employees vs independent contractor

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OTOH, most roofers work by the square, at least around here. I havn't heard its a big issue in the roofing business. Most siding contractors around here pay by the square as well.

People who have no pride in their work will have no pride in their work regardless of hourly or piece work based compensation.

Contractors almost always work on what amounts to a piece work basis. Are you saying that leads to poor workmanship on the part of the contractor?

I do realize there is a very strong antipathy toward piece work from unions, and I understand that if you are a union worker or a union contractor you might well think that piece work is a bad idea.

As for drywallers, as best I can tell, regardless of how they are paid, the end results often seem poor. I think it has to do with the often low pay scale for such people, rather than how they are paid. Insulation workers seem to be another area where the low pay scales result in low skill and uninterested workers doing mediocre work.

One of my BIL's is a dry wall contractor. He is basically competing against people who speak no English and could care less about the work they do.
 
petersonra said:
OTOH, most roofers work by the square, at least around here. I havn't heard its a big issue in the roofing business. Most siding contractors around here pay by the square as well.
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Bob, once roofers get out of jail and siding workers get out of detox they are normally just happy to have any kind of job. Other than that there are a few more variables to electrical work than there are to siding or roofing.

First the reason roofer and siders calculate by the square is the fact that it does take a certain number of squares of shingles to cover a certain area ( 1 quare = 100 sq. ft.). They use a sliding scale for roof pitch and type of shingle and additions for anything extra ( flashing, hips valleys, boots or any thing). It easy for the employeer and the employee to keep track of. You can calculate almost any house in about 20 minutes if it's only a 10 minute drive to the closest bar.

How are you going to pay an electrician piece work when one day he may be in a house pulling Romex and the next day he may be running EMT in a Laundry Mat or Drug Store.

Roofers put on shingles every day, their whole life ( if you can call it that ) is measured by the square.

I'm sure that if you wanted to pay piece work to run conduit it would work very well but what are you going to do when he has to stop to go pull wire for a couple hours. What's the piece work rate to set up a tugger, to fish in a pull rope. What I'm saying is that electrical can't be measured by the square ft.
 
dharber said:
Productivity is the only reason I am considering piecework. I am also considering some kind of bonus plan for getting jobs done on time. I am a small contractor, 2 crews and I am one of them. Just want to be as productive and profitable as possible.
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Your employee's attitude is key. If they can make as much in 2 days bustin' hump as they do in 5 by the hour, they may only want to work those 2.
Putting guidelines in place prior to using this method is very important. Also, checking to make sure they are really done when they say they are is very important.
Bonuses are sure-fire motivational material, an is easy to price as a percentage of the total job cost.
 
charlie tuna said:
considering the electrical trade -- there are too many negative issues facing the electrical contractor. now, a drywall contractor is different. the guy hangs 100 boards and you pay him, not too much guesswork there. easy to track and his work is in place. electrically, it's more of a task to track "who did what" than it would be to properly supervise the installation.

we all have our ideas on what constitutes a day's work and we also know that there are days that things happen which increase and also decrease a job's productivity! and some of these things are totally out of our control. consider the problem when you have a crew of men that run out of a certain material because of a backorder or can't work in a certain area because of a job condition. it gets like a tug-a-war!

a qualified happy crew is the most productive method from my viewpoint. provide a qualified man the layout and material with good working conditions and he should produce to maintain his job security !! there's something about self pride that enters into this formula. take a good worker and limit his output somehow and he will quickly become none productive. my men always had an attitude that they were the best and could out do any other contractor and i guess that comes from self pride. and we could always take any job and make decent money on it...

when i hear contractors talking about piecework, it tells me that contractor doesn't know how to supervise and keep his men happy --- a happy man is a productive man...........
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This is the same way I feel about the issue. Employees shouldn't need any more motivation than a good job. Give them benefits that come along with a good job and they should perform.

If they are hard at it all day, and have surpassed the day's expectations, don't be afraid to "call it eight". There isn't much more a worker likes than getting paid for not doing anything.
 
It depends on the work.

I used to subcontract for a resi service contractor and was paid a percentage of the ticket total.

It gave me the incentive to sell more and I think it worked out for all parties involved. I took pride in my work as I would have if paid hourly.

"People who have no pride in their work will have no pride in their work regardless of hourly or piece work based compensation."

