Building an Effective Bonus System Crewe

Carpenters and other field employees tend to think in terms of the quality of their work, and good remodelers wouldn't have it any other way. The downside is that carpenters' quest for excellence sometimes distracts them from the company's bottom-line goals and needs, and their attention to detail — to plumb walls and picture-perfect trim — can take more time than the budget allows.

An effective bonus system can help field employees achieve quality and profits alike. I generally recommend awarding bonuses directly to lead carpenters or project managers. If they want to share the wealth, that's fine, but I believe that the best way to motivate others is to let them see how well the leads are doing — so they'll want to become leads themselves.

There are many ways to structure bonus systems, but all follow these basic guidelines:

• Your bonus system should be designed to reward good behavior, not necessarily to change or punish poor behavior.
• Your bonus system should be as simple as possible to measure and track.

DEFINE THE OBJECTIVE

With these guidelines in mind, ask yourself what you want to reward: for instance, profitability, customer satisfaction, or timeliness? Depending on your answer, you should be able to determine the best way to bonus your production people.

Profitability. This is fairly simple to establish, typically using job costs and/or net profit as a basis. For instance:

For a full-service remodeling company, you could give the lead 50%

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