If you’ve raised kids in the past 20-30 years, you know the new rules – no one loses, everyone gets a prize. Don’t keep score at ball games because it hurts their feelings.
Now many of those kids are working adults, and apparently some of them are working in construction. I’ve heard a number of discussions recently on bonuses. I am afraid that this business of giving bonuses, if we aren’t careful, will degenerate into employees expecting a bonus just for showing up for work on Monday.
Here’s my opinion. A bonus should be a reward for a job continually done above and beyond the standard set for the employee. This expectation should be clearly spelled out in the company employee manual.
If you come to work for me, I’ll tell you what the job is, you agree to do it for whatever compensation we agree on and we get to work. On Friday, I’ll pay the agreed amount for the work that you did, assuming the work was up to the standard we agreed to, and now we are even. I don’t owe you, you don’t owe me.
Now, if you do something above and beyond what I asked, let’s say you completed the demolition or framing in fewer hours than I estimated, or you got a kitchen full of cabinets set in 2/3 the estimated time, then you deserve thanks. You deserve my praise. Am I going to give you a bonus? No, unless you are willing to work for free on those jobs where you take longer than estimated. That’s the problem – employees expect a bonus when they exceed standard, but no consequences if they are below standard.
Now, if you bring in several jobs in a row faster than estimated (assuming the quality is acceptable), now we can talk about a bonus. You are showing initiative and the willingness to work hard. You’re giving extra effort and a reward is fair.
I am all for rewarding initiative and hard work. I want employees who are dedicated to the cause. But I’m opposed to paying a bonus just to try and create a positive work ethic in an employee. You can’t purchase good work habits.
The knowledge and experience Michael Stone gained in his 60+ years in construction has helped thousands of contractors improve their businesses and their lives. He is the author of the books Markup & Profit Revisited, Profitable Sales, and Estimating Construction Profitably, and is available for one-on-one consultations.
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