Has anyone tried "Piece Work" to pay employees?

[Milland]

BTW, my shop foreman just bought a slightly used BMW big ass M series as a daily driver. Has heated armrest too. Good for him as he earned it.

What, he earned the despair* as electro-bits on the Bimmer gradually break down?

* For BWM owners, also know as "gotta dis-repair this car!".

 

[standardparts]

A large percentage of American Industry ran "incentive" for workers.
It's downfall I think was the cutting of prices by management, perverting the system for quick gains.

Thought about your post and most likely automation/cnc helped kill piece work.
Think about all those multi drill press machines that did 4 or 5 ops as the operator moved it down a table. Or a line of mills......
All those bins, boxes, carts moving through a shop. All those in-process cards/sheets.
It was nutz.

 

[CarbideBob]

Not sure how long you have had employees or how many have tried to sue you.
Absolute first step is consult your lawyers not the internet. Thin ice here.
I do believe in performance bonuses or pay raise and when needed pay cuts for poor output.
This has to be carefully structured, well documented and fair.
I may quote a job at 50 parts per hour and only get 10 done. Did I do wrong or did the employee not work hard enough?
If the employee did only make ten on a easy fifty whose job is it to get him/her up to speed and figure out why?
Do not take this as soft.
I have very high demands and the job is do it world class in speed and quality or do not let the door hit your ass on the way out.

(rant mode on)
I see so many supervisors, bosses, employers now that complain about their workers and output.
If many in the class are failing maybe the teacher is not doing the right things.
Easy to blame the slackers and for sure I've had more than a few... I get paid to find a way out. Some take a lot of effort.

Bob

 

[gmach10]

I worked with some guys who did piece work. Nail down a system where you could beat the alotted and make blood money. Till the man resets the time clock and increases the parts per hour. Heard a story about a Borg Warner shop that turned some kind of clutch part. Maybe clutch brakes for trucks. Guys would wrap their finger tips with duct tape so they could grab them out of the machine while they while they were spinning. "More parts per hour"!

 

[Seesecurity]

When I served my apprenticeship there were lines of capstan lathes, hundreds of them, all the operators were on piece work.
Coolant was in a big trench running under all the lathes, each lathe had its own pump in the trench.
The toilets were a 10 minute walk each way from the capstan lines.
Guess where they pissed...
Oh yeah, the time and motion guys were the most hated people in the shop, even more than the foremen.

 

[DDoug]

Are you that cheap? And then people wonder why we can't get people into the trade.

Get bent ya fuggin wanker.

Many people like piecework, and make a killing at it.
Problem is, management wants to cut prices then.

Local strawberry pickers are on the clock at the start of the season, as there isn't much work, they hate it. Full season,
the get piecework, and 3x or 4x their hourly pay.
Slackers don't work, they don't drag down the business.

 

[DDoug]

Read the article about Moore tools, he had his finish scrapers on piecework.

 

[Orange Vise]

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.

Problem with that comparison is that welding machines are comparably cheap compared to CNC machines. A CNC operator who isn't interested in hustling is not only making less in this scenario, but also bogging down one of your machines.

 

[john.k]

Piece work was absolutely standard in the metal industry........there were established heirachies of 'rate setters','time keepers','counting house keepers',inspectors ,foreman etc........and complicated agreements with unions and ,employee organisations .......It was being replaced with "sub contract agreements and worker contracts".........but these had a very adverse effect on income tax collection,and there are now hundreds of pages of tax law regarding subcontracting to one employer.

 

[Strostkovy]

It's great if you want to double your overhead with people pricing out the piece rate for every product, checking quality control far more, dealing with workers picking and choosing products to make, unhealthy competition, people with hard jobs getting pissed at the people with gravy jobs, constant complaints about delays or print changes or fitup or tolerances or whatever, and the absolute struggle of getting anyone to clean up or do maintenance or anything other than prime minimum work to maximum value jobs.

 

[Milland]

It's great if you want to double your overhead with people pricing out the piece rate for every product, checking quality control far more, dealing with workers picking and choosing products to make, unhealthy competition, people with hard jobs getting pissed at the people with gravy jobs, constant complaints about delays or print changes or fitup or tolerances or whatever, and the absolute struggle of getting anyone to clean up or do maintenance or anything other than prime minimum work to maximum value jobs.

Aside from that, Mrs. Lincoln, how did you enjoy the job?

 

[john.k]

Never the less,at one time it was the industry standard....quite often the little brass enamel badges with a number on come up on forums 'What are these? ,and how did the system work?"......some from iconic factories are quite collectable.

 

[hanermo]

Piece work functions fine in china.
With low quality std work pieces in high quantity.

IF You actually want higher productivity per worker, look at germany.
55€/hr burdened rate per hour per worker.
Look at finland. At sweden. At switzerland.

