How to Motivate HVAC Technician with Performance Pay Incentives

I'm going to be blunt here… If you're still paying your HVAC techs hourly wages with no performance pay on top, you're leaving a ton of money on the table and at risk of losing your top talent.

I've worked with over 200 home service companies and the most successful businesses all have one thing in common: they figured out performance pay. 

The ones still struggling with retention, callbacks, growth? They're still paying everyone the same hourly rate regardless of performance.

Why The Hourly Pay Structure Is Broken

Whenever I speak to an owner about implementing performance pay, I always ask this question… When you pay someone hourly, what behavior are you incentivizing?

The answer: You're incentivizing them to show up and put in time. That's it.

Are you incentivizing them to:

• Complete jobs faster and more efficiently?
• Upsell customers to better solutions?
• Provide exceptional service that leads to 5-star reviews?
• Sell maintenance contracts that create recurring revenue?
• Show up on time to the first job of the day?
• Minimize callbacks and rework?

In short, no. In fact, you're incentivizing the opposite. If your tech can stretch a 4-hour job to 6 hours, they still get the same money. If they can avoid the "difficult" conversations about maintenance plans or upgrades, they get paid the same.

Meanwhile, you're pulling your hair out wondering why your average ticket size isn't growing, you're getting callbacks on 14% of jobs when the industry standard is 3-5%, and nobody wants to sell maintenance contracts.

The problem isn't your people, it’s your incentive structure.

The Psychology Behind Performance Pay for HVAC Techs

Here's what most business owners get wrong about performance pay… They think it's just about money.

Sure, money is the way we keep score. But performance pay also unlocks three powerful psychological drivers:

1. Autonomy: When pay is tied to performance, your techs have control over their income and can directly impact how much they earn through their output.
2. Mastery: Performance pay creates a clear feedback loop — doing you best work = earning more money. Master new skills = higher income potential. Your techs will start wanting training, not doing all they can to avoid it.
3. Purpose: When someone can see how their individual performance directly impacts their paycheck, their family's financial security, and the company's success, their work has meaning beyond just "showing up for 8 hours."

Overcoming Employee Resistance

Let me address the elephant in the room: "What if my employees hate this?"

This is one of the top fears I hear from business owners, and I get it. Change is scary, especially when it involves people's paychecks. And even more so if you’ve tried to implement it before and it didn’t work out.

But here's what I've learned from hundreds of performance pay plans… If employees don’t like it, your plan was designed wrong.

Performance pay should make your best employees more money, it should give them more control over their income, and it should reward the behaviors that make them successful.

Here's how to get employee buy-in:

Start with the "Why"

Don't just announce the new plan, explain the reasoning behind it:

"Look, we're growing fast, and I need everyone to grow with us. Hourly pay doesn't give you guys the opportunity to share in that success. This new plan means that when you perform better, you earn more. When the company does well, you do well. It's not about me making more money, it's about all of us making more money together."

Show Them the Math

Use real examples based on current performance: "Last month you generated 15 5-star reviews and completed 20 jobs with zero callbacks. Under this new plan, you would have earned an extra $500 on top of your regular pay."

Your techs need to see concrete numbers, not concepts.

Building Your HVAC Performance Scorecard

So what actually works for HVAC companies? After working with hundreds of contractors, I can tell you this: the companies that succeed with performance pay keep it stupidly simple.

Don't overcomplicate this. At ShareWillow, we typically use 3-4 metrics maximum. Why? Because your techs need to understand how they get paid. I always say they should be able to explain it to a friend in 30-seconds. If they can’t, it’s too complex. 

Here are my top three tips for creating scorecards: 

1. Start with revenue: Your tech's individual revenue generation has to be part of the scorecard because it directly impacts whether your business makes money or not. But revenue alone isn't enough. You need quality controls, or you'll incentivize your techs to rush through jobs and create problems.
2. Callbacks are profit killers: I see HVAC companies running 14% callback rates when the industry standard is 3-5%. That's insane. Every callback is money out the door and a frustrated customer.
3. Then you've got the basics: On-time arrival, attendance, things like that. You know what's the only job you can show up on time for with certainty? The first job of the day. 
4. 5-Star Reviews: Your reputation is everything in this business. Getting five-star reviews should be baked into any performance plan.

But here's where most companies who are new to performance pay go wrong: Set company thresholds first.

Before you pay out a single dollar in performance bonuses, the business has to hit its numbers first. 

And one more thing that sometimes takes owners off track… You should never cut base pay when you implement performance pay. Tech’s hourly rates should stay the same — performance pay should be purely upside. 

What to Do Right Now

I could keep talking about theory, but when it comes to performance pay the best time to start this was two years ago. The second best time is right now.

Q4 is coming and 2026 is on the horizon. And if you're still paying hourly heading into next year, you're leaving money on the table.

Three action steps:

1. Stop overthinking it. Every successful contractor we work with says the same thing: "I wish I'd done this sooner."
2. Start simple. Pick one metric (like callback percentage) and tie a meaningful dollar amount to it. Test it for a month.
3. Get the data right. Whether you use ShareWillow or build something yourself, make sure employees can see their progress in real-time.

The companies growing fastest in 2025 have figured out performance pay. The ones struggling are still paying everyone the same regardless of performance. Which camp do you want to be in?

FAQs

How do I handle slow seasons with performance pay? 

Adjust targets seasonally. Don't use July revenue targets in February. Focus on different metrics during off-peak times like maintenance contract sales or training completion.

What if my techs game the system? 

That's why you balance metrics. If someone rushes jobs for revenue, callback rates will hurt their score. If they avoid difficult customers, satisfaction scores will suffer. The scorecard prevents single-metric optimization.

Should I include apprentices and helpers in performance pay? 

Start with experienced techs first. For helpers, consider team-based bonuses where they share in the crew's success. This encourages mentoring and teamwork.

Ready to implement performance pay in your HVAC business? Get started with ShareWillow — we've helped 200+ businesses do the same.