Pay Systems

I'm new to this industry and want to incentivize our techs to work to their ability. They are on an hourly pay rate and if it takes you two hours or four hours to do the job, the tech is paid for the hours worked, for the value contributed to the company. Hard workers are penalized as they get more tasks assigned to them.

I am thinking of leveraging the auto repair shop model of a flat rate pay structure, each job has an assigned pay rate based on the average hours to complete the job. Callbacks are the responsibility of the tech doing the work and do not count towards your weekly pay. Obviously, there may be times when a callback is legitimate and a tech would be paid.  

Are there other pay models or structures that you are using or know of that are being successfully implemented?

We have a significant number of college rentals so from the first of May til the end of July we are slammed with property turns and then things slow down and we have a lighter workload, with a small Dec/Jan spike.

We have about 700 units in a mix of SFH and Multi-family and Townhome/Condos with 5 full-time techs and 1 in the field supervisor. All of our techs have more than 5 years of experience and some have over 30 years of experience.

Thanks for your help!

I think this is a fascinating topic, and here are a few thoughts that immediately come to mind:

1) Given the difficulty in finding techs, the system must be a good opportunity for them.

2) A huge challenge is location. In an auto repair shop, there is no travel time, which could eat into their potential profits.

3) There are different methodologies or reasons why maintenance requests are fulfilled in any given order. Fair Housing would suggest doing them all in the order in which they are received, with the exception of emergency maintenance requests, but some properties might want to bundle requests coming from the same building, or other strategies. I would be concerned that maintenance techs might feel compelled to pick and choose maintenance requests based upon their difficult/profit ratio.

Regardless, I always love different approaches that don't get bogged down in whatever supposed best practice is at the moment.

Thanks for your thoughts on this topic.

In our company the techs are assigned tasks by a manager so that eliminates cherry-picking.

I had not considered in drive time, good point.

Thanks for your input!

I remember back about 25 years ago I worked for a GC and he was hired to tear down and rebuild decks/balconies on an apartment complex. He hired a two-man subcontractor crew to do the work but decided to pay them by the hour (no idea why). As I recall, the two men would do two decks over a span of three weeks. The GC decided their labor costs were killing him and renegotiated to pay them a flat rate per deck. Their production rate shifted from two decks in three weeks to three decks in two weeks.

I understand where are you are coming from in wanting to make your pay structure more efficient.

However, I am concerned about the issues you may run into as far as Fair Labor is concerned and minimum wage. What happens if a "bad" tech rushes through jobs in one week and spends half of the next week on callbacks, without pay? Or what happens between August and November, when the workload is light?

I think you are going to have to pay an hourly rate no matter what, and then use the "hours per job" system as a basis for paying out bonuses.

Also, you mentioned the hard workers are currently being penalized by having more work added. With the "per task" pay scale, I assume they will see bigger paychecks and now get rewarded for their hard work, which is a good thing. But your "not hard workers" will at the same time see a drop in pay, possibly? What happens after that? Do they turn in their notice and go to a competitor who is still paying by the hour (and possibly offering a higher wage right now to deal with the labor shortage)?

John,
These are certainly valid concerns and the reason for my post as our collective wisdom is much better than anyone of us alone.
Thanks for the great feedback!
John

It’s great to see some real ideas regarding maintenance pay being discussed.
Another set of considerations would be property age and condition.
For instance, a faucet leak or garbage disposal replacement at a newer asset might take an average of 20-30 minutes, whereas either of those tasks at a 25 yr old asset might turn into a 2hr project, or longer , if there’s years of deferred maintenance.
Compensation as a whole should be considered. Pay, benefits, on-call program, certifications and career growth with work-life balance are all part of the package, along with the respect due these professionals.
Thanks for opening up the topic!

Thanks for your thoughts on this topic. It is a tough nut to crack.

I applaud the effort for coming up with alternative solutions. I do however see a lot of room for exploitation of this proposed system for pay scale. Who will monitor all the work performed? Who's to say that a toilet only needed a flapper but I get payed more to change the handle,fill valve,supply line etc. With regards to material cost what's to stop me from changing as many parts as I would like for a bigger paycheck? How about service requests completed at units where residents were home asking for other work not originally included in initial requests? What about jobs that require more than one person to complete? These are not obstacles which cannot be overcome but it would take some trial and error to figure solutions to problems with such a system as it goes.

Thank you for your input; these are very valid issues that we need to be able to address.

It's called a raise, Mr. Benjamin. Perhaps you've heard of it. Can't afford it? Sell the property before it dilapidates. Sometimes, the simplest solutions are the best ones.

Interesting suggestion. That might work if they weren't already making $28/hour.