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maryland
MD PHCC - NEW MEMBERS........
PHCC CONTRACTOR MAGAZINE
Winter 2012
Brandon Johnson Pipe Dreams Plbg & Htg, LLC Lanham, MD
Scott Holsclaw Scott Mechanical, LLC Denton, MD
Larry Garrison Garrison Plumbing, LLC Street, MD
Raymond Schafer Pinnacle Plumbing, LLC Conowingo, MD
Michael Giangrandi A. J. Michaels, Inc. Baltimore, MD
George De Grasse G. A. D. Plbg, Htg, Inc. Edgewater, MD
ADVERTISER SUPPORT..... Senior Editor - Diane P. Kastner Maryland PHCC Contractor Magazine is the official magazine of The Maryland Plumbing-Heating-Cooling Contractors and is published four times annually. The Maryland PHCC does not necessarily endorse any of the companies advertising in this publication or the views of its writers. Maryland PHCC Contractor Magazine is designed and published by Blue Water Publishers, LLC. Articles and information published in this magazine may not be reproduced without written consent of The Maryland PHCC or Blue Water Publishers, LLC. The publisher cannot assume responsibility for claims made by advertisers and is not responsible for the opinions expressed by contributing authors. For more information on advertising, contact Jim Aitkins Blue Water Publishers, LLC 22727 - 161st Avenue SE, Monroe, WA 98272 360-805-6474 / fax: 360-805-6475 jima@bluewaterpublishers.com
Aireco Supply page 15 Bradford White 23 Cummins-Wagner 11 FastEst 11 Grundfos 7 Hodes Co. 18 Liberty Pumps 24
Parts Unlimited 2 Pepco and Delmarva Power 19 PHCC Nat’l Ed Foundation 20 Quality Service Contractors 17 Rheem 5 ROI Marketing 18 Rockford Separators 12
Slant Fin 10 T&S Brass 7 Viega 4 Virginia Marketing Associates 15 Woodford Manufacturing 9
CONTENTS .......... President’s Message - Katharine K. Stradley
4
Gerry Kennedy, PHCC Executive VP - 2012 Advancements Build Momentum for PHCC
6
HR - Top Ten Rules Every Supervisor Should Know
8
Calendar of Events
13
Company Events - Do’s and Dont’s
14
You Can’t Be Santa!
16
Maryland PHCC 32-Hour Backflow Certification Course Information
21
Backflow Certification Course Application
22
OFFICERS 2012 ............................. PRESIDENT KATHARINE K. STRADLEY WEST FRIENDSHIP, MD (410) 442-2221 (410) 442-7626 FAX FIRST VICE PRESIDENT ALBERT REED BALTIMORE, MD (410) 483-3312 (410) 866-5427 FAX TREASURER FREDERICK WOLF BALTIMORE, MD (410) 327-4750 (410) 563-1611 FAX SERGEANT AT ARMS TIMOTHY FELDMAN ELKRIDGE, MD (410) 536-5700 (410) 536-5705 FAX
DIRECTORS THOMAS KELLER ELLICOTT CITY, MD (410) 203-1741 (410) 203-2638 FAX JIM BERNDT BALTIMORE, MD (410) 254-7473 (410) 256-4787 FAX STEVEN M. SCHAEFER WESTMINSTER, MD (410) 876-6825 (410) 857-0011 FAX BRUCE J. SOLOMON REISTERSTOWN, MD (410) 833- 2188 (410) 833-9023 FAX RONALD STIEGLER ELDERSBURG, MD (410) 876-6825
APPRENTICESHIP EDUCATION COUNCIL MEMBERS RALPH M. VITALE, SR. BALTIMORE, MD (410) 665-6262 EDGAR W. ZEPP, IV CLARKSVILLE, MD (410) 531-6712 (410) 531-5812 FAX VERNON L. GAUSS, JR. KINGSVILLE, MD
JIM BERNDT BALTIMORE, MD (410) 254-7373 (410) 256-4787 FAX STEVEN M. SCHAEFER WESTMINSTER, MD (410) 876-6825 (410) 857-0011 FAX RONALD W. STIEGLER ELDERSBURG, MD (410) 876-6825
HONORARY LIFE MEMBERS WALTER L. BREWER TIMONIUM, MD THOMAS N. EARP HANOVER, PA
PAUL F. GOEDEKE BALTIMORE, MD RALPH M. VITALE, SR. BALTIMORE, MD
Winter 2012 | Maryland PHCC Contractor
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PRESIDENT’S MESSAGE Katharine K. Stradley
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I
