profit sharing programs for employees?

[kkamauu]

does anyone do profit sharing programs for employees?

i am looking into doing or adding more incentives for the employees - what about profit sharing or something to give extra when extra work is required? Does anyone out there have a system of bonuses or incentives when goals are reached or a profit sharing for employees?

thanks,
k

 

[Gene@mpls]

We are always slow in winter and busy in summer- best program we
have come up with is a percentage of gross exceeding our weekly
goal and always a couple of pizzas on Friday if the previous week exceeded the goal- sometimes the pizzas mean more than the money.

 

[WildWestDesigns]

always a couple of pizzas on Friday if the previous week exceeded the goal- sometimes the pizzas mean more than the money.

You would be surprised about how far even special recognition will go with an employee. Not all the time, but it does work.

 

[jiarby]

They have a job and get paid... that's their share of the profit sharing.

If there is no profit then they have NO job.

Profit is what the business owner earns for risking their money and investing their time into building a business. Do not just GIVE IT AWAY.. If you want to be in the charity business then earn a million dollars profit and give 100k to cancer research or something.

The employee has not risked anything. In exchange for their labor they earn a paycheck. That is enough.

I am a big fan of employee recognition (ahem... being in the trophy/awards business after all!) and it DOES work! People really like being recognized. You do not have to "give away the farm" to do it. They will jump through a hoop for a 99¢ gold star enamel lapel pin, or an employee of the month plaque.

 

[WildWestDesigns]

The employee has not risked anything

That's not quite true. There is a risk for them by going to work for you versus someone else. Going to work for a small business has risks versus going to work for a big company. The ole ball and chain works for a small(albeit national company, all relative) does her accounting work, gets paid, however, there is still a risk that comes december of this year she may be out of a job. That's a risk that is shared with everybody. The more you motivate a person to help keep the company healthy, that risk has a chance of getting reduced.

Now, like you, I think more along the lines of special recognition or even maybe a bonus if they really outshine or something that isn't reoccuring all the time.

 

[MikePro]

christmas bonuses along with gift cards to local businesses we do work for to keep our own "mini-economy" going strong.

 

[ova]

Profit sharing is sometimes a touchy subject. How do you share? Most are based on total income of an employee per year including overtime. Then they get a percent of the company profit. It needs to be based on the gross because of the deductions per pay factor.

How do you decide what employee will work overtime as to not slight another employee if your profit sharing is based on this? How many employees do you have? If all employess share in the same work, do they all get the same wage? Is their pay based on time served or qualification?

For a big shop, or if you are a Union shop, most wages are the same across the board per job class. Overtime is based on a schedule where employees have an equal opportunity to either work or refuse it. This way all overtime hours are kept equal in terms of worked/refused.

These are just some of the factors you might want to explore in determining if profit sharing will work for you. Hope I didn't muddy the waters too much.

As far as our shop [three employees] we just give a straight "bonus" if we feel we can afford it and the shop does good for the quarter.

Dave

 

[jiarby]

There is a risk for them by going to work for you versus someone else

Well... it sounds like you are worried about retention and believe that paying a bonus will help. It may in the short run, but what do you do when you don't want to or cant pay a bonus? It can backfire.

The problem is that the employees will grow bitter when there are quarters with no bonus. They will feel entitled to the bonus even if there is no profit, after all... they did the same work as last quarter...(at least in their eyes). In a quarter with no bonus they feel like they "got screwed". That is the OPPOSITE of the effect you were hoping for!

Far better (im my mind) to give a small raises more often and have a program of continual recognition to express their value to the organization.

Spend money on workplace enhancements that make their work life more comfortable and fun... Maybe add an employee lunch room with a cool espresso machine. A new jumbo monitor & new mouse. (people let their mouse get NASTY! Go look!) A more comfy chair... stuff like that. Buy them a tank of gas for running that errand for you. Pay for them to take a training or certification class in something work related. Take them to a trade show. Give your best installer the "Golden Knife" award... with a real shiny gold boxknife with his name lasered on it that will remind him everytime he uses it of the recognition... plus the other guys will want one too!

That kind of thing keeps people from shopping around for a job. You can add value to their work life beyond just the paycheck.

 

[GypsyGraphics]

i use to give my web developer a nice bonus if he met HIS project deadline... in 5 years he's only gotten 2

when he was salary... he got a christmas bonus equal to 2 weeks pay, now his christmas bonus is base on how much work he does in a given year.

 

[WildWestDesigns]

Well... it sounds like you are worried about retention and believe that paying a bonus will help.

