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Part 3: Establishing a culture where co-workers win, too

Originally published: 08.01.06 by Jackie Rainwater


Successful contractors know a winning company culture keeps customers and employees happy.

The culture we established while I was at Peachtree Heating and Air Conditioning (“Peachtree”) from 1990 to 2002, was a culture that valued and nurtured its customers and co-workers. That culture enabled the company to achieve tremendous growth and profitability during that period. Our Company

Culture was very simply:

WIN! + WIN! = WIN!
(#1 - Customer) (#2 - Co-Worker) (#3 - Company)

In the June issue of HVACR Business we discussed the overall importance of creating a sound culture in your company. The follow up article, published in the July issue detailed ways to ensure customers “win” each time they deal with your company. This month we’ll discuss some of the principles, practices, and processes we put in place to assure our co-workers were “winners” too.

The Second Winner: The Co-Worker

The management team at Peachtree treated our co-workers with sincere respect and appreciation. We were respectful of our employees as individuals and created an atmosphere where great careers could be developed; where success stories — whether employee-based or family-related — would be celebrated; where constructive criticism, help and encouragement where the rule of the day; and where ongoing communication was the

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norm.

How Did We Accomplish All of This?
Monthly Communications Meeting

We held “all hands” communication meetings every month. Our management team planned the agenda to review our revenue, pre-tax profits, as well as maintenance agreements.

In addition to the financials, we addressed the marketing and advertising needs of the company. Programs such as consumer incentives — 12 months same as cash — or free gift give-aways were discussed. We also analyzed the effectiveness of our advertising with direct mail or newspaper advertising.

The meetings also provided time to discuss employee-related matters. Not only did we focus on any current HR and worker safety matters, but we also used these meetings to celebrate our employees. We acknowledged birthdays and important family events, and announced the Co-Worker of the Month, each month.

Besides acknowledging individual employees, we also awarded the “Installation Job of the Month,” as well as awarded “Bonus Bucks,” which were payable to services techs and inside support personnel, ensuring that all members of the staff were eligible for recognition.

Here is an overview of how the “Bonus Bucks” were awarded:

• Installation Technicians were rewarded for generating equipment sales leads that converted into sales within a 30 day period.
• Installation Technicians who completed installations on a timely basis and passed the “Installation Quality Control Process” without flaws or failures were recognized.
• Inside support personnel (non-management personnel only) were awarded various cash awards for their participation in supporting the efforts of our field service, installation, and sales personnel.

The meetings always ended with a reemphasize on the importance of Win! + Win! = Win!

Careers — not Jobs

“Quality” people want careers with organizations that will provide them with opportunity and support, enabling them to achieve their career goals. These goals should include personal achievement and gratification, as well as compensation. Consequently, people of this caliber will not join companies and continue to work for them long-term unless the appropriate company culture is in place. The culture, communications, opportunity and support must be clearly stated, consistently administered and reinforced. A clear, formalized career path, including compensation plans, training, incentives, and regularly scheduled objective performance reviews should be in place for every co-worker.

Pay for Performance

Quarterly performance reviews for hourly service and installation technicians are vitally important. Field personnel are not under immediate supervision, therefore they, as well as their supervisors and managers, need to have clearly defined and measured performance standards for their daily activities. Field personnel should understand what is expected of them and receive regular feedback on how their performance is being measured and rated. As an example, we tracked and graded the following activities for our service technicians on a quarterly basis. We utilized a very similar system for our installation technicians, including:

• Safety records and respect for customers’ homes, facilities, and grounds
• Number of service calls completed and compared to the average for all technicians
• Number of “callbacks” caused and the percentage of “callbacks” to total calls completed
• Service dollars billed. (Note: This amount includes a dollar value for all maintenance calls performed by the technician).
• Number of maintenance agreements sold and the percentage of maintenance agreements made while on non-maintenance agreement customer calls
• Accessories sales revenue
• Number of equipment and IAQ sales leads generated and the percentage of calls completed resulting in leads
• Attitude and spirit of cooperation demonstrated towards customers, co-workers, and company
• Vehicle appearance and maintenance
• Personal appearance

Each of these areas of performance was tracked for each technician on a daily basis and the performance was then rated each quarter. We used a “1” through “5” rating system with “5” being the highest and “1” the lowest. Each service technician was reviewed by his immediate supervisor on a quarterly basis. The average quarterly performance rating was used to determine the technician’s annual hourly pay increase.