t’s hard to believe another year has gone by. The Board of Directors for the Maryland Plumbing Heating Cooling Contractors has been working hard to serve our members and help to improve our industry and our Association. We have accomplished a lot in the past two years with the help of many people. On behalf of the Board of Directors, I would like to thank our Executive Director, Diane Kastner for her hard work and untiring enthusiasm for this Association. How lucky we are to have someone so dedicated in protecting our Association and our industry. I would like to send out a special thank you to past MPHCC President, current member of the Board of Directors and our Legislative chairman Mr. Ron Stiegler. Ron has been a great mentor to me for the past two years. He is ready to listen and offer advice whenever needed. He is always willing to volunteer for the good of the Association. I appreciate the kindness and encouragement Ron and his wife Nancy have shown me over the years. They truly are a special couple. Thanks to you both! I would also like to thank my family for their support during the last two years. Thanks to my brothers, for their understanding and help filling in at the office at times when I couldn’t be in two places at once. To my husband for believing in me and encouraging me to believe in myself. To my parents for their patience, understanding, drive, work ethic, enthusiasm and unconditional love. I don’t know two people more dedicated and passionate about our industry and our Association. They have made me the person I am today, for that I will always be grateful. Thanks to the members and the Board of Directors for your confidence and support you have shown me, it has really been a wonderful experience. Thanks to the Past Presidents of Maryland PHCC for their hard work and dedication to our industry and Association and for paving the way for our future. I hope the next incoming President will be just as fortunate to have the same great experience and support from our members. Thank you.
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Maryland PHCC Contractor | Winter 2012
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2012 Advancements Build Momentum for PHCC
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hen PHCC was created, 125 master plumbers proved that their collective voice packed more power than their individual ones. 130 years later, PHCC continues to reflect those same values by working to advance the plumbing and HVACR industry at all levels. Change is coming fast to our industry in the form of new services, technologies, standards and regulations. Here are a few ways in which PHCC has uniquely positioned its members to break through to the next level with new tools, strategies, resources and representation: More Legislative and Regulatory Influence PHCC has expanded its voice and representation for the p-h-c industry on the federal, state and local levels. Here are some recent sample successes: • •
•
•
Repeal of the 3 percent withholding tax was signed into law. Expanded grassroots efforts to successfully influence legislation and regulations, generating more than 4,600 letters from PHCC members to Capitol Hill and the Department of Energy, Effectively voiced concerns about the Environmental Protection Agency’s lead paint abatement rule and continued to lobby to repeal the death tax. Aggressively represented members’ interests in the regulatory arena—particularly with the U.S. Department of Energy—on an initiative that would establish potentially harmful workforce guidelines for the Weatherization Assistance Program.
