ECN Forum Forums General Topics of the Trade Business Related Discussion Piecework?

LK

"If you finish early, you'll still get paid for 14hrs."

Is why I purchase better tools, look for time saving devices (such as my own glow rods, ballchain and magnets, and $1000s more on tools that the contractors I've worked for wouldn't buy because they don't see the time savings). I don't want to cut corners, I just want to be paid a reasonable rate for the expertise and equipment that I bring to the table.

Even as an employee of a contracting business, I wind up working T&M. We all know the issues with T&M work faster = less pay. That is really what an hourly employee is.

I admit, I don't like to work harder than I have too. But that doesn't mean I don't pride myself on quality workmanship. I do, however, believe that I should be able to share in the benefits that my entrepreneurial spirit brings to the table for the contractor that I work for.

Glen

Dave I believe in this thread 'piece work' means that the employer pays the employees 'by the piece'.

I have no idea the real numbers used but for example at trim out.

$2.00 per receptacle, $0.25 per plate, $1.00 per high hat trim etc.

In this way the employee has an incentive install as many units as possible in a given time. A motivated worker could make a decent wage. The employer knows they will not be paying for non-productive time.

However if a piece worker runs across problems, say stripped threads on the box or device are they going to slow down and fix it right or just 'make it look done'.

Bob

Rethread with 6-in-1 tap tool: 1 minute
Use sheet metal screw instead: 5 seconds

Wondered where that came from.

IMHO, our industry uses an interesting blend of the methods. Typically, we price "by drop" or "per opening", especially for new construction. This could be considered a type of piecework, from what I understand.

But then we modify the methodology, and, using a "labor rate" for each task that roughly equals "average" time to complete each task, based on hours of work, we assign a certain number of man-hours to the job as a whole.

If we base our bid on 300 man hours to the build, and only have to pay out for 240, we wind up ahead. Conversly, if we have to pay out 320, we take it in the shorts.

I think we can agree on "different strokes for different folks". Let folks believe their method is best.

Just my $0.02.

Not here! I haven't had a job inspected in years.

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).]

now on the flip side-

if the 'going rate' is $25/outlet, and you want to be competetive, so you charge the going rate.

you hire a mechanic who does great work. quality is super. your paying him that same $1800/weej, but he only does 90 outlets in a week. What do you do? Do you cut his pay? Even though he is doing great work? Do you take a loss every week?

Also, if a guy cuts corners because he is doing piecework, what makes you think he will suddenly have integrity if you are paying him hourly?

RR stated right at the start that implementing piecework with new resi work was fine.
My comments have been more concerning all the other jobs we do.


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

bris,

there are exceptions to every rule. I don't know how long you have been in this industry, but I'm going to go out on a limb and say quite a while. You are used to things being a certain way. Change is not comfortable.

There are exceptions to every rule, and there are ways to make things work well for everyone.

I'd bet that there is a way to come up with a viable incentive pay program for whatever you do.

If you are afraid of change, that's fine, just admit it.

If anything, I'm exactly the opposite. I get bored out of my skull very quickly when I'm not being challenged.

Tiger:

What price book are you referring to for residential service pricing? I am primarily charging T&M for all my service calls, and this is because I am new and do not want to lose money. It would be helpful to explore a flat rate pricing, if for no other reason, to be able to give a figure for a job right from the start.If you can get the name and the author for me I will try to get one.