Incentives

treehumper

treehumper

Carpal tunnel level member
Location
Ridgefield, NJ
I'm reading "Freakonomics" and just finished the chapter regarding incentives. In it he talks about the three basic incentives, economic, social and moral. He goes on to talk about how incentives can lead to the opposite effect and even to cheating (citing W.C. Fields, "A thing worth having is a thing worth cheating for.").

Having managed a sales force I saw this first hand where sales people will follow the money regardless of other forms of incentive and in other situations where a negative incentive ( a fine for example) actually led to an increase in the activity instead of the intended effect of a decrease. Call that one, "the cost of doing business" mindset.


What incentives, economic, social or moral (even a combination of them) do you use in your business? For employees? For clients?

My dilemma has always been how to create an incentive program that balances reward for performance with safe work practices and professionalism.
 
Check out the Freakonomics Podcast, they get into all kinds of cool ideas.

Jamin- How do you communicate that? Do you actually drop your per hour price? Have you found people to respond favorably to that?

Motivation is a funny thing. Sometimes people want the cheapest price, others want to pay whatever it takes to get it done right.
 
Indeed. I nearly get all of the larger scale jobs this way. I communicate my base price (man hour rates) and tell them after 8 hours I'll drop down to $XX/ man hour. (PM me if you'd like to know the numbers).
 
A client said it best, "Either you want it right now or you want it right".


Now what about motivation of your employees?

I'll definitely check that out, thanks!
 
treehumper,

Never read "freakonomics", so this may already be covered in that book, but my personal experience has been that a Performance Incentive Program based on crews "beating the bid" for a percentage reward determined by how much they beat the bid does not work in the long run.

You end up with corners cut, work done to the absolute letter of the bid, a blind eye to the details that turn a one time customer into a client. A crew that wants to Get-in-Get-out-Make-bonus, can too easily drop nuanced customer service as an mere impediment to performance.

It is also no good to have a schedule of anticipated bonuses, and not just because they become expected. Slim, or "extremely competitive" bids can become issues of heated dispute between Production and Sales, sometimes bitter.

A really effective way to reward employees is with the "surprise bonus".

Some of the better bonuses I've received:

Boss: Hey guys, we really impressed here today! So much that next door would like this and that trimmed here and there. Cash job, $300. I've got some estimates to head out on, so the two of you can split that, see you Monday."

-------

Me on phone: Hi boss, we're done at 123 Main st., was that all for today?

Boss: Customer happy?

Me: Delighted, cheque collected with thanks.

Boss: You guys kicked , it's only 2:30. I bid that for a full day! Please make sure everything's gassed up and sharp for tommorrow, and book a full eight hours on your time-sheet. Thanks guys.

-------

These aren't huge bonuses, true, but it's ony two typical examples and the fact that they come out of the blue and with a true sense of gratitude means they are met with appreciation.

Northwind
 
Thanks NW, that's what I've seen with Performance based bonus systems. The focus of the crew is singular just like the bonus and the sales people are left to deal with the fallout.

I've always liked the unexpected bonus but does this create an incentive to perform well in all respects? should it be done with some consistency so it will in fact motivate better performance? If it isn't done consistently, will the crew become disgruntled when they aren't rewarded?
 
[ QUOTE ]

A really effective way to reward employees is with the "surprise bonus".

Some of the better bonuses I've received:

Boss: Hey guys, we really impressed here today! So much that next door would like this and that trimmed here and there. Cash job, $300. I've got some estimates to head out on, so the two of you can split that, see you Monday."

-------

Me on phone: Hi boss, we're done at 123 Main st., was that all for today?

Boss: Customer happy?

Me: Delighted, cheque collected with thanks.

Boss: You guys kicked , it's only 2:30. I bid that for a full day! Please make sure everything's gassed up and sharp for tommorrow, and book a full eight hours on your time-sheet. Thanks guys.

-------

These aren't huge bonuses, true, but it's ony two typical examples and the fact that they come out of the blue and with a true sense of gratitude means they are met with appreciation.

Northwind

[/ QUOTE ]

This kind of thing is HUGE. It means so much for an employee to know that the people who matter really see and appreciate your work. This kind of thing works well with truly professional employees.

This may not work with people who work just to collect money and do as little as possible to get it.
 
[ QUOTE ]
A really effective way to reward employees is with the "surprise bonus".
Some of the better bonuses I've received:
Boss: Hey guys, we really impressed here today! So much that next door would like this and that trimmed here and there. Cash job, $300. I've got some estimates to head out on, so the two of you can split that, see you Monday."---------
Me on phone: Hi boss, we're done at 123 Main st., was that all for today?
Boss: Customer happy?
Me: Delighted, cheque collected with thanks.
Boss: You guys kicked , it's only 2:30. I bid that for a full day! Please make sure everything's gassed up and sharp for tommorrow, and book a full eight hours on your time-sheet. Thanks guys.
-------
These aren't huge bonuses, true, but it's ony two typical examples and the fact that they come out of the blue and with a true sense of gratitude means they are met with appreciation.
Northwind

[/ QUOTE ]

It's nice to know there are bosses out there that still do that.
My old boss did that occasionally. Haven't had that type of treatment since 1984.
It's very much appreciated by most climber's, including me, but not all.
Nowadays, $ talks.

We had incentives based on (1) Safety; (2) Productivity; (3) Positive client responses.
 
[ QUOTE ]
How did you measure safety?

[/ QUOTE ]

It was based on 'safety at the site'.
We had "incident" reports and "accident" reports.. An incident is 'a close call'. An accident is damage to property, equipment or an injury. It's been documented that many incidents will lead to an accident.
When writing an incident report be very honest. "I was pruning a 24" DBH white oak with a rope and harness. I cut a 2" diameter limb off with my polesaw. When the limb hit the ground, it missed my groundperson by 2'."
What could have been done to prevent this incident: "Using the 'Command and Response' system. Yelling 'stand clear' and waiting for the 'all clear' before cutting."
Writing incident reports actually made the crew more aware of the incidents and actions to take to avoid them. So, writing incident reports, lead to fewer accidents. The goal was to take it 1 day at a time through 1 quarter (3 months). If a crew had a certain amount of incident reports and "No accidents", they were rewarded accordingly. This meant not writing up 10 incident reports in the last week of the quarter to make their quota, since they didn't have an accident for that quarter.
Once arriving to the jobsite, cones are placed at the proper interval and respective places. Review the work order with the crew. Make sure all crew members are aware of the location of the job (in case an emergency arises and EMS has to be called). The 1st aid kit is handy and fully stocked. All crew members have their PPE. Tasks are handed out according to skill levels.
When you arrive on a jobsite, question the crew to see if they did in fact perform a jobsite inspection, know who's doing what, the 1st aid kit is handy and fully stocked, the fire extinguisher is fully charged, cones are placed, hi-viz vests are on, etc.
Safety is everyone's responsibility.
 
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