Incentives

[teco]

Hello,

I would like to ask some of the business owners if you are offering your employees incentives to make more money, above and beyond their normal hourly pay? What incentives have you tried? Do you give a % for up selling? Do you offer profit sharing? Meeting monthly revenue numbers? Etc.. What have you tried? How did it go over for your staff? Thx!

 

[petersonra]

From the employee side I would say this. Bonus plans of any kind depend on reliable measurements and dissemination of what the bonus is based on. Most small businesses are pretty secretive about their profit levels and such things.

You already pay them time and a half when they work extra hours.

My guess is that most employees will respond better to believing they are actually appreciated over some minor extra pay which is often based on things they can't see or that they have no control over like job costs.

Don't get me wrong. Some places have implemented very good bonus plans that actually work to reward those who produce more. However a lot of places implement the plans so either everyone gets something whether they deserve it or not or almost no one gets anything. My best suggestion if you decide to implement something is to make it simple. Try to find some measurements that is Meaningful that you are willing to tell your employees rather than forcing them to trust that what you're telling them is true as far as bonuses go. You can do a lot of damage if people don't trust the bonus system or if it is seen as unfair 2 some and generous to other.

As for up-selling, I think what will happen is that your salesman will have a cow when your best electricians are making more commissions than they are

 

[growler]

Are you talking about service work or construction ?

 

[growler]

As for up-selling, I think what will happen is that your salesman will have a cow when your best electricians are making more commissions than they are

Then everyone can eat steak. :happyyes:

 

[cowboyjwc]

I had to think about this one for a little bit. I never cared for incentives, I had one guy offer me a percentage of every "job" I sold and not on upselling a job, I just ended up doing more work on my own time and not getting paid trying to sell jobs.

I'm an electrician and you pay me to work. Pay me a fair wage and I'm good. If you want to upsell jobs or get more jobs, hire a salesman or do it your self.

I know a guy who worked for a company (just started with them) that was all about the upsell. He went over to some old ladies house who had a receptacle that wasn't working and he told her that's all it was. Company policy was that he call the shop. The shop told him to tell her that she needed a panel upgrade, he said I already told her she didn't, they told him never do that again, they then told him to tell her that it would be $150 (1980's) to replace the receptacle. He hung up the phone, told her she needed to call someone else, drove the truck back to the shop and handed the keys to the warehouse guy and quit.

 

[John120/240]

I had to think about this one for a little bit. I never cared for incentives, I had one guy offer me a percentage of every "job" I sold and not on upselling a job, I just ended up doing more work on my own time and not getting paid trying to sell jobs.

I'm an electrician and you pay me to work. Pay me a fair wage and I'm good. If you want to upsell jobs or get more jobs, hire a salesman or do it your self.

I know a guy who worked for a company (just started with them) that was all about the upsell. He went over to some old ladies house who had a receptacle that wasn't working and he told her that's all it was. Company policy was that he call the shop. The shop told him to tell her that she needed a panel upgrade, he said I already told her she didn't, they told him never do that again, they then told him to tell her that it would be $150 (1980's) to replace the receptacle. He hung up the phone, told her she needed to call someone else, drove the truck back to the shop and handed the keys to the warehouse guy and quit.

Exactly my feelings. Stories like this give the whole trade a bad name.

 

[JFletcher]

The shop told him to tell her that she needed a panel upgrade...

That's not upselling, that's fraud. Good on him he quit and went to a more reputable place.

The co I work for now allows us to pitch upgrades to the customer if we feel they are needed. This is includes fixing anything inoperable or broken, code violations, replacing old lights with LEDs, replacing devices with TR and/or grounded units, bringing things up to current code (like in-use covers on exterior receptacles), and additions like extra lighting, better products, etc. We do not hard sell these things unless we consider them a major safety issue.

Example: Saturday, customer wanted two old lights in kitchen removed and two new ones hung, along with some repair work. One light was very off center of where their new dining room table was, so we suggested moving the fixture over the table. They agreed. The repair work, we fixed the original install to work as they wanted it instead of a stop-gap measure they had suggested. They were happier and we made more money. Win-win.

The company is small, but we do get incentives. Some are:

1) Getting paid full day's work if we are efficient and get the job done faster
2) Get a % of any work we upsell.
3) We get a say in how the work is to be done. This may not sound like an incentive to some, but having the boss listen to and accept your input goes a long way to job satisfaction for me anyway
4) We get paid lunch breaks and paid-for lunches on weekends

I will say if you're a small outfit (1-3 employees under you), that going on vacation and leaving your employees w/o work that week or two is no good. They either need work scheduled that week, a partial/full paid week off, or loan them some money, SOMETHING. Leaving your people high and dry because you cant not micromanage, or trust them to work alone, or schedule sufficiently in advance is bad business. I hear guys griping about this all the time. Sitting on your butt not making a dime when there is work that could be done is incentive...to seek employment elsewhere.

One of the biggest free incentives you can offer is praise. If an employee does a really good job, or goes out of their way for you, or comes up with a cost-saving measure, THANK THEM, SINCERELY. People want to feel important, valued, recognized. It doesnt cost you anything to tell someone they did a great job.

 

[Cow]

Upselling with employees is a slippery slope.

One of the area HVAC companies(our shop also has an HVAC division, that's how we hear about it) is notorious for trying to upsell jobs(they push for replacing instead of repairing it). Customers quickly sour to the idea when they call us or other HVAC contractors and find out it's only a small part that needs to be replaced for much less money.

