Mike, I build shutters not cabinets, but I believe it may be possible to pay by the piece in your shop. I did this about 15 years back, when I had about 23 employees. I took what my production cost was suppose to be, the very numbers we based our sales price on, and broke it down to just how much money we were taking in to pay for all the individual functions being performed in our shop. (After all, your labor cost when estimating prices should run true to the actual payroll, right?) I also ran live realistic trials to be sure I was being fair to my employees. An added unseen benefit was the process helped me get my pricing more accurate as to my true cost of labor for production. My big motivation for starting to go to piece work, was payroll would go up, production stayed the same. Payroll could stay the same, production would still drop. I also knew I had some workers, just a few who were not pulling their fair share, or they were making too many errors. My better employees would not rat them out, and I strongly disliked the few bad apples, making it difficult for me to cover the payroll every week, endangering the jobs of the productive people. I actually saw this as an opportunity to better pay the good workers, while weeding out the bad.
To be truthful, when I held meetings to set up our going to piece work, you would have thought I threw ice water on everyone. It took a lot of convincing and educating my crew that it could work and be beneficial. One downside, some of my less intelligent people (but good workers) did not understand how we would track the work flow. After a few weeks they caught on, and several saw some actual improvement in their checks. Which I was only too glad to pay, as I saw several of the suspected shirkers quit within just a few days. I actually had one guy get about a 10% increase in his pay, and he quit because he had to start working harder than he had wanted to. It was a lot of hard and trying work on me to set up the system, to break down all our functions and come up with rates that fit the skill required and difficulty of the work performed. Bonuses helped round things out too and helped the system be accepted. You may lose some workers, but in the end you may be glad you did. Might even lose one or two you had been thinking were really good. I did keep my entry level guys who were on a 90 day trial, at hourly rates. That took care of things that needed to be paid by the hour, that were not production. Like cleanup, unloading trucks, sweeping the floor, that type of stuff. Oh yea, we based our rates on square footage, as that was the way we sale our product.
The whole thing required a lot of paperwork and forms, as I had the workers tracking their work flow, and turning these forms in at the end of the week. I had to double check their numbers, and we also had to keep an eye on quality as this can create a tendency for workers to rush the product. I quickly learned to better evaluate each employee, much better than when paying by the hour. A very eye opening experience.