I agree.
 
walkerj said:
If they are hard at it all day, and have surpassed the day's expectations, don't be afraid to "call it eight". There isn't much more a worker likes than getting paid for not doing anything.
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I also agree with this and do it with my guys.
 
no wonder this industry is so far behind the plumbing and hvac industries....out thoughts and ideas are 20 years behind the times...
 
an outsider's view of piecework when it first started in my area.

many years ago i was a foreman on a 34 story condo and a very good friend of the drywall superintendent. this only concerns the piecework of drywall installers, but can be related to our trade. the drywall contractor decided to offer his men, on an individual basis, the ability to get paid by the sheet. now, the contractor's main objective was to remove his burden of major increases of work's compensation insurance. this as a large union drywall contractor. the entire crew jumped on it! they teamed up into two man crews and the contractor actually payed to have them incorporated as individual crews. the piecework dollar figure offered by the contractor sounded like heaven to his men. of course they hadn't figured in their benifits--taxes ---insurance -- like any average construction worker they multiplied the per sheet offer times the number of sheets they normally hung each day -- their new pay was near double their hourly pay and the incentive caused them to hang more drywall than normal. so the effect was that their paychecks were more than double their original checks!! i could not tell you there was much difference in the craftmenship!

well, the drywall contractor soon realized that this was too much money for any guy to make, so he lowered the per sheet price figure. the men retaliated by sloppy work, cutting corners, not screwing the board off in areas that were not noticeable! the contractor countered by withholding their checks until all the work was corrected. soon the men were not happy and complained they were not making the money as they were originally on hourly pay. now the way they determined how much to pay them was by the paper tear away strips that hold the two sheets of drywall together. each day they would turn them in to the superintendent and he would write it down in his time book. as time went on the superintendent happened to find his guys had gone to the upper floors of the building and removed the paper strips to get extra pay.. they fired the whole crew!!!

then a few years later the IRS and state came in and audited the contractor's books and it cost the contractor a bundle!!
 
charlie...what's you point?

that the guy didn't know the labor laws?

that he was greedy and didn't do his math before setting up a plan? that it was an incorrectly administered plan?

or that because contractors aren't smart enough to figure something out, it must be bad?

any of the above? or did you have a totally different point?

btw - if the project was a bid job, the entire job was piecework...
 
That's A Start

That's A Start

dharber said:
I agree that a happy employee is a productive employee..... I really try to pay well and provide good equipment and working environment.
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Build loyalty. :smile:

When your employees are vested in the success of the company they will have your back. If they know you have theirs.
I can't imagine not being part of a good team, exited by the success of everyone involed. Don't forget to that you as a business owner are a teacher and a leader. When your employees experience that they will be good ambassadors for your company. The money will then take care of itself.
:grin::grin: :grin:
 
Piecework is great, but few electrical projects are suitable.

Piecework is great, but few electrical projects are suitable.

I know a thing or two about piecework and the electrical business. First off, most electrical work is not appropriate for piecework. Most electrical projects are one-off, hand crafted masterpieces built to unique specifications by a master craftsman. You can't piece out this kind of work.

You need work that is monotonous and repetitious. Wiring new homes is a perfect example of this. Even the IBEW in Florida has agreed to allow their Residential Wiremen to work by the piece.

You must use good judgment when determining what you'll pay for each piece. Let's say trimming out a new house. A guy that hustles can do 20 devices per hour (That's 1 every 3 minutes), and you want him to make $30 an hour when he does this, so you pay $1.5 per piece. A guy that trims out 10 devices per hour will make $15, he's probably a newbie and that's OK money for a guy eager to learn, and he'll have ample incentive to learn how to work faster.

The claim that piecework results in shoddy work is a logical fallacy. The men know that if something does not work or is crooked or otherwise not up to your standards, they have to correct the issue for free. Your paying for it to be done right.

The men will work extra hours and Saturdays because everyone likes money. You don't have to pay overtime either. Also, this allows you to "know exactly" how much money you're making because you are no longer worried about lack of productivity.

The drunks and drug addicts will last a day or two and quit. The guys who want to work will love to show up for work and they will have good attitudes because they are being rewarded for being good workers.

