Pay Installation Techs A Bonus To Keep Them On Budget?

This came up in a conversation with an integrator, how to keep techs motivated and working efficiently, especially on larger jobs. The problem is the sales guys quote things based on standard labor estimates (which the techs agree are realistic), but then jobs go over on labor hours.

A thought was to give the techs a bonus, based on working more efficiently so they come in under budget on hours. Would this encourage them to move faster, or just to cut corners and cost more in the end?

Has anyone implemented similar programs to give a bonus for under-budget projects? How do you manage these programs?


see the following link. there was a discussion on this a little while back.

Brian thank you for doing this. I would like to break down if someone has done this if there is a minimum job cost that doesn't apply for the bonus. Such as anything under $20,000. Anything over would get a percentage of the profit to be paid back to the team of techs that worked on the project if they were under the hours quoted. Keep in mind our staff including the technicians have settled on what to charge per device, head-end etc.

We do a couple of things. One is track that efficiency. Without tracking it, you cant even tell them if they are doing well at it or not.

we pay a quarterly bonus to all employees based on profitability, a large chunk of profitability comes from labor efficiency compared to quoted times, and another chunk comes from keeping callbacks down.

We pay techs a bonus for quarterly training requirements. If they meet their requirements, they get $2/hr for the entire following quarter.

We have been looking at creating an actual target for both efficiency and productivity now that we can track it pretty reliably. We are looking at job based bonuses and we are looking at monthly based bonuses. You have to be careful tho, because if its sales fault that there arent enough hours on a project, then techs get pissed.

Key here is agreement between sales and tech that the estimated hours are reasonable for both sides.

Im curious as to how others are estimating time. We created a calculator for our use and constantly tweak it, but its not quite right. As far as I know we dont have an NADA book time guide or anything like that. IPVM's labor guide was helpful in creating our calculator tho.

We have not launched this bonus, but its something I really want to do. You keep them from cutting corners by having a combination of company culture that does not reward that tactic and a separate bonus structure that takes that into account. For us, we have a law... "Corners Have Rights - We respect corners. Corners Hold Up Buildings! Don't cut corners." We have a culture of continual improvement and ways for employees to reward each other by noting that they went out of their way to follow one of our laws or did not do enough to ensure those laws were followed. Both in the spirit of improvement and not of snitching.