Advice for profit sharing for an employee???
 

I am thinking about putting one of my employees from a hourly wage, to a salary with profit sharing benefits position. My goal is for him to work harder, and be available at more hours, while wanting to the website we are working succeed and of course make more money. Anyone have any advice on this? I have a few general questions to start out.

How much less will his salary be from his current wages, as a percentage?

What percentage of profit is a good figure?

How many hours should he be required to work?

What if he becomes unmotivated?

These are just a few, questions that I can think of right now. Thanks in advance.

Jay

Put goals out there. If you reach certain plateau's you get X, the next plateau X. so on so forth. Should keep him motivated. Keep his profit sharing so on so forth results oriented. the longer more phases you have the longer he is motivated. the more goals you reach. the more results your business will get.


Just an idea.

Don't do commission at all, just pay him salary or hourly. Give him bonuses and pay raises dependent on performance.

Thank me later...

Mark

Assuming he's profitable now, lock-in his salary at what he's currently making and give him a generous profit share for everything he makes from this day forward. Realistic, stepping goals are fine. (ie 10% for the first 5k in new profits and 25% thereafter) He needs the security of his current paycheck and the motivation that all his future (and hopefully generous earnings) are all up to him. And when shit changes and what he's doing is no longer as profitable, it's up to him to figure out how to continue to make himself a worthwhile contributor.

Also, make sure your employee fits the right profile, some people just want a steady paycheck and can't really be motivated with extra money. I find season's ski passes, engaging and interesting work, flexible schedules, opportunities to contribute thoughts and ideas, paid vacations and just making people feel part of the family are also huge contributors to morale and motivation.

don't turn your employees into partners, all you will get out of it is headaches... like GTS Mark said, give the guy bonuses for good performance and leave it at that...

peformance setting...with terms agreed on mutually that is drafted up in a formal contract and signed by both parties. (They must make x profit for the company in order to earn x shares/percentage of the company.)

First off, thank you for all the great advice. The bonus idea and the goal ideas are the way I'm leaning. Now I just have to put together a bit of a package for him. And see what he thinks. Only problem that worries me is this:

I am not sure he is motivated by money. He's a smart kid. But lives at home, and only has a truck payment. He likes the site we are working on, but just doesn't seem to want to work extra extra hard. I've got him to work a few times at night at home, but that's about it.

If that's the case than I retract my previous recomendation. You can teach most any skill (technical, or operational) to just about anybody with half a brain in this industry..but you can't teach characteristics such as drive, dedication, integrity and work ethic.

I think he's got it all but drive. Or should I say, he has like half the drive. That's what I'm trying to figure out, is how to get him to work harder, and have some goals to shoot for.

What is it that he is doing?

Unless he's hungry for the money it won't make a lot of difference.

Find him a real hot girl to fall in love with, get married and have kids. There's no incentive too beat having to pay for a family. LOL

Sounds to me like you need to find someone else.
If he lives at moms and does not need money girls will most likely always be the biggest motivator at this time in his life.

If you start putting him on a profit sharing plan one of 2 things most likely will happen
1. You will get frustrated as he SHOULD be more motivated, but is not...
2. He will leave as he has been putting in a ton of hours, but not seeing a proper return.