Restoration logo
search
cart
facebook twitter linkedin youtube
  • Sign In
  • Create Account
  • Sign Out
  • My Account
Restoration logo
  • NEWS
  • PRODUCTS
    • New Products & Technologies
    • Submit Your Product
    • Interactive Product Spotlights
  • EDUCATION
    • KnowHow.
    • Podcasts
    • Trade Shows & Expos
    • Training & Certification
    • Webinars
    • Whitepapers
  • TOPICS
    • Water Damage
    • Fire & Smoke Damage
    • Mold
    • Contamination
    • Odor
    • Contents
    • Architecture
    • Catastrophe
    • Cleaning
  • BUSINESS
    • Managing Your Business
    • Insurance/Legal Matters
  • BUYER'S GUIDE
  • VIDEOS
    • Ask Annissa
    • Ask the Expert
    • Ironclad Marketing Minute
    • TradeTalks
    • Video Channel
  • INFOCENTER
    • Mold and Mycotoxins
  • THE EXPERIENCE
    • Conference & Exhibition
    • Convention & Trade Show
    • R&R Special Issue
  • EMAG
    • eMagazine
    • Archive Issues
    • Contact
    • Advertise
  • SIGN UP
Managing Your Restoration Business

Employee Bonuses: Give or not Give? How Much is too Much?

By Les Cunningham
Cunningham_sl1
Cunningham_sl2
Cunningham_sl1
Cunningham_sl2
January 6, 2015

Bonuses are one of the responsibilities that many business owners learn to really dislike, and the reason for the dislike is that setting correct and fair metrics are very difficult to do.  If there are no metrics for judging whether or not a bonus is due and how much is due, then the bonus can become a disincentive! Instead of a good leader, the leader will be viewed, at best, as a benevolent dictator.

Let me set up some basic thoughts as to some different potential levels of employee performance compensation:

Regular Compensation

When deciding on whether or not to give bonuses – or how much to give – it’s important not just to take the employee’s hourly pay or salary into consideration, but additional benefits such as:

  • Medical insurance
  • Vehicle usage
  • Paid time off (i.e. vacation, holidays, jury duty, etc.)
  • Professional development opportunities
  • Retirement plan

In any job market, it is difficult to determine what the pay is for each category in your marketplace. One good way to get a number is to ask each interviewee the next time you’re hiring what they are currently being paid to do their job elsewhere. Ask a lot of questions and you will get some very valuable information on which to make your future business decisions with. The information you gather then needs to be shared with your employees so that they realize what the local marketplace is paying for their job and whether or not they are being paid competitively for their market area. 

Employee Expectations

More important things to determine and identify include:

  • What you expect and need from each employee, in writing.
  • Teaching each employee how to do what you want and need them to do with metrics that they can read.
  • Meeting with the employees regularly and confirm with them that they are doing what you want and need done.

Performance Metrics

One difficult thing to determine is the metrics that any employee bonus will be judged by. These metrics need to be agreed upon and accepted by all that will be affected prior to the bonus program starting. The last sentence of any bonus program should read along the lines of, “Any action that management deems necessary regarding the bonus program…” This way, if the bonus program needs to change, it is done in the open, with everyone understanding why the change needs to be made. It also must be made as a written change to the existing bonus program.

Most companies award their people based on completed jobs on either a monthly, quarterly or annual basis. The more jobs that are averaged for bonuses, the more solid the averages will become and the higher the trust process will become between all of the participants in the bonus plan.

One of the considerations to think about is to split your bonus system into two parts. One part is the bonus plan that all have agreed upon in a democratic process. The second part would be to have a plan that is completely at the discretion of the owner. An example would be the owner giving some type of reward that is strictly decided on and funded by the owner. This could be a turkey at a holiday time, a cash spiff for a notable personal effort of an individual going above and beyond normal job requirements or even something as simple as a public expression of gratitude to a specific individual.

Profit First

One of the most challenging aspects of any bonus program is getting employees to live by the idea that the company must make a profit before any bonus amount is paid to anyone. For many businesses, a portion – if not all – of any remaining profit is divided out among employees according to an agreed upon written bonus plan.

Regardless of how hard someone works, if a profit is not made by the company, there should be no incentive-based bonuses paid to anyone for anything. My clients have had the most success with a written program where all members of a program buy in. The concept is simple – it’s either a win-win or a no-win for all participants.

If a company and its team members trust each other, the company can become highly successful. In order to achieve this level of success, the company must be transparent at all levels. The accountability that results from everyone knowing what is going on within their company will accelerate the success of the company. In order to build the trust on all sides, it is necessary to job cost every job and then review it with all members that participated in the job on a regular basis, preferably weekly.

