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Do Not Penalise Performance!



By Allan Ferguson

I recently had a service business owner ask me for advice on a situation where he had four technicians on call. Overall, the company didn’t reach their monthly sales target yet one out of these four techs exceeded their individual targets.

The owner was unsure about how to handle distributing bonuses in a scenario where the overall goal wasn’t reached.

Not reaching a monthly target is obviously not ideal but it can happen to any business, and in a situation like this the advice is always the same.

Let’s say Johnny had exceeded his individual target and his performance deserves a bonus.

Johnny doesn’t necessarily care how the other three technicians are performing because it’s out of his control, it’s not his problem.

He’s more worried about doing a great job to provide satisfaction for customers and income for his family.

In that last month Johnny did everything asked of him and then some.

What other technicians did (or did not) do is irrelevant to Johnny’s performance or his mindset.

Imagine saying to Johnny “you did the right thing, you smashed your targets and went above the rest but because the other technicians’ sales were low, I can’t give you a bonus.”

How do you think Johnny is going to react to this?

Do you think he’s going to stay with you or do you think your best performing technician is going to look for employment elsewhere?

I went many years paying bonuses when my companies weren’t making a lot of money.

It’s painful for your finances but do not penalise the person doing a good job!

You’re showing appreciation and respect to them and in return you’ll receive loyalty.

What a bonus can also do in this situation is prevent performance standards dropping, because if you mess with bonuses staff are used to, you destroy motivation of your troops and that is a very hard thing to fix.

So, how do you respond to Johnny’s performance and lift the others up to scratch?

Johnny is a no-brainer, he needs to know he’ll be rewarded for the sales he’s made and he’ll be rewarded for future sales too.

It doesn’t matter if finances are tight, you need to make this happen and I highly recommend businesses budget for rewards in advance so the money is always there for it.

Now, what about the other three under-performing technicians?

This is where you need a manager to give them a kick up the-you-know what.

They need to see “if Johnny can do it, so can you,” because their performances are dragging the company down.

You might need to spend some time individually with them and even run calls with them to find out why they’re not following the system.

Accountability is a must and I can give you an example of a basic system to use for this, based on industry-leader Joe Cunningham’s principles, which do increase sales if you implement them correctly.

We set up a format where we had our technicians send in their reports after they claimed to have completed a job and we went through it making sure every step of Joe’s system was followed.

Each technician has an iPad, so they scan the document and email it back to us.

We then analyse their responses and we would not release them to their next job until all of this criteria was fulfilled.

This ensures our system is always getting followed, standards are being maintained across the company and customers know they’re going to get quality service from us.

This encourages accountability and it makes a genuine difference to technician motivation knowing if they perform as they should, they will be rewarded for it.

Do not penalise performance!

Allan Ferguson is the CEO of Service Professionals Australia.

To get exclusive insight into becoming a better leader plus exclusive business management tips, listen to Allan Ferguson’s Pipeline to Profitability featuring Australia’s premier leadership coach Peter Cox now

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