Piecework is more common than most people realize, anybody that is paid a commission for a sale is a pieceworker. Manicurists and hairdressers are pieceworkers. Electrical service technicians working from Flat Rate Books are pieceworkers.

Piecework will solve all your problems but unfortunately, unlike painting, roofing and drywalling, most electrical work does not have the required repetition that makes piecework a viable option.
 
One firm I know of, hired 4 piece workers for switching and plugging, this was in the early 70's .25 cents a plug/switch. They did the whole complex in a weekend. Company owner berated all the full time employees saying how these "GOOD ELECTRICIANS" (piece workers) made them the full timers look like chumps, slackers and lazy bums they were. Two weeks later during punch out they found none of the receptacles nor switches were connected to the branch circuit conductors.

The owner made the full timers redo all the receptacles and chewed them out the whole time....
 
A Monkey Could Do This

A Monkey Could Do This

HaskinsElectric said:
Piecework will solve all your problems but unfortunately, unlike painting, roofing and drywalling, most electrical work does not have the required repetition that makes piecework a viable option.
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Well said. I'll bet pieceworkers are not good problem solvers.

That's a worthwile trait to have in your stable.
 
nope...no contractor out there has problem solving skills...after all, every small contractor that does work for a set price is a pieceworker...

there is good and bad in every possible situation...how many contractors get in trouble for not following the labor laws on prevailing rate jobs? how many guys pay OT in cash? ignorance of the law is not limited to any one payment method.

what's wrong with paying an employee a set price for a project? you have a mechanic and a helper on a small remodel (say 5 days)...they do the entire project from start to finish...what's wrong with paying them a set amount of labor for the week? If they finish in 4 days, they get the same as if they finish in 5 days?

as a contractor, when you quote that project, you have a labor cost built into the project..(at least you should, but i'm beginning to wonder if most of you don't just guess at your pricing)...so, you have a labor budget...paying hourly, I win if the guys finish in less than 40 hrs...i lose if they take more than 40 hrs...

what's wrong with paying them the entire labor budget no matter how long it takes them?

puts everyone on the same team...we all win...

hourly rate, in it's very essence, puts contractors and employees at odds if the project has a fixed price.
 
brian john said:
One firm I know of, hired 4 piece workers for switching and plugging, this was in the early 70's .25 cents a plug/switch. They did the whole complex in a weekend. Company owner berated all the full time employees saying how these "GOOD ELECTRICIANS" (piece workers) made them the full timers look like chumps, slackers and lazy bums they were. Two weeks later during punch out they found none of the receptacles nor switches were connected to the branch circuit conductors.

The owner made the full timers redo all the receptacles and chewed them out the whole time....
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Then that owner was an idiot. It doesn't mean piece work doesn't work.

The way it worked for me was that it was understood that if something I installed was done incorrectly or didn't work, it was up to me to go make it right.
 
I wish someone would have paid me by the wirenut or the 6-32, and I'd be retired now. ;)

The biggest problem I see with piecework is the owner has better access to historical data, and has the ability to get over on the employee. The plan seems to be to keep him closer to or below the average wage for the most part, and throw him a real nice gem every once in a while to keep his hopes up. It lets the employer keep his labor exactly where he wants it, and leaves the employee waiting for the next "big one", sort of like a gambling addict.
 
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wireman71 said:
Piece work? LMAO, not likely unless I'm making more than I could not doing piece work.
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that's the point in a properly set up system...

think about an hourly pay system...

company takes a project at a fixed price...their goal is to get it done asap - regardless of whats in the pipeline- so that they can make as much profit as possible on the job...

employee works hourly...the quicker he gets the job done, the less money he makes...the longer he takes, the more money he makes...

the employees goals are opposite the owners goals...i don't care how much of a team you have, how much you care about your employees goals, etc...if you are paying hourly, you are undermining any teamwork you have...

a PROPERLY executed pay plan based on piecework, commission, etc puts the company and the employees on the same side...working for the same goal.

think about it logically...get your emotions out of it....and realize that most of you are against it simply because you don't understand it and have never done it...kind of stuck in your ways...;)
 
