Incentive Compensation for Contractors - Types of Programs

There are many types of incentive programs.

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Contributors Sue Weiler-Doke David Brown

The best approach is to look at each type and details within them as a tool in a toolbox. Depending on where you are at as a business and what your goals are, you will utilize a different set of tools just as you would when building a project.

Here are some basic categories of incentive programs to think about:

  • Safety - actions and outcomes measured weekly and monthly
  • Field production - more applicable to specialty contractors self-performing 
  • Functional areas - are there other simple measures in other functional areas like there is for the field when it comes to safety and productivity?
  • Total company performance - sharing some portion of the pretax profits in some way.

Ensure that you are continuously communicating the philosophy of the program and the why behind each element of the incentive program.

One of the best ways to validate whether the communication is happening is what David Marquet calls “Certify, don’t brief” as a method of ensuring people deeply understand. He discusses this in his book “Turn the Ship Around” and you can easily apply this to incentive programs.

Whenever you are handing out an incentive, ask the recipient(s) to explain why they are receiving it, how that ties to the company’s mission and values, and most importantly, how it benefits the customer.


In this video series, Courtney Stearns, Sue Weiler-Doke, and David Brown discuss the most common questions we get from contractors about incentive programs, including a bunch of great questions from the audience.

This is Part 10 of a 20-Part Series


Topics Covered in the Series Include:

  • Who Benefits?
  • Calculations
  • Mitigating the Talent Shortage
  • Succession
  • Next Steps

All relationships start with a simple conversation. Let’s schedule some time to talk about your specific challenges and opportunities.


Incentive Programs for Contractors
Every successful and profitably growing contractor we work with has a comprehensive and integrated set of incentive programs in place at all levels of the organization. These programs reinforce the daily actions and behaviors that make them successful. ...

Incentive Programs for Contractors
Every successful and profitably growing contractor we work with has a comprehensive and integrated set of incentive programs in place at all levels of the organization. These programs reinforce the daily actions and behaviors that make them successful. ...

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