Relevant Education Programs PHCC—National Association continues to collaborate with the PHCC Educational Foundation, the PHCC enhanced service groups and state and local chapters to customize timely and relevant educational programs to meet our members’ changing needs. These range from the national seminars offered at the annual CONNECT event, to the technical and business management seminars offered by affiliated chapters. The [6]
Maryland PHCC Contractor | Winter 2012
By Gerry Kennedy PHCC National Association Executive Vice President
Foundation expanded its popular bi-monthly webinars this year and continues to offer them free-of-charge to PHCC members. Increased Industry Participation, Member Support As your “in-house resource” for the latest installation technology, product standards and code interpretations, PHCC has increased participation on many industry levels this year. The association guides members on energy efficiency and water conservation topics, including a new water auditor certification program that launched at CONNECT 2012. It also offers expanded safety resources through our online library, provide regulatory updates on new energy standards and product limitations and collaborates with several industry groups to advance the efficient and sustainable use of water. More Member Resources, Fresh New Looks PHCC members received a new member benefit this year: information-packed member resource mailings that provide timely, insightful information and education on crucial industry issues. The first two topics were understanding overhead and risk management. The next ones you’ll receive will cover leadfree products and new water heater regulations. Members also should have noticed a fresh, personalized look in PHCC communications, including the recently redesigned www.phccweb.org. And the latest communications initiative is an exciting brand awareness campaign that will help us spread the word about the professionalism of PHCC contractors. With the momentum that’s been building within PHCC and the positive impact we have on positioning our members as leaders in this changing industry, there’s no looking back! We’re moving forward with a well-thought-out strategic plan that will help us continue “Building Momentum” in the future. Be sure to check your mail for the printed 2011-2012 PHCC annual report to learn more specifics about all of the exciting initiatives that are underway. As you look ahead to 2013, be sure to maximize the full value of your investment in PHCC. Get involved. Be the next success story. Keep the momentum building!
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8:52 [ 7AM ]
HR – Top Ten Rules Every Supervisor Should Know
C
ongratulations on your promotion to supervisor! You have demonstrated a set of technical job-related skills that qualified you to become a supervisor. In your new job as a supervisor you will oversee and guide the work of a team of people. But there’s more to it than that. As a supervisor, you are now charged with knowing and following a number of policies, procedures and regulations that are Human Resources related, “HR” for short. But what do we mean? What is “HR” anyway? HR refers to a collection of activities related to the people of a company or organization. It involves managing people and the workplace and typically includes: recruiting and hiring, administering compensation and benefits, training, complying with regulations, and managing job performance and behavior in the workplace. When properly attended to, good HR practices enable employees to contribute at their highest level to achieve the business’s goals. Even if your company has a designated HR manager, “HR” is really a shared responsibilities that relies heavily on informed line supervisors aware of the key role they play in getting the work done effectively, safely, and to standards. This is true for all companies whether large or small. As a supervisor, you need to know that along with “best practices” in HR, there are also several federal and state laws that govern certain workplace actions. To help protect yourself and your company, you need to learn about employment laws and your responsibilities as a supervisor to comply with these laws. With a nod to David Letterman, this article offers a brief introduction to a top ten list of HR “rules” that all supervisors should know and heed. Drum roll please! 10. Know Your Company Policies. If it’s been a while since you’ve reviewed the employee handbook; now’s a good time. If your company doesn’t have a handbook, be sure you understand the practices of your company. Pay particular attention to policies regarding vacation and other paid or unpaid leave available to employees. You will also want to know how the company handles employees who are absent or late to work. The watch word here is “consistency.” Company policies need to be applied consistently to all employees. If you let one employee get away with coming in late, but come down hard on another employee, you could find yourself defending a discrimination claim.