So you bid the job and have shared your results with your employees and said this what I have built in to the bid for labor..this is what the material costs are..this what the taxes, insurance and every expense and what your profit is..because your employee on job and finds out your bid and it is different then what you said..then what..and why would your employee doing the work, just not decide to bid it himself..then the benefit is his..I work for someone because I am good at what I do and am not a businessman..i can not buy into your whole logic area..you are still responsible regardless of anything..HO does not sue employee he sues business..employee screws up and needs to redo something by law you still pay him regardless..you can not require the employee to purchase any materials or do labor for free..I can not buy into the logic..
 
take a breath man, take a breath....

there is a lot there, and some of it is misinformation, so lets start from the top...



cschmid said:
So you bid the job and have shared your results with your employees and said this what I have built in to the bid for labor..this is what the material costs are..this what the taxes, insurance and every expense and what your profit is..because your employee on job and finds out your bid and it is different then what you said..then what..and why would your employee doing the work, just not decide to bid it himself..then the benefit is his..
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shoot, you are making this very difficult...when you bid a project everything has a labor component...you have a labor rate that you use in order to determine your labor price...when you bid a job, your goal (at least it should be) is to get enough money for that job to cover your costs and make a profit, and then some...So, when you have a job, let's say it's a $9,000 job...material is $3,000, labor is $3,000 and OH/P is $3,000....the labor rate that you base this on is $50/hr (this includes all the burden of the employee)...so you estimated this project to take 60 hrs, this is based on solid information, not a SWAG...if you estimate by the SWAG method, this will never work for you, but then neither will paying your guy a decent hourly rate....of this $50, $35 is for his salary, and $15 is burden...

you don't need to lay out insurance costs, etc...just a breakdown of labor, material, OH/P. In this scenerio, the guy will receive $2100 for this project (the $15/hr burden still needs to be paid to the taxman, insurance man, etc...he is still your employee, not a sub)

if he does the job in 60 hrs, he makes $35/hr +benes
if he does the job in 50 hrs, he makes $42/hr +benes
if he does the job in 70 hrs, he makes $30/hr +benes

now, if i bid this job, and pay him hourly, what happens if he runs long? short?

Can I bid this job at $10,000 and still pay him $35/hr? or do I need to pay him $30/hr in case he runs long? so it doesn't eat profits...

Paying hourly, I have to pad the numbers somewhere to make sure that we are covered if something goes wrong.

Paying a fixed labor rate, actually gives the employee incentive to think about the project and look for ways to be productive...coupled with a GOOD boss, who really cares about his employees well being, this project will almost always get done in less than the alloted time...but again, in a properly executed system, it puts the employer and employee on the same team...



cschmid said:
I work for someone because I am good at what I do and am not a businessman..i can not buy into your whole logic area..you are still responsible regardless of anything
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I never said you weren't...in fact, i've always argued that it didn't matter if you paid hourly or piece, you were still responsible for overseeing the work and making sure it's done right...which is why the argument that piecework = crappy work is pure BS...


cschmid said:
..HO does not sue employee he sues business..employee screws up and needs to redo something by law you still pay him regardless..you can not require the employee to purchase any materials or do labor for free..I can not buy into the logic..
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law says I have to pay minimum wage...law says I have to pay 1.5x for over 40 hours in any 168 hour period...

I never said, require the employee to purchase materials...the company pays for the materials...

I never said, require the employee to work for free...as was so stated by Lawnguy, the owner doesn't pay for anything, the employees and customer does. So, if I pay you hourly, I need to make sure that I have a cushion to pay you extra when/if you screw up and have to rework something. This cushion is paid for by you in the form of only making $30/hr (instead of $35+) no matter how fast you work.

so, like in my example above, I might figure $35/hr+burden for labor at 60 hrs...but, if I pay you hourly, I can only pay you $30/hr...the other $5/hr, I have to bank so that if you take an extra 10 hrs because you have to rework something, I can pay you for the time, and still be under the labor allocated for that job.

So, in the hourly pay method...
(in this method you are making $30/hr, no matter what)
if you finish the job in 60 hrs, you earn $1800 +benes
if you finish in 50 hrs, you earn $1500 +benes
if you finish in 70 hrs, you earn $2100 +benes


the piecework method
(in this method, he's making $2100 for the project no matter what)
if he does the job in 60 hrs, he makes $35/hr +benes
if he does the job in 50 hrs, he makes $42/hr +benes
if he does the job in 70 hrs, he makes $30/hr +benes

Compare the two situations and tell me which one is better for the good employee?
 
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