[jwholden]

A set of criteria the forman should use for every job, but randomly use the form to check some jobs. Keep an average of his 'score' and whatever percent his score is is the percent of the pot he gets to keep. Break it down to quarterly, or even monthly, and go from there.


Is the site clean?
Is lawn damage repaired?
How close to target goal of hours?
Bond lines straight?
Customer pleased with attitude of employees?
Customer pleased with appearance of UNIFORMED employees?

Whatever is important to you put on the form.

My better half used to do this for a living, called something like Quality Assurance.

[Stonehenge]

Dan - can you give me an example of how expenses can get out of control, even though quality and speed and where they ought to be? I'm having a hard time getting this to sink in.

[dan deutekom]

Jeff the way I see it is like this.

Say you want a quality job. So your man is cutting in and his cuts arn't as good as he thinks they should be to get his bonus. What does he do. Throws them out and does them again. Lots of wasted stone and then you have added expense. Or if the speed isn't fast enough then he will do a dig out faster by tracking the skidsteer all over the lawn, destroying turf (meaning you need to buy more sod to repair damage), and overloading the truck with the waste to make one less trip and cause the truck to break. Add quality and speed together and you get things like wasted stone and material with abused equipment. This is just an example.

But as a general rule I find that if you want to raise quality it generally costs more money, and if you want to increase speed it costs more money. I think what you have to do is to provide the highest quality and speed possible within the set budget.

[agla]

A pile of 200 pieces of brick cut 1/3 in length.
Three extra pallets of sod.
Chipped teeth off of your $300 14" diamond blade.
14" of loam for a lawn.
A big dent in the bottom of your plate compactor.
The wheel barrow cartwheeling down the highway.
The planks that hung 6' behind the truck that broke when Uncle Fester backed the truck 2' from the block wall....and the block wall repair,...

Oh, the memories. Brings a tear to my eyes.

12 step program for anger management:
1. Work for someone else, 2. Work for someone else, 3. Work for someone else, ...

[dan deutekom]

Agla

exactly my point

[PSUscaper]

I remember a study I read a few years ago.

It was related to the logging industry. They were having a problem with their truck drivers either getting overloaded, thus causing fines, or underloaded, thus costing the company money in delivery costs.

What they discovered was quite interesting.

Basically, they conducted a test where they had two groups of drivers. The first group of drivers were set up on a incentive plan, where as, if they achieved proper load weight each day, they were awarded a monetary bonus at the end of the month.

The second group of drivers were set up on a 'goal setting' program. This involved no bonuses at all. The drivers were just told that, for the first month, they want to see 'x' percent of the loads close to weight, and the following month, 'x+1' percent of the loads close to weight, etc. etc.

What they discovered was that the group of drivers who were just given a goal to achieve each month out performed the drivers who were given a monetary bonus each month.

I thought it was very interesting......have to see if I can dig that one up somewhere.

[PSUscaper]

Also,

I think the point being made by others is that qualtiy isn't cheap.

If you have quality work being done......that work is being done at a higher cost. That too me seems like common sense.

I have to say that I've been looking back at many of my projects this year and think about all those lost days, hours,.....maybe even weeks, that were lost in the name of quality.

For example....on one project it rained all month(months!). In the name of quality, I refused to build the project in the poor site conditions. Many days, I would have to do so much extra site work to get the desired results to build, that I would maybe get a 10th of the work done that would be accomplished in dryer weather.

As we all know, there are guys who would install a retaining wall on top of 2 feet of mud, and not think twice about it. They'd be in and out in a day.......whereas, to do a quality job....one that isn't going to sink the day after you pull out of the drive, you have to spend many more hours and spend more money in materials to get the job done.

If you are trying to 'measure' quality in a monetary sense, I think you are contradicting the entire reasoning behind your business.

You do high quality work, and expect your clients to pay a high price for it. Now, what you are trying to do, is tell your employees to do high quality work, but..........also try to do it as cheaply and efficiently as they can.

