Contractor Evolution 252. Performance Pay vs. Hourly: What Actually Boosts Contractor Profits? - Michael Fortinberry
Dec 24, 2025
Michael Fortinberry, co-founder of Protiv and former construction owner, shares insights on transforming contractor profitability through performance-based pay. He discusses how traditional hourly wages can hinder productivity and offers a framework for implementing incentives that boost team morale and efficiency. Michael emphasizes transparency in labor budgets and the importance of a performance-first culture. With real-world examples and data, he highlights significant productivity gains, demonstrating how the right pay structure can revolutionize contracting businesses.
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Show Teams Their Labor Budget
- Give crews a clear labor budget and show it to them so they know what they must hit.
- Pay a frequent share (weekly/biweekly) of savings to reinforce behavior and build muscle memory.
Performance Pay Yields Significant Lifts
- Typical productivity lifts from performance pay vary by trade but are often in the teens.
- Cleaning saw ~40% lift; painting and landscaping commonly see 15–18% improvements.
Collective Money Drives Peer Accountability
- Team incentives shift peer accountability because the crew shares the same money.
- Workers police quality and efficiency when their collective bonus is at stake.