Oh, this really more of an "academic" discussion on my part then it is anything else as I'm a one man shop. Makes for some long ass hours at times, but I don't have to worry about the headaches of having employees. The point of my bringing up what I did is that employees do take a risk when they join your "firm". So employees do have something to risk versus what you had said specifically that they have no risk(or stakeholder) in the "firm".

Also, if you look at my first post, I was more along the lines of special recognition then I was for bonuses.

 

[Sticky Signs]

I used to work for a place that bought awesome x-mas gifts and we'd play the "gift trading" game at the staff x-mas party. Cool things like big screen tv's, the latest cell phone, x-box etc etc etc. Everybody got something cool even though some things where cooler than others.

 

[shakey0818]

They have a job and get paid... that's their share of the profit sharing.

If there is no profit then they have NO job.

Profit is what the business owner earns for risking their money and investing their time into building a business. Do not just GIVE IT AWAY.. If you want to be in the charity business then earn a million dollars profit and give 100k to cancer research or something.

The employee has not risked anything. In exchange for their labor they earn a paycheck. That is enough.

I am a big fan of employee recognition (ahem... being in the trophy/awards business after all!) and it DOES work! People really like being recognized. You do not have to "give away the farm" to do it. They will jump through a hoop for a 99¢ gold star enamel lapel pin, or an employee of the month plaque.

 

[shakey0818]

When i got guys working for me i always treat them fantastic.I take them to lunch allot,pay them extra if i feel they are doing a good job,get their car/truck fixed,loan them money,whatever they need as long as they remember #1 when they are on the Proctor Plantation they best set their mind to work,#2 If they fall from the ladder they are fired before they hit the ground.I think anyone who has ever worked for me knows that working for me is a bonus!Incentives are good for sales people,but does anyone share in the losses and stress?No they don't!

 

[wetgravy]

Team building or morale incentives should be a large incentive in a job. Doesn't need to be much ... or some sort of corporate b.s. thing that is manditory. Back in the day when I still owned my screen printing business, when we did good for a week, I would make sure to schedule an easy day where we did light work in the morning then I would pull out the grill and cook for my shop help. ... they could invite their family if they wanted to (some did) and we took the afternoon to relax, play some stupid games and let them get paid to do so (2 or 3 hours of pay was worth the morale and loyalty building). Now whenever I have a studio assistant to do things like stretch canvases, make gesso, prep screens, whatever ... my form of ordering lunch occasionally (like the grueling days) or just getting a gift card occasionally for the good work (if it was deserving)

In a large business, incentives should be in the form of benefits (vacation days, sick days, health care benefits, etc) ... as such they are ways of making employees feel more valued as an employee.

As for profit sharing ... if an employee is willing to accept a portion of the risk of ownership, they would then be someone who I would offer profit sharing to in the future. I think 2% ownership each year (so 4% next, 6 next after that, etc) to a max % is fine incentive for retaining good help. Again, they would have to accept a portion of risk in the ownership as well ... company takes a loss, he is responsible for that % of loss.

 

[Fred Weiss]

Bonuses, profit-sharing and other financial incentives are great when you're growing constantly. But when you level off or have a decline it can be a morale killer. We went through that and ended up losing a key employee. If I had it to do over, I would never have my employees involved in the sales performance of the business and definitely not profit sharing where how money gets spent would affect the profits on which their share is based.

 

[Locals Find!]

If your incorporated the easiest way to do profit sharing and boost company morale is to give employees stock in the company. If the company does good they get paid dividends and the stock goes up. If they screw up and the company does bad it automatically reflects in the value.

If they want a larger share let them buy more stock from you and then they are investing their money into the business and will be working hard to make sure that investment pays off. Just retain enough of a percentage so you have control.

If they quit or get fired work out a program for buying back the stock. A good CPA / Corporate Attorney could set it all up for you.

However, if your not incorporated why share your profits? You are the only one on the line if things go to hell. So, you earned all the reward for taking all the risk. They got a job that is their reward in this market.

 

[kkamauu]

thanks everyone for your input - for the most part i see what your saying about leaning more towards gifts/bonuses/ and small rewards. Versus profit where i may get the employees expecting a profit even in the down times.

I like the idea of just a BBQ every once in a while, small bonuses here and there.

We are just at 5 full time employees, but have been pretty steady on growth the past 6 months. We want to keep the employees excited but also don't want to have anything backfire on us.

I'll look at starting up bonus type programs and also goals where we meet certain sales for the week or month. But that way i can keep them small versus some large expectation of a qtrly profit and year end profit that might not occur.

Also something that is easily measured, where if a job is redone because they messed up its not counted in the sales goal for the week or month type thing.

thanks for all the input!