Bonus Interview Arrys Roofing on Performance –Incentive Based Pay episode 100

December 24, 2015

Bonus Interview Arrys Roofing on Performance or Incentive Based Pay

On the podcast this week we have special guest Arry Housh with Arrys Roofing, someone who has taken the performance-based pay to a whole different level.

Arry likes to call it an Incentive Pay Program because that is the way it is actually set up so that the technicians have the opportunity to earn more than an hourly wage.

The program helps make the employees become accountable for their actions. It’s no longer just, “I’m going to stretch out a job to see how long it’ll take me do it.”

Now since there’s a bonus involved it’s of the mind set, “how can I do it better and be more efficient so that I can make more money.” It becomes a win–win situation and actually a team scenario where everyone is playing to win. Ultimately the effects are felt from the customer all the way to the owners.

The program has a positive side and a negative side… the positive side is that they do the job in the time budgeted, money goes into the bonus if something happens on the job like something breaks or there’s a red tag and there’s a negative effect on the bonus.

Arrys first year of tracking the incentive pay program they actually did more business with 10 less employees, fewer trucks and the supervisors made an average $16-18,000 more that year than they did the year before. And in the last 5 years since it’s been in place they have tripled their business. Yes tripled their business. And we’re talking from a 7 figure to a 10 figure a year business, mainly because of the systems and the training put in place to help their employees grow into a career.

Because of this new system profit margins are better, but also is his cash flow. Why? Because the customers are happy with their jobs completed in a more timely fashion. Whereas before there were people going back-and-forth to finish jobs getting the customer frustrated, when the customer becomes frustrated they have a tendency of retaliating. One of the ways is to hold on to your money and now everyone becomes frustrated.

The bonus comes from them performing better than the budgeted hours. Probably one of the most challenging areas of the whole thing is the tracking of the bonuses, but it can be done.

But the benefits far outweigh the challenges if you have employees that are buying into the operation of the company, great teams and long-lasting careers.

This is one way of solidifying your profit margins, building teams that have bought into helping you build your business. As a business owner I know that having a happy customer and steady profit margins makes me a much easier person to work with.

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