All produce world class mechanised stuff of very high quality, and have very low rates of company bk and failures.

Making higher productivity is easy.
You buy AKA pay better workers, and get them better tools, and better jigs.

 

[DDoug]

It's great if you want to double your overhead with people pricing out the piece rate for every product, checking quality control far more, dealing with workers picking and choosing products to make, unhealthy competition, people with hard jobs getting pissed at the people with gravy jobs, constant complaints about delays or print changes or fitup or tolerances or whatever, and the absolute struggle of getting anyone to clean up or do maintenance or anything other than prime minimum work to maximum value jobs.

YUP ^^^
The prices can be set by either the estimator quoting the job, or the planner making the work flow sheets.

 

[DDoug]

Piece work functions fine in china.
With low quality std work pieces in high quantity.

IF You actually want higher productivity per worker, look at germany.
55€/hr burdened rate per hour per worker.
Look at finland. At sweden. At switzerland.

All produce world class mechanised stuff of very high quality, and have very low rates of company bk and failures.

Making higher productivity is easy.
You buy AKA pay better workers, and get them better tools, and better jigs.

It's been proven time & time again when these postings come up.

Your European work ethic just isn't in place here. For any number of reasons.

And can't be changed by the OP, as it's bigger than any one of us.

Period.
Full stop.

 

[markz]

I ran a medical equipment company, 26 years. While we didn't actually manufacture anything, many of the same employee issues. 4 people total, including me: marketing/inventory, warehouse manager, technician, and me (sales, chief cook and bottle washer). After about 12 years of various employees, hired a competent warehouse manager, after about 2 years we started to get into various minor arguments. I figured out what he wanted was to have a bit of the feeling of owning his own business. So from my perspective the issue shifted from whatever the minor arguments were, to, how do I make him feel like he has 'a piece of the action' ? As I was on 100% commission, my company after all, I had few motivation issues.
What I came up with, without doing any more than 3 minutes thought and analysis, was, give the employees a motivation, 1% of gross sales, divided amongst them. I simply figured it like a marketing budget, we'd all happily pay a commission for a $500,000 contract, or $50,000 or much more for another machine, why not spend the same, or less, money on the simplest item to increase company sales? Cause. Effect. So what if it was paid to employees instead of a machine vendor.
Over the space of 2 weeks, many minor problems seemed to disappear. supplies ordered so we did not run out. if we hired temps for surge work, if they weren't performing our regular employees would get rid of them. or keep them on. equipment prepped so when actually ordered, it could be shipped quickly. 3 shipping quotes sought out in advance, crating quotes, parts, the list goes on.
Should have done it 20 years earlier. Guess my thinking as an employer needed to mature a bit. Best problem I could have had, under this commissioned profit sharing arrangement, would have been to have to pay them 1 million dollars each. Too bad never had to face that issue.
Details: employee had to be with company more than 3 months (some exception for project temps, where they would get a $100 or whatever bonus)(in 12 years had zero employee turnover)(yes, zero), bonus on small sales paid on shipment, larger sales 1/2 on shipment, 1/2 after delivery, very large sales 1/3 on payment, 1/3 on shipment, 1/3 on arrival. Big deal made about sales when they happened. Less of a big deal, but mentioned, were customer returns (which were subtracted from commissions).
When it was time for me to retire, and close the company, I gave everyone 6 months notice, same employees helped close the company down, hired an auctioneer to liquidate what was left (took 6 auctions) paid same commissions on whatever the auctioneer sold, the last day we went out to lunch, came back to an empty building and sat in the warehouse looking at each other, no one wanted to leave. I actually had to say to both of my 2 remaining employees, guys, time to head for home, it's been great. My warehouse manager and I became friends after that, until he passed recently.
Use my story at your own risk; I do not act as an adviser to your business, not do I play one on TV, if it works for you great I'd like to hear the story, if you decide to not implement and keep having the same old gripes then I do not want to hear about it.
Good luck.

 

[Metalurgent]

The rest is propaganda..

 

[gustafson]

Damn Albert Finney was young then

 

[standardparts]

It's great if you want to double your overhead with people pricing out the piece rate for every product, checking quality control far more, dealing with workers picking and choosing products to make, unhealthy competition, people with hard jobs getting pissed at the people with gravy jobs, constant complaints about delays or print changes or fitup or tolerances or whatever, and the absolute struggle of getting anyone to clean up or do maintenance or anything other than prime minimum work to maximum value jobs.

Good post which adds some more valuable details to take into consideration.
Prompts the question if in this day and age of automation if piece work would have value, I guess is the question post #1 was exploring.

 

[hanermo]

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.

Your European work ethic just isn't in place here. For any number of reasons.
And can't be changed by the OP, as it's bigger than any one of us.

Period.
Full stop.