This information came from a session during the 2023 ELEVATE conference and expo. Don’t miss ELEVATE in Charlotte, North Carolina, on Nov. 3-6, 2024.
Having the right employee incentives can drive your lawn or landscape company’s success by motivating your staff, improving employee satisfaction and engagement and retaining your top talent.
A survey by the Incentive Research Foundation found that companies that use incentives to recognize and reward employees for their contributions and achievements report higher levels of employee engagement (89%), retention (87%), and loyalty (85%) compared to those that do not use incentives.
Incentives can be financial and non-financial. It’s best to have a combination of the two and align them with your company’s goals.
Financial Incentives
Examples of financial incentives include bonuses, commissions, profit sharing & stock options, pay increases and various employee benefit programs.
Bonuses can be rewards for achieving targets or creating exceptional results. You will need to decide if these are discretionary or pre-determined and who all on staff qualifies for them. Weed Man lays out performance bonuses for their managers the previous year and tie it to customer acquisition, customer retention and profitability of the wider business.
You can also use commission to align employees’ interests with the company. You will need to determine what percentage or amount to pay. At Landscape Workshop, their business development managers earn commission for new maintenance contracts sold, which is 10% of the gross margin generated for 12 months. Weed Man pays their technicians a commission for upsold services and a 20% commission on new customer sales.
Choosing to do a profit sharing or stock options is another way to increase employee investment and develop a sense of ownership on the team.
Offering pay increases rewards hard work or strong performance, but you will have to raise revenue in alignment with the increased wages. Landscape Workshop provides annual performance-based raises to their staff.
Various employee benefit programs can help recruit and retain top employees, but these can be expensive.
Non-Financial Incentives
Non-financial incentives can include everything from flexible work arrangements and additional PTO to mentoring and team-building activities.
Internal promotions are another incentive that can show employees they can have a true career at your company. Over half of Landscape Workshop’s general managers come from internal promotions and most of their VPs were once general managers. Similarly, Weed Man does not hire managers from outside of the company. All of their managers started out as technicians, salespeople or CSRs.
Professional development is another way to invest in your employees. Weed Man provides internal and external leadership classes and resources to employees who show an interest in advancement. Landscape Workshop trains their high-performing field operators so they can become managers.
Recognition and showing appreciation should not be overlooked. Landscape Workshop gives out ‘Lead Dog’ awards, recognizing employees who demonstrate that ‘lead dog’ mindset in their work. Taking the time to highlight employees for their good work gives them greater job satisfaction and a stronger desire to continue to perform well.
How to Design an Incentive Plan
When creating an incentive plan, it’s important to make sure it is aligned properly. Misalignment of employee incentives and shareholder interests can result in misdirected efforts of employees where they prioritize personal gain over the company’s long-term success.
Poor financial results and unethical behavior can occur if employees are incentivized to sell unprofitable work or are encouraged to cut corners on jobs. Employees can also have diminished motivation if they feel their efforts are not adequately recognized or rewarded.
Consider your company’s culture and how your incentives reflect that. For instance, if you are customer-centric organization, you want incentives that encourage customer retention. If one of your core values is collaboration, focus on rewarding employees for working well together.
Your incentive system should be transparent and customized for different roles within the company. Set clear and measurable goals and provide timely and meaningful recognition when your team meets those goals.
Avoid unrealistic goals and try to keep them simple. Don’t promote unhealthy competition and don’t forget to continue to evaluate the program’s effectiveness.
For more content like this, register for next year’s ELEVATE in Charlotte, North Carolina, on Nov. 3-6.
