Company Bonuses

[cadpoint]

Well said all, I used my safety points to get my 2005 NEC, funny that the collard shirt was more.

 

[chris kennedy]

In other words, the rank-and-file workers have very little invested in the company compared to the boss.

I take great exception to this statement. I am part of the rank and file. My last 3 jobs have been 7yrs, 10yrs and 7yrs. I have been with my current employer for almost 4.

It is absolutely essential that the owner of the company is making a decent buck. That trickles down to me.

I can't tell you how much I respect all the business owners here, but please give your key guys some respect also. Interesting projects and a comfortable living.

A guy making a good living doesn't need a bonus.(but tools are always great perks:grin: )

 

[480sparky]

I take great exception to this statement. I am part of the rank and file. My last 3 jobs have been 7yrs, 10yrs and 7yrs. I have been with my current employer for almost 4.

Then you are the exception rather than the rule. Most people I've seen in this trade go on to other professions for one reason or another. They don't like working outdoors... they didn't like the type of work... it was just a job until they found something else...

My point here is not so much about time as it is money. The average field worker has how much money wrapped up in his pouch full of tools? A couple grand if you figure in a cordless drill and a couple hand benders? But what does the average EC have wrapped up in tools? Triple-nickles, tuggers, meters, trucks, KO sets, job boxes, a bucket truck.... And what about the shop building? It's not the rank-and-file guys who buy this stuff, it's the owner who ultimately coughs up for it.
In other words, if the company goes bankrupt, the average electrician won't be out thousands of dollars. The owner has the liability. That's why he's entitled to the profit. That's why he started, and built up, the company. Few field workers understand that when they start working on that new job, their pay and the material has to be paid for somehow, and not 18 months from now when the job is completed.

I guess what I'm saying here is if the crews aren't investing hard dollars in the company in order for it to grow and become more profiable, why should the share in the spoils?

 

[cptviggi]

My point here is not so much about time as it is money. The average field worker has how much money wrapped up in his pouch full of tools? A couple grand if you figure in a cordless drill and a couple hand benders? But what does the average EC have wrapped up in tools? Triple-nickles, tuggers, meters, trucks, KO sets, job boxes, a bucket truck.... And what about the shop building? It's not the rank-and-file guys who buy this stuff, it's the owner who ultimately coughs up for it.
In other words, if the company goes bankrupt, the average electrician won't be out thousands of dollars. The owner has the liability.

There's more to it than that. Contractors start SMALL. Most buy tools as they can afford them with profit which was made with help from the men.
One way to avoid paying too much in corporate income tax is to put the money back into the business such as in buying tools. Many EC could easily rent a tugger the 5 times a years they need them but if they have money left over they can buy a depreciating tool and save on paying taxes.
Many of the larger firms here tack on a tool % onto their bid knowing they will need to buy and replace tools for the job. It's part of their overhead.
The last Job I was on was a $4,000,000 bid with $50,000 allotted just for tools.
EC's are protected from personal liability if they are properly set up. The tools, building etc. were purchased by the business, not the owner, if the business should fail it would lose it's assets, but not the owner. If your not protected by a LLC, LLP, Sub chapter S, or C corp, you've got no business doing large scale work.
People have to remember that "manpower" is still a tool and you treat it well just like your other tools. People often leave this trade because it is physically demanding and there is not much of a future for the "average guy".
Unless you go it alone, you will have a hard time making any kind of real living at it. It's competitive, hard on the body, tough on the pschye if you don't "fit" in with the crew and the money just lets you pay the bills, no getting rich here. Unless your a project manager, steady union hand or work a boat load of overtime.
How many guys in the trade do you know who have a stay at home wife and live in a decent suburb? I bet it's not too many.

 

[MAK]

You should ask yourself : Do I know which guys are working there tails off and which ones are not? If you can not answer that then no bonuses should be issued. IMO giving bonuses to the wrong guys is much worse than not giving them at all. Give a sweet bonus to the wrong guy and the other workers will show there response by displaying poor attitudes. I think most guys want to know/hear that their workmanship and work ethic is what keeps or makes the company successful. That they are needed and appreciated. That's what keeps me going everyday. Knowing my employer appreciates my efforts has built a lot of confidence in me and the execution of my work. I've never felt entitled to a bonus and never understood how others could feel that way.

