This is part of a strategy to help everyone in the company think and act more like owners. BBL had four different incentive systems for four different groups in the company. Field employees earned bonus when they kept labor hours below the estimated hours for a job, shop employees earned a bonus if their overall labor hours was below the hours estimated, salespeople were rewarded on volume, and office employees were rewarded based on discretionary bonuses which varied with profitability. In addition, the incentives were often the source of unproductive conflict. This year, BBL introduced a single incentive plan which is based on profitability.
Early buckets have small payouts.
Buckets filled later in the year have larger payouts. In the break room at BBL, there is a large display of the current bucket of profits. As builders, we have slow months. During a slow month, someone drew a hole and droplets leaking out of the bucket. BBL took on these challenges directly when implementing the new incentive.