you mean to tell me that if you pay a guy hourly, you don't have to inspect his work for QC?

I'd love to meet that employee.

If set up properly, the only thing a piecework or incentive program does is give the employee some stake in what they are doing.

For example, you pay a man $45/hr total package. That works out to $1800 for a 40 hr week. If this is service work, that should be no more than 30% of your gross. If it's new construction, it will probably be about 40-45% of your gross.

So for service work, he needs to generate you at least $6000 in gross sales. For installations (at 45%) it needs to be $3275.

So what happens if he only makes you $3000 for a few weeks in a row? your still paying him the same 40 hrs, but he's not earning his keep so to speak.

Now, most contractors have a unit price for everything that we bid. Resi new construction might use a sq ft price, but I'd bet 90% of them also had figures per outlet.

So, it's simple to translate into piecework or incentive work.

Say for example, new resi, you charge $25/outlet. That mechanic needs to rough and finish 131 outlets that week to cover his costs. If it's simply a rough, use a percentage. Say that rough is 50%, finish is 50%. So then he needs to rough in 262 outlets that week and finish 262 outlets the next week.

most larger resi contractors don't even hire electricians, they run assembly lines with the worker doing the same task in every house. Very easy to monitor.

Now if you as a contractor charge $50/outlet. That same worker now needs to do half as much work for the same result.

all this does is set a benchmark for the worker to meet. As an hourly rate mechanic, how many of you really have an idea as to what financially needs to be accomplished each day/week/month?

So how do you know that you are hitting your targets?

like anything else, it can be used for good or evil. when implemented properly it does work and it does work well. if you don't implement it correctly, it can backfire and be a disaster. simple as that.

[This message has been edited by mahlere (edited 05-01-2006).]