 

[hardworkingstiff]

.......
How many guys in the trade do you know who have a stay at home wife and live in a decent suburb? I bet it's not too many.

No, not too many. You usually have to go out on your own.

 

[hardworkingstiff]

Giving bonuses is a difficult thing to do. It's best if the bonus is objective rather than subjective.

The problem comes in when you try to figure out how to analyze the performance of someone. Let's say you have some difficult jobs that were bid tight. In order to show a profit, you put your best and fastest guys on the project. These guys may have a harder time bringing in the difficult project on budget than the less skilled workers that get the fatter jobs because the job can absorb the extra cost.

So you say I know that my best guys did a better job in difficult circumstances (but isn't that becoming subjective, just what you were trying to avoid?).

Bonuses can be difficult at best. Reasonable pay and good morale is a better investment.

 

[ITO]

Simmer down now?

Khixxx and bikeindy, I understand both of your positions and am looking for a solution to a big mess I got myself into. Would both of you please not go too far and get my thread shut down? Thanks

As I stated before I have heard way way more from the guys on the receiving end than I have heard from the guys on the giving end. Everyone has an opinion about getting a bonus, but I suspect there are lots of employers out there just like me either trying to figure out how to get out of it, scared to even start it. My intentions here are to find some right answers from people in the same boat as me.

As a business owner I assume all the risk, when I bond a job it?s my business, my house, and my bank account on the line if that job goes south. The skilled labor I employ assumes none of the risk; if that job goes south they still get paid. In today?s market, if I go out of business my employees just go sign the books, and are back out working within a few days, while I loose everything and have to figure out how to get a loan or hang my head low and go beg for a job. Little risk, little gain?big risk big gain, and my daughter goes to Europe.

Yes, I spend too much time here, but I work a lot more then anyone else I employ. My day starts at 4:30am and can go past 6pm, and lunches are spent at my desk. Sometimes my weekends belong to my wife, sometimes they belong to the office. Business owners like me don?t sleep at night, we spend our Sundays at home worrying about how to pay bonuses and we get real cranky sometimes. It?s hard to understand unless you have walked in the shoes of a business owner, all that money they make is earned the hard way.

Bonuses and pats on the back are not black and white, and everyone reacts differently to praise and reward. A big part of this business (a bigger part than most realize) is you as the boss have to figure out how to work your employees and they all require something different, and they all have their quirks.

This is where I am now, I want to reward my men but every time I do it feels like I am shooting myself in the foot. In the past few years every time I have given out a bonus, somebody has quit, and somebody has gotten their feelings hurt and it became the source or way too much drama. Think about that for a second, something you did made one of your good employees quit wouldn?t you think twice before you did it again?

So here is the problem, how to I create an incentive and a sense of teamwork with out pissing everyone off?

 

[ITO]

Just could not let this slide on by… With all due respect you have not walked the walk and don’t really understand the risks and the money it takes to keep all this going.

…Many of the larger firms here tack on a tool % onto their bid knowing they will need to buy and replace tools for the job. It's part of their overhead…

So this means the tools are fee? Seriously re-read what you wrote, if it is not part of overhead then its profit. Money is money and it has to come from somewhere, if you don’t tack in on the bid you pay out of your pocket.

…EC's are protected from personal liability if they are properly set up…

I am not trying to be rude here but that is ridiculous, you have obviously never bonded big work or been sued.

…The tools, building etc. were purchased by the business, not the owner…

WHO DO YOU THINK THE BUSINESS IS? The cold hard reality of being a contractor, a real contractor who bids jobs, takes real risks and keeps the whole show running is that contractor is the business the business the contractor. You eat, sleep, and breath your company, you are the company, YOU buy the tools, YOU take the loses, and YOU make it all happen, YOU own the building, YOU are are the business.

…if the business should fail it would lose it's assets, but not the owner…

Exactly who do you think owns the business?

…If your not protected by a LLC, LLP, Sub chapter S, or C corp, you've got no business doing large scale work.

That is a pretty naive statement, if you every find yourself signing a performance bond for big work or getting sued even, you are in for a big surprise.

