How to Run a Successful Pay-for-Performance Model

Pay-per-performance models can be extremely powerful in boosting employee productivity, engagement, and loyalty. The reason is simple: Pay-per-performance gives your workers a stake in the company’s success.

Creating this kind of win-win situation requires three key activities:

1. Setting the right goals
2. Communicating with your team with regular cadences
3. Using Protiv to instantly track and manage bonuses for all jobs

With Protiv, contract workers are seeing 10% wage growth and their companies are enjoying a 12-15% production lift. Here’s how to run a successful pay-per-performance model and start reaping those rewards:

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Step 1: Decide Who Will Participate

Think carefully about the workers you will include in your bonus program. These will be the people that stand to benefit the most, so make sure you include your A-listers.

All participants should:

• Be blue-collar workers
• Have hourly-based pay

Once you’ve identified your participants, don’t skimp on communication and education around the model. Make sure all workers know how the system works. When they understand, they are more likely to appreciate your efforts and succeed with the program.

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Step 2: Start Planning

Once everyone understands and agrees to the terms of the program, collaborate with them to decide how performance will be measured. Bear in mind that pay-per-performance models only work if employees feel that they have a realistic chance of meeting the goals. If they don’t, they will become frustrated or disengaged.

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When it comes to your performance metrics, ask yourself:

• Are they realistic?
• Do employees have a good chance to succeed?
• Am I setting them up for success by bidding on jobs accurately?
• Am I giving them the right supplies to get right to work?

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Step 3: Communicate, Communicate, Communicate

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Protiv is designed to give transparency between you and your workers. Everyone will see the same information about the job, the budget, and individual bonus potential. This way, there is no question about what needs to be accomplished to get a bonus. Our most successful users communicate the goal at the top of each job, whether during Tool Box Talks or throughout the process. For example, a foreman might remind workers, “If we get this done in 16 hours, we’ll each get a 10% bonus.” To reiterate the goals,  Protiv’s platform comes with a gamified employee app that keeps workers informed about their bonus potential for each job. Make sure that all of your employees know how to use this app before you start the job.

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Moving Forward

Pay-per-performance models can be extremely lucrative for employees and their companies–but only if they are implemented correctly. The team at Protiv is excited that you’ll be starting your program and is here every step of the way if you have questions. If you’d like specific help about getting your program started, reach out to us at [email protected].

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