Case Study: Healthy Homes

How performance Pay Transformed an Indiana Company

In the competitive world of contracting and construction, even small improvements in efficiency can lead to significant financial gains. But what if you could reduce labor costs by nearly 8 percentage points while simultaneously improving productivity, recruitment, and employee retention? That’s exactly what happened with a startup in Indiana after implementing performance based pay, a strategy we at Per4mance.io specialize in.

The Challenge: High Labor Costs and Inefficiency

The company in question was struggling with labor costs eating up 23% of their revenue, a figure that was cutting deeply into their profitability. Traditional hourly wages weren’t motivating employees to work more efficiently, and turnover was a constant issue.

The Solution: Incentivizing Performance Pay

Instead of sticking with flat hourly rates, the company restructured its compensation model to reward productivity and performance. Here’s how it worked:

• Tiered Pay Structures: Employees earned more based on output, not just hours worked.

• Transparent Metrics: Clear benchmarks were set so workers knew exactly how to increase their earnings.

• Data-Driven Adjustments: Real-time tracking ensured fair pay and highlighted top performers.

Within seven months, labor costs dropped from 23% to 12.1%. That drop directly boosted the company’s bottom line.

The Ripple Effects: Beyond Cost Savings

While the direct labor savings were impressive, the benefits didn’t stop there:

1. Increased Productivity

• Employees were motivated to work smarter and faster because their pay was tied to performance.

• Top performers earned significantly more, creating a culture of high achievement.

2. Better Recruitment

• The company could now advertise higher potential earnings in job postings, attracting better talent.

• With data showing average earnings per role, candidates had transparency—no more guessing about pay.

3. Reduced Turnover

• Employees who excelled stayed longer because they were rewarded fairly.

• The company saved on rehiring and retraining costs, further improving profitability.

Why This Matters for Your Business

If you’re a contractor or running a labor-intensive business, performance pay isn’t just a theory, it’s a proven strategy. This Indiana startup’s success shows that:

✅ You can lower labor costs without cutting wages (in fact, top earners make more).
✅ Productivity improvements compound over time, leading to even greater savings.
✅ Recruitment becomes easier when you can showcase real earning potential.

Want to learn more? 

At Per4mance.io, we help businesses optimize labor costs, boost productivity, and retain top talent through smart compensation strategies.

Could your business benefit from an 8%+ reduction in labor costs? Let’s talk.