Hourly vs Commission vs Incentives


#1

What do you think is best? One of the above or a combo?

If you do offer incentives, what kind? How creative have you gotten?

Hourly
Pros: employee guaranteed their money and profits can be increased by raising prices.
Cons: possibly less employee productivity

Commission
Pros: increased employee productivity
Cons: Less profit impact from raising prices

Incentives
Pros: Increased productivity
Cons: ?


#2

My two cents:
Commision is the way to go. You may have a little less impact from raising prices to make profit, but there seem to be way more pro’s then con’s.

You get to control labor costs on every job, they are going to work harder to make more money, they are more likely to upsell and market services, and you should ever have to “push” your workers to get more production out.

Start them on hourly when you train them, and switch to commission after the training period.


#3

I tend to agree.

The question I’ve been tossing around is how does hourly with incentives compare with straight commission?


#4

I guess it might depend on how you decide to pay the incentive?

Whatever you do, make it simple for everyone to understand.


#5

After all these years of installing glass, I WISH it was commission. I think most employees would agree for most jobs.


#6

In the search field ( Community ) Type in : " Hourly or Commission " and read away.
This topic has been written about many times. Hope this helps !


#7

Reward what results you want and that’s what they’ll produce and you’ll get what you want

it all needs to be congruent

one can’t reward what they don’t want and expect a different result that they do want


#8

I really want to do the 30% commission but I’m paying 20% of gross income to previous owner until it is paid off and That’s leave me living off less my bare necessities until that done. My regular helper would thrive with it but the new guy I just got rushes through everything and if doing a terrible job; I can’t imagine how bad it’d if he thought he could make more going faster. That is a me problem, controls and systems etc.


#9

This is where lower commission plus incentives might be a good fit. They make more when they do more.

As far as quality, that may be an issue with that particular employee no matter what the pay structure.

It’s tough man.


#10

I’m going to research commission+incentives now, s if I’m not in this forum enough already!!! My good pt guy said he’d be interested in ft once I started commission! I can’t pay this thing if fast enough…14 more months at this rate.


#11

My staff makes hourly now and I want to transition. How do make the transition? What if jobs don’t pay out?


#12

you need to fire that guy NOW or he will harm your business including contaminating your good employee or causing him to quit.


#13

For those of you that do commission what are the rates & what do y’all provide.

I am not at the point where I can hire someone but God willing I want to start subcontracting soon.

I prefer 2 man crews as I feel the homeowners want a diligent job but they also don’t want it to take all day.

I have heard a maximum of 40% commission whether it’s a 2 man or 3 man crew or whatever. I am wondering what you guys provide them with as in supplies, company vehicle, insurance & so forth.

Thanks


#14

Subcontracting means they are their own company. You provide them with nothing except payment. And technically, you can’t sub out window cleaning if you are a window cleaning company.


#15

Interesting

I would not know as I am new to the industry but I know I read in another topic that he pays 40 percent commission for 2 & up crews & 30 percent for a 1 man crew.

I just wanted to know if he supplies them or provides a vehicle or what.


#16

He’s gone and the another guy I brought in was fudging his time card. He’s gone after only 3 days. Learning to hire slow and fire fast. I need to slow down even more and build my business.


#17

Of course you can, if it falls outside of an area you do not specialize in. or even if you have sporadic work that would not justifying putting on an employee for a few days.

Or maybe that is just how it is here.


#18

You’re correct… there are very many factors and variables when determining worker classification. It’s a broad subject. The bigger you grow, the more you have to ensure everything is in order.


#19

Any type of work can be subcontracted out legally.

Why would this industry be different?


#20

The way a modern civilization works is that many individuals specialise in certain areas, over here 25 years ago we had a on site staff who would do all these maintenance tasks, then in the late 80s early 90s many people started to get seriously injured or died at work. After that a big inquiry was held and it was found that many of these tasks needed additional training which was more specific than a general handyman or janitor that they had on staff.

This was the birth of outsourcing, or subcontracting in Australia. After that each subcontractor was required to have all training involved with the task at hand.