Something just seems wrong with this.

One of the biggest problems with our trade is that we can not build a landscape and THEN give the client a price. A fine furniture maker doesn't know what the price of a item will be untill he is finished. If he spent a extra hour doing intricate wood carvings, he will most likely add that into the finished price.

Perhaps this is where the flaw with the whole system is. Were putting a price on something before hand that really can't be priced until completion.

[diginahole]

I like Aglas thinking. I remember listening to Charles Vander Kooi speak on incentives a few years ago, he had a very similar take on the topic. The one thing that really stuck in my mind was that you should never let them know how bonuses are figured.

I have a few more thoughts on the subject, especially the problems arising from having multiple crews on production based incentives. When I have some time later in the week I'll get back to you.

[PSUscaper]

sorry, but I can't sleep tonight so will try and type myself into sub-consciousness.

Here's and idea.......

Take a new home project.........

Most homes are built by a GC.........the GC supervises the project, and he hires and pays a array of sub-contractors to do each task that is required to build the home.

Each sub-contractor is paid his rate for doing the task that he does. For example, take an electrician. The electrian operates his own company, is his own employer . Therefore, in order to make a living, he knows he has to complete the job in x amount of time in order to make the money that he wants to make.

Also, being his own employer, he realizes that if he makes any mistakes, he is soley responsible for his error, and that, if any costs involved in fixing any of his errors are incurred, the money comes right out of his own pocket.

This is what motivates him to do the job right and efficiently.

Being that I am, and most of you are, self employed, this makes complete sense. This is the point that were trying to convey to our employees........if you make a mistake, it costs money......that money comes right out of the company, which in turns, comes out of your pocket. If a project takes twice as long to complete than it should of, then once again, the money comes right out of the company's money, which again, comes out of your pocket.

Before I started my own business, I always understood this lesson, but quite frankly, didn't really UNDERSTAND it until I looked back at the expense sheet for one of my jobs and asked 'where did all that money go'

Because of this, I believe that perhaps the best way to make our employees understand the consequences of their own actions is by doing nothing simpler than doing what we did to ourselves..........turn them into their own, individual contractor.

Or should I say, 'sub-contractor'

For instance.......

Let's say 'Tom' is our main paver guy.....well now Tom is the official 'paver layer sub-contractror'. Just like a GC would set a price for the electrician to wire the house, we, the 'Landscape GC' would set a price for our 'paver layer' to lay pavers.

Now it is up to Tom to perform. Like us, Tom now knows that if he wants to make money, he has x amount of days to complete the task. Tom also knows, that a expected level of quality is also to be met, or he runs the risk of a heated 'hollering' at, along with the possiblility of another 'paver layer' sub being hired to replace him.

Also keep note........Tom is a employee......Tom does not want to run a landscape business........what Tom wants to do is create beautiful works of art in stone. He does not want to make phone calls, pay bills, service trucks, go on estimates..........he just wants to lay pavers. On the other hand, Tom also wants to make a decent living at what he does, so therefore, Tom wants to make sure he gets the job done on time and in a fashion to do so.

I've always had this idea in my head, and when I hear discussions like the one here, it seems to be the only true solution. To make a employee act like an employer.......you have to make him one.

I think the idea sounds a little wacky, and the logistics of setting up a system in which each employee becomes a sub-contractor is rather complex, however.....I think when you look at the construction industry as a whole and how most major projects are completed, it is obvious that this is how it works......few jobs are completed by one, giant company.........they are completed by a gathering of sub-contractors who all do their own, specific task, and control their own income.

More or less, I'm suggesting kind of a 'micro-system' in which employees become subs.

[BJR]

My leading hand has performed exceptionally good over the past 3 months. So as a bonus I went out and bought him something he has been wanting for ages, an X BOX and 1 game.

Wasen't he stocked!!!!

A little gift always says more than money.

