Dave Sr. talks about piecework and productivity in this webinar. Shows how productivity improvements can revolutionize your business!!
Dave also wrote a book, for that information see: More info on Piecework
Increased Productivity Means Increased Profits
Every business is trying to figure out how to become more profitable. Whether you’re looking to put that money into expanding your business, or just lining your pockets, profit is king.
Some companies look for ways to cut costs to try and increase profits, thus hurting morale in some instances.
What does it look like if we just increase productivity though?
For example, let’s take a small lawn care company that makes roughly $13,000 in profit. They have 6 production people working 10 hours a day for 28 weeks. What would happen if they increased their productivity by just 5%?
Compared to what they were working, that’s just 30 minutes extra of productivity per employee. That would increase your billable hours by 84 for the year. Therefore at a cost of $40 per hour, you have $3,360 more in profit.
That’s a 26% increase in profit for a small amount of individual productivity!
How Do You Get 30 Minutes A Day?
What’s always the biggest question? How do I motivate my employees?
If you took a poll of why your employees work for you, generally they would say because they need money.
There are really just two extremes when it comes to them making money. They can be paid straight-time with overtime like most companies do, or piece-work when they complete jobs. Which seems like it would motivate them the best?
Here’s some advantages of paying piece-work.
Firstly, they get the job done as fast as possible. Secondly, they take better care of equipment. Thirdly, they take less breaks. Lastly, they make good decisions about breakdowns and other situations.
In this type of system, the harder workers make more. Once the employees see this, it will motivate them to work even harder.
Another great advantage is that the foremen won’t tolerate slow workers. Why would you want someone dragging down your pay?
Skill Equals Better Quality, Not Time
Using piece-work can help you attract and retain more skilled and qualified workers. For instance, would you rather know exactly the amount your making each week no matter what you do? Or would you like to make as much money as you can by completing things with quality but faster?
How do you ensure that the quality stays high on your jobs?
You have to develop a system that works specifically for your company.
Some examples we use are that workers fix complaints on their own time, moving foremen around to different crews for quality checks, and offering incentives for not getting valid complaints.
How Can CLIP Help You Succeed?
CLIPxe allows you to enter man hours for every job. Once you’ve entered your employees into CLIP, then when they close their jobs, you can use the efficiency report to see how the day went.
This report can quickly allow you to see budgeted man hours versus actual crew man hours, thus allowing you to show your employees the advantage they’re making over straight pay.
No better motivation than seeing the results in front of you!
In part 2 of this webinar, we’ll dig more into real world applications