Improving Retention and Results: Eclipse Advantage’s Productivity Pay Model Explained

Industry-wide data highlights the need for change:

• 60% of warehouses cite labor recruitment and/or labor efficiency as top operational challenges.
• 73% of companies are shipping more volume and a wider variety of SKUs than ever before.
• 75% of warehouses plan to increase their staff within three years to meet growing demand.
• 72% of organizations are planning to implement new operational processes to support faster, more responsive delivery models.

As with any challenge, there’s no one-size-fits-all strategy. To meet these evolving demands, companies need flexible workforce strategies that fit their unique operational goals.

Eclipse Advantage offers multiple staffing models to support your success including hourly labor with onsite Eclipse Advantage supervisors, rapid-response travel teams for expert backup when and where you need it, and our productivity pay model, which rewards teams based on throughput.

In the sections that follow, we’ll break down how Eclipse Advantage’s productivity pay model has helped distribution centers across North America gain better control of costs and build more engaged teams.

Why Productivity Pay Works

In warehouse environments where output matters most, as aforementioned, productivity pay aligns compensation with performance. By rewarding results instead of time, this model boosts productivity, encourages teamwork, and helps reduce turnover.

1. Increases Productivity

In team-based pay, new hires ramp up faster when their success benefits the entire team. Team-based incentives break down silos, encouraging workers to help one another and complete tough tasks together. The more the team produces, the more everyone earns, making shared effort a win for all.  With individual pay, each worker is motivated to increase their productivity to increase their pay.

2. Raises Wages Without Raising Labor Costs

Productivity pay allows workers to earn more through increased productivity without increasing your labor costs. With fewer people doing more, you maintain productivity while improving morale, retention, and recruitment.

3. Increases Employee Retention

The average cost to hire a single new employee is more than $4,000, making turnover a direct hit to your bottom line. One of the key advantages of productivity pay is retention. When workers earn more through performance-based wages, they’re more likely to stay. The result is a more stable, engaged workforce.

4. Builds Stronger Leadership

Productivity pay transforms floor managers into hands-on leaders. Rather than managing from a distance, they stay actively involved while motivating teams, coaching underperformers, and fostering a collaborative environment. This day-to-day engagement helps build leadership skills organically, positioning managers for greater responsibility and long-term growth within your organization.

5. Fosters a Healthy Culture

When managers are on the floor interacting with employees, it helps establish a stronger culture. The compensation model also creates ownership, as pay is tied to performance.

Implementation Considerations

Transitioning to a productivity pay model requires careful planning. Organizations should be prepared to invest time in upfront coordination to ensure a smooth transition and long-term results. Key factors to address include:

• Clear communication: Employees need to fully understand how compensation will be tied to performance, how team-based pay or individual pay works, and what success looks like. Misunderstandings or a lack of clarity can lead to resistance or disengagement.
• Training: Shifting from an hourly model to a productivity pay system requires not only technical training, but also a mindset shift. Team members must learn to collaborate, trust each other, and take ownership of outcomes.
• Regular monitoring and adjustment: Productivity pay should not be a "set it and forget it" system. Regularly reviewing results helps fine-tune targets, identify outliers, and ensure the model continues to drive desired outcomes. Ongoing feedback loops allow for continuous improvement and scalability.

Who Are Industrial Athletes

Productivity pay only works when you have the right people in place, which is why Eclipse Advantage builds its workforce around Industrial Athletes. Industrial Athletes are warehouse and distribution workers who approach their physically demanding roles with the same discipline, endurance, and focus as professional athletes. These individuals are trained to work efficiently, prioritize safety, and sustain high performance over long shifts. At Eclipse Advantage, we invest in recruiting and retaining these high-caliber workers, ensuring they are not only skilled, but also resilient, reliable, and aligned with your operational goals.

Once on the job, Industrial Athletes are supported with structured onboarding, recognition programs, and ongoing engagement activities that promote retention and performance.