Achievement-Based Bonus Programs That Don’t Stink – Part 3

Achievement based programs help you make things happen.

Achievement based programs help you make things happen.

Build the bonus program

Building an achievement-based bonus program will take some effort on your part, yet it need not be overly complicated. As a matter of fact, simplicity can be key to success. While there is room to base an incentive program on a quarterly or annual basis, it is likely shorter-term situations will be easier to design, build, and carry out.

Even if you do intend to incorporate long-term bonus programs it is a good idea to start small. Here are 3 reasons why:

  1. It is easier to design and carry out
  2. Your employees want their rewards sooner rather than later
  3. Successful bonus programs build interest amongst your employees making them eager for the next challenge

The size of your construction company, the typical length of your projects, and the number of employees you have will all factor into the length and frequency of each bonus program.

Just like building your construction business takes time, building your achievement-based bonus program will take time to establish and function properly. Eventually, your company may become known as the great place to work because of (such-and-such) annual bonus program. In the meantime, start developing bonus bits which will fit into the overall concept which is part of your company culture.

The 6 Ds  

Remember this from the last post?

At the highest level of implementation are two considerations:

  1. Motivating your employees to excel beyond their base job descriptions and regular duties.
  2. Exceeding your client’s expectations in both small and big ways.

Thinking of the above two considerations, use the 6 Ds to design your program.

  • Determine the objectives


  • Decide who will be eligible to participate (consider team or individual based)


  • Develop the achievement criteria


  • Devise the reward levels


  • Derive the funding formula (Where’s the money coming from to pay for this?)


  • Decree the method of payment


We’re going to break it down step by step.

Determine the objectives

What do you want your team to accomplish? Raise productivity or efficiency? Drive teamwork? Improve customer service? Increase safety habits?

Consider: It is easy to see that a team which works together will without fail be more productive than one that doesn’t. If your team is filled with a majority of workers speaking a foreign language, steps to improve their English skills will inevitably improve customer service. Improving safety awareness and habits is bottom line good for all involved.

Decide who will be eligible to participate

Will this be a company wide initiative, or will only persons performing particular job types be in the running? Will all your field crews be involved or one specific team? Will the office staff be the only ones eligible?

Consider: Devising a scheme which is available to every employee can be tough. Yet, in order for all in your employees to get in on the fun you may decide to have one plan running for field hands and a different one for office staff, or some derivative thereof.

Develop the achievement criteria

What must be accomplished in order to receive the bonus? What are the parameters involved? Will there be levels of reward based on levels of accomplishment?

Consider: Developing the criteria concerning reaching the goals may be the easy part, yet if parameters are left to chance there is room for great error. For instance, if speed is the only criteria, both craftsmanship and safety may be neglected.

Devise the reward levels

Setting attainable benchmarks along the way to the final goal eases the tension which might arise from seeing a big hairy objective. Even if the final goal isn’t met, at least some amount of achievement will have taken place and be worthy of reward.

Consider: Use hard deadlines, percentages, frequencies, or volume as units of measurement when determining the levels which can be achieved.

Derive the funding formula

Just how are you going to pay for all this stuff? Sure, the entire, overall, sweeping objective of having achievement goals in the first place is to improve your operation thereby improving the profitability of your construction company. But you have to start somewhere, right?

Consider: 1) Dig into your own pocket if you must. 2) Give low or no cost rewards with integrity, letting your crew know their part in the effort will pay off as you grow. 3) Contact Schulte and Schulte. We’ll show you how to begin now preparing for fantastic future achievement bonuses your crew will rave about.

Decree the method of payment

Tell your crew exactly what they can expect for each benchmark they reach. Then when they reach it – give it to them.

Consider: Have a party – onsite or elsewhere. Make a razzle-dazzle of the presentations, keep it humorous and fun while at the same time making sure your people know you really do care about them and you appreciate their effort.

A simple example

Before I get into the example I’ll give you a bit of background concerning where this story came from. I’ve recently become a bit of a construction-centric podcast junkie. (A topic which I’ll likely share with you in the future.) The following story came from one of the podcasts I heard early in my podcast adventure.

