The Case for Performance Pay
Performance pay, also called incentive-based pay, ties a technician’s earnings to the work they complete. For trades like the HVAC business, plumbing business, roofing business, and electrical contracting, this approach can:
- Increase productivity
- Reward top performers
- Boost HVAC sales and upselling opportunities
- Align technician goals with company profitability
When combined with contractor management services and HVAC business software, performance pay can provide accurate data on job efficiency and revenue per technician.
The Risks of Switching Too Quickly
While performance pay has clear benefits, switching too abruptly can backfire. Many companies have lost their best technicians because they:
- Didn’t provide training on how performance pay works
- Failed to explain how HVAC services, plumbing sales training, or electrical service tasks would be measured
- Lacked clear HVAC performance metrics or tracking systems
- Ignored technician input during the transition
Without proper communication, even top HVAC technicians or electricians may feel undervalued and leave.
Best Practices for Implementing Performance Pay
To successfully implement performance pay across trades, contractors should:
- Start with Transparency – Explain how pay is calculated for HVAC installation, HVAC repair, HVAC maintenance, or plumbing and roofing projects.
- Use Software for Accuracy – Leverage contractor management software, HVAC business software, or electrical contractor software to track data.
- Train Teams Thoroughly – Invest in HVAC business training, HVAC classes online, and plumbing sales training to build confidence.
- Pilot Before Scaling – Test the system with a small group before rolling it out company-wide.
- Pair with Coaching – Engage an HVAC coach, electrical business coach, or trades business coach for guidance and accountability.
Why Coaching and Training Are Essential
Performance pay works best when paired with coaching and training. Through business coaching for trades, contractors can:
- Ensure pay aligns with company culture
- Improve technician skills and close rates
- Support leadership development for managers
- Create sustainable systems that drive growth
Having a contractors coach keeps the focus on long-term profitability, not just short-term gains.
Final Thoughts
Switching to performance pay can transform your business—but only if implemented carefully. For HVAC companies, plumbing businesses, roofing contractors, and electrical contractors, the key is communication, training, and accurate performance tracking.
👉 Hear the full discussion on the Successful Contractor Podcast to learn how to retain your best technicians while boosting profitability.
