I pay a bonus based on the job. I pay them half of what they save and keep them posted with a progress report updated weekly and posted on the board. If they shave 15 hours off a job that I have figured at $30/hr, I pay half of that to them minus the labor burden.

The way I do it is through a spread sheet. Each guy on the job is on the sheet and his weekly hours is entered every week. At the end of the job I take the total hours worked and divide it into the money they saved (minus my half). This gives me a $/hr bonus amount. If Joe has 10 hrs and Sam has 30 hours that's how many bonus hours they get.

It works great on small jobs as they have saved over 50% on some, but those running several weeks I've found tend closer to the estimated time.

The smaller jobs that last no more than two weeks we routinely knock them out with 70-85% of estimated time.

One thing I find it that many contractors for whatever reasons don't spend any time educating their employees as to the code. This causes rework which you don't budget in the job. If you do you likely won't get many jobs or will have to lower your hourly rate such that you don't make any money.

My wife works for a large construction company that isn't doing very well and says "we don't have the money to pay the bonuses" They don't because the guys are getting paid by the hour only. You go on their job and see them taking smoke breaks frequently which last for 20 minutes to an hour sometimes. Three or four guys! That's why they don't make any money but many people can't see that. It is beyond me...

One thing I do to make this work is explain the importance of having necessary tools and that if someone isn't pulling their load they need to say something to them. We're not in kindergarden and elementary school. Peoples livelyhood depends on us doing well and if they continue to freeload they need to share that info with the office. If someone is goofing off it is taking money from their pockets. I stress that to them and it seems to motivate them to handle it.

Last edited by teester; 07/22/07 01:52 AM.