Has anyone tried "Piece Work" to pay employees?

[DDoug]

I disagree.
The spanish work ethic is crap to non-existent.

With my-our finnish mexican-owned work principals we got all sales guys to do more than 10x more visits per week.
This was not easy - and I had to do it.

BUT every sales guy ended getting more than 2x their best month ever in previous 10 years in salary and comissions - continuosly.
GREAT money.
Plus free iphones, tablets, laser printers, cars, gas, lunches, etc etc.
I grew sales 11 times, from 4 machines/yr to 80/run rate, used to be 150/yr, don´t know actually.
Best HFO in the world.

I´ve done this in Finland (2x), and in Spain, somewhat in the UK, somewhat in Tunisia.
I guarantee I could do the same in the US in any company, where it would be much easier in some ways and much harder in other ways.

The US work ethic is excellent - unlike Spain.

Just like here in Spain for HAAS -- getting serious sales for a serious capital goods product, is expensive to start with.

We spent about a 1M$ for the showroom, 3M$ in stock, and 2 M$ in ongoing costs, 130.000 $ for sales guys + support per month.
And we are/were just about the best guys in the business in the world.
Hitec mexico, the owners, are the biggest best hfo in the world.

My haas hfo in montcada-rexac became the best global hfo within 2 years.
We had the 3rd best margins in the world, partly because of me.
And the worlds best service - because of the owners mostly.
And a 100% customer satisfaction rate.
Best in the world.

Because the owners told me I could and should do anything, to fix any issue with any customer, anywhere, for any cost to them.
I fixed maybe 6 major customer issues, out of 500, with zero cost to the customer.
When one pissed-off customer shorted by the previous rep. asked for the cost, my second day on the job, I told them "I will send You an expert technician, not an invoice".
I ask only that You rate us fairly to Your neighbouring shops, acquintances, etc. and previously tell me if we ever fail in anything in any way.

Some became our friends and demo sites.

Another customer hang up on my sales guy. Literally.
Once we got him to talk, and I told him I can do absolutely anything to fix his issues, or even give him back 100% of his original 6 years ago purchase price, now, cash, he changed the story.
We were not the "enemy" any more.

The horizontal pallet changer that had proved to be unreliable -- they simply used it without the pallet changer.
It was in production every day.
It was making money every day.
He did not want a new machine or a refund.

When I asked him how could he speak of us really well to everyone he suggested a half-price new haas machine.
So I sold him a really good new machine, at a loss, supported by HAAS USA.
The customer became really happy with us.
He spoke to everyone about our service, and standing behind our products.

I told every single customer that we are the best at what we do.
We sell decent CNC machines, not perfect, with excellent service, and advise as much as we can on what is a bad idea on production, if you ask us.
Others (may) make better machines with much higher prices.
I recommended a mori lathe to one. Making caskets, of all things.

I refused 500.000 in sales of a few VMC with angle tools for long bores (bearing holes) for large scale production.
The customer was very angry, upset.

You said flat out that the European work ethic is what's needed.
Changing your tune yet again.

 

[F35Machinist]

The owner and machinist would work up a quote...I think the ratio was 50/50. The machinist would get a set amount for the job and the owner would take the other half for overhead.

I run this deal with a machinist that I work with for prototype work quantities up to 10pc. If any machinists are interested in this type of deal, send me a message. 100k-200k/yr is possible if you are skilled, maybe more if we're lucky.

 

[john.k]

Not really DD.....in the old Anglocentric view of Europe,the south was considered to be Latin,not European.....the south of France was included in the Latin area too....the workforce taking a siesta from midday to 4 in the afternoon,as the area was agricultural..

 

[gbent]

Jack Stack wrote a book called "The Great Game of Business" about his incentive system. It is one of thousands of business books, but his take on piece work is from personal experience. I recommend it, among others, before starting down that road.

Just a few of the problems that will have to be answered, preferably before starting:
Who decides who runs the gravy jobs, and who gets the low pay jobs?
Nobody wants to change the inserts 10 parts before shift end and let next shift get the gravy.
When shop buys better tooling or other job improvements, who recalculates the job time, even though worker is doing exact same loading and qc checks?
You will have to pay minimum wage if employee doesn't make enough parts to make minimum.

As soon as the system is announced, both management and workers will be working their hardest to game the system. To the OP, if, in your example, the operator was able to change things so they could make $40/hour and still turn out perfectly acceptable pieces, what would you do? If you would find that acceptable because you are also making more money, how will you handle the internal conflict with other employees who are making less than half as much?

 

[gustafson]

I think this is why profit sharing is a better idea.
If you have one rock star and a bunch of bums, the rock star is going to leave, but at least you never have to pay profit sharing
IF you have 9 rock stars and one bum, they are going to tie an anchor around his neck and throw him off the stern

 

[M-M-W]

The last shop I worked for did piece work rates. It would have worked out well if the owner dished out work evenly. He had beef with one of our guys for a while and would punish him with some of the less pleasant and lower paying work. While the owner's son always got the gravy work and rarely got a crap job, when he did it was mostly for show because it was always such a low quantity of parts. The hourly workers would occasionally get some menial rate work, kicker was they still got their hourly rate on top of the piece rate. Needless to say, it caused a lot of frustration among us.

