The Team Incentives Strategy That Finally Stopped the Drama in My Company
Discover how shared team incentives and positive peer pressure transformed my crews, boosted efficiency, and built a culture of accountability and teamwork.
KickStart: Base techs’ pay on both individual performance AND teams’ exceeding their production/ efficiency/ cheerleader targets.
I learned early on that the biggest challenge in building a residential services business that ran smoothly without me wasn’t marketing, equipment, or even customers… it was my employees.
Even worse, it wasn’t just one problem with employees—it was all of the staffing issues rolled up into one slimy, stinking mess! Yep, I’m getting PTSD just reflecting on my years down in the Home Front trenches…
Constantly recruiting, endlessly interviewing, fearfully hiring, frustrating onboarding, interminable training sessions, stressful evaluations, never-ending motivating, the list goes on and on.
And after all of the above? I was forced to fire people which of course was agonizing but then so was the rejection when an employee quit on me! This brutal parade just never stopped! 🫣
NOTE: I’ll cough politely here and mention that the “Hiring the Very Best” systems I developed as I grew into a Critical Mass Business saved me from a lot of headaches. 🗝️ 🗝️When you hire great people, 90% of your problems will miraculously vanish!
But the one area that always comes up on employee retention is compensation—specifically, how to use money to develop loyal, motivated people. Fair enough. However, remember that…
ProTIP: My Very Best People stayed with me long-term because of their emotional connection to our company (and me too, I guess) 🙄 along with their pride in being part of “something bigger than themselves”! But even these quality folks responded to smart, fair, transparent pay systems.
After a lot of introspective reflection, I came up with a totally new compensation system. We called it the Employee Efficiency Bonus (EEB). Basically, each employee earned a fair hourly base compensation. Then to increase their pay (and get more praise) they would get rewarded—and occasionally penalized—based on their performance.
If a worker rocked it, they got public recognition and a solid bonus. If they slacked off, well… the “consequences”🫣 came at them fast. (Heck, that kind of sounds like… LIFE!)
As I told one technician, “You want a raise? Perfect. With our EEB, you control your raise every pay period.” The result?
My Very Best People absolutely loved the EEB.
But then my EEB hit a snag. When compensation was based on totally on individual performance, it quickly turned into whispering, bickering, and lots of “the office is giving you all the great jobs and I get garbage” drama! 😡
All this posturing, suspicion and envy threatened to kill the culture I was trying to grow. I didn’t want a bunch of selfish, me-focused techs working for me—I wanted a crew that was a team focused on common goals!
So, I shifted gears and added another system: a shared Employee Efficiency Bonus Pool (EEBP) for each team. The EEBP introduced team incentives that created what I call “Positive Peer Pressure.” (PPP)
Now, when one guy kept losing tools, it wasn’t just his problem—it was money coming out of the whole team’s EEB pool. So, his teammates stepped in: “Bill, you’re killing our bonus. Suck it up, man.” 😈 And let me tell you—this PPP was way more effective than me screaming at my workers!
Even more importantly, the EEBP wasn’t only about penalties. It also rewarded crews for working together efficiently. 😁For example…
As part of our internal pricing process, we would normally set a reasonable target time for a big job—say a large residential project or a restoration loss—and beforehand we would post the projected workers’ target production hours.
Now if the team coordinated well and beat the target, (while keeping the client happy) everyone shared the extra profit.💲💲💲 Those were good days. That’s when I saw real teamwork, not the forced kind.
To make it stick, we shared EEBP updates constantly. Weekly team meetings were perfect for this. Transparency kept the momentum rolling. However…
THREE WARNINGS when it comes to employee compensation changes:
1) Legal. Be sure to have a labor attorney review your compensation adjustments. Even when you’re convinced your payroll modifications are a) logical, b) legal and c) better for your employees… better safe than sorry.
2) Avoid impulsivity. ALWAYS be positive your changes will work for your workers AND your company. It is extremely frustrating for your staff to have a new compensation structure announced with great fanfare and then two weeks later- you’re tweaking it again! 😡
3) Prepare yourself for initial rejection. Speaking of frustration, be prepared for employee suspicion and pushback initially. (This happens even if you sincerely are trying to be “Mr. Nice Guy” with your pay changes.) 😥 We all instinctively resist change- even if said changes will benefit us! 🙄
However, once we dialed in our EEBP team incentives and let Positive Peer Pressure do its thing, our whole operation changed. Teammates corrected each other, encouraged each other, and pushed for better results—without me stirring the pot!
NOTE: I’ll delve deeper into the nuts and bolts of the EEBP in a future KickStart.
That’s when I realized I wasn’t just paying people… I was building a culture that transformed my residential services company into a smoothly running Critical Mass Business that let me achieve the ever-elusive Personal Freedom!
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