The Turbo-Charged Business

A strong economy and an unseasonably warm and wet winter could bring booming business to pest control companies across the nation this year. But realizing significant profits from the extra business may be an entirely different story. The companies that can squeeze the most productivity out of their operations will be well-positioned to reap the rewards of this potential pest boon. But achieving that level of productivity is a multi-step process.

MONITORING PRODUCTIVITY. Monitoring employee productivity is the first vital step toward improving productivity, said Mike Lawton, vice president of sales and marketing for Western Exterminator Co., based in Irvine, Calif. Lawton recently presented the session, Measuring Employee Productivity, at the PCT Dialogue Business and Technology Conference held Feb. 1-4 in San Diego, Calif.

Lawton pointed out that the greatest impact managers can have on motivating employees is by measuring their performance. “You can’t begin to motivate employees unless you are already measuring their performance.” Once managers establish ways of measuring employee performance, Lawton added, they can spend their time working to solve problems rather than uncover them. “Once you find out someone isn’t performing very well, the hard part is finding solutions to get that person to change and imprve.”

To quickly identify such productivity problems, companies need to monitor company and employee productivity using performance reports issued no less than once a month, Lawton says. “You should be able to look at these reports and pinpoint a problem almost immediately, with very little effort.”

In monitoring for productivity and performance, Lawton said pest control operators should look at three main areas: quality, quantity and cost. The following criteria can be used to measure the company as a whole, specific branches and individual employees, he said.

Quantity. To measure quantity, Western tracks a vast array of specific business statistics. For instance, in conducting monthly audits of its general pest control operations, Western evaluates technicians on nearly 30 different criteria. Broadly grouped into four categories — Route and Production, Cancellations, Sales and Lead Commissions and Quality Control — the measurements include figures such as the number of bad debt accounts per route and the dollar value of sales leads generated. Preparing these detailed measurements of production levels is crucial for managers, Lawton said, to properly identify drop-offs in employee productivity.

Western also maintains similarly detailed production measurements for service centers and for the company as a whole. Lawton said these audits are based on profit and loss statements and include measurements such as the percentage change in revenue from the preceding two years, percentage change in the number of jobs in the past two years, and various sales measurements.

A key indicator Western employs is generated by dividing the gross margin dollars by the number of frontline personnel. Lawton said this number directly indicates the company’s productivity level and profitability. “We always want that number going up,” he said.

Cost. Lawton said cost levels should also be monitored when measuring the company’s productivity, as expense levels can obviously affect the company’s overall profit. While most companies measure only labor and material costs, Lawton suggests also factoring in “management costs.” For example, Western tracks how much management time was needed to help remedy an employee or service center production problem.

Quality. While Western keeps detailed records of its productivity levels, quality too must be measured to ensure that increased productivity does not come at the expense of doing a good job.

Western sends out “How We Rate” cards twice a year to have customers evaluate the quality of service they are receiving from their technicians. The data that comes back is incorporated into a performance measurement system the company has developed called the Potential for Improving Performance report, or PIP. The PIP, Lawton explains, is a ratio of an employee’s exemplary performance to typical or average performance. Lawton said Western sets exemplary standards, which is the level of performance capable from the best employee doing the best possible job, and employees are evaluated by how well they do compared to that baseline. By monitoring this data, Lawton said, PCOs can identify problem areas quickly. “The purpose of PIP is to rank employees on a particular measurement so you can prioritize your coaching efforts, you don’t want to spend time coaching or trying to improve an employee who doesn’t have that far to go to be as good as your exemplary employee,” he said.

It is important that all the standards by which employees are measured be quantifiable, Lawton cautions. “If you can’t put a number on it, it is probably not a good thing to measure.”

For example, in addition to assigning a number to quality by using customer rate cards, each month Western also measures the monthly dollar value of accounts that have been canceled. “We like to show that figure to our technicians,” Lawton said. The figure demonstrates the value of exemplary service to technicians, as well as the high cost of poor quality. “It is a very startling figure in some cases, and technicians appreciate learning about it,” Lawton said. To further measure quality, Western tracks the number of positive or negative customer calls into the office, the number of extra service slips generated, the number of negative cancellation cards and the percentage of signed service slips.

EMPLOYEE MOTIVATION. While monitoring production and quality can help PCOs identify problem areas, identifying employee production levels will ultimately set the company’s course. “Your service people will basically make or break you,” said Lloyd Smigel in his PCT Dialogue presentation, Motivating Your Service Staff.

Creating an environment in which employees are motivated to perform at their peak production levels is the responsibility of management, Smigel said. “You cannot motivate people; you can only create an environment where they want to do it themselves. So if you learn how to create an environment that encourages employees to be motivated, it’s a major key to working with people,” Smigel said.

