Contractor fire fast and incentives

[Andrew Lawrence]

I have heard suggestions to pay a contractor a bonus for completing work early and penalizing for late work. How do you know that they don't abuse the trust between the two of you with this system? Example: they give you a bid and say it should take 4 weeks to complete a job, you get it in writing and promise to pay a 5k bonus if they complete the job in 3 weeks. They follow through. In the second job, they quote 5 weeks, knowing that you're likely to pay another nice bonus for finishing early even though they know they could really complete it in 4 and once again, complete the job in 4 weeks and get the bonus for finishing "early".

And on that note, the term "Firing fast" when you recognize a contractor isnt quite working out also goes around. How do you have the talk to let them go? Especially if they are in the middle of a project and still have some left from a partial draw?