On the podcast I was listening to, a fellow who is a construction business owner was being interviewed. This guy believes wholeheartedly in incentive bonuses and he shared the story of the first time he tried it. He said that he looked at the jobsite, looked at the scheduled completion date, looked at his crew and came up with his plan.

He told his crew that if they could complete the job three weeks ahead of schedule he would take them all to a local steak house where they would all be treated to a first-class meal. If they could complete the job two weeks ahead of schedule he would have a big pizza party for the entire crew. If they completed the job one week ahead of schedule he would take them all to the fast-food joint and buy them each a hamburger, fries, and a soft-drink. As it turned out, the pizza party is what took place. He said it cost him a couple hundred bucks and came out of his own pocket.

How it worked

So, here is how his story breaks down in accordance with the 6 Ds.

He determined the objective of finishing early (I don’t know if he had the added parameters of safety and workmanship in his objective, but it would have behooved him to do so.)

He decided the entire crew would be eligible and it would be a team effort.

He developed the achievement criteria based on the measurement of time. One week, two weeks, or three weeks.

He devised the reward levels by establishing just what the crew could expect determined by when they reached the goal of early completion.

He derived the funding formula by looking at his checkbook and deciding it was worth it to him to see if his experiment would work.

He decreed the method of payment by letting his crew know exactly what they could expect based on what they achieved.

Further information

The Project Management Institute produced a rather lengthy study and article concerning Incentive Programs in Construction Projects.

Here are a few of my take-aways from their article.

  1. They strongly recommend the participation of employees in planning and implementing an incentive-based program. They say, “As for the ‘participation’ parameter, previous studies demonstrated that employee involvement contributes to the amount of information employees have about what is occurring, and to the feeling of control over and commitment to what is decided.”
  2. Their determination is that presenting a single objective is preferred over multiple objectives.
  3. Further, they advise a monetary program measuring group performance is somewhat preferred over a non-monetary one measuring individual performance.
  4. They say high quality of management contributes to a high likelihood of program success.
  5. My final takeaway — they say, “Under some conditions, participation may lead to higher-quality decisions.”

This has been the third in a 3-part series. You can catch the first here and the second here.

Now that you see the potential in developing an achievement-based bonus program it is time to get in touch. We can help you analyze and develop the financial end of the process. Click here or call 866-629-7735.

Achievement-Based Bonus Programs That Don’t Stink – Part 2

Achievement-based bonus programs that work.

Achievement-based bonus programs that work.

Win, win, win

Once you’ve decided that embarking on an achievement-based bonus program will be beneficial for your team members as well as your construction business your next move will be determining which bonus initiatives will be most advantageous.

Typically, the considerations fall into two major categories – efficiency and profits. Or, reduced to its base level, time and money. Yet, there are a couple more categories which may help bring this matter into better focus. Retention and satisfaction. Retention of your best employees and the satisfaction level of your clients.

A well-executed achievement-based bonus program will be a win for your clients, a win for your team, and a win for your construction business. Yep, win, win, win.

Set the bar high for employee achievement

You’ve been told in the past to look for your clients’ pain points and determine a way to meet their needs. Good advice. Yet, have you considered your employees may also have pain points which need to be addressed? There will always be the WIIFM (What’s In It For Me) issue to consider. When devising your plan, be sure your employees will be rewarded well for their achievements. The goals you set for them should be easy to understand. They should know both what they’re expected to do and what they stand to gain if they do it.

And, while you’re setting the bar high, don’t set it so high no one could ever hope to jump “clear up there.” Plus (and this is the part that will ease your team’s minds) whenever possible, have graded levels of achievement. “If you reach this milestone, the reward you’ll receive is this.” And, “If you meet this even harder milestone, this reward will be on the table.” Plus, “This really tough to reach target will net you this reward.”

By the way, the rewards don’t necessarily have to be higher and higher amounts of money. But, more on that later.

Give the client more than they asked for

“I would like for this project to last longer than we agreed on and cost significantly more than expected”, said no client ever. Which translates into being done on time and not exceeding the budget is the bare minimum for meeting client expectations. But, what more could they ask?

