Not me <-- —> I love it!
But do you hate it? Not believe in it or believe hourly is the way to go? If you are a straight up hourly guy let me know your thoughts.
I’ll be keeping my eye on this one because I’m contemplating how to pay potential employees. It seems to boild down to this:
Hourly- milk the clock- I pay too much
Commission- speed demon- Jobs become sloppy
So, I’m thinking I’d either do a commission with bonuses to ensure good work, or hourly working directly with me so I can see what is going on and how much they can do hourly. After a certain amount of time a level of trust would hopefully develop and this issue would be easier to deal with.
commission except for trainee’s
I have always done hourly, but the constants of commission sound attractive. I believe many attach a responsibility to the employees to handle call-backs on their own time. Is that the case?
I pay my guys hourly. I did a stint of commission and my guys hated it, and or I hated what I was seeing from my guys. Blasting through jobs. Speeding through town. (literally passing on a double yellow line). They like making the 35 an hour when it happened, but whined like babies when they made 7 an hour on a poorly priced job. I want to do commission again, but I have questions on how to do it right. What about a contract that pays throughout the year and there is no way to track the section of work they are doing to put a commission price on it. (Job is too big and takes months to do) How do you pay for that scenerio?Average hourly rate? I’d love any suggestions or stories.
For me the commission equals about 13-16 an hour, sometimes more for larger jobs. On hotels were the commission would average to about $50 an hour I pay a flat rate of $20 an hour and salary for that job…if the hotel takes 25 hours of work to do and they complete it in 20, they will get paid for the completion of 25 as long as quality was good.
Don’t bid low and you won’t have a problem with a silly $7 commission off one job, unless you do a entire strip mall where there commission could be $50-$70 and only take 4-5 hours to complete.
I started off hourly and since moving to commission last year more jobs get done, the guys seem happier knowing they are making more per hour if they did the math and I’m able to get more done in a week…over all it’s saved me money.
That’s pretty much it but I don’t think the jobs have to become sloppy. From what I’ve seen lack of supervision caused not only sloppiness but outright fraud. I know of lots of times where people have faked signatures on their job tickets including the bosses daughter. When I worked for this particular company I usually worked alone on big buildings but when I ended up on route work those rookies, you could see where they would skip the same windows week after week. But when it had a good production manager, a stern one, that never happened.
I also know of a lawn company that pays by the yard. Driver gets I think it was $7 and the helper gets’ $5… so they gotta do 20 yards at least and they do. The owners know their labour costs that’s for sure, it’s a fixed expense. (larger yards they get paid more and of course the customer is charged more).
My brother in laws carpet and duct cleaning pay commission and have been doing so for 20 years and there you better do a good job. the cleaner has to upsell also and gets a they share a % of that also.
My own experience as an employee getting paid commission is great. It’s almost like you’re in business you work so hard, it also gave me my best pay checks.
for instance.
I was paid 100 hours for this first building, all out, glass and panels and back then they had slanted glass where now they have a tin sub roof. I did it in one week and it wasn’t even a hard week.
And this 2nd building I did in one day and got paid for three.
I pay salary and have a bonus structure
Thanks for the replies so far guys, please keep them coming. Mr Bumblebee can you please tell us more about your structure?
I like commission. My incentive for them to do a better job is my foot
in their @ss out the door if they don’t. Why give them more to do a good
job… what the hell is the commission for?
I never got paid more to do better. I guess I did not know I had an
option.
1 Like
Hey Paul,
I believe a quality bonus is just a more positive way of saying there will be a PAY REDUCTION if quality is poor.
You just can’t cut peoples pay back if you’re not happy with their performance. Not giving them their bonus on the other hand can be done more easily. That’s how I see it. It’s kicking them in their wallet where it really hurts instead of their butt.
I budget every job. When I submit a bid, I try to know where each dollar from the job goes into which jar. I don’t make this common knowledge, but, if the cleaners get done on time , under bid, with no complaints or call backs. I made more money than I had budgeted. I put the excess aside. Every month, when we do our meeting, I tell them I have “X” dollars available. I basically give them two (2) options. I can give them the excess in bonus, or we can buy a toy/tool from our wish list. By keeping the cleaners very much aware of what things cost to repair or replace, they take much better care of them.
And yes, they go for the toys more often
Dang, I need to start doing seminars on this stuff!
