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Hey all !
I am sure this is something we all wake up thinking about everyday .... but some of us must of found a way to do so . There must be some people out there that found a way to do this with out monetary rewards because this just seems to be a short term fix.
We are a custom shop....each project is given to one guy on the shop floor. Larger jobs or kitchens are given to two guys. We have 8 guys on the shop floor. We don't do just kitchens...we do entry doors , pieces of furniture....wall paneling ...etc. Any and all custom work. Not fortunate enough to setup procedures for each task...because each task is different.
So the obvious way is to tell an employee they have x amount of hours to complete a job. But this for us in our shop just has not seemed to work. I find people either panic....or rush to beat the time. Either way it has not created a positive energy for most of the guys.
I have recently thought about creating a daily goal work sheet. So that every morning or afternoon prior the individual can jot down their goals for the day at hand. My thinking is they can create self rewarding goals... but then I find my self pondering how to keep them setting productive and ambitious goals.
What has worked for you?!
I truly think this is a topic we all can learn and benefit from....Thanks in advance all .
I have a cousin that owes a very successful moving and storage business. He was in a similar position with his drivers. So he made them all independent contractors. There is a local cabinet shop by me that provides all the work and "subs" it out to his guys in the same way. It puts responsibility in their hands. Just wanted to mention that maybe something along these lines may help. I'm sure there are others here that can discuss this in more detail
Age old problem, and no real cure.
1. Rarely do employees get the job done fast enough to please the boss.
2. Hopefully the work is done to the customers satisfaction.
If you achieve #2, live with it. No amount of money will achieve both in the long term.
Thank you, rich c.
I've pointed this out before and really didn't want to do so again, but you inspired me.
In a non-woodworking business, I had a bunch of ACTUAL independent contractors.
They sold my products, but they paid their own overhead at their own locations. They sold my stuff if, when, how and where they wanted with no rules from me. Straight commission. The very definition of an independent contractor.
Some of them were earning 50K+, so I started bringing them in-house.
Now, they're using my facilities, my phones, my resources and doing things how and when and where I want them to do them, under my direct supervision.
Oops, that's not an independent contractor. So, after a few months, I simply told them all that they were all now employees -- full withholding, the whole bit. No more 1099s. W-2s, just like everyone else.
A couple of years later I (as the corporation) got audited. 5 mill of annual sales. The IRS guy was in my offices for a week. I gave him an office and the run of the place -- ask anyone for any record and they'll give it to you.
He noticed the change in treatment of the sales guys and asked why I did it. After I explained how the sales guys got started and how that evolved to in-house, he said what I did was exactly right and didn't change a penny of the treatment of their income or anything else on the corporate return.
Even though he probably could have said I should have done it slightly sooner than I did. But, he didn't. I think he was shocked that someone did the right thing without even the advice of a CPA, never mind an audit.
The IRS has VERY detailed rules about how to classify employees. Playing stupid games with those rules can be very expensive.
Do you really want to be personally on-the-hook for 7.65% FICA of all amounts paid to fake ICs for the last few years?
That adds up fast. $100K to however many "ICs" for 3 years at 7.65% is $23K. Add the civil fraud penalty of 75%, now it's over 40K. Tack on the usual failure to pay and underpayment penalties and you're approaching 50K of pain for what sounded like a great idea at the time.
And the IRS wants its money now. If you don't pay within 90 days of assessment a lien on all of your assets arises as a matter of law, and they'll file notice of it with your local jurisdiction. Not good if you want to sell, say, a piece of real estate.
Call someone an IC when they're really an employee?
Don't even think about it.
I would propose getting your employees involved in setting the time frames as you suggested. The times that they suggest are their opinions, not set in stone. If you feel that they are way off the mark, ask them why and how they came to those conclusions. Ask them to justify their scheduling of time. You will need to justify yours as well. Come to an agreement about what is expected. If there are setbacks to the process, document them so that you and the employee understand why it took longer.
Maybe you will learn something about the way that they operate their station. You may also discover that certain people are better at some jobs than others.
I have a production shop making many of the same items, so it was easier for me to determine work time for products. I did have my employees help in setting up the times in the beginning, then verified those times and in some cases changed them. Some went a little longer but most went faster. Each employee has a checklist of daily startup and close down tasks with an area for them to mark down barriers they had to being productive. The barriers get discussed at daily meeting to find ways to eliminate or reduce them.
Woodust - Your type of work and shop sounds like mine was, until we downsized. Every project was different, but it was all done by one man, or a team for larger jobs, with one man in charge. We had the time budget right on top of the time sheets that went with the work orders, so everyone knew what the expectation was.
How it was handled is very important. Some guys will lie awake at night worrying about it if they go over budget, others will say that I was wrong on my estimate, and another will get defensive and point fingers and squirm.
So I started referring to the budget number as just a guideline. Sometimes I would change things in process that would affect the budget one way or another - not their fault. Sometimes the material was crap, sometimes my estimate was off. That and more affected the budget - fairly.