 

[BugRobotics]

We are trying to come up with ways to get employees to be more productive, without sounding like we are being slave drivers. I used to have a roommate who was a welder, and he was paid for every fitting he was able to weld during his shift, pretty much leaving how much money he wanted to make up to him. I want to know if there are any shops out there that have tried to pay their employees, using this method. I would think it would go something like this. The employee makes $16.00 per hour. The machine they run has been proven that it can produce 10 parts per hour. If we set a goal of 80%, that would mean that the employee would have to produce 8 parts per hour at $2.00 per part to make his $16.00 rate. The upside is, that employees, with minimal effort, can give themselves a raise to $18.00 or even $20.00 per hour depending on how hard they want to work. Produce more parts, and make more money. Granted, this is all dependent on them producing good parts. If the employee has downtime between parts and wants to make even more, they could possibly be assigned a small job assembling parts with o-rings and seals and get something for that. I would think, it would benefit both the shop and the employees equally. As it stands right now, employees feel they can make 4 per hour, 6 per hour, or 10 per hour and still make the same, so why put more effort in when the pay is the same? Any thoughts on this would be greatly appreciated.

As others have stated in various ways, I'd be looking at your internal processes and work flow and make the changes there. Even if you have to let some of them go because you streamline your process that would be better than stringing them along at $16 or even $22/hr. If that is too much of a headache or overwhelming then hire someone who can take a non-biased look at your workflow. Shouldn't cost more than a a few $k to get a knowledgeable person in your place to give some honest feedback, find the right person and it may even be close to free.

EDIT: I bet if you were to spend some time crafting a nice post with all the work you do and your workflow (with pics and/or videos) you would be inundated with excellent advice in a matter of hours.

 

[michiganbuck]

I have worked at shops that gave a simple quarterly gift for good attendance and that worked. The gift was like a jacket, duffel bag or the like...
For better all-around performance an honest monthly productivity bonus likely would work. It would be enough for a dinner out so perhaps $150. on a good month. The good workers would encourage poor workers to be better, and the spouse would also encourage better performance.
*By-weekly would be even better. Good parts, profits, scrap and everything honestly considered.
Yes, for accounting ease the bonus might be based on two weeks or four weeks ago.
A notice would be posted
"We are going to try a productivity bonus for 6 months and if it works we will make it permanent, The bonus will be from zero to about $200. for each xx period.

 

[john.k]

A very old idea is the group of ten (a tything)......everyone profits or everyone suffers .........slackers quickly correct ,or quit.

 

[Trboatworks]

My first job ever was piece work in a glass factory.
Pretty much just like this…..:

 

[Stirling]

We are trying to come up with ways to get employees to be more productive, without sounding like we are being slave drivers. I used to have a roommate who was a welder, and he was paid for every fitting he was able to weld during his shift, pretty much leaving how much money he wanted to make up to him. I want to know if there are any shops out there that have tried to pay their employees, using this method. I would think it would go something like this. The employee makes $16.00 per hour. The machine they run has been proven that it can produce 10 parts per hour. If we set a goal of 80%, that would mean that the employee would have to produce 8 parts per hour at $2.00 per part to make his $16.00 rate. The upside is, that employees, with minimal effort, can give themselves a raise to $18.00 or even $20.00 per hour depending on how hard they want to work. Produce more parts, and make more money. Granted, this is all dependent on them producing good parts. If the employee has downtime between parts and wants to make even more, they could possibly be assigned a small job assembling parts with o-rings and seals and get something for that. I would think, it would benefit both the shop and the employees equally. As it stands right now, employees feel they can make 4 per hour, 6 per hour, or 10 per hour and still make the same, so why put more effort in when the pay is the same? Any thoughts on this would be greatly appreciated.

Or a base rate with per pc production bonus?

 

[john.k]

My last boss was a slave driver ,and very rich with it.....he was basically a nincompoop,and the place could have been run a lot better .........he tried slave driving me a couple of times ,but it didnt work .....he also fired me several times , the last time he fired me I didnt ignore it ,and went to the office and collected my week in lieu of notice...........the woman in the office didnt want to pay me ,but I insisted ,and she had to .....Col sent the foreman out to tell me to come back ,and then when I did ,he wanted the weeks pay back .....I refused,and he fired me again.....how can a moron have millions?

 

[Yan Wo]

... Why would anyone make good parts when you get more money by making crappy parts with poor finish? ...

Why? Because some people have personal integrity and pride in their workmanship that doesn't allow them to do that.

 

[DDoug]

Or a base rate with per pc production bonus?

Been done, but same problems listed above for straight incentive pay.

 

[Seesecurity]

.how can a moron have millions?

I don't know, but it seems very common. I do VMR and the amount of people with multi million dollar boats that are complete morons is unreal.

 

[Stirling]

I don't know, but it seems very common. I do VMR and the amount of people with multi million dollar boats that are complete morons is unreal.

When your a moron your not scared.
Just giver

 

[gustafson]

Why? Because some people have personal integrity and pride in their workmanship that doesn't allow them to do that.

Man you are a funny guy.....

 

[john.k]

I can see my boss ....Profit sharing....????? Whaaat?......i once commented to him the toilets were filthy......."They already steal 15 min from me every time they go,I dont want them to spend more time there."

 

[William Payne]

Here is an actual scenario happening right now where I live. I look at my wages in the trade, they don't work anymore and haven't worked for a while. I get a pay cut every time the government here puts up minimum wage. I look at the job listings and there is a call center job paying $5 an hour more than I earn. So what is my incentive to stay?

 

[Seesecurity]

I get a pay cut every time the government here puts up minimum wage.

How does that work, are you expected to pay the increase in minimum wage out of your wages?