# Profit sharing with your crew?



## Luke (Nov 8, 2006)

*Profit Sharing*

Mike, Actually I didn't create this system of profit sharing to retain employees. I have six field personnel ranging from 50 years with the company (a still-working foreman!) to my least tenured employee that has been here over ten years. My problem, as you guessed, is production and what I did was hold salaries at a base level, and they have to make their money via the profit sharing which they can only do by increasing production and profitibility. They know that efficiency means more dollars in the company's pocket and in turn in their paycheck. The one area that I struggle with is the idea of rewarding somebody for years employed with the company - exactly how does time employed equate to producing more profit and if this is a true profit sharing system, just putting in time shouldn't be a component of the system. Or should it? I still assign points for years employed, I just can't get over the fact that someone that loyal (or that overpaid?) should get something extra for that. We complete mostly custom, large additions and whole-house renovations where there are numerous variables so it is difficult to assign values to particular tasks like window installations, cabinets installed, etc. It is really a team effort and my system attempts to put a team spin on the process and while not perfect by any stretch, it seems to work for my company but I'm certainly open for any suggestions and ways to make it even better. Thanks for the input.


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## Mike Finley (Apr 28, 2004)

I don't see anything wrong with rewarding employees for long-term careers with your company, with the utterly disastrous results that turn-over creates in a company keep good employees with you is worth it's weight in gold as far as I'm concerned.

Now keep so-so employees long term is another story!:laughing: 

Luke, I didn't see anything that you wrote describing anything that rewards productivity. Perhaps it is in the '8 items' that you didn't describe?

Rewarding for 'company wide profitability', now don't take this wrong, but I think it's a myth that employers believe is a valuable thing. I think owners are putting way to much belief that something as vague as that is making employees do things to add to it. 

I really think it is way too detached for an employee to contribute to it on a daily level. Sure general things like -not wasting material - contribute to company wide profitability, but it's not really measurable and and something an employee can do more of to contribute more to profitability. I think the biggest benefits will be felt when you can come up with a system where the employee can contribute a daily basis with measurable results. The benefits are that they are part of something that they can see the results of, part of something that rewards them for the better they are at it. It creates a company wide system that everybody is aware of and focus is on it on a daily basis.

But, like I said, maybe you have some of that in the 8 things you didn't list?


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