# Commision or Hourly Pay?



## USPDPro

I am a licensed plumbing contractor/business owner. I would like some honest thoughts from the employee’s perspective. If paid on a per job basis/commission, does that promote price gouging? If paid at an hourly rate will the service tech be more or less motivated to sell? Some truth telling is appreciated.

Thanks

Matt,


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## OldSchool

If you want a salesman ...other than a professional plumber then go commision.


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## plbgbiz

We would like to hear an intro to better get acquainted. Some "_truth telling"_ (as you put it) about your background and how you run your company will help us give answers more relevant to your situation. 

My belief is you have to do what is best for your business. Pay your techs a fair wage for what they produce in skill AND sales. The semantics of choosing commission over hourly is addressing the symptom rather than the problem.

A dishonest employee on commission will steal from a customer. A dishonest employee paid hourly will steal from you. NEITHER is acceptable. An honest employee can and will thrive in either situation.

Aside from that, you must find ways to reward top performers regardless of your pay method.


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## user2090

Not very long ago(months) I was still an employee. I have always worked with hourly pay, and for the first few years I found it to adequate compensation. But, as my skill grew and my speed increased, the money did not grow at a comparable rate in my opinion. I considered many times, before I went out on my own, that I would like to try commission. Here are some observations I have made about companies in my area, and paying commission.

The odds were always stacked against the technician.

Rules are always changed, favoring the company.

Unrealistic expectations were laid out it hopes of Huge profit, and medicore pay for the technician.

Due to these factors, I would say, and know for a fact, that in my area, technicians that are paid commission, most certainly inflate the cost of a job to make money.


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## Will

I have done both as a employee. I never liked commission pay. I liked getting paid hourly and time and a half after 40. Commission is a roller coaster ride and employee's will consider unethical practice when they can't "sell" the big job. Pay your employees a good hourly wage and give them bonuses when they do well.


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## Redwood

*I'd talk about it... 

but,
after you make an intro...*:whistling2:


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## greenscoutII

I'm a plumber, not a salesman.

I have very little patience for complicated compensation schemes. I prefer to be paid an hourly wage, but will accept piece rate on some jobs.

As far as sales go, hire a salesman to sell the job, then send me to go install it. I'd sooner have an inch off of my pecker before I'll do the sales end of things.


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## rocksteady

I am not a salesman by any means. I have been payed both ways as an employee and liked commision way more. I made WAY more money by working commision than I did hourly (my hourly pay was with a big blue franchise so... ). I like the idea of the sky being the limit with your pay. When our shop was busy, if I could get an extra call done in the same 8 hours because I was faster, I'd make more $$ than the slower guys. 





Paul


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## PlumberDave

As an employee I like commish. No clock tickin just me and the customer plenty of time to explain things no rush build a relationship have a customer for life you know the small things. On hourly I felt the HO watching the clock freakin if I went out to the truck just doesn't seem right.
Now the price gouging that will come with one way or another with folks that don't think right. If they can work the system they will.


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## service guy

As long as the money is green, and the tech is paid fairly for the bacon they bring in, it is all good.

Hourly can be abused, commission can be abused too.

Mostly we hear about how hard it is too find good workers, good plumbing employees.
It is true that it is hard to find good employees, but in the reverse, it is hard to find good employers too! Let's face it, most plumbing companies suck to work for. A good, fair plumbing employer is hard to find...so if you find one, stay loyal!

I prefer commission, both as an employer and as an employee. It is "self-regulating" as long as the price system is not abused.


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## rocksteady

I should also say that when I was paid commision, I worked for a T & M company.







Paul


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## Ron

service guy said:


> As long as the money is green, and the tech is paid fairly for the bacon they bring in, it is all good.
> 
> Hourly can be abused, commission can be abused too.
> 
> Mostly we hear about how hard it is too find good workers, good plumbing employees.
> It is true that it is hard to find good employees, but in the reverse, it is hard to find good employers too! Let's face it, most plumbing companies suck to work for. A good, fair plumbing employer is hard to find...so if you find one, stay loyal!
> 
> I prefer commission, both as an employer and as an employee. It is "self-regulating" as long as the price system is not abused.



I totally agree with you SG, I work for a commission, but for now work hourly at min wage.


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## JK949

When I'm working as an installer it's hourly. When the schedule is overloaded, I take calls on commission. The company is flat rate if that affects your decision. 

My only gripe is our pricing for drain stoppages since we felt we had to compete with a "gemstone" plumber advertising $99 drain service. So I get to start the job with a convo explaining $99 for the first hour then hourly after that. Not fun.


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## Tommy plumber

When I worked for a shop that paid me 22% of the total ticket, I liked that better than working hourly. When the company was busy, it was great. Some days I would earn $300- $400. When it was slow, I would earn $20.00 per day!

Most guys who are commission aren't interested in repairing stuff....only replacing. :whistling2:


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## Ron

Tommy plumber said:


> Most guys who are commission aren't interested in repairing stuff....only replacing. :whistling2:



I love repair work I make more money in repair myself. I'm commission paid.


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## Redwood

If you are a business owner of a one man show aren't you working for commission?:whistling2:


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## 1234mg

What I do is a hybrid of both. If you consider what your commission percentage would be, for me, it's 20%. Then you track your tech's sales and do some math. After the tracking period, set the hourly wage at 20%, but then you continually track--if the tech falls below you advise and ultimately adjust his wage. Also, be sure to increase the wage if he earns it.
All of this is based on a re-call rate of less than 5%, without that nothing works. And also I pay just a bit over minimum wage during re-call work.
I think there is no fairer method for the company or the tech.


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## Blue2

dru604 said:


> This sounds interesting, could you help me understand the "set the hourly wage at 20% " part?


 no


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## dhal22

Blue2 said:


> no



Nice 12 year bump.......


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## Blue2

dhal22 said:


> Nice 12 year bump.......


Whoops….but my answer doesn’t change.


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## dhal22

I'm interested as well. I do hourly with monthly bonus but always looking to improve.


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