Listening to your clients translates into detail or specialty applications and may mean improved functionality. Having a pulse on your clients, means you will likely learn of ways your team can perform better to improve the clients’ delight levels. Incorporate what you learn into your achievement-based bonus program.

Bottom line, communication with your clients can, and should be, what pushes your achievement-based bonus process.

How to implement a bonus program

At the highest level of implementation are two considerations:

  1. Motivating your employees to excel beyond their base job descriptions and regular duties.
  2. Exceeding your client’s expectations in both small and big ways.

Thinking of the above two considerations, use the 6 Ds to design your program.

  • Determine the objectives


  • Decide who will be eligible to participate (consider team or individual based)


  • Develop the achievement criteria


  • Devise the reward levels


  • Derive the funding formula (Where’s the money coming from to pay for this?)


  • Decree the method of payment

*There will be an example of using this method in part 3 of this 3-part series.

You’re not made of cash

You’re a nice person. You’re also a good business owner. You would like to give lots of great stuff to your well-performing employees. There is only so much money in your coffers. You have a dilemma. Or do you?

You may think the only thing your employees want or will respond to is cold hard cash. Yet studies show that isn’t always the case.  The author of an article found at Incentive Concepts states, “The best rewards experience, then, isn’t a matter of presenting the best rewards, but the best mix of reward, recognition, and experience.” It is an enlightening article based on studies conducted by the Incentive Research Foundation (IRF) and the Incentive Marketing Association (IMA).

Which incentives to give

Following is a brief list of possible reward options you can consider.

  • gym membership
  • golf trip
  • training or educational opportunities
  • company-paid family activity events
  • tickets for sporting events
  • additional vacation days
  • paid group meals
  • company branded mugs, hats, shirts, or jackets
  • chair massages
  • job site lunch delivery
  • tools
  • a magazine or audio subscription
  • car wash and detail coupon
  • ice cream socials
  • theater gift cards
  • concert tickets
  • entrance fees for industry related conferences
  • house-cleaning or maid service at their home
  • museum, zoo, or botanical garden memberships
  • gift cards

You’re likely to think of many other options, especially when you pay attention to what your team members are into. What are they talking about before and after meetings, while on the job site, or during lunch. What are they interested in? Where do they spend their time when not working? What are the ages of their children?

Bargains, discounts, and low-cost gifts

Be on the lookout for bargains and discounts on the items you’ll be presenting to your employees. The obvious option is buying while items are on sale. You can also ask for a discount when purchasing in bulk – even if the “bulk” is only a few dozen on some items. Discounted gift cards are a good option.  Another source for bargain priced gift cards is found here.

You can also consider gift cards in small denominations. Five or ten-dollar cards to local fast-food restaurants and coffee houses, plus slightly higher denominations for familiar department stores.

Get the crew talking – in a good way

Remember, the pleasure your crew derives from receiving achievement bonuses is three pronged. They want reward, recognition, and experience.  Following is a list of fun or different gift items sure to get people talking – adding more to the experience part of receiving the bonus.

Extraordinary shaving items

Gentleman Barbarian T-Shirts

A variety of products found at The Art of Manliness

Give some fun from Etsy

Sleeve notes (you know who needs this)

Key finder (another of those products best suited for certain members of your team who most “deserve” or need them)

Consider the gift of home cooking made easy here, here, or here.

And of course, rubber duckies.   You decide how and when you pass out these little lovelies based on . . . well, who knows what! They’re just for fun.

Perhaps you can start a rubber ducky tradition, similar to the golden banana award tradition. If you don’t already know about the Hewlett Packard Golden Banana Award each of these articles includes the story. New York Times.   Smart Business.   Cindy Ventrice on LinkedIn.

If you missed part 1 you can find it here.

In part 3 expect expanded information concerning how to implement a bonus program based on the 6 Ds mentioned above. Plus, there will be a simple example of the system used in “real life.”

Call today to get in on the Schulte and Schulte accounting advice you need. 866-629-7735