 

[ITO]

After making that post, and re-reading it struck me this is EXACTLY the kind of discussions I get into with my employees about the risks a business owner takes.

Just last week one of my men “lost” a Rigid 535 threader, stand and die 4”/6”. It just “fell out of the truck”, and due to a clerical error it was not listed on my insurance.

Believe me when the “business” spent $5,070 to replace it, I personally felt it come out of my pocket, because it was my card it got charged to.

Don't take my comments in the previous post personally... I am not trying to flame anyone.

 

[George Stolz]

ITO, opinions here are free, please simmer down. You can convey what you are trying to say without degrading the person you're responding to - address the statements, not the person (that includes comments like, "That's the stupidest thing I've ever heard.") Your last post addressing Cptviggy's statements was a little over the line.

 

[ITO]

Yeah it was a bit over the top... fixed it.

 

[bikeindy]

BikeIndy,
I'd be curious to know what your turnover rate is, or if you even care?

When working for other people, I ALWAYS made it a point to be the best I could be and ALWAYS the best on each job. I would work harder then my fellow employees, smarter then them, take only my alotted break time even if they ridiculed me for it. I wanted to stand out. I wanted to be noticed.
Unfortunatley, and very rarely does that ever happen. In a recent article in Electrical Contractor Mag. they talk about ridicule fromm " lesser " employees and a lack of management validation as the number one cause for turnover.
I never got any recognition for my extra effort. The employee/employer contract is 8 for 8. If you have a good man, you take care of him because they are increaingly more difficult to find.
Now that I'm on my own, It's my single biggest problem. I can't find quality help.
It blows my mind that established companies can be so disimissive of their help and treat them as if their replaceable. One good man can be, but if you lost 3,4 or more you'd be in trouble, you have to admit it.

The single biggest incentive I got/get is to cover time. If something happens and my guy has to scoot out a little early or take a long lunch, I don't usually question it. It has built a sense of loyalty to my guy that I actually care about him and his wellbeing. People budget based on a full paycheck and when their kid gets sick or their wife locks herself out of the house, losing a hour can hurt.

As far as the financial risk/reward? How much did you actually come up to start your business? You may have hundreds of thousands tied up now but that is all money you made from the business. How much did you actually put up out of your pocket years ago? I bet it wasn't all that much.
I started with $3,000 in tools and another $5,000 in the bank .
We have to remember not to think too much of ourselves and remember how blessed we truly are for being the success stories.

I didn't think I sounded like I was dismissive of my workers my point is that Safety is in the employees best interest too Workman's comp doesn't pay the bills the way a pay check does. I have fired three guys none have quit. And I am the most reasonable guy in the world to work for. I have been on the other side trust me it is much easier to collect the weekly pay than it is to run the company it is just not in my blood to have others being in control of my future. I am not a big guy on the block just a little guy who started out while working at an industrial plant doing side work for a GC I talked into giving me a try while I raised three boys on my own as a single dad. I know hard times I looked for the side work because I wasn't being rewarded for my hard labor and skills that were making the company tons of extra money. Now they have to use me as a contractor since it would cost them too much to have someone else come in and learn what I did. my old boss said, " If only we had drawings of what you did." I replied, "If only I had been paid to draw them." It is in my head and that is where it will stay until I am paid to put it on paper.

 

[bikeindy]

Simmer down now?

Khixxx and bikeindy, I understand both of your positions and am looking for a solution to a big mess I got myself into. Would both of you please not go too far and get my thread shut down? Thanks

I personally think you need to tell your guys there will be no more bonuses or that they will be limited to an annual one based on some criteria you come up with. Tell them pay raises will be in order and at any time you feel the reason to give one. I don't do annual raises I might give a guy three raises in a year and another one none depends on production cuz lets face it, it is all about production at a higher quality than the next guy that gets you to the top. that is for employees as well as owners.

 

[khixxx]

Ito

Ito

Believe it or not I agree with Bikeindy about not giving out a bonus. I guess I'm on the other side. I don't own a business.

ITO you are dealing with a double bladed sword. Good luck. The job of a leader is to be a motivator. Everyone is motivated differently. Money is not a big motivation for me. I like being left alone. I don't go to company picnics, I don't BS with the owners son. I think I have been to the shop 4 times a year if that. I like what I do and take it serous. You will always have those guys that are grumpy and annoying.