When the job was over, we could sit down and talk about what went right and what went wrong, and how I could improve it. This was done out of hearing range of everyone else, but it was fine if they saw us both laugh and walk away with smiles. Never in front of everyone, unless it was an over the top budget beater.
I tried to frame it in the context that I was learning and needed to know, so I could have a better time budget and we would all benefit from that. No blame or responsibility went to the employee, only positives like "I need to know where I went wrong". Or "What did you figure out that I didn't?" when they beat the budget.
This took the pressure off and made for no stress. They wold make observations along the way that such and such took twice as long as I had thought. Or half as much. They became part of the process, not the receiver of blame.
Wood Dust that is a great question.
As much as I like Paul Akers and lean manufacturing methods it is hard to apply that to architectural woodwork for the reasons you state. Not to say that you can't still use some of it.
Repetitive work is very easy to apply a metric to.
I have wasted a ton of time on the holy grail on this subject. The question is what is the metric?
The saw that if you want to manage it you have to measure it. But hard to do on custom. I like David's take on this. Implied in this is that you have a shop manager/foreman who's job it is to care.
I would heed the advise on independent contractors. The IRS want's their pound of flesh in order to justify the expense of the audit. At least Economics 101's did his own reports.
Thanks for all the great responses. There are things you guys said that I had thought about as well, but hearing someone else say it gives it backup.
I am relatively young (30) and deciding to eventually buy out our family business. Because I love woodworking and I love our custom shop. I have been in this shop since I was a child. But managing can really take the fun out of the trade. We do have a good group of guys, everyone of them working hard. Theres very little abuse of the shop time. But at the end of the day working hard does not equate to the efficiency . So the idea behind self motivating is to have them think more about being efficient. For example, they are all true woodworkers....they love their tools. But is a rabbet plane really the fastest way to do a certain job effectively?
I would like to see them take this thought approach into their jobs.
Thanks again for the feedback guys its nice to hear and learn from other peoples thoughts and their troubles. It helps remind you that your not alone .
consider implementing lean into the shop . look at the center for lean learning on youtube. looks like they have some good results with woodshops
A word about using that rabbet plane: Yes, it may not be the best way to get the job done, but we work for more than one reason, and one of them should be enjoyment of the process. Good tools - hand and power- can help insure enjoyment.
I am fortunate enough to have always put my enjoyment on a par with profitability, and so after 47 years still enjoy my work immensely. I teach this to all my best employees also; they can do things they like to do instead of the absolute, let's split that hair again, most soul-less efficient method.
We are fortunate to have the place in our area as the best, with absolutely the best attitude and level of professionalism. We have raised prices 30% in the last year, and still have too much work hitting the door. We will raise another 30% - slowly - if this continues.
I am in the minority on this, but I feel strongly about it. I do not have to conform to anyone else's idea of a business or profession or craft. I can make it what I want (within reason), and what my coworkers want. It is possible to be profitable and still enjoy every day. It may be more likely to be profitable if you determine that every day will be enjoyable.
Please do not get so lost in lean that you have converted the workers to mindless nubs. Money is not that important.
David's understanding of Lean is on par with his understanding of economics. Which is fine for the reasons he states.
Lean is awesome for the something that has repetitive tasks, cue Tim to state how I'm wrong on this.
It seems to me that the most equity is derived from Lean when the improvements are used over and over. In custom that is not as possible. I can see it for some general things.
The thing I like about Lean is the interest and empowering of the employee it creates. Ironically the same thing that David does.
Lean thinking is simply the recognition that some of the things you do add value and some of them do not. You will never get rid of all the non-value added activities but you can get rid of some of them.
Which part of this logic is not consistent with every aspect of custom work?
In David's world the thing to remember is the primary difference between a good craftsman and a great craftsman is speed.
Both of you would benefit from reading my new book "How to get your hobby down to 20 minutes a week and still show a profit!"
Holy crap Tim, you wrote a book?
In that case I have to read it, give me the link.
As I stated the difference is that in custom your setups are only going to be used ONCE. Kitchens don't qualify because the parametrics are the same on every job.
The corollary to this is that you might be better off focusing on jobs that are repeatable.
David , point taken. Turn work into a hobby so people show up energetic , I am and have been 100% on board with that. We often times get a fun project that will be desirable to any true craftsmen . While I wish I could build everyone of them , I like to try and let each guy have their turn and the fun ones .
You only have success until you make your business your hobby. You yourself has to motivate. Target your goal and work hard.
Independent contractor is NOT the way to go and not just for tax reasons. The biggest problem in my experience is that you instantly create a situation where you have someone in competition with your other interests. It is too easy to blame the tools, the other guys, plan discrepancies, materials provided, etc. Trust me, unless it is very small shop it is a real pain in ass.
Easier to use standard employment ...and run things through employee leasing company to force yourself not to get behind on taxes.