I’m thinking about hiring an employee and I’ve been pondering some issues. First off, let me ask both employees and employers how involved you let the foremen be in the numbers on jobs. Do you or they know how much money is in a job? What it was bid at, how much materials are, and how close to budget you are?
I’ve been considering coming up with a way to let the numbers determine my new employee’s fate. He’ll be coming on board already thinking he’s worth more than he’ll be paid. I don’t want to engage in the mind games of trying to convince him he’s worth less so I don’t have to pay him more. But at the same time I don’t want to give him more than I should at the detriment of the company. I want to be able to cost out a job and look back and say “this is how much we made, and you are consistently paying your way and then some, here is what you are worth, if you want more you’ll either have to perform more or get more performance out of your helper.”
So I’m thinking if he has a good idea of where he is performing (profit-wise) verses where he might want to be, he could motivate himself.
Do any of you see the pros & cons to this and what types of conditions would you put on it?
The way its done at the company I work for, its how much profit has increased or decreased in a percentage.
The crew leader doesn't know what the jobs bid at or anything about the job cost..
Every 3 months the crew will get a statement about how they are doing profit wise. Payroll and material costs are taking into account. So you can kind of see which crew is making you money and which isn't.
keep good records on time and material... and keep track of how much money he made you... say for a 10 week period... then after the next ten weeks do the same thing... compare that 20 weeks side by side and get the + or - percentage. Then you can come to him and say... whateve...r your uo 35%,...or down 20%..
It helps in our company people know they are being kept track of. We also take core of our own inventory and storage units so it cuts down on people 'borrowing' material.
In my business we track cost by the hour. It is essential for the foreman to know how you estimated a job. Every estimate I do is put together by units. Every electrical apparatus has a unit and that is what you multiply by the quantitites to estimate the cost of a job. My foreman know what the units are and that I expect them to not only meet but exceed the units. Say you are estimated your crew could install 100 feet of pipe in 8 hours and they are only getting 90 feet up you are missing your units, thus losing money, if they are getting 100 feet up they are meeting there units, thus breaking even, 110 feet, they are beating there units, thus you are profitting more. It is essential for the foreman to know what is expected of them everyday. My foreman build daily workplans for there crews and every work plan has listed the units they need to make. With this system in place I can tell you any day of a project were we stand as far as making money or losing money.