Have you thought about hiring a consultant to help out with your business? The information on this site is FREE. Do you want your money back

Let us know what you come up with.

 

[ITO]

? Everyone is motivated differently?

BINGO!!!! You got it.

I have a few guys that are as you described yourself, and I line them out and leave them alone. One of them asked for some old temporary panels and some junk used lights for his church, I took the opportunity to buy them new panels and fixtures; it was one of the few bonuses that worked out really well for me.

 

[LawnGuyLandSparky]

IMO your purpose behind the bonus is to give an incentive to your employees to do something they wouldn't ordinarily do. Mixing quasi "commissions" with regular hourly wages doesn't seem practical. Especially when your view is units of labor, and their view is their craft or trade. It's not as if an individuals production quota can be easily quantified, as if selling cars or mattresses.

You stated that you take all the risk, while your employees don't, they just sign a book if your business goes south, indicating to me you are a union shop. If this is the case, then you are indeed playing with a double edged sword. Your employees agreed to their rate of pay in the contract. Any talk of bonuses would simply be viewed by many as a transparent bribe to knock down conditions. More experienced journeymen would begin chanting "hurry up guys, a layoff is coming!" to tease the younger who don't see the bigger picture, and are aiming for a bonus.

If you are a union contractor, I suggest you maximize you profits by utilizing the union hall for all it's designed benefit. A supplier of skilled labor. Spend your time productively by aquiring jobs and supplying the proper material and back-office support. When you have work, the men are there. When you don't, the men go back and it costs you nothing.

 

[brian john]

We give bonuses and once you start stopping is not in the cards. They expect it. Unfortunately our bonuses are tied to nothing but longevity.

I do this at Christmas and bonuses range from a weeks pay for new employees to several months pay for long term employees, in addition they get their choice of a Smithfield Smoked Turkey or Ham and Christmas and New Years with pay.

Some employees are very thankful and always bring me something nice (though all I want is the Thank You)

Some never mention it, no Christmas card, not even a thank you when I hand them the check.

Had one employee's wife call me up and call me everything in the book (CHEWED MY EAR OFF till I hung up on her) for holding back her husbands bonus. Only problem was I gave him a very generous bonus, he was hiding it her for a up coming Vegas trip. He works for someone else now.

It goes from a bonus to a RIGHT.

We also do family outings (skybox at Camden Yards) fishing trips, seminars.

 

[cptviggi]

No harm done...

No harm done...

I didn't think you were being over the top. You are correct I haven't done any "large" jobs that require bonding.
The way I'm set up, All I'm responsible for personally is my credit line. There is a distinction between me being the "member/owner" of the company and the company itself. When I take money out of the business it is now my money. I account for it as my money. It goes on my personal networth statement. If I leave it in the business account it is business money, to pay bills and grow the business. There is a distinction if ever a fine line and no comingling of funds.
We live our businesses. We have to. It's a way of life for us and the critics will always nip at our heels.
I have never given a cash incentive and I guess I'm not advocating one.
All I'm saying is that I remember the people who helped me get here, the late nights, the pay me when you cans, the hey, don't worry about its, the take anything you needs, and I really feel that alot of this business is relationship and loyalty. I really believe that you should take care of those who take care of you. None of us are an Island.
Y'all are pretty cool by the way

 

[ITO]

If you are a union contractor, I suggest you maximize you profits by utilizing the union hall for all it's designed benefit. A supplier of skilled labor. Spend your time productively by aquiring jobs and supplying the proper material and back-office support. When you have work, the men are there. When you don't, the men go back and it costs you nothing.

Yes I am a union contractor. As a business plan, what you just said sounds great, the problem is despite what IBEW says, not all electricians are created equal. As any EC knows labor is your most valuable commodity, and when you find a key player, a big producer or a leader you had better keep them busy and happy or or you will lose them.

Therein is my problem, I want to find a way to boost moral, and reward the men who make me money, but every time I do one of them gets mad and quits.

So far the best solution seems to be company parties, fishing trips, jackets, hats, and some nice tools for xmas. Some one in another thread suggested a gift cert for dinner for birthdays and maybe a gift cert for weddings and births too.