSite Fanatic
    Messages: 5,780

    Nice!! :drinkup:
  7. bobcatnj

    bobcatnj LawnSite Senior Member
    Messages: 687

    i go with the beer too, plus a little extra cash at the end of the year
  8. Flow Control

    Flow Control LawnSite Bronze Member
    Messages: 1,267

    Overall is your work steady? I run a irrigation company and the way I pay for installs benefits and motivates both myself and the workers. Once you can PM send me a message and I will explain it.
  9. RickR1818

    RickR1818 LawnSite Senior Member
    Messages: 342

    Well first I would learn how to spell incentive, team, instead, and say "our company" not "are company". Otherwise, they may not take you seriously and your plan may not matter much.

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