Employee payment methods

Discussion in 'Lawn Mowing' started by Mark Erpelding, Jul 22, 2002.

  1. Mark Erpelding

    Mark Erpelding LawnSite Member
    Posts: 4

    I am tired of of sending two employees out together and when they return they have only mowed eight lawns. I go out myself and mow eleven in one day! I am seriously considering paying them commission can anyone enlighten me to the pitfalls of this method of employee compensation. I was thinking about 40% for the employee. Has anyone tried this? Does this method work?
     
  2. Supply some more info.

    This seems more like you have a nother problem and the commision pay will not solve it.

    What hours are we talking here?

    More stuff like that.

    I remember a post a while back about commission pay. Use the serch to find it. Type in "commission."
     
  3. brucec32

    brucec32 LawnSite Platinum Member
    Posts: 4,403

    40% for one guy seems about the same as I have considered, but maybe less if you provide the vehicle also. Do the math and see.

    One potential problem with pure commission is that if they are the type to goof off and mow only 8 yards together, they may also be the type to cut corners and do a rushed job to make more money. Another negative is this system means your employee knows what you make on each lawn, and may, in his ignorance, think it's easy to do it on his own and make 100% of the money.

    You would have to be sure to incorporate a severe monetary penalty for jobs not done right. Example:

    1. Employee gets 40% commission on sales.

    2. Owner goes behind and inspects every lawn(ideal) or spot checks (more probable) a sampling of lawns. Any lawn not done to standards is deducted from pay. Severe, but necessary. A digital camera to illustrate problems is a good idea here.

    3. If customer calls and complains about quality, and owner agrees its subpar, employee forfeits DOUBLE the full price for the lawn(since you will credit the customer and this damages your company's reputation)


    There are lots of ways to do it, but if you're clever you can probably come up with a good system. I gave up paying employees per hour (and employees altogether eventuallY) because like you, I could do about as much by myself as two ding dongs. It just wasn't paying.


    I think paying a commission system would work best with a motivated part time employee who wants to rock n' roll and make some good pay fast as a second job. I find most "full time" lawn techs are hard to motivate with money once they're paid enough to get by on. I would gladly pay a guy who could do 12 $30 lawns in a day, making me $360, $144 for his work (I net $216). Paying $90 or so for an hourly employee's day usually results in only about $210 of productivity in my experience (net of only $120)
     
  4. Soupy

    Soupy LawnSite Gold Member
    Posts: 3,125

    I don't see how you can profit by paying 40% commision. In high school, I took a workshop that explained that an employee should generate a profit 5 times their pay to keep the employer from loseing money. Granted we have less overhead then alot of other types of business. but I still think at 40% you are actually working for your employees.

    I would concider letting one man go, and putting the other man on a truck with you. if you can do 11 lawns yourself. you should be able to do 8 more with his help putting you at the same amount of lawns that are geting done now. Unless you dont cut anymore yourself then maybe pay one guy a liitle more to be the crew leader and push him to be more productive. give him a route and tell him you expect this route done in a certain amount of time.

    Just my $0.02
    Soupy
     
  5. awm

    awm LawnSite Gold Member
    Posts: 3,354

    i know one framing contractor ,keeps his boys smoke needs taken care of as part of the pay.:D it takes all kinds . guys a genius as far as carpentry work.
     
  6. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    I don't know necessarily about "pitfalls" of paying commission. But I certainly think it's not necessary.

    If you can do 11 in one day and they can only do 8 TOGETHER, then you need to hire some new guys. Personally, if I had hired 2 guys who were doing anything less than what I could do, I'd let them both go in a heartbeat. I expect every one of my guys to at least work as hard as I would or could.

    I know this is a generalization, but I find that most migrant [hispanic] workers will work at least as hard and fast as I will whereas most American guys will usually work less hard than I do. This year we have ended up with a work force of nearly all hispanic workers and I haven't had any of the employee problems I used to have.

    I'd replace them. You should be able to find people who can at least work as hard as you do.
     
  7. Alan Bechard

    Alan Bechard LawnSite Member
    Posts: 175

    For a while we paid the lady working with my wife 1/3 or 33%, however you care to look at it. The rational was that she made 1/3 my wife made 1/3 for her direct work and the "business" made 1/3 to cover mower expenses, advertising, PROFIT, and a bit for me working on the stuff. It made the difference in the evenings and stuff wether they could jam out one more or not. It worked pretty well in my opinion, if they had callbacks then there was not really a hassle cause they were both "losing" money at that point, but we have relatively few of them.

    Currently we pay a straight hourly wage to our one full time employee and part timers are handled on a case by case basis.

    We would like to hire some hispanic workers and have not made the contact yet. How do you guys go about getting them at first?


    Al B
     
  8. smburgess

    smburgess LawnSite Senior Member
    Posts: 469

    No one will ever work as hard as you do as owner of your company, they have no reason to. You're foolish to think otherwise.

    IF an employee WILL work as hard as you, then watch your back and make sure you have a good "non-compete" agreement because he'll be out on his own before long.

    Don't get me wrong, there are some great workers out there, but use common sense, if they would work as hard, be as consistant, strive for the best job, as you the owner - they would be in business for themselves.
     
  9. KLMlawn

    KLMlawn LawnSite Senior Member
    Posts: 443

    I have a helper who has experience and does a fairly good job when we work together. Yes it is true that me being the owner, on site, will help motivate things and keep him moving and I personally oversee the quality control aspect of each job. But either way you look at it, either hourly or by commission, he would still be making about the same ... why? Because for one employee, you really shouldn't be paying anymore than 15% of what you make off of him per day. On maintenance, I make about $300 a day average only working a total of about 5 hours a day. I pay my helper $10 hr., but have considered paying him commission of about 15% ... either way he would still be making about $50 for the time he is working. So, if I hired another guy to work with him to allow me to sit at home all day watching TV ... LOL, I wouldn't consider paying them collectively more than 30% of the days revenue, barring mechanical breakdown, act of God, etc. If you can't take a decent margin for yourself and still pay off equipment, repairs, fuel and so on, then you might as well just sell or hand the business over to someone else.
     
  10. Shady Brook

    Shady Brook LawnSite Bronze Member
    from Indiana
    Posts: 1,517

    Jim Lewis is correct as usual! :) Two guys mowing less then one is ridiculous, even if they are not very experienced. Two guys may not do twice as much work as one, but it better be pretty close to double.

    Hispanics on the whole, from my experience, work harder then any of the other workers I have hired, do not complain, and try to do a good job. Perhaps in another generation they will become as lazy as most of the American born fellas I have hired.

    Jay
     

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