 The best bonus program is one that pays the planned bonus amount. Conversely, the worst bonus program is one that does not pay the planned bonus amount. But it’s important to not create a bonus plan until everyone understands that a company does not always make a profit. If that is not made clear and in writing, you will rue the day you ever even considered such a plan. 

KEYWORDS: disaster restoration employee morale restoration business owners

Share This Story

Looking for a reprint of this article?
From high-res PDFs to custom plaques, order your copy today!

Les Cunningham, CGC,CR,CCR,CGRa, is president and CEO of Business Networks, Inc. He is a restoration industry expert and can be reached at 1-800-525-1009, ext. 14 or e-mail him at Les@BusinessNetworks.com

Recommended Content

JOIN TODAY
To unlock your recommendations.

Already have an account? Sign In

  • mold remediation

    Fighting Mold and Bacteria Damage

    Successful mold remediation can be multidisciplinary,...
    Mold Remediation
    By: Josh Woolen
  • certifications and licenses for restoration professionals

    Certifications and Licenses Every Restoration Company Needs

    Restoration companies need to make sure they have the...
    Restoration Training/Education
    By: Sharon Elzarat
  • a wall covered in moss and fungus

    Zero Tolerance for Toxic Molds: Essential Steps for Successful Remediation

    Understanding the importance of zero tolerance for toxic...
    Mold Remediation
    By: Michael A. Pinto CSP, SMS, CMP, RTPE, FLS, ERS and Kendra Seymour
You must login or register in order to post a comment.

Report Abusive Comment

Manage My Account
  • eNewsletter
  • Online Registration
  • Subscription Customer Service
  • Manage My Preferences

More Videos

Popular Stories

Pop Art Female Superhero Punches a Masked Villain

TPAs vs. Independence: The Restoration Industry’s Own Version of the Cola Wars

RIA Carrier Advocate Mark Springer

Turning the Page: A New Era of Trust and Collaboration in Restoration

Paul Davis Restoration Leadership Team

Justin Graham Expands Paul Davis Restoration’s Reach with Acquisition of Greater Seattle Franchise

Submit Your New Product/Technology to R&R!

Would you like to promote a new restoration, remediation or cleaning product/technology with Restoration & Remediation? Fill out the question below to start your submission:

Events

September 3, 2025

The Experience Convention and Trade Show

The Experience Convention & Trade Show logoJoin us in Las Vegas for The Experience Convention & Trade Show, the leading event for cleaning, restoration, and remediation pros, packed with hands-on demos, expert speakers, and high-impact networking. Happening September 3–5, 2025 at Caesars Forum—this is where the industry comes to learn, connect, and grow!

View All Submit An Event

Poll

Doffing PPE

When you are doffing your PPE, do you sanitize between every step?
View Results Poll Archive

Products

The Cleaning, Restoration, Inspection, and Safety Glossary

The Cleaning, Restoration, Inspection, and Safety Glossary

The Cleaning, Restoration, Inspection, and Safety Glossary.

See More Products
Prepare for CATASTROPHE with R&R!

Related Articles

  • Cunningham_FT

    Accounts Receivable: How Much is too Much?

    See More
  • Google Ads reporting

    The Fog of Google Ads Reporting: Too Much Information Can Hide Your Results

    See More
  • textiles hard goods art

    Ask Annissa: Just How Much Money is there in Contents Restoration?

    See More

Related Products

See More Products
  • COVER pdf.jpg

    How to Get More Restoration Jobs in 14 Days... (ebook)

  • Cover.jpg

    How To Get More Water Damage Jobs (ebook)

See More Products
×

Stay ahead of the curve with our eNewsletters.

Get the latest industry updates tailored your way.

JOIN TODAY!
  • RESOURCES
    • Advertise
    • Contact Us
    • Directories
    • Store
    • Want More
    • Submit a Press Release
  • SIGN UP TODAY
    • Create Account
    • eNewsletters
    • Customer Service
    • Manage Preferences
  • SERVICES
    • Reprints
    • Marketing Services
    • Market Research
    • List Rental
    • Survey/Respondent Access
  • STAY CONNECTED
    • LinkedIn
    • Facebook
    • YouTube
    • X (Twitter)
  • PRIVACY
    • PRIVACY POLICY
    • TERMS & CONDITIONS
    • DO NOT SELL MY PERSONAL INFORMATION
    • PRIVACY REQUEST
    • ACCESSIBILITY

Copyright ©2025. All Rights Reserved BNP Media.

Design, CMS, Hosting & Web Development :: ePublishing