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Maryland PHCC Contractor | Winter 2012
9. Personal Information is “PERSONAL.” As a supervisor you will have access to, and may become aware of, personal information about your employees. You have both a legal and ethical responsibility to safeguard and keep confidential all personal information on your employees. This includes information that may make your employees vulnerable to identity theft such as social security numbers, names and addresses, driver’s license numbers, and banking information. It also includes protecting an employee’s privacy by not discussing their family issues or health information regardless of whether it is volunteered by the employee or disclosed on employment records such as insurance enrollment forms. 8. There Are Legal and “Illegal” Questions. If your role as supervisor includes interviewing candidates for employment or making promotion decisions, you need to know that there are certain questions and lines of inquiry that could give rise to a discrimination claim. No questions should be asked that would reveal a persons’ race, gender, religion, marital status, age, disabilities, ethnic background, country of origin, or age (“Are you married?”, “Any kids?”, “What do you do on the weekends?”). And depending your state, there will be other protected groups. For instance, in California an employer may not discriminate on the basis of sexual orientation and in the District of Columbia, employers are prohibited from making adverse employment decisions on the basis of political affiliation. Sticking to job-related questions is your best bet. You may think a question is just a friendly attempt to establish rapport but you may inadvertently solicit personal information that is not jobrelated. For example, what’s wrong with asking someone where they are from? Seems like a polite question; we ask people that all the time in our everyday lives. True enough, but if the answer is, India, China, El Salvador or some other country, you have just set yourself up for a potential discrimination claim if you do not hire the candidate. They may think they were not hired because of their country of origin. 7. Employees Have Rights. Whether there are Union employees in your company or not, all employees have certain rights under a variety of federal laws. You should be aware of these rights to be sure you do not violate them and expose your company and yourself to legal liabilities. The details of all the laws regarding
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Winter 2012 | Maryland PHCC Contractor
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employee rights are beyond the scope of this article, but in general they encompass employee rights related to job safety and health protection (OSHA), equal employment opportunities (EEO), overtime and minimum wages under the Fair Labor Standards Act (FLSA), collective bargaining under the National Labor Relations Act (NLRA), family and medical leave (FMLA) and polygraph protection. A summary of U.S. labor laws can be found on the Department of Labor website at http://www.dol.gov/opa/aboutdol/ lawsprog.htm. You should familiarize yourself with labor laws along with the Labor Law posting requirements that inform employees of their rights under U.S. laws (See http://www.dol.gov/ compliance/topics/posters.htm) In addition to federal employee rights laws, you also need to be aware of any state laws that cover employees. Visit http://www.dol.gov/whd/state/state.htm website to learn about employee rights in your state. 6. Equal Employment is the Law of the Land. Equal employment laws apply to both applicants for jobs and current employees. These laws are at both the federal and state level. As a supervisor you are prohibited from making employment decisions based on race, color, religion, sex, age or national origin of the employee. These are known as “protected classes” under Equal Employment Opportunity (EEO) laws. Employment decision under EEO laws includes hiring and firing decisions along with, assignments, pay, training and 1promotions decisions. In 1practical MDPHCC1012_CHS_7.5x5_Layout 9/28/12 3:56 PM Page terms, this means that if you only send your male employees for
additional HVAC training or give the best work assignments to only one race, you could find yourself responding to the Equal Employment Opportunity Commission (EEOC) based on an employee’s complaint. 5. Employees Deserve Feedback. Whether positive or constructive, your employees deserve to know when they are meeting expectations or performing below par. Too many supervisors and managers fail to give their employees feedback or they only give one kind of feedback. But research has shown that feedback, both motivational and formative, is most effective when given separately. To do their best, employees need both. Motivational feedback is also described as “positive”. Tell your employees what he or she did well. This can reinforce good performance and increase the likelihood that it will be repeated. It can help your employee feel confident in their work. Formative feedback is “constructive” as opposed to “negative”. When you tell your employee what could be done better the next time, you are providing constructive feedback. This can help shape (construct) the performance you want to see and increase the likelihood of improvement in performance. Formative feedback is offered to build an employee’s competence in a work task. You will be best served in your role as supervisor if you develop the habit of providing both types of feedback consistently. Be as specific as you can when providing feedback. Try to identity exactly what you liked or disliked about your employees
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Maryland PHCC Contractor | Winter 2012
