Many business owners assume their employees don’t know what the others make. But Nick Nykorczuk, president of Creative Pavers, Inc., a design/build landscaping firm in Gibbstown, N.J., found out the hard way that employees do talk about money. And without a clear employee compensation plan in place, he discovered he had inadvertently created competition and hostility among his crews based on what they were being paid. After losing 20 percent of his workforce over this issue, Nykorczuk realized he needed to put a universal, tiered pay scale in place. Today, employee compensation is a lot more cut and dry.
Three years ago, as the economy began to strengthen and work really picked up, Nykorczuk says he was approached by a handful of his employees who wanted to know why one was being paid more than another. With seven design/build crews — each with foreman, a mid-level technician and a laborer — he was paying employees at various levels, mostly based on his own understanding of who was working hardest and performing the best. But as employees from different crews began to talk to one another, they grew hostile and demanded to understand the pay scale. Ultimately five key employees left and Nykorczuk realized he needed a system that was a lot clearer cut.
“The whole thing really blew up in our face,” Nykorczuk says. “We had employees saying they were better than so-and-so and that they deserved more. There was a lot of anger and we realized we needed a tiered system that clearly explained how our employees were compensated.”
In addition to creating salary levels based on job descriptions, Nykorczuk also created an incentive program in which employees could earn more based on efforts that go above and beyond, such as keeping equipment clean or receiving high survey rankings (all customers are asked to rate their experience). In an effort to leave no questions unanswered, Nykorczuk also clarified what skills it takes to reach a certain job level. By developing a testing area in the shop yard, employees can now be tested on a skill before moving up to a new position. For instance, they might need to demonstrate that they can build a seating wall before they are able to move up from a laborer to a tech.
The result of these efforts has been happier crews and clear-cut answers.
“The entire system is published as a spreadsheet that our crews have a copy of, so it’s all literally spelled out for them,” Nykorczuk says. “That has eliminated a lot of questions because they can just refer to the sheet. Everyone is now held to the same system and there are no special favors. Having these structures in place has solved the problem and ultimately helped us operate more efficiently.”
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