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“The super usually got three out of the four items,” Thompson recalled. The recommended total percentage of construction costs earned is 1%-4%.
Superintendent incentives can be tied to zero punch lists, as Betty Hardle does at Vanderbuilt Homes & Realty in Minneapolis. “There are lots of creative ways to show appreciation,” she explained, “and some don’t cost much money. Share some of the goodies that you get from suppliers, such as trips, prizes, gifts, etc.”
Communication goes a long way toward augmenting a good incentive plan. “If a superintendent is really good and you want him or her with you a long time, then tell them so — repeatedly,” Hardle recommended.
Show superintendents that you’re looking toward the future by keeping them informed about your ideas and plans and asking for their feedback. Discuss the super’s own plans and ideas, too.
The rationale for rewarding superintendents goes far beyond good will. A good superintendent actually saves you money. “If the budget is met, there is money in that, and if the schedule is met or beat, there is money in that overhead recovery is accomplished faster,” said John Barrows, president of J. Barrows, Inc. in Wainscott, NY, who uses a three-part bonus plan that’s similar to Thompson’s.
If you still want to do an incentive plan based on profits, there’s a creative way to do that as well.
Greg Miedema, who heads Dakota Builders in Tucson, AZ, calculates a target gross profit in his sales price and then gives his superintendents a bonus for beating that gross profit. “It takes careful job cost accounting, perhaps a warranty contingency, but it can be done and we’ve found it effective so far,” said the remodeler.
BuilderBooks.com Has ‘Managing Your Employees' to Help With the ‘People Part’ of Business
Looking for help with the “people part” of your business? “ Managing Your Employees,” available at BuilderBooks.com, contains a model personnel policies and employee handbook that you can customize for your company, a section on legal and regulatory authorities that affect personnel policies and suggested systems and processes for managing your employees. It also contains a CD of forms and checklists for managing human resources policies and programs. To view or purchase this publication on line, click here, or call 800-223-2665 to order.
The NAHB University of Housing Offers Courses on Business Management
The NAHB University of Housing offers a course on business management designed to help builders improve their business and profitability. For a list of current offerings, click here. Search keywords: “Introduction to Business Management.”
NAHB Has More Than 160 Resources to Help You Run Your Business More Profitably
Go to NAHB's Business Management Tools Web pages for instant access to more than 160 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more.
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