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work. “Good job!” is easy enough to say, but try breaking that down: “I really liked the way you took the extra time to move that stuff to get to the unit. You made it a much safer work area.” Your employee will know that you value safety and it’s worth a little extra effort to move obstacles. 4. It is Illegal to Hire “Illegals”. All employers, under federal law, are required to verify the identity and employment eligibility of all employees within three days of the date of hire. This verification is done by completing a I-9 form provided by the United States Citizenship and Immigration Services (USCIS). As a supervisor, you may be asked, on behalf of your company, to examine the documents that must be presented by each new employee. These documents serve the purpose of verifying a person’s identity and eligibility to work in the United States. If an employee is not able to present acceptable documentation within three days of their date of hire, their employment must be terminated. 3. Hire Right, Fire Right. In spite of strong hiring practices, you may still be faced with a decision to terminate an employee’s employment. The goal of all terminations is to have the employee leave the company with dignity and without filing a lawsuit. Your first obligation is to confer with your manager to determine your company’s policies and practices regarding terminating employees. If you are in a union environment, you need to make sure you learn the details of the contract regarding terminating union employees. The union contract will most likely outline a
number of actions required before a decision to terminate will we supported by the union. This may include showing evidence that you provided coaching, counseling, training and discipline in an attempt to address the issue before making the decision to terminate employment. If your company is an “at-will” employer, your company is legally allowed to terminate employment with or without cause and with or without notice to the employee. However, just because you can doesn’t mean you should. It’s a good practice to follow the same kind of progressive path often found in union contracts. The courts like to see that you provided feedback (and warnings) to your employees and gave them a fair chance to improve. Avoid saying the dreaded words, “You’re fired!” in the heat of the moment. Your employee may respond by filing a wrongful termination suit against you. Instead, check your company’s policies on suspending an employee and then take the time to investigate to get all the facts. Make sure the facts support your decision. Remember, “Fire in haste, repent in court!” 2. Employees Are People Too. Employees leave their jobs because of their bosses more than any other reason. As you face the people challenges inherit in any workplace, remember, it’s not just a tool box that comes to work every day – it’s a whole person. “He doesn’t respect me” is a phrase we hear all too often when an employee is asked about their boss. And no doubt, you want your employees to respect you also. But what does that mean? Do you share a common definition of respect in the
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workplace? At your next staff meeting, set aside some time to discuss the question, “What does it mean to show each other respect on the job?” First, listen and value the ideas and opinions of each person; acknowledge any concerns and challenges they may be facing; and, ask for suggestions on how you can help to address issues. Establishing respect in the workplace is not only common sense and courteous, there are laws that regulate certain workplace conduct that you need to understand. As a supervisor you take on the added responsibility to ensure that you and your colleagues behave appropriately toward one another. Creating or allowing a hostile, intimidating or harassing environment can subject you to personal liability if a claim is made. You must not look the other way if you know of or should have known that someone is being illegally harassed, intimidated or discriminated against. The work place is no place for a “boys will be boys” philosophy. 1. You Are the Company. Perhaps the most significant thing to know as a supervisor is that you are the Company. Your staff will view you as management and the courts may view you as the Employer. This has significant implications. As a supervisor you may be held personally liable for what you do and what you fail to do on behalf of your employees. You may be held personally responsible for allowing an alleged discriminatory practice to occur, for contributing to it, or for ignoring it altogether. Remember too, that the supervisor is usually the bearer of bad news. You may be called upon to announce cut backs, reductions in hours
or terminations. This can make you an easy target to be named in a wrongful employment action claim or lawsuit. And it is not just discrimination laws. You may also be held liable for violating an employee’s rights by not properly paying wages, disallowing certain types of leave, failing to notify employees of their rights or interfering with an employee exercising their legal rights. Personally liable means you can be held personally responsible in a civil action brought by an employee. As a supervisor, you may be a named party to a lawsuit or administrative action either individually or along with the owners or senior management of the company. If a judgment goes against you, you may be required to satisfy the judgment through your personal assets which could include your house, personal belongings, bank accounts, investments and other assets. This article introduced you to the “people” part of your job as a supervisor. You are encouraged to take the steps to learn more about the concepts, laws and strategies discussed in this Top Ten list. Learning more about and heeding these HR “rules” will go a long way toward making sure your experience as a supervisor is richly rewarding and not a pain in the pipes!  This content was developed for the PHCC Educational Foundation by TPO, Inc. (www.tpo-inc.com). Please consult your HR professional or attorney for further advice, as laws may differ in each state. Laws continue to evolve; the information presented is as of April 2012. Any omission or inclusion of incorrect data is unintentional.
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For additional information on the location and dates for Backflow Certification, Plumbing Code and Gas Fitters Training classes call the MPHCC office (410) 461-5977 or visit our website at marylandphcc.org
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Company Events – Do’s and Don’ts Prepared for the PHCC Educational Foundation by TPO, Inc.
