Trade Secrets

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Secrets and insights from the remodeling industry

January 01, 2008

A bonus system that works

For the last few years, The Wiese Co. has been trying to find a merit-based bonus system that recognizes employees for a job well done without causing strife.

After abandoning a more complicated system that was good from a business standpoint but bad from a personnel standpoint, the company last year settled on a three-part system. The new program allows the company's two project managers and five lead carpenters to earn up to one-half of 1 percent of a project's cost as a bonus on each project.

"We had to find a way for people to be on board with the fact that they had to be responsible if there are problems on a job," says Ray Wiese, president of the Natick, Mass., design/build firm.

Each project is judged on three factors: customer satisfaction, budget performance and project quality. Customer satisfaction is measured through independent surveys by Guild Quality, budget performance is judged on hitting required gross profit and quality is evaluated by Wiese's personal observation of the completed project.

The process replaces the previous management by objective system, which had rated employees on a scale of 1 to 10 on several factors, with bonuses awarded on a quarterly basis. Although the old system had a positive effect on business in the form of higher margins and less slippage, employees didn't like it.

"Some felt like it was overcritical," Wiese says. "I felt like if we kept going down that road we were going to end up with employees carrying animosity around with them."

The problem, Wiese thinks, is that he was asking employees to respond to problems from months ago. He hopes the new system addresses that.


Being a good neighbor

Life can be difficult for the neighbors of a remodeling project, a problem that led to California Dream Builders Dream Neighbor Policy, started last year by the Santa Clara, Calif., remodeler and custom home builder.

"I noticed that most contractors don't really seem to care about the neighbors," says company President Shawn Bowman. "I wanted to let them know we do care and see if there was anything we could do to make it go smoother."

When a project starts, either Bowman or the project manager walks around the neighborhood and distributes a letter that outlines the work the company will be doing and includes the company's pledge to keep a clean job site and observe quiet hours from 7:30 p.m. to 6 a.m. The letter also contains contact information for the project manager in case neighbors have any problems.

Even though the program has only been in place for a few months, Bowman says it is already generating leads.

"A lot of the neighbors tell us they've never heard of a company doing this and it makes a great impression," he says. "We're getting a lot of interest from the neighbors, so it's definitely helping from a business standpoint."


The Green Piece: Taking green beyond remodeling

A.J. Stones has been involved in green remodeling in the Pittsburgh area for 20 years, so he's a big believer in the movement. Now, though, Stones wants to increase his business by offering homeowners consulting services beyond a remodel.

Stones, president of AJ Stones Design Contractor, recently earned a Building Analyst Professional certification from the Building Performance Institute.

"This allows me to analyze an existing home and look for problems that could cause health concerns," Stones says. "I'm doing more and more consulting with homeowners, looking for areas where they can address indoor air quality, where they can improve energy efficiency."

Stones believes home performance analysis is going to be one of the biggest parts of green construction as the market continues to grow.

"It works hand-in-hand with remodeling, so it makes sense for me to be doing that rather than let somebody else make money with it," he says.

The BPI training consisted of a four-day training program, with two days in the classroom and two days in the field. Even with his experience in green, Stones says he learned a lot from the class. The certification, along with others he has earned such as Green Advantage, also helps him with potential clients.

"When people are searching on the Web for 'green,' it should help me stand out a little more," he says. "It won't close the deal, but it helps get me in the door."


If you have a Trade Secret you would like to share, e-mail Senior Editor Jonathan Sweet at jonathan.sweet@reedbusiness.com.

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