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Maintaining the Ethics of Commissioned Based Service Techs

By Todd Liles April 14, 2014 Maintaining the Ethics of Commissioned Based Service Techs
Is commission evil?

Plumbers and HVAC techs are naturally motivated by commissioned based pay.  Paying commissions is a very natural way to keep techs focused on production.   As a sales trainer, and business consultant, it’s one of my first suggestions.  The challenge with a commissioned based pay structure is “how to maintain ethics.” 

4 Ways to Maintain the Ethics with Your Commissioned Based Plumbers and HVAC Techs

1.  Hire Personalities that Work Well With Commission Structures

Not every plumber is going to work well in a performance based pay system, and that is just fine.  Some plumbers will perform best when they are just getting paid a flat per hour fee.  Think new construction plumbers.

Straight hourly pay is not ideal for a residential based service company.  Performance pay is best.

Performance pay means the HVAC Tech is keeping a certain percentage of the money he brings in.  Even if you don’t pay “straight commission” you can be performance based on pay.  Bonuses, and hourly wages that adjust on performance are types of performance based pay systems.

You are going to want to hire plumbers that like a performance based system.

I have found the best method to determine whether a plumber or HVAC Tech will be successful in commissioned based pay systems are the following:

  1. The Past.  If he has succeeded in similar systems in the past, he will most likely succeed again.
  2. The DISCover Advanced Profile.  When I help with pre-employment screenings, I look for a tech that has a balance of:
    1. The Proper Balance of the “Driver, Influence, Stable, and Compliant” personality.
    2. A High Values and Motivation Score on “Economic, Political.”
    3. Lastly, a Strong Indication Score of “Empathy, Ethics, and Goal Orientation” in the External and Internal Dimensions Score.

We have administered over 600 of the DISCover Advanced Insights Profiles.  CLICK HERE TO DISCover More.

2.  Provide an On-Ramp Pay Structure for New Hires

An on-ramp training period is a time frame during which you pay a fair “training wage.”  This allows your plumber or HVAC tech the time needed to learn your system.

Here is a good 90 day guideline for an on-ramp training period:

  1. The first 30 days.
    1. In the truck with your top producer.
    2. Meet every morning to go over standards.
  2. The next 30 days.
    1. He is now in his own truck.
    2. Manager performs at least 2 ride-alongs per week.
    3. Meet daily to discuss any challenges.
    4. Train on standards weekly.
  3. The last 30 days.
    1. Meet weekly to discuss challenges.
    2. Train on standards weekly
    3. Send to away training if his performance is on task.

RELATED – PRESS PLAY Classroom Training

3.  Establish Clear a Clear Code of Ethics

“Good fences make good neighbors.” – unknown

A clear code of ethics creates a clear boundary.  Often times, just establishing the importance of your standards is enough to keep the standard high.

However, there is no substitute for putting your standards in writing and having them signed.

In addition to having your standards in writing, you need to also “inspect what you expect.”

This means performing ride-alongs, “happy calls” aka client debriefs, and having strong accounting standards are a must.

 

4.  Charge Enough to Pay Well

“Desperate people do desperate things.” – unknown

It is your responsibility to charge enough to support your business.  If you want highly motivated, highly ethical employees, then you are going to have to be priced properly.

Not charging enough money forces your HVAC tech or plumber to accept less pay than what they are worth.

If the pay becomes too low, then they are left with a few choices:

  1. Quit, and go to work somewhere where the company charges more.
  2. Violate his personal code of ethics.  This can happen by offering items that are not needed, or by even stealing.

The type of team member you are looking for would actually quit before he violated his ethics.  Or, he would never come on board because he couldn’t see himself earning a great living with your company.

You may be asking yourself, “How much money will a performance based, or commissioned based plumber want to make in a year?”

In my opinion, the answer is not less than $60,000 per year.  And most want to be closer to $100,000 or over.

Those are the numbers that I find keep my clients’ plumbers and HVAC techs happy and ethical.

Question:  Do you think paying commission is unethical?  Please comment and share on  and .

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