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Incentive compensation programs for construction personnel allow home builders to keep base salaries at a manageable level given the cyclical nature of the industry. During the inevitable downturn, if base salaries are too high, builders could be forced to cut high-performing staff to stay in business.
Although supplementing base salaries with bonuses is common in the housing industry, developing effective incentive programs is a struggle for most home builders. Poorly conceived, arbitrary incentive programs can demotivate staff and drive good talent away to the competition.
The Good
Well-conceived, well-executed incentive programs offer home building companies significant benefits. They can help a builder retain top talent. When bonuses are tied directly to results achieved, they can have positive motivational effects for personnel, resulting in higher productivity and improved performance.
The goal of an incentive program for construction personnel should be improved performance in delivering homes on time, on budget and that meet the quality standard.
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