Expert Advice on Bonus Benefits and Best Practices

Industry leaders discuss bonus benefits and best practices to grow your company

Bonus pay can be a strategic way to encourage employee satisfaction and retention, which leads to higher-quality service for customers. However, the structure of bonus offerings varies among companies.

Long-term bonuses

“Our main goal is employee retention — a sense of having some skin in the game — because as the company goes, so does the pool of bonus money,” says Tracy Bond, co-owner of Great Valley Pool Service in Pennsylvania.

Our main goal is employee retention — a sense of having some skin in the game — because as the company goes, so does the pool of bonus money.” Tracy Bond, Great Valley Pool Service

Like many companies, Great Valley Pool Service offers employees an annual bonus at the end of the year based on the company’s overall revenue. Employees are scored on their performance as measured against their objectives. These objectives can include a willingness to work extra time during busy seasons, keeping good notes, ensuring all necessary tools and training are acquired, good time management, offering company-wide assistance and establishing good rapport with clients. Employees earn a bonus percentage equivalent to their completed objectives; for example, if they are eligible for $1,000 and score 90%, they will receive $900.

“This provides some incentive for employees to want to achieve their performance objectives,” Bond says.

Motivating positive behaviors is also the main driver of Pool Scouts and the company’s franchises in 16 states. Each individual franchise determines its own bonus structure, but they are generally based on some combination of its net promoter score, company revenue and the frequency of requested “scout guarantees,” which promises a free return visit if a customer isn’t satisfied.

Pool Scouts president Michael Wagner explains that it uses a brief customer survey to determine a net promoter score — an average score based on customer satisfaction ratings — for all its franchises. The surveys and scores also highlight the individual work of technicians. “This allows us to identify great performances,” Wagner says. “What we try to encourage is a performance-oriented culture in the organization — meaning we expect high, but we reward high.”

Short-term incentives

Beyond the expected annual or semiannual bonuses, some Pool Scouts franchisees offer smaller gifts throughout the year to recognize employees, often in the form of gift cards. For example, if a customer recognizes a certain employee in a survey, phone call or email, that employee receives a gift card. Franchisee leaders stock up on gift cards and hand them out as needed publicly during the team’s daily “morning huddle,” Wagner says.

“We encourage our franchisees to incentivize the behavior that helps them the most,” he says. “So getting all their jobs done in a timely fashion and keeping customers happy — if they can do that, then the franchisee is going to be more successful.”

Wagner finds these short-term incentives are particularly motivating for junior-level employees who may not benefit as much from annual bonuses because they’re not at the highest pay levels.

Profit sharing

All-Seasons Pools & Spas in Illinois offers a different kind of bonus structure where every employee receives a percentage of the profit they generate from clients each week in their paycheck, says vice president Dan Lenz. After their initial training period, an employee’s hourly rate drops, but this profit-sharing model more than makes up for the change, he says.

All Seasons offers six tiers of company leadership. As employees move up each tier based on longevity, acquired training and the amount of revenue they bring into the company, that employee’s percentage of profit-sharing revenue increases along with their base hourly pay.

“If someone is just working for their base hourly rate, they’re not going to be around long because the real money is made by getting the profit sharing,” Lenz says. “When we made that change, it made us a better company, and it’s provided the platform that’s allowed us to grow so much over the years.”

At tier six, the most seasoned employees are expected to train and mentor new employees. Once their assigned mentees complete training and start working on their own, both the junior and senior level employees receive a percentage of profits from the junior employee’s client accounts.

This method not only offers employees a clear pathway to move up in status and pay but also encourages senior-level technicians to invest in mentoring.

“It’s always been a bit of a thing in our industry where people didn’t want to share their knowledge because they’re afraid, ‘Well, you’re going to take from me,’ ” Lenz says. “By introducing that [mentorship program], it gave senior technicians a reason to share the knowledge.”

Showing appreciation

All Seasons also offers bonuses at the end of the year, but the pandemic led Lenz to give all employees an extra bonus in June, right after their busiest season.

“After making that hard push and dealing with COVID, we said, ‘Let’s give them some money to show them we appreciate all the hard work and all the extra effort,’ ” he says.

Every year since then, they’ve kept up the tradition.

“The real goal was to pay people when the money is really coming in,” he adds. “When you’re making good money and the crews are all putting in the effort, if they get that money then, instead of waiting to see what they happen to get at the end-of-the-year bonus, it just gives them a reason to wake up every day and put their boots on.”