# per-project based payment for employees, how?



## terzdesign (Mar 8, 2010)

What are the in's and out's of setting up a system where I pay my employees on a per-project basis? I have one guy who does great work but is sooooooooooo inefficient. If I could set him up on a per-project basis it would give him incentive to get faster and I wouldn't have to pay him extra hours. Any help would be great.

I thought about a percentage but I just don't see it working for small jobs, or huge jobs for that matter.


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## AtkinsonConsult (May 2, 2011)

jcterzin:

Paying people per job can be handled that way, but in my opinion it's the wrong way to go.

A better option is to have consistent discussions on your expectations, support to make those expectations happen, a good training program, and a good discipline program. Record daily performance using production logs, and outline fair and reasonable expectations on how much time it should take to do each task. Be fair and honest and have your numbers based on the equipment and type of task that is being performed.

If the employee still doesn't measure up. Have in-depth conversations as to why they aren't performing as expected. Train and help them succeed. Set weekly or monthly goals for them.

However, carry a stick too. (not literally, but you know what I mean). Every time you counsel the employee or have discussions be sure to jot that down into their file. Give them fair notice as to what's going to happen. If they still can't cut it, terminate their employment and hire someone that will perform to the level that you need. The sooner you drop the dead wood and find someone that will work the better. It's easier to use what you have on hand, especially if they already do good work....maybe they just need a boot to the butt.

Remember the old adage, there aren't bad employees - only bad managers. Be supportive, fair and firm. Treat everyone the same way. Post production numbers from yesterday's work every day on a whiteboard. Numbers that met established standards are posted in black. Numbers that didn't are posted in red. Too many red numbers can show you the door. 

You may also think about how to reward your staff that over achieves. It doesn't have to be completely monetary in value, but that helps. A public thank you or acknowledgement work wonders. So does a free lunch every now and then or an extra day or afternoon off. Maybe have a point system where staff can earn things for quality work turned in.

You can only manage what you can measure...so make sure you know your numbers and what values you are trying to achieve. Set goals...

You can do it!!

Good luck,

-M


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## dottavig (May 2, 2011)

i'm kinda in the same boat, When i need help i always use my friends little brother. He doesnt have a job so i like to pay him over someone else. The biggest issue i have is that hes so god damn SLOWWWWW! gets work done but its slow. 

My solution was to figure an hourly wage and estimate with a small buffer how long a job should take. I applied that wage multiplied by the time of the job and arrived at a fixed amount to pay him. The most important part about this was telling him how i arrived at this fixed amount. With this said i dont care how long it takes him to do things anymore and i dont have to manage a friend (its so hard to treat a friend like i would an employee).


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## terzdesign (Mar 8, 2010)

I appreciate the feedback guys. Atkinson, I don't think my shop is that developed yet to do production reports... That would mean I would have to watch over them when they work and keep track of their progress. I'm a graphic designer, the owner, the guy who places orders, the guy who does everything. I just don't have time for it. As long as my employees print quality products and we are not super behind on projects I don't really mind how long it takes them so long as its right. I've had an employee in the past that was very efficient but didn't get the prints consistent or there were finger prints on the shirts... Ill definitely take quality over quantity.

I'm thinking what I may do is take each job and do a quick analysis of how long it should take a normal printer to do and calculate that hourly. Then I would pay the employee that figure when printing. I would also pay them 2-4 hours a week to reclaim, burn, and clean up as well. Does this sound fair? I wouldn't worry about efficiency and they have the incentive to get faster so they don't spend as much of their time on a project.


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## Louie2010 (Feb 26, 2010)

I used to have a lot of employees . It wasn't in this business so take this advice in the context that you may not feel it applies.


The one form of payment I found to be the most affective in "steering" or directing employees was to set up some type of bonuses based on goals that I would set.

Rather then extra pay based on per-project completed where it could indirectly lead to them cutting corners over time which could then lower quality, instead think about what you want them to achieve entirely and offer a *potential *bonus (over and above their base pay)based on their results when compared to the goals you had set for them.

I have no idea how much additional dollars you are thinking of offering them, but you need to sit down and figure that out first. You then need to *write down everything* that you would consider perfect results from them in doing their jobs. Then sit down with them and tell them that you appreciate their hard work and as a reward you want to offer them *a chance* to earn some extra money. 

You can fill in the specifics, but you need to *communicate clearly* to them *everything you expect*, for a job to be perfect. Include the quality standards to be met, the time you expect it to be completed in etc. *Communicating this clearly is important* because if not you will have people expecting a bonus when you are not expecting to give one.

Then if all the goals are met after your predesignated time period have a review and give out the bonuses earned. This could be per job if you want it to be very specific and controlled, per month if less so. If you do go per month you might want to just keep notes and still give a percentage of the bonus based on the percentage of jobs they did achieved the goals you set compared to all the jobs done that month.

By setting goals and bonuses you have the flexibility to modify the amounts based on profitability (which can be one of the goals) and anything else that might become a factor that you might need to address in the future. Blanket pay increases tend to get forgotten and lose their motivational benefits over time where the benefit of bonuses, if done properly always remain current.

This is not to say you never give anyone a raise, but you can keep those to a minimum cost of living increases while using bonuses to better control and grow your business.

You can do this individually based on each persons importance to your business or collectively as a team. Individually takes more of your time, but gives you more control to be more specific. I strongly recommend individually, but if doing so I would also recommend doing this privately and telling each person the amounts are confidential.


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