I
t is that time of year again and holiday event planning is underway. In spite of the continued challenging economic conditions, most companies will continue their tradition this year of hosting some sort of holiday celebration to thank and reward their employees for their contributions and hard work throughout the year. While holiday parties are well intended, they can loose their charm quickly if they escalate into employee relations or even legal issues. With the right precautions and ownership of responsibilities, events can be a great investment in staff morale and engagement. Since holiday parties are a business event, both management and employees have a responsibility to treat them as such. Companies who share the accountability for the success of their sponsored events, are much more likely to enjoy win-wins. This year, make it a season of dual accountability by sharing the following suggestions. Planning Companies: Poll your staff for their ideas and preferences to get a better sense of what they would like and what’s most important to them. Employees: Voice your opinion, let your managers know what activities are meaningful and motivational to you. Attendance Managers: Encourage your staff to attend events by articulating the value, but DO NOT communicate that they are mandatory. In general, it is important that your company does not require attendance at company-sponsored events to mitigate legal risk. In the process, be sure to eliminate any perception that work is being conducted. Employees: Attendance is purely optional. You should not feel pressured or obliged to attend, nor should there be any negative consequences should you choose not to. Alcohol Companies: The timing of your event can set the tone. Consider a lunchtime celebration with a return to work afterward or an afternoon party with an early release for the day. This pulls employees out of the field during work hours, but helps to avoid the expectations of alcohol being served that may come with having an evening event.
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Maryland PHCC Contractor | Winter 2012
Managers: If alcohol is a part of your celebration, remember that drinking in moderation is your responsibility, and you must take it seriously. You are senior role models/representatives of your company and set the standards for behavior. If you don’t keep alcohol consumption in check, you may have a tough time returning to pre-party roles and relationships. Even worse, you risk losing the respect of your employees. Employees: Don’t be the one that everyone is talking about the next day. The stereotype is the person who got so drunk at the office party that they groped a co-worker, told off the boss, and passed out under the buffet table. It should be obvious that your attempt at being the “life of the party” can cost you your job. But even being the one who is stumbling a bit or is slurring their speech at the party demonstrates to your co-workers and managers that your decision making skills and/or self-control isn’t what it should be. Having just a drink or two more than you should have can affect how others see you, including those who make decisions about raises and promotions. Drinking a bit too much may also cost you your life or your freedom. If you drive drunk, you are risking killing yourself or someone else. While your company should arrange for transportation for employees who over indulge, the final responsibility ultimately rests with you. Remember, too that cameras are everywhere now. If your behavior is worth recording, you can count on one of your co-workers to “helpfully” step forward with video documentation should a problem arise from your actions. Impressions Managers: Company events are a unique and great venue for making a good impression. Your staff will be watching you. Believe it or not, employees yearn for executive role models as well as to be assured that their company is in the hands of leadership that they trust to make good decisions. Be sensitive to the reality that the owner and managers play a big part in setting the “tone” – environment and ambiance are key ingredients to attendee behavior. Whenever invitees feel intimidated, inconvenienced, embarrassed or presented with too much temptation, the consequences will be remembered long after the actual deeds. Don’t unwittingly give employees an excuse to engage in bad behavior!
Employees: Remember that company events are business functions. They are wrapped in a social context but they are still work and the impressions you make at events are important. You will be noticed, good or bad. Office Party Etiquette Here are a few additional tips for both managers and employee to ensure that a good and appropriate time is had by all. • Dress appropriately for the occasion. Leave the Hawaiian shirt and flip flops at home (unless that’s the theme!) and avoid short, tight or revealing items. You’ve worked hard to create a professional image, and non-professional clothes can alter your coworkers’ and manager’s perception of you as a competent professional. • For bigger companies, your company party may be one of the few times a year you get to see the owner in person. Say hello be visible to your organization’s higher-ups. At the very least, don’t spend the entire evening with your regular buddies – get in the holiday spirit and mingle with people. • Find out who can come to the event. Spouses and significant others are not always on the guest list. Check beforehand to avoid a potentially uncomfortable evening. • Pay attention to the time you arrive and when you leave. Even if you don’t really want to attend, avoid arriving 20 minutes before the end just to make an appearance. On the flip side, don’t party into the wee hours either. Co-workers and managers will notice both errors in judgment. • Be sure to thank those who coordinated the party. They likely put in a great deal of effort hoping you would have a good time. Not only is saying thank you the nice thing to do, but it also makes you stand out from the many employees who don’t. This content was developed for the PHCC Educational Foundation by TPO, Inc. (www.tpo-inc.com). Please consult your HR professional or attorney for further advice, as laws may differ in each state. Laws continue to evolve; the information presented is as of November 2012. Any omission or inclusion of incorrect data is unintentional. Please note this article is not intended to provide legal advice or to substitute for supervisor employment law training.
