Ask the experts: Damaged equipment and bonuses

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Q: I am trying to think of a way to hold employees accountable for damage to equipment: One crew lost a $310 chain saw and another ran over a customer’s gardening wagon. I was thinking something like the company will pay the first $250 of accidental damages to equipment or for lost equipment. After that, the crew foreman would be held accountable. Does this sound reasonable?

A: While that may be a reasonable way to get some accountability, it can often lead to morale problems and perhaps your crew members doing things they may not normally do (like not telling you when accidents happen, etc.). Another route to go may be to let them know there will be a bonus paid at the end of the year based on you deducting the costs for any damages or lost equipment. That way, the bonus would be theirs to lose.

I would also suggest you look deeper into what may be the bigger issue. Perhaps there should be some training on safety: (1) using two people to help in backing up a vehicle, and (2) making sure the load is secure, thus forcing crew members to look around to see if everything is on the truck before they leave the job site. 

Sometimes, it helps to explain why these things can ultimately cost the entire company and not just individuals and that it is up to everyone to be safe and aware of what is going on.

Unfortunately, things happen, so it is critical that you set the tone about safety and the costs involved in these occurrences. Sometimes good communication can go a long way.

Joe Markell, Sunrise Landscape & Design

Q: Year-end bonuses: what are small companies paying this year? How is everybody rewarding crews for hard work and dedication in a tight profit economy?

A: Great question. I am advising my clients to get rid of Christmas bonuses and any bonus that cannot be tied to some measure of performance. I led a webinar on this topic, titled “Incentives That Work – Motivate Staff, Reduce Your Stress and Increase Profits!” this past January for PLANET. Good incentives require three things: Simple to calculate – for both the recipient and you, shows ongoing progress, and are self-funding.

The singular Christmas bonus has gone out of style. There is something wrong if you are paying bonuses to your crews but not yourself. A bonus should be “self-funding” and thus there should be enough for the owners too. Making it self-funding, a percentage of savings, doled out on a percentage of salary is fine, although that may make the math complicated if you are doing frequently throughout the year.

Giving from the heart and saying thanks is super important. I think there is a missed opportunity when owners can’t bonus themselves or struggles to bonus their employees. I think both conversations are important – giving for sake of giving, and calculating ways to engage and bonus employees to create more for everyone. By giving employees more information throughout the year, one can create ownership thinking and a win-win environment. L&L

Jeffrey Scott, The Leaders Edge Peer Group