I spoke with two service business owners last Friday. Both were struggling to keep their margins in the right place, but were experiencing the problem in completely different ways.
First, the owner of an installation business. As we spoke he was reviewing his weekly payroll and spotting huge inconsistencies with the overtime logged by his crew.
The second was running over 200 techs and his guys were spending too long completing jobs with low ticket values, which was dragging down the labour rate and margins.
Both of these owners are trapped by the exact same mechanic.
When you pay strictly by the hour, you put the technician’s financial goals at odds with your business goals. As an owner, you win when a job is done on time and efficiently. But for an hourly installer, the longer the job takes, the more money they make — especially if they can drag it into overtime.
The Right Incentives Improve Work Quality
When owners finally hit their breaking point and decide to shift toward performance-based pay, their biggest worry is that incentivizing speed and output will lead to sloppy installs. It’s a concern I talk about with business owners every week.
But we often see the opposite happen. Ron Williams, owner of Benjamin Franklin Plumbing & One Hour Heating & Air in Ocean City, MD is a great example.
We’ve been working with Ron for a few months and incentives have changed the way his team works.
"Now that pay is incentive based, techs are taking their time,” he told me. Before incentive pay, his techs would find the problem, fix it, and leave. With incentives, they’re doing walkthroughs of what they fixed, explaining the problems in detail, and going above and beyond, instead of just applying a band-aid fix.
Since implementing performance pay, Ron’s average ticket has doubled from $800-900 to $1,500-2,000.
Staying on hourly pay because you are afraid of sloppy work is essentially just subsidizing slow work to avoid managing quality.
📅 Live Webinar: Why Most Bonus Plans Fail (And How to Fix Yours)
Tired of running bonus plans that don't change behaviour? Next Thursday I'm going through the 5 reasons most contractor bonus plans fail — and what to do about each one.
We'll also be discussing real-world examples of how incentive plans have doubled average ticket sizes, cut callbacks, and turned A-players into recruiters who bring your business the best techs in town.
Here's what you'll learn:
The 5 reasons bonus plans stop working the fixes that solve all of them
How to structure incentives to impact the KPIs that matter most to you
The Shadow Payroll method for rolling out the change and the guardrails that stop techs from gaming the plan
When: May 21, 12pm ET | 45 minutes
Where: Online
How to Build a High-Output Compensation Plan
The companies that successfully transition their teams into owner-minded operators don’t just throw cash at techs. Here’s how many of the owners we work with are fixing the hourly trap:
The Callback Deduction: Your plan needs to protect the house. If a tech has to go back and fix an issue, it shouldn't just cost the business, it should cost the tech. Deducting cash from a bonus pool for callbacks instantly changes how a technician handles each job as they don’t want to be going back.
Resetting the Hourly Anchor: Technicians anchor their value to their base wage ("I'm a $30/hr guy"). Quarterly or spot bonuses won't fix this. Keep the hourly safety net, but introduce a real-time effective hourly rate. When a tech opens the ShareWillow app and sees their hard work bumped their pay to $47/hr this week, they stop thinking like a clock-puncher.
Keep It Dead Simple: If your technicians need a spreadsheet to figure out their paycheck, your plan is already dead. A-players need a clear path to win. If your techs can't explain how they get paid to their spouse in 10 seconds, it won't change their behavior in the field. Give them a simple equation: Do X, make Y.
Stop Paying for Time and Hoping for Outcomes
When you apply these three rules, the math changes overnight.
For the installation owner I spoke with, it means he’ll stop paying for 15 hours of phantom overtime each week because his crew actually wants to finish their jobs by 5:00 PM. And for the team with 200+ techs, it means his guys stop burning hours on low value jobs because their paycheck is tied to the revenue they produce, not the hours they log.
You don't need to spend your weekends auditing invoices or building complex spreadsheets to make this happen.
By using ShareWillow, you can automatically enforce these rules. Our software plugs directly into your existing tools (like ServiceTitan) to track the metrics, apply callback deductions, and give your techs a real-time view of their earnings so they start acting like owners.
If you're tired of watching your margins bleed out through hourly pay, it's time to change the mechanics.
Want to see exactly what an incentive plan could look like for your business? Grab a time to chat here.
Best,
Ryan
P.S. Want to see the full case study on how Ron Williams doubled his average ticket with incentive pay? Hit reply and I’ll send it over.