In any economy, integrators must become creative in how they compensate their staffs. Not only are compensation programs important for existing employees, they also need to attract new workers.

A good compensation program not only offers commissions, but it also includes:

• Recognition
• Training
• Bonuses
• Job security
• A quality work environment

"Many employees get no recognition. It is a big morale killer," says Steve Firszt of Fast-Forward Business Coaching in St. Louis. "It costs you nothing to give out recognition."

Here are eight valuable compensation suggestions.

Determine Your Local Cost of Living
Firszt recommends dealers start by determining the cost of living in their local market. Use an occupational relative pay index based on where your business is located. Integrators can use the scale, as opposed to a national average, in determining a proper pay scale.

The average entry-level technician earns $14.46 per hour. Government reports show the highest cost of living in the San Francisco Bay Area is 19 percent higher than the national average, meaning the average technician there should earn $16.83.

Employees in Brownsville/Harlingen, Texas are on the other end of the scale, earning 24 percent below the national average, which would equate to about $10.98.

Offer Flex Time
Lynda Polk of Audio Video Guys in Houston has instituted several employee-friendly policies, including allowing technicians to drive directly to the job site rather than first coming into the office.

She has also permitted 10-hour/four-day work weeks that give technicians Fridays off (or Friday as overtime). "They really like it," she adds. "Flex time is very important for many employees."

Give Recognition
Employee recognition is certainly a key part of any compensation plan. Mikki Lantz of Mesa, Ariz.-based Automated Environments passes on all calls or letters to employees from clients complimenting a job well done.

Michael Pope of Audio Video Interiors in Medina, Ohio has two creative recognition programs:

• Monthly Awards — The company recognizes Technician of the Month, Salesman of the Month and Employee of the Month.
• Annual Awards — Each year the company's management team also selects the Technician of the Year, Salesman of the Year and Employee of the Year.

Each winner receives "AVI Money" that can be redeemed for 50 percent cash value or 100 percent in products and educational expenses.

Winners are acknowledged at quarterly meetings, and their names are also posted on plaques that are kept on a "Wall of Fame" in the company's lobby

Offer Employees Free or Discounted Gear
One of the perks for working in the custom electronics field is cool electronics. Lantz gives his 20 employees the chance to experience some of that cool equipment. The company holds a free raffle for employees to win the various pieces of equipment taken out of homes.

Provide Educational Advancement
Audio Video Interiors established $2,500 Educational Advancement Fund for every employee. The money can be used for college courses, certifications, trainings, books, seminars and industry conferences. The results have proven to be a huge differentiator in the business as well as to increased staff pride.

Get Creative with Bonus Programs
Chris Hatzis at Custom Home Sound in Charleston, S.C. bases half of a technician's compensation on performance and the other half on the company's overall performance. The individual performance criterion is primarily based on billing hours. A technician can also earn a commission on equipment if he upsells on the job.

Sales bonuses are totally different. Custom Home Sound pays sales staff a very small bonus (as little as 0.01 percent) if the company achieves its overall goals. However, individually, a salesperson can earn a $10,000 bonus if he doubles his quota.

Propose Phantom Stock Programs
One way to create longevity with employees is to give them equity in the company. Unfortunately, most integration companies are too small to start giving away ownership percentages. One solution is to issue phantom stock.

Randy Zahora of Enhanced Solutions Corp. in Oak Brook, Ill. offers specific key employees the opportunity for a no-cost buy-in. The phantom stock has a certain value placed upon it that is only redeemable when the company is sold. Hatzis of Custom Home Sound recommends offering programs like this only to key salespeople "vested" with the company.

Set Your Sales Compensation
Paying salespeople is tricky. You want to keep them motivated to keep pushing. So, the carrot has to be good, but you don't want them to get too comfortable.

Firszt says the two basic payment methods for a salesperson are:

• 100 percent commission with a draw
• Base salary + commission

He says the salesperson's quota should always be more than the amount of the draw. Let's say the company pays 7 percent commission on sales. If the company's goal is for an individual salesperson to sell $1 million, then that person should earn $70,000 if he hits the target. So, the company should pay him a $55,000 draw, for example, to entice him to reach the goal and earn regular commission checks.