# Bonus plans for employees...



## jlomama (Feb 13, 2007)

We are in the process of developing a bonus plan for our employees. We are going to base it on customer satisfaction (we have a survey we use), job done on time and under budget. But we don't know exactly what kind of bonus to give them. We want it to obviously be a percentage but a percentage of what and how much? This would only apply to our leads at this point. 

If you don't mind, would you please share how your bonus plans work? And who in your company receives them?


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## rbsremodeling (Nov 12, 2007)

I think bonus systems are hard to put into place

You give a bonus on a good job. what happens if they have a bad job can i take the bonus back??

I rather give raises.

I keep an OCRA. Money for when times are tough and slow. instead of firing or laying of guys I can use it to cover payroll during the tough times.

Bonus systems are really hard especially if you have several employees.


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## Grumpy (Oct 8, 2003)

I think a bonus system is important because it gives the employee the reason to go the extra mile. It's an accounting nightmare in some cases, and I hate that we live in a society that we have to pamper our employees, however I just play the cards I am dealt.

Companies that pay hourly should attach a budget to each job. Assuming the budget is realistic, the employees shold be given a bonus for completing early. Obvisusly subject to customer satisfaction and punch list inspection by management. 

If you budget a job for 40 man hours, (4 guys, 1 day), and they do it in 36 man hours, split it with them! There are 4 hours left that the customer is paying for, why not give the guys two hours extra, or 2 hours divided by 4 = 1/2 hour bonus for that day. Doesn't seem like alot but if they do it on a consistant basis they are earning 3 or 4 extra hours per week for nothing. 

Also realize that "customer satisfaction" isn't always the best basis. We just did a job and I will tell you this customer is nuts. When we started the estimate phase we were dealing with her husband, about a week before we were scheduled to start her husband died. This woman is frantic, she cries on the phone, when she's talking to you. She really needs to seek some professional help. Anyways when we finished the job I thought it looked good. She called me yelling at me on the phone and on our survey gave us all 1's on a 5 point scale with 5 being the best. She is the first person to give us a bad review, and we didn't even do anything wrong! 

Do the guys still deserve a bonus?


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## Forry (Feb 12, 2007)

According to my comp. insurance, for a scheduled bonus, I need to pay comp. on the $. For unscheduled bonuses, no comp. Doesn't make any sense to me, but because of that I give out bonuses when the guys kick azz, or when a job comes in under. Mostly it's at my discretion.


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## jlomama (Feb 13, 2007)

What do you mean by a scheduled or unscheduled bonus? Like quarterly bonuses opposed to bonuses at the end of a job?


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## bookie (Oct 24, 2007)

The carpenter I work for bases his bonuses paid on budget & time only. If customer satisfaction or quality was a problem, he would just get rid of the guy based on the issue.

The only thing that makes the program work is that the employees are not really privy to the criteria. As in, they don't know the budget. The carpenter issues bonuses apparently (to the employees) at random. They don't really know if they are on budget/time etc. 

If a job ends up well, the carpenter will give me a chit to bonus the lead guy $xxx.xx because he was X-number of hours under. The carpenter pays his lead guy 1/3 of his hourly rate for bonus based on hours saved. 

The beauty of his program is that it's unpredictable, the lead man REALLY appreciates it when there's a bonus (because it's not expected) and it seems to generally keep the guy working fast and doing nice work.

Hope that sounds the way I meant it to, I have a tendency to over-explain LOL.

bookie


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## Forry (Feb 12, 2007)

jlomama said:


> What do you mean by a scheduled or unscheduled bonus? Like quarterly bonuses opposed to bonuses at the end of a job?




As I understand it, if it's expected, it's considered a scheduled bonus. If the employee considers it part of their pay.


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## Forry (Feb 12, 2007)

bookie said:


> The carpenter I work for bases his bonuses paid on budget & time only. If customer satisfaction or quality was a problem, he would just get rid of the guy based on the issue.
> 
> The only thing that makes the program work is that the employees are not really privy to the criteria. As in, they don't know the budget. The carpenter issues bonuses apparently (to the employees) at random. They don't really know if they are on budget/time etc.
> 
> ...



This is pretty much how I do it. Except that I give the bonuses based on how the company's doing and how the job went. If the guys are kicking azz and it's showing, I give 'em a bonus. If the company's just getting by, but a job goes really well, or even if I notice some extraordinary effort by the crew, I'll give a smaller bonus, based on what the company can afford. Really, it's up to me. I don't want the guy's to expect more than their wages. I like a bonus to be just that, a bonus. A pat on the back they notice.


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## Earl1350 (Nov 2, 2007)

We give bonuses to lead people only.

Its about 2% of the PROFIT on the job

If we do well on the job we will give a little more

If we do bad on the job and its not the lead persons fault we may still give 2% of the profit

If the customer is insane we may give 1 to 2 % more.

Bonuses are given no less than 30 days after a job is finished

Any call backs to fix a problem are deducted from their bonus.

If you give a bonus and fire or lay someone off you are still required to give them the bonus since it is considered part of their pay.

If they quit you do not need to pay it. (Department of Labor Rules)

Here are the problems we ran into........

Employees think we charge 100.00 and make 100.00 PROFIT and give them 1.00 in wages so they always expect the bonus to be more than they get.

If they dont get the bonus they expect, they are mad no matter what they get.

Employees learn to live (pay bills) of their bonus if they are regularly included in paycheck. So when they dont get it they start worring and crying about being poor. Dont give them on a regular schedule like every two weeks.

If the other non bonus prople get wind of somone getting a bonus they also want one and feel cheeted if you dont give them one. Kills moral.......


But I still suggest if you do give bonuses, leadpeople only

Talk to them alone and explain it to them and about how much they can expect on a average job

Explain WHY you are giving a bonus including pet pieves like ........each morrning a job starts at 8:00 that means tool belts are on coffee is put down and everone is listening for their instructions at 8:00. This is how we (the company) expect a job to be run. 

Be very clear what you expect describe how a total job is expected to be run. Then tell them what they will get for a bonus IF you do it this way.

Dont just say a bonus if for doing a good job

Dont expect a poor employee to become a good employee.

A bonus is to get your leadperson to act like a leadperson.

It gives them a connection to the job and company.

Say "we expect good work reguardless, but we want you to be a company man. Do the work our way" (hopfully your way makes money).

If you are using a bonus to make people feel good about working for you they will feel bad if they dont get on..............

Hope this helps


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