Part 2 – By Ron Pestone
Guess what, it’s all baloney. You know why it’s baloney, it’s baloney because all construction work is seasonal! Most construction workers do not work 12 months a year. It could be due to weather or more often work starts to dry up and when work starts to dry up construction workers get laid off. Nobody keeps you around if they don’t have the work. It’s not personal, it’s business. So take the hourly rate and throw it out the window and look at what your peoples annual salaries. If you still think they are making too much remember that it is because of them you are sitting where you are. And if you are still indigent about it remember what happened to Marie Antoinette when she said, “Let them eat cake.
At this point it’s pretty obvious where I stand. I am a believer in spreading the wealth. Not by mouth but by deed. While I’m at it let me make one more point that runs really deep in me, nothing happens without the field. I know the office is important but without the field generating billing there would be no money to support the office. While I spent many years in the office my entire youth was spent in the field and there has never been a day in my life when I have not appreciated the guys and gals in the field.
So you put it all together and the questions arise; who do I bonus, when do I bonus and how much do I bonus? The answer is just use common sense. Do not bonus yourself into bankruptcy. Do not bonus the undeserving and most importantly if you are going to spread the wealth do it like peanut butter on a slice of toast, cover the entire slice of toast.
Maybe you are a small contractor and you mad a nice profit on a small job with you working the field as foreman with your crew. If the job did well enough maybe give each guy a $200 bonus. If it didn’t do that well maybe $100 bonus. If the job only made a few dollars maybe a pizza party. No matter what you give it will mean a lot to your guys and they will more than reciprocate by really working hard on the next project.
Let’s go to the other extreme. Say you are a subcontractor finishing up a multimillion dollar contract where you made a three million dollar profit. These are the guys I would bonus.
Project Executive [yearly]
Purchasing Agent [yearly]
Layout guy [job]
Lead guy [job]
Best producers on the project [job]
How much do you want to bonus these guys? You just made three million dollars due to their efforts; can you give up 10% of it to bonuses or $300,000 to be split up between them? You can’t get yourself to give up 10% because you will not be able to sleep at night, how about 5% or $150,000 to be split up among these guys? Can’t do even that in fact you can’t get yourself to give up an extra dime to them. How many more jobs do you think you are going to do with these guys and make three million dollars profit? How hard do you think they are going to work for you and your company? How much material on the job site you think is going to walk? How much loyalty and respect do you think your people are going to have for you?
Everyone has their own opinion and I guess everyone is entitled to it. I believe down to the very fiber of my bones that the key to prosperity and success in subcontracting lies in the thoughtful art of sharing the wealth by bonuses.
If you doubt my opinion take two similar projects that were successful, bonus one and don’t bonus the other. When you send these same two crews out again with all the important things being equal like good estimates and good buy outs look at the two bottom lines when their projects are complete. It doesn’t take Einstein to figure it out.
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