For the reasons mentioned above, I wouldn't recommend upselling with employees that would be receiving commission. You'd have to really trust them. That HVAC contractors name is mud now, it's too easy for employees to get greedy over commissions and hurt the business in the long run. I think it would be much simpler to have the onsite electrician make some quick notes of something that may be worth upgrading or needing repair and passing it along to a dedicated company salesman or estimator to handle. Someone with integrity that you can trust to make smart decisions.

Our shop has profit sharing, with one condition. They will usually buy a couple new trucks every 2 years. The years they buy trucks, every other year, we don't get profit sharing. Everyone likes the profit sharing, I don't hear too many complaints even the years we don't get it. It should be noted that when we all started work for this shop, profit sharing was not mentioned. So I like to think most guys think of it as a perk, rather than a requirement they should get every year.

Bonuses related to projects coming in under bid would be tough for us as well. The electricians in our shop all work different roles. Some guys seem to do mostly service and small jobs, more capable guys seem to work larger bid projects mostly. I personally work a lot of T&M and service for some very good repeat customers. I can't think how we'd do a bonus system that would be fair to everyone beyond the profit sharing we already get.

 

[norcal]

Upselling with employees is a slippery slope.

One of the area HVAC companies(our shop also has an HVAC division, that's how we hear about it) is notorious for trying to upsell jobs(they push for replacing instead of repairing it). Customers quickly sour to the idea when they call us or other HVAC contractors and find out it's only a small part that needs to be replaced for much less money.

For the reasons mentioned above, I wouldn't recommend upselling with employees that would be receiving commission. You'd have to really trust them. That HVAC contractors name is mud now, it's too easy for employees to get greedy over commissions and hurt the business in the long run. I think it would be much simpler to have the onsite electrician make some quick notes of something that may be worth upgrading or needing repair and passing it along to a dedicated company salesman or estimator to handle. Someone with integrity that you can trust to make smart decisions.

Our shop has profit sharing, with one condition. They will usually buy a couple new trucks every 2 years. The years they buy trucks, every other year, we don't get profit sharing. Everyone likes the profit sharing, I don't hear too many complaints even the years we don't get it. It should be noted that when we all started work for this shop, profit sharing was not mentioned. So I like to think most guys think of it as a perk, rather than a requirement they should get every year.

Bonuses related to projects coming in under bid would be tough for us as well. The electricians in our shop all work different roles. Some guys seem to do mostly service and small jobs, more capable guys seem to work larger bid projects mostly. I personally work a lot of T&M and service for some very good repeat customers. I can't think how we'd do a bonus system that would be fair to everyone beyond the profit sharing we already get.

Recent situation was 2 HVAC companies were called because of a water leak in the attic, both told the customer that the evaporator needed needed to replaced, for a cost of $1500.00, the real problem was the PVC condensate lines were broken the equipment worked fine, after her friend consulted w/ his HVAC contractor brother & fixed the broken lines there were no further problems. Too much emphasis on upsell screws the customer.

 

[JoeyD74]

Recent situation was 2 HVAC companies were called because of a water leak in the attic, both told the customer that the evaporator needed needed to replaced, for a cost of $1500.00, the real problem was the PVC condensate lines were broken the equipment worked fine, after her friend consulted w/ his HVAC contractor brother & fixed the broken lines there were no further problems. Too much emphasis on upsell screws the customer.

A lot of these situations come from the fact that these guys are install and don't know how to troubleshoot anything. They see something not working, it must be broken throw it out and buy a new one.

 

[kwired]

A lot of these situations come from the fact that these guys are install and don't know how to troubleshoot anything. They see something not working, it must be broken throw it out and buy a new one.

Yet with the case of the broken drain line, if it was in their own home I bet they just fix the drain line

 

[teco]

Yeah, there are lots of horror stories of shady business practices in all types of businesses. Up selling is a term that makes some folks think its a con or a scam. Wanting to repair or replace something that really doesn't need it is obviously dishonest.

There are many occasions when one of my electrician's finds an issue that just isn't safe. Or found one issue has caused another, now more work needs to be done. Some will call this added work an up sell, or an extra, some might call it an add on, whatever. My electricians are pros and I trust their judgment on such occasions.

I also feel they are looking out for our customers this way. I have never had one of my guys call me yet to add more work, or up sell something, or add on something, where he didn't feel the customer needed to do this or at least bring it to their attention, also wanting me to know.

I think those who really show they care about our customers should get recognized for their efforts. Maybe a % of the repair or add on is the best way to go.

 

[John120/240]

Yeah, there are lots of horror stories of shady business practices in all types of businesses. Up selling is a term that makes some folks think its a con or a scam. Wanting to repair or replace something that really doesn't need it is obviously dishonest.

There are many occasions when one of my electrician's finds an issue that just isn't safe. Or found one issue has caused another, now more work needs to be done. Some will call this added work an up sell, or an extra, some might call it an add on, whatever. My electricians are pros and I trust their judgment on such occasions.

I also feel they are looking out for our customers this way. I have never had one of my guys call me yet to add more work, or up sell something, or add on something, where he didn't feel the customer needed to do this or at least bring it to their attention, also wanting me to know.

I think those who really show they care about our customers should get recognized for their efforts. Maybe a % of the repair or add on is the best way to go.

I think you and your firm are looking out for the customers best interest in these situations. But there are firms in all trades who come across like AmWay sales men. Smarmy, high pressure charlatans.