All of these areas outlined above are vitally important to ensure the commitment your co-workers will have to the company and to your customers. By showing your commitment to your co-workers in a consistent and thoughtful manner, you can easily see how everyone can succeed!

Next month we will discuss ways to be certain the Company is the third “Winner” in the WIN! + WIN! = WIN! culture.

EXAMPLE SERVICE TECHNICIAN HOURLY PAY SCHEDULE 2006
Level
Description
Requirements
Minimum
Mid-point
Maximum
A
Apprentice PTU Specialist 
Entry Level
Precision tune ups only
$10.00
$11.00
$12.00
1
Precision Tune Up Specialist 
Tech school grads Minimum 90 days apprenticeship
$12.50
$13.50
$14.50
2
Experienced Technician
Up to 3 years work experience
Demand work
Residential only
$15.00
$16.00
$18.00
3
Senior Technician 1
> 3 years residential experience
Residential only
$18.50
$19.50
$21.50
4
Senior Technician 2
> 5 years residential experience
> 1 year light comm
(to 25 tons)
$22.50
$23.50
$25.50
5
Master Technician
All residential with > 5 yrs experience 
All commercial (to 50 tons) with > 3 yrs
(includes applied systems to 50 tons)
$26.50
$27.50
$29.50

 

EXAMPLE MERIT HOURLY PAY INCREASE MATRIX 2006
  
Percent Current Hourly Pay Rate To Mid Point in Pay Range 
 
Minimum
 
Mid-point
 
Maximum
 
80% - 87%
88% - 95%
96% - 103%
104% - 112%
113% - 120%
Rating
5
(Pay Incr.)
7 - 9%

6 - 8%

5 - 7%

4 - 5%

3 - 4%
4
6 - 8%
5 - 7%
4 - 6%
3 - 5%
2 - 4%
3
4 - 6%
3 - 5%
2 - 4%
1 - 3%
0 - 2%
2
2 - 4%
1 - 3%
1 - 2%
0%
0%
1
1 - 2%
1 - 2%
0%
0%
0%
* Merit Pay is higher on a percentage basis below the midpoint. The reason for this is we wanted employees to move to the midpoint or higher as quickly as possible to keep morale high and to make sure employee retention was high. Of course this assumes the employ merits the increase.

Jackie Rainwater is a 46-year veteran and former owner of Peachtree Heating and Air-Conditioning in Atlanta. He built his businesses on service agreements. 


Articles by Jackie Rainwater

Achieve Business Goals Through Partnering

I want to let you in on what seems to be somewhat of a secret in our industry . . . partnering works! In this instance, I mean partnerships between hvac contractors and their primary hvac equipment manufacturers and suppliers.
View article.

 

Building a Winning Company Culture

Would you like to triple your customer referrals? Increase your sales closure rate 10%? Cut your installation warranty cost 75%? Add 1% to your installation profits? Reduce the turnover rate of your installation technicians to less than 5%? Boost the pride and morale of your co-workers and your company’s reputation?
View article.

 

Part 1: Establish the Appropriate “Culture” in Your Company

What is culture and how do you develop the right kind of culture within your company?
View article.

 

Part 2: Establish the Appropriate “Culture” in Your Company

Referencing the culture he established at Peachtree Heating and Air Conditioning, Jackie Rainwater describes how to ensure the customer “wins” in every interaction with your company.
View article.

 

Part 3: Establishing a culture where co-workers win, too

Part 3 of a series: How Peachtree Heating and Air Conditioning put in place principles, practices, and processes to assure co-workers were “winners”.
View article.