paid employees

[AS18]

Hi Everyone!
i'm trying to decide how to pay employees. I've ruled out hourly pay. I'm considering a percentage per job , minus the materials. I'm also considering a flat rate type deal. what works in other shops? What doesn't? Thanks guys

[MinUph]

Whats wrong with hourly? Years ago I worked in Florida for a percentage of the labor. It was never good for my end but it was a job. I have always paid my employees hourly and one as a 1099 still hourly. I just think it the fairest all around.

[AS18]

before I opened on my own, I was hourly. I believe that was one of the things that led to the demise of that establishment. there were other factors, ofcourse, poor management, poor financial choices etc... maybe I should reconsider hourly, but be smart and pay close attention? why did percentage not work for you? what were the down falls and such. I want insight from all angles

[baileyuph]

Actually, the best method depends on company skills and worker skills.

If the company is sharp and their marketing skills are effective, then a worker with above average skills,
could fair well on percentage along with the company.

I see the problem in paying an hourly wage that a worker doesn't warrant.

If the company goes "percent" and the worker is fine with that, then also let the employee have input on the sales prices.

Years ago, I started hourly, then went percent and made a lot more money.  Along with the change,
I gained control of the job charges for labor.

Now, owning my own business, my earnings are related to percent, for my income.

Good question,

Question:  Are highly qualified workers available for what you do?


Doyle

[MinUph]

  The reason it did not work for me was mainly because the labor cost was low in the first place. I was young and didnt care much it was only for some pocket money. Hourly can be a challenge unless you have good employees that pull their weight. They have to earn the wage you pay or they are just not good for business anyway you might pay them. If they don't pull their weight then a percentage might make sense. I have been pretty lucky in that my mail people do pull their weight. I've had a few that did not and they are no longer working for me.
  I guess it all boils down to what you feel comfortable with. Try to be honest and fair to your help and I think it will work out no matter what agreements you have with them.

[SteveA]

This is an interesting topic.  When I had employees I paid by the day.  This worked best for me.  No one felt like they had to watch a clock.  If someone had to leave early or had an issue come up I'd still pay them for the day and they'd make it up without me asking.  Sometimes if they wanted to finish and leave early I had no problems with that.  I also paid daily since guys wanted their money at the end of each work day and they didn't have to wait until their hours were calculated at the end of the week.  If a guy went above and beyond his task I could reward him with an extra amount without others seeing what he was getting by the hour.
SA

[sofadoc]

In the early days of our family business, my grandparents struggled with this.

It always seemed like if they paid piece work, the employees would slop through it just to get it done faster.
If they paid hourly, the employees would slow down to a crawl.

I guess either system can work if you have the right people. But if you have the wrong people, neither system will work.

[AS18]

thanks everyone. helpful insight.

[kodydog]

Use the threat of piece work to increase your hourly productivity.

[kodydog]

This is how by the piece pay worked in the factories. The only reason factories paid by the piece was to motivate the emploies to work faster. Some pieces were priced better than others but the rate was always under priced. The workers compensated by taking short cuts. Anything to get more tickets into their bucket by the end of the day. Imagine a line of 20 upholsterers. Everyone of them is watching the front of the line waiting for the higher paying jobs to come up. They will speed up if the next job pays well and slow down if it doesn't. They called it waiting for the gravy.

The only way I can see piece work working in an upholstery shop is the owner must be highly organized and the upholsterer highly motivated. The owner will have to spend a good part of the day making sure everything flows smoothly. The owner needs to make sure the next piece is always sitting there ready to pick up. The fabric is there and any notes pertaining to customer conversation. When an upholsterer is on piece work he does not have time to hunt down the owner every time he is ready for the next piece.

The upholsterer also needs to know how much the piece pays before he starts the job. That way if the piece is way under paid he can dispute it.

You can bet, if the upholsterer thinks he can get away with sub-quality work to save time, he will. Does that spring really need to be fixed? How about that loose joint, just shoot 5 staples into it and call it good, nobody will ever know.

I once work in a place with 2 other upholsterers and a seamstress. One particular upholsterer was a slacker. He wasn't carrying his share of the work. So the boss put him on piece work thinking he would stop screwing around and pick up his speed. It backfired. The upholsterer figured as long as he was making piece work he could go any speed he wished. And he did, he slowed down. His attitude brought down the morale of all the other workers.

[MinUph]

Good story kody!

[brmax]

  Some how if I were considering these options. The methods to seperate the task of a job is a path I would pursue. Its I believe a win win option for both employee and company.
This could be tough, difficult or impossible for a few employees, but I would try it and improve on this method as its where we are in the company world today. In my opinion. 

  This production method is not new and very respectful actually, why you consider?  Well this fairly pushes the adage in station peformance, with this the imediate team is both on notice and yet has itself the stations input towards betterment or corrections. This is again in my opinin a team of sorts and can  ( hopefully ) correct itself toward motivation in company production and team trust and confidence.

Floyd

[Mojo]

Paying by the piece is a great way to nail down your costs per job. But there are many pitfalls which is why this practice, which used to be popular generations ago was dropped.

Paying hourly is the way to go. If the employee is in management then salary is a great way to go. The last 5 years of my career in my previous life I was a salaried employee. I loved it as the salary was large as was the raises I got every year based on performance.

We pay our employees by the hour. If we ever hire a manager again we will pay him/her a salary with annual performance bonuses.

Mojo

[kodydog]

About 6 years ago I went to an interview. The owner of the shop told me they pay piece work. He told me the Upholsterer gets 1/2 of the estimated price. He said the upholsterer does the whole job. Strip, cut, sew. and put it all back together. So to get an idea how much they pay I asked what a typical wing chair paid. He said $150. I did some quick math and said not interested. I refrained from telling him $300 is way low to charge for a wing chair.