In an industry as fiercely competitive as construction, companies must turn over every rock in search of lower costs. One of the best rocks to look under is the performance bonus.
Designed and managed correctly, bonus systems produce amazing cost savings. They keep everyone focused on doing things right and using time productively. They put money into both the workers' and the owner's pockets. Everybody wins.

Thy Bonus Program Shall Be Fair to ALL
"Did you hear about the new bonus program?"
"Yup."
"What do you think about it?"
"We'll never see any of it."
"Why not?"
"We never make any money on any job. At least, that's what they always tell us."
"Good point. Let's take a break."

Your bonus program must be fair to all parties. If it isn't fair to your workers, they will not work any harder. If it isn't fair to you, your labor costs will rise.

A bonus program must be well balanced in order for it to provide long term, rewards for everyone. That means it needs to include two features:

1. It should be paid out for savings the employees have some control over (typically hours used).
2. Negative performance must be subtracted from positive performance.

The easiest way to comply with condition No. 2 is to pay out for total performance over the course of a few jobs. When the program is profitability based after subtracting out assigned overhead, the employees usually get short-changed. Be careful when rolling out a profit based system.

If you are like most business owners, you love freedom. Freedom to do what you want. Freedom to spend your time as you want. Freedom to change your mind to whenever you like.