Performance Based pay

Discussion in 'Employment' started by hortman30, Jan 12, 2010.

  1. hortman30

    hortman30 LawnSite Member
    Messages: 1

    Our employees have been doing the same jobs slower and slower every year. We try to implement no-overtime policies, but something always comes up (equipment break-down, etc.). We are considering paying each mow crew on a per yard basis. Does anyone have experience with this and how to handle taxes, insurance, unemployment, etc.?
  2. albhb3

    albhb3 LawnSite Senior Member
    Messages: 502

    how about GPS trackers? Or cameras
  3. grassman177

    grassman177 LawnSite Fanatic
    Messages: 9,795

    i think this warrants a good discussion, and will add a few myself.

    i am performance based pretty much. we have a system that works well so far. i am a crew leader and get payed a certain percentage of each job, minus labor and materials are shared costs. this gives a pretty good reason to get as much done as possible but do a good job as going back on a job only costs us money. well, lost revenue at the very least.

    we pay our labor by the hour so when you have bad days due to whatever, you make less but they always make the same. i was thinking about implementing a percentage system(vary with experience and performance in amount per individual) for them too, but i know it would be very hard for some to choose it as some paychecks really might now be that great. adversely, some would be very good.

    i am sure it could be shown to them the advantages of it, fut still then i am pretty sure they would not go for it like they were getting screwed or something. you know how these guys are. we are however are known to be fair, respectful and generous with good employees.

    this would be a great way to control labor costs better and i think with motivation these guys might actually make more if they just work a little harder and smarter. this way they can directly see the benefit.
  4. zurfsturfcare

    zurfsturfcare LawnSite Senior Member
    Messages: 327

    i agree 100%, when you find a system that works let me know
  5. New2TheGreenIndustry

    New2TheGreenIndustry LawnSite Senior Member
    from GA
    Messages: 925

    The company I work for has all full time employees on salary. A 2 man crew will do 75 yards in a week and a 3 man crew will do 100. The number of yards will vary depending on your area and average size of the yards. There are pros and cons to doing it this way. A pro to this system would be a fixed labor rate and no ovetime hours. One of the flaws I see in the system is that the guys are busting their hump to get all the yards done and things can get sloppy.
  6. GrassNat

    GrassNat LawnSite Member
    Messages: 2

    To put it plainly, I'm tired of busting my hump as a one-man show in the sole-proprietor arena for the past 7 years. Therefore, I came up with an idea of hiring just a couple of individuals, experience preferred, and pay them not only an hourly wage but an incentive as well.

    For instance: if they use my equipment, I would pay $10 per hour plus $3 per property. If they use their own equipment, I would pay $12 per hour plus $5 per property.

    Weekly or bi-weekly checks would be mailed out with either taxes taken out or just 1099 them. I haven't decided which to do yet.....whatever's easiest.

    Granted, the number and size of the properties I have may be a crumb on the table compared to the full-course dinners some of you might have. I simply can't be everywhere at once to keep this business growing.

    Currently, the only employee I have right now is myself. From the business end to the labor end and absolutely everything in between. I thought maybe this year I'll try something different and see where it goes.

    Let me know what you folks think.
    Last edited: Jan 24, 2010
  7. AllHardscaping

    AllHardscaping LawnSite Member
    Messages: 77

    Paying them $10 an hour and then $3 per lawn is not performance or incentive based. I'd give them x amount when they complete a given daily goal whethre it be based on # of lawns or $ sales for the day.

    Like someone else said you have to keep an eye on qulaity because they'll plow through them as quick as possible.
  8. supercuts

    supercuts LawnSite Silver Member
    Messages: 2,814

    their are so many difficulties with these systems, not to say they cant work. but basing it on # of lawns or $ sales there are many flaws. think of it from the employee point of view. if he works just as hard each day and only makes the goal 2 or 3 times a week he might start to think, hey, im doing bigger lawns mon/wen, why am i being penalized? or im working harder on thursday but we're not grossing as much, maybe my boss didnt price these lawns right and i shouldnt have to suffer for that.

    mix that negative thought with rushing sloppy work. then you get upset and tell them to do a better job if they want to make more. they get even more mad your taking it out on them and before you know it, you've fired all your guys or they have quit. and whose dime is it on when a machine goes down. if im the employee, im on the job, not my problem your machiens fail.

    it would be great if you had an excact time it takes you to complete your work and try to have one guy repeat it. when you have a crew out, it only takes one guy dragging his feet to ruin it for all of them and that isnt fair.
  9. MarcSmith

    MarcSmith LawnSite Fanatic
    Messages: 7,157

    sound like a liability nightmare. oh, and good luck finding a sub contractor to work for you for 12-15 bucks per hour...

    first. multiple equipment break downs warrant an investigation. is it as a result of poor PM's, old worn out equipment or operator error. If its poor PM then they service guy needs to disciplined for missing things on the PM service. PMis not juts changing oil and sharping blades. its looking over teh machine for cracked belts, loose nuts/bolts, ect... If its old worn out equipment replace it. if it operator error..discipline.

    if guys are working slow. then hold the crew leader responsible. discipline accordingly. once he realize that annual raises and bonus' are being based on his performance and annual reviews he will either get the crew in gear or let you know who is not performing and ask for new crew members.

    there is also the fluctuating work week based pay. it kills overtime. it actually starts dropping the hourly wage for hours worked past 40... is a salary base though...
  10. twcw5804

    twcw5804 LawnSite Senior Member
    Messages: 439

    As business owners we all have monthy net income goals that we like to achieve. So what would be wrong with setting up a bonus for months when lets say your goal is $5k and you get $7k net give them a $250 bonus.

    But if they are dragging and racking up more hours, breaking equipment, and so on they cost your more. So no bonus.

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