Metrics and Employment Agreements Address Productivity Issues

RCS Influencer Trent Cotney says contractors should consider using employment agreements to define performance expectations.

Short of monitoring employees in the field, it can be difficult to know if they are working to the highest level of productivity. Contractors should consider employment agreements for their employees that spell out expectations and include performance metrics tied into bonuses.

In the case of salespersons, it is somewhat easier to know how much of their time is productive as their compensation is directly tied into the number and dollar volume of jobs sold. The salesperson’s employment agreement should specify whether he or she earns a salary plus commission or commission only.  Developing annual sales goals for the team is the best metric to evaluate productivity and whether each person is performing optimally. With multiple members on the sales team, it will be easy to identify underperformers and address the issue.

It’s much harder to monitor productivity of other employees, such as installation crews, project managers, and field supervisors. This is where performance metrics that tie into a bonus can play an influential role. For instance, if a supervisor or crew member knows that he or she will receive a bonus for on-time completion of a project, he or she will likely be incentivized to work at maximum productivity.  At the same time, employers want to never emphasize productivity over safety, because OSHA routinely questions employees on whether they avoided tying off to work faster.

The advantage to an employment agreement is that everything is clearly specified before an employee joins the team. It eliminates the risk of confusion surrounding work performance and what is expected of the person taking on that particular position within the company. The agreement can also cover other important topics, such as employee benefits, use of company property, and non-compete or confidentiality agreements.

Trent Cotney is the founder of Trent Cotney, P.A. Construction Law Group, specializing in construction law. See Trent’s full bio here.

Author’s note:  The information contained in this article is for general educational information only.  This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.