January 3, 2014
Employee incentives: not just how, but whyBY MARK BRADLEY
The hiring turnstile. That feeling in your stomach as you leave a jobsite bracing yourself for all the things that might go wrong when you take your eyes off the job. That overwhelming frustration of pouring most of your waking hours and energy into a business that doesn’t deliver anything close to the potential you know exists. Sound familiar? Let’s try to take 2014 in a different direction.
Years ago, we realized that training was a priority if we were going to keep growing. I had too much on my plate, our jobs had too
many mistakes, we burned through too many new hires — yet the solution to these problems kept coming back to the same thing:
I needed to train my staff more and better if I was going to make this business bigger than myself.
And so we did. We implemented on-the-job training to build new skills in our crews. We sought out and employed the best subcontractors we could find so we could watch and re-create the systems they used for efficient work or craftsmanship. We implemented, and still use today, an online training program for every staff member that comes aboard to cover the basics of safety, construction orientation, and PPE as well as courses that taught the language and culture of problem solving and waste elimination.
We saw a difference almost immediately. We quickly grew stronger. I could delegate more. I could take on more work and bigger jobs without the fear I used to have when I left the jobsite. We were getting better, but we were still lacking something.
My business was my life. It was how I provided for my family. It’s my future, it may be my children’s future, and I spent most of my waking life thinking about, living and breathing our company. But for my staff, it was not the same. Understandably, for them, this was just a job. Just a way to a paycheque. And all our talk of getting bigger, better, more profitable… it just wasn’t delivering the results I knew it should. The problem though, was obvious.
We were teaching our crews how to do their jobs better, but we were failing to show them why to do their jobs better.
Proper training will solve problems, but it can’t solve the underlying problem that robs companies of their true potential: motivation. If we were going to build a successful business, stop the hiring turnstile, and improve profits on productivity, then there was no other option. We had to show our staff why all this talk about productivity was important to them, not just to our business.
Over the years, we’ve been developing and refining a multi-tiered approach to employee incentives. Some rewards are financial. Others are not. Combined, they work together to create a culture that rewards high achievers and frustrates (and drives out) poor performers.
Going into this season, ask yourself one simple question: If you worked for your company, why would you work harder, faster and better?
What’s in it for you?
Many company owners I’ve met spend more time and energy worrying how to stop breaking a $50 shovel than how to motivate their staff. But with a just 10 per cent improvement in productivity, you could afford to buy your crews new shovels every day. You wouldn’t… but you could.
I don’t believe there is one right answer to this question, but I will share just some of the tools that help us:
- Attract superior talent
- Produce industry-leading revenue per man hour
- Retain and develop long-term employees
- Standardize your wages Get rid of annual reviews and arbitrary raises and create defined roles in your company. Show the paths to advancement (e.g. Labourer C, $15/hr.; Labourer B, $17/hr.; Labourer A, $18/hr. etc.). Define your expectations for what it takes to move up the ladder: certification, education, field-proven skills, clean driving record, perfect safety record, etc. Show your staff the opportunities within your company and define for them how they can progress towards their goal.
- Go to salary for better stability Consider moving key field staff to an annual salary. Seasonal layoffs or reduced income force good staff to look to other trades for more predictable employment compensation. If you’re an upstanding, responsible person trying to build a future and raise a family, you’re going to need job with a predictable, stable income. Talk it over with key staff and agree on a salary based on a conservative estimate of hours worked multiplied by their hourly rate and make up the difference if you’ve overworked or underworked them at the end of the year.
- Bonuses and incentives Have a bonus/incentive program linked to company success. Keep it simple. I can’t stress that enough. Our program is based more or less on two simple metrics that are easy to measure, and easy for staff to control: sales and field wages. We have a clear sales goal and we have a clear percentage of sales that we can afford in field wages. If crews beat their production (produced revenue) goal without overspending on wages (as a percentage, not a flat number), it’s bonus time. It’s not a perfect system, but it is perfectly simple. At almost any time of the year, I can pull a very accurate sales and field wage spending to date. That’s all we need to know whether we’re tracking to meet, beat, or fall short of our goals.
- Give them a future Offer a pension contribution plan. Most banks and major investment houses will help you setup a company pension plan where your employees can contribute pre-tax income directly off their paycheques. Match their contributions up to a maximum that grows each year. Have your investment agent show your staff what it takes to retire a millionaire. It’s not as much as you and your staff might think. You’ll attract/motivate people who see their future tied to our industry and improve your retention rates.
- Paid vacations Pay your vendors with credit cards (but pay your cards promptly!). Collect travel points. Attract new, key staff with a paid vacation benefit, or reward your best performers with a pair of flights anywhere in North America during your down season.
Create a flowchart showing how employees can advance within your company. It inspires your employees along a path toward career growth, and helps you plan to profit from investing in human talent.
- Share your goals for company growth Growth and profitability are not just important to you, they are critical to staff who want opportunities to advance in rank and pay. Stagnant companies can’t offer promotions and raises. Employees see nothing but a dead-end, the same job every morning with no hope for anything greater.
- A scoreboard Put 12 guys out on a pond to play hockey and they’ll have a blast. Put 12 guys in an arena with some fans in the stands and a working scoreboard, and they’re ready to kill each other just so their number can be bigger than the other guys’ number at the end of the game. We use our mobile timekeeping system to show our staff real-time, up-to-the-minute estimated vs. actual hours on every job. When everyone knows “the score,” everyone starts playing to win. It’s simple.
- Training and education Through on-the-job training, industry training events, and online training, we want to offer our staff opportunities to build their skills. It gives them a chance to move ahead in this industry and in my company. It gives our company the opportunity to promote from within. Key roles are assumed by current staff who already know our systems, know our procedures, and know our expectations, rather than trying to fill these roles with other companies’ castoffs.
- Company events BBQs, a company team in a beer hockey league, pro hockey tickets, Christmas parties, a company golf tournament, foreman dinners… Once a quarter, try to host some kind of special event for some/all of your staff to reward and reinforce your direction, your progress, and opportunities available in your company.