[HR Issues] Creating Compensation Plans

Whether you have one employee or 100, offering the right compensation package is key to loyalty and satisfaction among the ranks. At a previous PestWorld convention, three pest management industry leaders, each offering a different mix of salary, bonuses and benefits, discussed how to create optimal compensation plans.

OPTIONS FOR SMALLER COMPANIES. For those who are just beginning to grow their pest control business or wish to keep the company small, Dwayne Howell, General Pest Control, Durango, Colo., offered his perspective on compensating a small crew. "Small companies, like General Pest Control, make up a significant portion of the industry," Howell said. He added that he intentionally elected to maintain a small company of two office staff and a half dozen technicians in the field.

Because he offers fair compensation and benefits to his employees, Howell noted that several of his workers had been with General for long periods. In fact, his first hire 22 years ago remains with the company today. This stability is important to a firm’s bottom line, he added, because "turnover is costly. By the time you advertise a position and hire, train and equip a new technician, you’ve spent a significant amount."

Howell said compensation is an important tool for motivating employees and encouraging them to improve their skills. Therefore, he offers additional compensation to employees who earn additional certifications and gain industry expertise. He advises small business owners to present and promote their compensation plans in their entirety, including all the perks employees receive in the way of equipment, uniforms, time off, company events and training opportunities.

"Be proud of what you have to offer your people," he says. He provides employees with a pay scale that clearly shows their potential for increased compensation over time, which he uses as a motivational tool. Technicians move through the ranks from Level I to Level III with corresponding increases in compensation and the opportunity to earn more based on commissions. Those who pursue a qualified supervisor license also are eligible for more income. "This encourages more training and education, which strengthens the company," he says.

ALLOW FOR FLEXIBILITY. Howell allows his employees to choose their method of payment — weekly, monthly or based on production only. By providing flexibility, employees are able to exert some control over their pay situation and choose the method that best fits their needs. "You should ask yourself whether you would want to work for your own company," he added. "That’s a real indication of how well you take care of your people."

Mike Rottler, a second-generation owner of St. Louis-based Rottler Pest & Lawn Solutions, spoke about the issues and challenges facing owners of larger companies like his, which includes several divisions and a sizable office staff supporting many teams of technicians. Rottler’s approach is to reward employees for key performance outcomes, which he believes encourages them to strive for excellence and helps them understand the company’s priorities.

"When I began working for my dad, he told me that I would earn approximately a quarter of what I brought into the company in revenue," he says. "So for every $40 in revenue I brought in, I would earn $10. And that’s been a good rule of thumb over the years."

Yet Rottler admits to some early missteps in formulating appropriate compensation packages. As he learned the business and grew the company, he noticed high turnover and realized that it was related to a lack of motivation among employees. That’s when he began to formulate a bonus system based on the company’s most valued behaviors.

Rottler’s employees receive a semi-monthly salary draw, but their final compensation is based on a set of points they can earn for various performance standards. A spreadsheet tracks their performance, which is reviewed monthly with team supervisors. Rottler outlined the points on which employees are scored and compensated:

• Performing service and turning in paperwork on time.

• No chargeable accidents.

• Appearing on time and ready to participate in daily morning meetings.

• Keeping trucks clean and maintained.

• Maintaining a clean and professional appearance.

• No damage to customers’ property.

• No sick days.

• Decrease customer skips and cancellations.

• Exceed company production goals for the month.

• Keep product usage within 10 percent of a preset goal.

• Earn positive customer survey responses.

• Make creative sales.

All of these things matter to Rottler Pest & Lawn Solutions’ image, corporate culture and bottom line. And while some PestWorld attendees expressed surprise at the complexity of tracking such a plan, Rottler noted that this compensation method works well to motivate employees and is worth the time involved in tracking performance measures. "If an employee has a downturn in performance points, then we see that as a coaching opportunity," he added.

A TAILORED APPROACH. Jim Vaive, president of Varment Guard in Columbus, Ohio, takes a more tailored approach to aligning compensation to employee goals and is careful to distinguish between the company’s five owners, who all receive the same compensation package, and the firm’s technicians and other staff.

"The five owners of this firm have always had the same pay and benefits, even though we all perform slightly different jobs," he says. "This has worked very well for us — we’re all still with the company 22 years after forming it. We don’t argue about money."

Meanwhile, new employees complete a personality profile, the DISC assessment, in order to determine their best fit within the company. DISC, which stands for Dominant, Intuitive, Steady and Conscientious, offers a peek into a person’s driving personality traits. Over the years, Vaive has noticed that specific personality types tend to thrive in corresponding positions. "We find that dominant types like to be leaders and managers, steady types are good technicians, and intuitive people are good in sales," he says.

Once an individual’s personality is considered, Varment executives ask new hires to outline their personal and professional goals. New employees also are introduced to the firm’s basic treatment techniques, structure and culture in order to ensure a good fit.

Vaive said salary alone is not sufficient compensation for most people. In fact, depending on an individual’s goals, other benefits may be much more powerful motivators. For instance, some people find flexible scheduling to be a key component of a satisfying job while others want definite opportunities for advancement or education. Thus, each of Varment’s employees receive a package tailored for their situation and agreed upon after management-employee negotiation. Semi-annual employee reviews at Varment provide in-depth opportunities to examine performance and ensure that the employee’s goals are still in line with compensation.

Vaive further advises managers who make hiring decisions to use some of the resources available online as guidelines for appropriate regional salaries and benefits packages. He recommends Salary.com, JobStar Central, SalaryExpert.com, and the U.S. Salary Survey.

"There’s a great difference between leaders and employees," he adds. "Always look for the leader coming up in the ranks. It may be the person who’s the most challenging to manage."

DIFFERENT APPROACHES, SIMILAR RESULTS. Despite differences in their companies’ size and approach to compensation, these pest control industry leaders agree that fair pay and benefits are a must to maintaining a motivated and satisfied workforce that will perform well and represent the company and the industry in a positive light.

The author is president of Compelling Communications, St. Louis, Mo. She can be reached at jvanklaveren@giemedia.com.