Winter 2012 | Maryland PHCC Contractor
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You Can’t be Santa! Prepared for the PHCC Educational Foundation by TPO, Inc.
M
ost employers intend to use bonuses to attract and retain top talent, but whether or not this intention translates into success may very well depend on what an employer means by “bonus.” End of the year bonuses distributed by the boss while walking around like Santa Claus may have a very different result than an annual incentive bonus tied to performance. Handing out money to employees is a motivator, right? Not necessarily. Consider the following disadvantages of playing Santa Claus. •
•
•
It can reinforce a sense of entitlement, resulting in employees expecting the bonus regardless of individual or organization performance. Playing Santa could result in unrealistic expectations. This can result in a disappointed unproductive workforce if the budget doesn’t allow for a bonus or if the bonus falls short of what employees have come to expect based on prior years. Employees may “pre-spend” what they believe will be their bonus and could find themselves in hot water.
Linking Bonuses to Performance Many employers are turning away from “Santa gifts” and toward a tool that allows them to attract and retain top performers in the organization – incentives tied to measurable performance. Employers may find that this can be quite a culture shift, but with the proper executive support, planning, communication, and execution, it can be a powerful tool that helps the organization achieve its objectives. How Can We Afford Incentives? Incentives are different than bonuses, as they are typically based on an employee exceeding a set goal. If the employee is simply meeting the basic expectations of the job, then they are not contributing anything more than expected to the company’s profitability and therefore there is no reason to pay any incentive. However, by exceeding (measurable) expectations, that same employee is adding value or unexpected profits to the company. It is fair for the company to retain a portion of those [ 16 ]
Maryland PHCC Contractor | Winter 2012
profits in excess of expectations, but the rest should go back to the employee as an incentive to continue those efforts and expand on them. In this manner, the incentives are paid out only from the money the company would not have had if the employee had not done the extra work to earn it for the company. One Approach – Individualized Goals Consider the following when implementing an incentive program tied to measurable performance results. Each employee and their manager should work together to set goals: Managers and their employees should work side by side to create goals that are linked to company objectives to give each employee an opportunity to contribute to organization success. Use SMART goals: goals that are Specific, Measurable, Achievable, Realistic and Time-Oriented. Whenever possible, tie individual employee goals to the organization’s strategic objectives. Getting the employee’s agreement on the goals and measurements increases buy in. Once goals are set, talk about them: Goals discussions should not be a one-time event, discussions should happen throughout the year. Managers should set time aside at least quarterly to discuss employee progress toward goals. This is a great opportunity to offer positive as well as developmental feedback. Communicate: Make sure employees understand the link between their performance and their incentive. Formally review each employee’s performance against expectations and use this information to differentiate between employee bonuses: When writing a performance appraisal, managers should consider the employee’s position description and responsibilities as well as performance results relating to established goals. Managers should be sure to ask the employee to write a self-evaluation and consider it when writing the appraisal. This will offer an objective, well-rounded look at each employee’s contribution and will serve as the basis for the incentive bonus.
Development
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Our members say it best! Quality Service Contractors (QSC) is an elite professional association that assists plumbing and HVACR service and repair contractors. We help each member reach their potential in our increasingly demanding industry. As a member, you benefit from business management services and state-of-theart training to enhance your image and enable you to better serve the needs of your clients.
