Eren Design & Construction values its loyal trade contractors and wants to value them even more. Last year, the Tucson, Ariz., company implemented a formal rating system for its plumbers, electricians, painters, granite contractors, and other subcontractors. “They know our standards,” says CEO Janice Donald. Now these subs also know precisely how they measure up and where they might need to improve.

The system focuses on five areas of performance: communication, integrity, jobsite manner, quality of service, and quality of product. (See “Good Form,” page 80, for details.) Within each category are several specific criteria that members of Eren's estimating and field staff rate on a scale of 1 (for “intolerable”) to 5 (“five star rating/mentor to others”).

All standards are data-driven, Donald emphasizes, so as not to elicit “emotional statements” from her staff. And because so much thought went into developing the standards, completing the forms is a cinch: “We handed them out at one staff meeting and got them back at the next,” Donald says.

Ratings were then compiled to create an overall rating for each company, with each sub receiving a copy of its own evaluation as well as those of others. The goal isn't to shame anyone, she notes. “We share the results to show that we work with some great companies, and we want to keep working with them” on an ever-improving basis.

In its first year, Eren's rating system shored up relations with strong subcontractors while weeding out a few subs whose compiled ratings fell below 3 (“meets expectations”). “We sent them a letter saying, ‘These are the things you have to do, and you have 90 days to do them, and we'll support you in whatever way we can,'” Donald says. The companies cut off ties with Eren shortly afterward, even though the goals “were definitely doable, like the stucco guy not returning calls.”

Donald also uses the rating system to audition new trade contractors. “They have one job to show how they perform within these expectations,” she explains. “And if they don't, we don't work with them.”