This is a profit sharing plan. The employee gets paid for all hours worked just like he always has nothing changes here. When I price a job I estimate how many hours it will take. If I estimate it will take 10 hours and the employee does it in 8 hours all the money for the 2 extra hours I figured the job would take would go to me and none would be given to the employee for completing the job quicker than I had estimated it would take. What incentive does the employee have for completing the job quicker? He is getting paid less for the same amount of work. If he worked slower he would get paid more for the same amount of work. With the system I am talking about I am simply giving him some of the money for the extra 2 hours that he din't use to complete the job. Instead of 2 hours you could call these points. The employee would then have 2 points included in his file. At the end of the quarter he would be paid for the points that accumulated in his file. These points could be included in his performance review.
These points in no way represent any hours that he worked. These points could be paid out in any way you wanted to. They could be paid out at $10.00 per point. They could be used to determine his pay raise for the year.
The more points the bigger the raise he gets.
They could be paid out as a bonus at the end of the year.
With this system an employee could work only 38 hours and still get paid for 40 hours. An employee would never work 40 hours and only get paid for 38.
This is not a system I made up myself. I think this system is used in the plumbing and HVAC industries to compensate their technicians. As far as I know plumbers and HVAC people are making more money than electricians. Why is this? Are our services less valuable? I don't think so.
[This message has been edited by A-Line (edited 12-09-2004).]
[This message has been edited by A-Line (edited 12-09-2004).]
