Need Ideas for Bonus for my Operations Manager

Residential
1

3 months ago I hired an Operations Manager. His job is to make sure all the jobs are completed and my clients are happy. He is currently overseeing two other full-time window/gutter cleaners. We have 2 trucks at this point.

I would like to grow as a business, but would like to link the financial prosperity of my Ops Manager to the financial prosperity of my business. So, I have been doing some brainstorming, and would like to bounce an idea off of you. I’m very open to ideas. This may be a bad one. I don’t know.

Basically, I would give him his established salary of $3,600 per month, PLUS a bonus that would be determined by how well the business did that month. I’m thinking for $0 - $250,000 gross sales, he would get 1%. $250,000 - 500,000 he would get 2% as a bonus. Anything above $500,000 he would get 3%.

This would only be on the crews that he supervised.

If we grew to the point where I needed more than one Ops Manager, then he would get the bonus only on the gross sales that the crews he oversaw produced.

I would give the bonus on a monthly basis. So, if we did $25,000 in a month, he would get a $250 bonus for that month. However, after we hit $250k for the year, and we did a $25,000 month, he would get a $500 bonus for that month.

What do you think of this idea? Has anyone tried something similar. I would like to give him incentive to work hard to get the business to grow and make sure that we keep the quality of our work at a very high standard, and make it so that he is rewarded in the process.

It would be my responsibility as the Owner, to do the marketing necessary to grow the business. I’m considering doing some heavy direct mail marking to see that happen.

Anyway, would love to get your feedback.

2

I would not do monthly bonus, quarterly would be better imo.

he would have to bring jobs in on budget, this is where the bonus comes from, if jobs are not coming in on budget no bonus for that job. all jobs are lumped together for quarterly bonus.

this way if you have a good month and a bad month you are not taking the hit alone

3

Agreed. This is how we do it.

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4

How do you define “coming in on budget”? Can you describe that a little?

5

For us, we have an estimated number of mandays per job, and an estimate of rental expenses (lifts) for each job. That sets “budget”, and performance is based on that figure

6

it sounds like you want to reward him for sales but he is not selling anything, only managing the work.

It may be better to base the bonus around call backs. What I mean is that he will get “X” per month but will loose “Y” for every callback. This will keep him focused on quality and customer satisfaction

7

I think personally, you are basically paying him to over see a crew, and keep expenses to target. So if he keeps the crew doing the job right, and he keeps projects on target, he is doing what he was paid for and deserves no “bonus” for doing his job. However, IF he is selling work, cutting expenses, or in some other way saving or making the business more money, THEN he deserves a bonus.

Unless someone goes above and beyond their job duties, I don’t understand why they need or deserve a bonus.