I pay hourly for one employee and a salary for another. Next year no salary as it killed me this year. But I know how long it takes to clean a window. My employees know how many windows I expect them to clean in 1 hour. My time is based on a very dirty window. When they get to a job they are to inspect the windows and take a picture of any nasty glass and send it to me. Basically a 24 window home should take 1 employee no longer then 4 hours. With two working the job I expect it done in 2 hours 2 1/2 max. As soon as they run into a problem they have to call me. This has worked out just fine for me and when it comes to the larger $1000 plus gigs, it works out much better for me even if I bonus them at the end of it. On large $1000 jobs I expect them to stay all day and make 100% sure everything is triple checked. I factor in a fulls days pay for both but in most cases they complete the jobs in 6 or 7 hours and I pay them for a full day. I will bonus them $50 each. Again this has worked out well for me but I can see where the commission is tempation in motivating more jobs per day. I just get concerned with quality issues.
I was doing commission for everyone but lately, if I have two guys on a single job, the supervisor makes commission and the other guy makes 9 bucks an hour. I may see how this goes for a while. I like the supervisor making commission because he has incentive to kick the other guy’s butt in gear if he’s slacking. This way I may wind up making more on the job than if I was giving the other guy a commission. I’ll let you guys know how it works out.
Kurt, IMO that has diaster written all over it. Hope I’m wrong.
We have been doing it for our maids and it works great. We’ll see how it goes with WC.
Commission pay is indeed great! Its increase our profit margin by a good bit. I do have a commission based scale as well.
We start off with our trainees at minimum wage for the first week. If they show significant improvement we’ll keep them on.
If they are slow we usually find out by the third or fourth day. When they first come on…especially the first month their % pay
is lower and as they show improvement we increase the percentage.
We have ‘pep’ meetings with awards to keep them motivated. They love this!
When I was paying hourly, it was a disaster! My guys werent crying like a baby. I was ! I remember doing payroll every week thinking of how crappy of a business owner I was. How I felt that it was nearly impossible to turn the tables and turn an awesome profit. Jobs were way under bid and had little or no increases on services for years. Every week it seemed liked my ship was sinking and I was in dire straits all the time. One day I had finally had enough and I needed to take action or I was going to go under or end up a one man band again. I had the work, I just wasnt making good money. There were two issues that I had to deal with. Labor and profit. Moving to commission whipped my business into shape within our first year. My bank accounts were growing by leaps and bounds. My guys were reporting back to me on jobs that were totally out of whack and needed a serious price increase. They werent making money on certain jobs. I got valuable feedback to make a move to correct it. I had no choice. It forced me to put my feelings aside on long term loyal customers and raise my rates on those jobs that were under priced.
Commission does have drawbacks. It will increase your payroll and you could end up paying more for workers’ comp. My workers’ comp. is based on my payroll. My guys make more $$ so that will go up. This is how it works in my area. Maybe not in yours? Im in a group rating with the BBB so I dont feel the punch as bad.
I have been on commission for several years now and I encountered the “Zippy” employee that was playing the “do a splash and dash job and get paid great” attitude this year for the first time. He is on strike 2 now and will be fired on the next complaint on quality. You have to address quality and how quickly they are getting done. Call your customers randomly and check on jobs to make sure that they are getting done to your/their standards. Send a message to your employees that you take quality serious and you wont put up with it.
Hourly has big drawbacks for me. Fudging hours, No feedback on underbid jobs, employees slack, no supervision, extentended lunches, excuses why the job took so long, complaining about wages, employee retention is so-so.
If I were to go back to hourly (which I never will), I would monitor everything from start times to completion times on jobs. Just have my guys write their arrival times and completion times down on their invoices they bring back. This would be the only way to run the profit and labor numbers. I would set those jobs aside and correct them (rate increase if needed). I would install a GPS tracking system on each vehicle to track it at all times (I use Zoombak) . This would be like having a supervisor out in the field monitioring them to which way they are taking to jobs. A GPS navigation system is crucial for getting them to and from jobs the quickest way thus getting rid of the “I got lost” excuse.
Looking back, I could make hourly work with all of this knowledge and the technology thats available now. I love commission too much to go back to all that. I like running the business but hate living and breathing it 24 hours a day. Commission basically runs my profit and labor expenses on auto pilot. No tug of war with employees over pay and hours. No worrying about why the guys are out so late and it seemed like they had a light day. I can also say that that I dont have employee morale issues either. The guys basically write their own checks. I gives them a sense of “the skys the limit” on making more money.
Steve
Sounds like you have a good handle on things now
What is a normal percentage range for hourly?
I have heard from 35 to 40 %