[agla]

A quick story (an I capable of a quick story?):

One winter I worked for a duct work installer on a large 272 unit senior living building. A certain amount of work would have to be done in the walls and ceilings befor the dry wall was installed. Part of that was the framing for the registers and grates. He would mark the framing with magic marker to show where the dry wall had to be left open. Once the drywall is up you can not tell exactly where the hole should go.

Enter the drywall crews that got paid by the room (subcontractors for the drywall subcontractors). They would cover everything and move on to the next room. Now her comes my boss with the hammer looking for the framed duct work. Sometimes he'd find them on the first try, but not always.

That is a prime example of being too specific on a production rate incentive program. The big picture was lost and only the pay method was addressed. It went on throughout the whole job because the sub had no clause for these guys to leave open the holes.

The electricians were even more pissed. What outlet?

[dan deutekom]

If you are going to make them sub contractors then they have to supply their own tools, trucks insurance etc. Subs also get to set their own work hours and methods of work. If you don't do it that way they are considered employees. I don't think subbing would work for small companies. Employees are employees because they either don't have the capability or the desire to run their own business. If they become subs then they are in their own business and are free to work for other "customers" also. I don't think that is what we want

[Stonehenge]

Steve, that's one of the things that's been on my mind, too. This system is to try to get them to think like the owner, and to have his compensation tied to many of the same things the owner's compensation is tied to. But I don't want them to be subs.

Charles VDK notwithstanding, I disagree that the employee should not know how he is being measured. If they don't know how they're being measured, then they cannot make improvements in the way they do things to improve theirs and my bottom line. It's also my opinion that to hide the system from the people indicates that it may not be the best the system. From what I've seen, a good system is one that provides incentives for the right things. So the burden (as usual) is on the employer to create a good system, that leads them where you want them to go.

In fact, one of the discussions I had with one of the guys today is 'what happens if...'. Like what happens if one of my guys doesn't show up, or has to leave early? I said 'then you work with 2 guys. I told him that this will be just like real life - this is not a perfect world, and you may miss a target through no fault of your own. But that's how things go sometimes.

For the quality measure, I intend to give them a list of the things I will be looking at in judging their work. I will also give them the questionnaire that the client receives, so they know what I expect them to do for the client (service, smiles, etc). So when I walk on that jobsite and appraise the work, there should be absolutely no mystery as to what the outcome will be, because they have the same checklist I do.

And this will also indirectly tie to productivity - if the work is sub-par and has to be redone, those hours will be added to that project just like any other, and they will likely not hit the productivity target.

[agla]

They should know what you are measuring, but not how to calculate it. My opinion is as an employee, a former employer, and more often the guy right in between.

Those of you who started your business at a young age are equally as alien to how an employee thinks or does what he does as he is to how you think and do what you do. You can not get them to think like you if you can not think like them first. What makes sense as a motivator for you might be manipulated, ignored, or not understood by your employee.

Have you ever heard an employee say that if you paid him more he would work harder? Do you believe that would do the trick? Have you ever told one of your clients that if he paid you more than the agreed upon price, you would do a better job?

I really believe, from my experience that it is a whole different mind set and you have to use it as a tool to convert it to yours. It will not just happen.

[Stonehenge]

I have to admit that with the opinions seen here, I move forward with this with a fair amount of trepidation. Nonetheless, I think I can build a better mousetrap here, so I want to give it a whirl. At the absolute least it can be a test case for everyone else.

Having this incentive package doesn't mean it is a replacement for my management. If I see something going wrong, I will provide incentive of the non-monetary kind to ensure the problem gets fixed. I enjoy the managing part of a job like this, sitting down with each guy and telling them where they are doing well, and where they are failing, and how I think they can correct their shortcomings. And when I'm not bogged down in the day-to-day, I can actually be pretty good at it. So I see the incentive package as a way for me to be there, whispering in their ears, without me really being there. That coupled with my spending more time managing them and not the project, and I think this can work.

By the way, there is also going to be a short book of rules that accompany this incentive package, spelling out things that can and can't be done for the sake of manipulating the system.