Incentive Pay For Contractors: Why It Fails And How To Fix It [Video]

Incentive pay structures can significantly impact employee performance and overall business success in the trades. However, many business owners struggle to design systems that motivate employees effectively while supporting company goals. Learn three reasons why incentive structures often fail in home service businesses and hear three actionable tips to make them work better for your business.

Why Current Incentive Structures Don’t Work

1. Overly Complicated Systems

Many incentive plans become too complex, with layers of bonuses and metrics that are hard to track. Employees often don’t understand how their bonuses are calculated, leading to confusion and reduced motivation. If workers can’t see a clear connection between their efforts and their rewards, the structure loses its impact.

2. Disconnected Goals

Incentives are often tied to overall company performance, such as annual profit margins, rather than the specific responsibilities of individual roles. For instance, a sales rep might be judged on company-wide profitability, even though their direct influence is limited to closing …