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For more information call (800) 533-7694 or e-mail wallace@naphcc.org Winter 2012 | Maryland PHCC Contractor
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A Different Perspective – An Employee Created System Another approach that may be considered is allowing the employees to create their own plan. In this scenario, the owner and employees create a system that determines how the incentive pool is funded – typically a percentage of profits beyond that which was budgeted. Then a committee of employees creates the rules by which the overall incentive pool of money is distributed among the employees. A point system is developed where employees can earn extra “shares” of the bonus pool based on actions that funnel money into that pool - such as beating sales goals, customer compliments, beating completion deadlines, etc. At the end of the year (or quarterly), the incentive pot is paid out, with employees holding a larger number of shares receiving more cash. Because the distribution of the incentive funds is determined by the employees themselves, it removes the “management vs. employees” feelings from the process. If someone feels the system isn’t fair, then they can get on the committee and add their input to the process. Another advantage to this system is that this can also help employees do more peer-management. If a fellow employee is doing things that are negatively affecting the available bonus pool for everyone, chances are they will be encouraged to move along by their coworkers. This can help the company to weed out bad employees who look great in front of management, but are slacking off when they think nobody is watching. The key here is that every factor for earning points must be examined for ways it could be manipulated or abused to rack up points while hurting the company. For example, completing a project early by working in an unsafe manner cannot be rewarded. It may take a while to work out the kinks, but this type of system can lead to better teamwork as employees pressure each other to grow the incentive pot (and thus their share of dollars) as big as possible. Conclusion While it may be more temporary fun to walk around like Santa Claus and hand out bonus checks, an effectively designed incentive bonus has the potential to have longterm individual employee and organizational performance improvement impact - the kind of positive impact even a jolly old elf would endorse.  This content was developed for the PHCC Educational Foundation by TPO, Inc. (www.tpo-inc.com). Please consult your HR professional or attorney for further advice, as laws may differ in each state. Laws continue to evolve; the information presented is as of September 2012. Any omission or inclusion of incorrect data is unintentional. Please note this article is not intended to provide legal advice or to substitute for supervisor employment law training.
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Maryland PHCC Contractor | Winter 2012
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C&I Energy Savings Program Winter 2012 | Maryland PHCC Contractor
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ESSENTIALS OF PROJECT MANAGEMENT COURSE MARCH 13–16, 2013
Northern Virginia, National Conference Center (near Washington Dulles International Airport)
in the Construction Game! n i W o T y a l P
Subcontractor Business Owners • Project Managers • Estimators • Superintendents • Lead Foremen The construction game has changed—but the best techniques for making a profit have not! Your managers must understand the impact of every decision they make and when to say “No” to unfair demands.
The common sense planning, procedures, and communication skills we cover in the Essentials class are your keys to strong productivity and steady profits.
Why Play the Game
If You’re Not Playing to Win?
TOPICS INCLUDE: • The Power of Pre-Construction Planning • Your Secret Weapon: Prefabrication • Partnering with Your Suppliers • Understanding What’s in the Contract • Knowing When and Why to Say “No” • Sharing the Plan: Turnover Meetings • Identifying Lost Time and Delays • Winning at the Change Order Game • Using Scheduling to Avoid Delays • Project Billing and Cash Flow • Painless Project Close Outs
PREVIEW the course at phccfoundation.org/essentials then REGISTER by calling (800) 533-7694. Course is offered only once a year—seats are filling up fast! DON’T WAIT!
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LABOR CALCULATOR BENEFITS: • Provides average installation times so estimators don’t have to start from scratch. • Provides independent third party verification of the labor required to complete required work. • Two levels of adjustments allow you to tune the numbers to be accurate for your company and job. • Database updates can be downloaded as they are released from the Foundation (subscription required). • One purchase allows installation on three computers. • Expanded Reference Manual guides new estimators through a sample bid with helpful estimating calculators and spreadsheets included.
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Maryland PHCC Contractor | Winter 2012
Winter 2012 | Maryland PHCC Contractor
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Maryland PHCC Contractor | Winter 2012
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