The 3 KPIs Every Employee Watches at Our Massachusetts Machine Shop
Leave a CommentAt our Massachusetts machine shop, we offer all the essentials you’d expect in a reliable manufacturing partner, from high-tech equipment to tight tolerances. But there’s one attribute critical to successful collaboration that’s often overlooked, and it’s an area where Peerless Precision excels: stability.
In 2026, we will be celebrating 50 years of Pride in Precision, so whether you need a precision parts manufacturer today or five years from now, you can count on us. That kind of longevity only happens through careful planning and coordinated management. Stability requires you to constantly invest in the best team and ensure every member—both new employees and veteran staff, from Baby Boomers to Gen Z—is aligned and moving toward the same shop goals.
One way we achieve that: a profit-sharing program for every employee based on clearly defined KPIs. Here’s how it works, and why it helps to ensure our customers receive quality results over the long-term.
Improving Results With a Smarter Approach to Bonuses
Many precision machine shops offer a bonus program of some sort, where employees will be rewarded based on individual or company-wide performance. At Peerless Precision, we used to follow a similar model, until President Kristin Carlson noticed a problem: bonuses were becoming an expectation, even during slower periods. The rewards felt disconnected from the actual performance of our business or the quality of our work.
She rethought the program and transitioned to a profit-sharing model. Now, employee rewards are directly tied to our company’s performance and our customer outcomes. When Peerless does well, our team shares in that success.
The motivation was simple: if our team felt more connected to our mission and saw how their work impacts overall results, they’d be most invested in doing great work.
The Three Critical KPIs That Drive Performance
To create an effective program, we required an objective set of criteria to track performance. These metrics needed to matter to both our shop and, ultimately, to our customers. We landed on three key performance indicators (KPIs):
- On-time delivery is self-explanatory. At our Massachusetts machine shop, reliability is central to our reputation. Our customers depend on us to deliver when we say we will.
- Scrap rate isn’t directly visible to customers, but it’s ultimately reflected in our efficiency and our project costs. Some scrap is inevitable in tight-tolerance machining and employee training, but we never want it to become an accepted part of our process.
- Profit may sound like an internal concern, but it really is important, even for our customers. Strong margins reflect operational efficiency, smart quoting, and Lean processes. Low or non-existent profits aren’t sustainable for us or for our customers.
We grade each KPI on a scale of 1 to 3. For instance, a scrap rate of 2% earns a 1, while anything below 1% would earn a 3. Based on the sum of our ratings in these three categories, we determine the payment our team receives.
It’s objective, transparent, and directly linked to the quality our customers see.
What We’ve Seen So Far
We’ve found that this structure helps team members see the connection between their daily performance and the shop’s overall success. When any metric slips, they rally together to troubleshoot and improve. It creates a friendly, results-driven competition among the entire team.
For leadership, Kristin notes, there’s nothing better than handing out payments and seeing people proud of their work. Recognition is part of our culture. It’s why we host shop parties, bring in food trucks, schedule team outings, and more.
Our shop spans all generations and backgrounds, but one thing is universal: people do their best work when they feel valued.
Experience the Results on Your Next Project
Programs like this are one reason our customers receive high-quality work from Peerless Precision. Whether you need 5-axis machining, laser welding services, or other complex manufacturing work, we’re ready.
Request a quote today and collaborate with a team that’s aligned, accountable, and motivated to deliver!
