At most landscape contracting firms, figuring the amount in an employees’ paycheck is as easy as multiplying their wage by the number of he or she hours worked in that pay period.
But The Lawn Mowgul isn’t most landscape contracting firms.
Scott Olden, president of the Dallas, Texas-based company used his interest in business and his accounting degree to develop a payment system that pads employees’ wallets depending on their efficiency on the job.
“It’s a confusing system at first,” Olden comments, “but even if the crewmembers don’t understand all the details, they can tell that they come out on top when they do the work they’re supposed to do.”
The “piecemeal” payment system Olden uses divides the profit on completed projects between each crewmember in predetermined amounts.
“If we hire someone to work on a two-person crew and service 20 yards in a day, each yard would be worth a predetermined number of credits based on our profit expectations fore ach job,” Olden explains. “The foreman and worker each have their own multipliers – similar to wages – for the credits they earn.”
As an example, Olden explained that a crew may be assigned to complete 20 yards in a day, where each yard is worth one credit. “The driver is going to get 60 percent of that credit and the laborer is going to get 40 percent,” he says. “If each credit is worth $10, the driver will make $6 per yard and the worker will make $4 per yard. In essence, the driver will make $120 for the day and the worker will make $80 if they finish all the work.” As the crews become more efficient, more yards can be added to their routes, quickly increasing their paychecks.
Olden says that he initially started this program after reading an article on piecemeal work and tweaking it to his company. “I had gotten to the point where employees who were doing a really good job and making $500 a week were coming to me because another employee was making $475 a week and that person would come in late and didn’t work as hard,” he notes. “They would ask me, ‘Why am I working my butt off and only making $5 per day more than the other employee?’ And they were right – it didn’t seem equitable.
“So I sat down and asked myself what a decent job would be worth,” Olden continues. “I determined that if I paid a certain amount and an employee was able to exceed productivity, that would be to the company’s benefit because we would be getting more work done. At the same time, if the didn’t make productivity goals, it would still be to the company’s benefit because I wouldn’t have to pay for someone not doing what they’re supposed to do.”
For legal purposes, Olden guarantees that each employee will make the greater of The Lawn Mowgul’s piecemeal system or minimum wage with the applicable overtime. “That way, I won’t have a slower or newer employee working a 60-hour week but hardly making any money,” he notes. “I define the system so that a new hire is coming to work for minimum wage, but they’ll earn much more if they meet targeted productivity.”
Also, instead of giving raises, Olden’s employees can have more lawns added to their routes as they become more efficient. “If I have a crew that can handle 15 percent more work than expected and they’re not getting any complaints, they’ll either benefit by finishing their work earlier in the day and keeping the same amount of money or we can add more lawns to increase the amount of money they take home,” he adds.
Olden says he tries to keep his employees from thinking in terms of hours and wages, and instead has them focus on efficiencies within their own crew-companies. (See “Crews & Co.” for information on how Olden’s crews operate as their own small companies.) But it wasn’t easy to turn the company over from a regular payment system to piecemeal.
“When I immediately switched, everyone said, ‘O.K. we’ll try it – we don’t’ really understand it, but we’ll give it a try,’” Olden remembers. “The guys who were hard workers succeeded in it and said ‘Wow, this is working out – I’m making more money.’ The less ambitious employees saw their check drop 20 percent. Some of them left and even though we lost a few people, we were able to increase our efficiency and bring in other employees who shared our work ethic. Since then, I have yet to have a problem of being short on labor and our employees don’t quit to work for competitors because they know they can make above-market wages if they stay here.”
See “Prize Patrol” to learn about more ways Scott Olden keeps his employees happy and on his team in.
The author is Assitant Editor of Lawn & Ladnscape magazine and can be reached at lspiers@lawnandlandscape.com.