“Creating good healthy competition among your own group can be a powerful motivator,” said Kevin Pass of Action Pest Control, based in Evansville, Ind. Pass keeps a daily production chart displayed prominently in Action Pest Control’s office to track each technician’s productivity. Technicians can use the chart to see how their individual productivity level compares to that of co-workers.

Promptly recognizing employees for their accomplishments is also a vital motivator, Pass said. “If you don’t reward the person soon after the accomplishment, then the employee is stuck wondering if anybody really cares.” Furthermore, Pass said, if you completely ignore an employee’s accomplishments, “you create ill-will, you create an employee that is bitter. And a bitter employee is not too productive.”

Technicians at Action Pest Control are rewarded weekly, if not daily, for superlative performance and are praised in front of co-workers at the company’s morning meetings. Technicians are also often awarded for a job well done with cash incentives or gift certificates. Furthermore, Pass said, if the company as a whole reaches its monthly production goals, the company honors all of its employees with a cookout at the end of the month. At the cookout, employees with superior performance for that month are recognized.

STREAMLINE OPERATIONS. While motivated employees are essential to ensuring peak productivity, even the most motivated employees will be unproductive if they’re working inefficiently. Looking closely at how you can become more efficient will help pump-up productivity levels. And being more productive benefits not only the company’s bottom line, but the service technicians’ paychecks as well, said Joe Silvestrini of Pest Control Technicians, Inc., based in Norristown, Pa. “The higher your efficiency, the less you need to charge and the more cost-competitive you become. The increased competitiveness in pricing will result in more business and ultimately more money for service technicians,” Silvestrini said.

Silvestrini said compensating technicians on a commission basis helps make his company more efficient. “It’s an opportunity for them to make money, and technicians take advantage of that by being more efficient,” Silvestrini said.

For example, technicians at Pest Control Technicians are responsible for their own route scheduling, because as Silvestrini said, the technicians know their own route better than anyone, and they know where they are going to be at any given point in the day. As a result of their scheduling autonomy, technicians can streamline their operations to ensure they spend most of their day servicing accounts, rather than wasting valuable driving time going back and forth across the city.

Silvestrini said technicians at his company sometimes even trade accounts with one another to make their routes more productive. For example if one technician knows he’ll be spending the better part of the day on one side of town, he can trade a far-away account to another technician, who may be working in that area.

Productivity experts throughout the pest control industry agree that ultimately a company’s production levels will be determined by the overall work environment managers create at a company. Employees included in decision making, such as those at Pest Control Technicians who schedule their own routes, are ultimately more productive and take a sense of ownership in their jobs.

Similarly, employees recognized for a job well done take a renewed sense of pride into their work, making them infinitely more productive. And while it may take considerable effort for managers to create a motivated work environment, the benefits are equally considerable. A positive work environment breeds successful employees, and successful employees can create a successful and productive company. What more could any PCO ask for?

The author is associate editor of PCT magazine. PCT’s 3rd Dialogue Business & Technology Conference will be held Jan. 31-Feb. 3, 1999, at the Westin Canal Place Hotel in New Orleans, La.

Sidebar: 12 TIPS TO BRING THE BEST OUT OF YOUR PERSONNEL

Recognize their accomplishments.

Tailor your supervision to the needs of each individual.

Show confidence in your employees. Let them know that you are confident they can do the job well.

Stress the link between employees’ performance and the company’s mission.

Encourage employees to participate in goal-setting, and get their “buy in” in company planning.

Let employees know it is OK to ask for help.

Give employees responsibility and accountability.

Encourage individual decision-making and thinking.

Foster trust and two-way communication.

Frequently let employees know how you feel about the job they are doing.

Motivation is contagious. Show employees your enthusiasm.

Learn to listen and observe.

Source: Lloyd Smigel’s presentation, “Motivating Your Service Staff,” PCT Dialogue Business and Technology Conference.

A SAMPLE EMPLOYEE PERFORMANCE AUDIT

Western Exterminator Co. of Irvine, Calif., uses the following table to measure the performance of its wood-destroying organism inspectors. These reports are issued monthly. These types of detailed analyses can help PCOs quickly pinpoint productivity drop-offs among individual employees or within business segments, said Mike Lawton, vice president of sales and marketing for Western.

Inspector   A B C D Sales revenue   $259,700 $290,510 $233,800 $325,650 Sales goal   $308,000 $325,000 $235,000 $275,200 Difference   ($48,300) ($34,490) ($1,200) $50,450 Total inspections   535 659 748 691 Clear inspections (no pests found)   15 33 92 42 % of jobs sold from non-clear inspections   37.2 44.5 47.3 39.8 Revenue generated per each non-clear inspection   $499 $464 $362 $502