defining expectations: keeping employees accountable · •unfortunately, when hiring the applicant...
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Defining Expectations:
Keeping Employees Accountable
ACCOUNTABILITY
BREEDS
RESPONSE-
ABILITY(Steven Covey)
Accountability: 2 Keys1. Right People.
2. Right Systems.
• Having great people with poor systems will ultimately result in failure.
• Having the best systems without employee buy-in and engagement will also result in failure.
• Both Keys are never perfect at the same time.
• Your business will go through different cycles.
• Having the wrong people with the right systems will end up being a tremendous waste of management time.
– More enforcement required.
– More training and retraining required.
– Will be detrimental to the other good employees.
• Managers and owners cannot fundamentally change employees.
• However employees can change themselves very quickly.
Current Employees• It is no longer possible to just fire and
employee, and easily find a replacement.
• Employees make mistakes, is there a pattern?
• If the mistake is isolated then there needs to be a consequence.
• Multiple mistakes should lead to termination.
• Why should the company pay for this mistake.
• Why should other employees pay for this mistake in profit and therefore bonus?
Positive Effects
• If company is more profitable, then Bonus is larger.
• If the employee receives addition compensation due to performance, suddenly the employee has an owners mentality.
• Employee engagement improves
• Mistakes are reduced.
• Better decisions are made.
Where can you find great employees?
• The single biggest challenge for any growing green industry operation, and it's only going to get worse.
• Less and less younger people are considering horticulture as a career opportunity.
• Other industry’s can afford better compensation packages.
• Seasonality is a huge issue, because the perception is that this is not a real full-time career.
• The speed of growth should be governed by the quality of new employees required and the organic growth of qualified leads.
• Company growth should be reduced based on the quality of new or replacement employees.
• Many employees with experience have a lot of baggage, and may not be a culture match.
• Referrals from Existing employees, suppliers, subs, etc.• Get involved in your local community:
– Community colleges.– Vocational schools.– Training centers.– Veterans.– High schools.– Ex. convicts
• In most cases finding experienced employees that fits into your current culture is very difficult.
• It is more realistic to find the right employee and then train them.
• Look for the right character & talents and then teach the skills.
• Look for:• A great Attitude.• A good culture fit.• A willingness to learn.• A willingness to change.• A great work ethic.• Initiative.• Common sense.
Don’t Settle• Unfortunately, when hiring the applicant pool
tends to be small.
• Hiring and training the wrong employee is expensive, and does solve your long term needs.
• Will negatively impact the other employees and your customers.
• Quick to hire, and quick to fire.
• Set up a field evaluator, to review each new employee.
Accountability Labor Cycle
1.Long TermPlanning
2.Selecting
Define ExpectationsManaging
3.Measuring
Job Costing
4.Performance
Based Compensation
Business Planning
• It is critical to determine your long-term future employee needs.
• Important to understand other critical components of your company such as facility, equipment, overhead needs and systems.
• Create a year by year breakdown of needs.
• Consider current obsolescence.– Replace ex, employees that leave or that the
company moves past.
• “It is not necessary to change. Survival is not mandatory.” – (W. Edwards Deming, Management Guru)
• “Good is the enemy of great”.– (Jim Collins)
• “Long-range planning does not deal with future decisions, but with the future of present decisions– (Peter Drucker, Management Guru)
Selecting Employees
• Develop future organizational Chart.
• Determine when and what positions need to be filled.
• Can the position be filled with experienced employees, or must they be developed?
• Development time?
• Hire timeframes.
• Develop Job Descriptions.
Organization Chart 2017
President
SubcontractorSupervisor
LandscapeSupervisor
DesignManager
Drafts-Person
Lansdscape 1Foreman3x Labor
Lansdscape 4Foreman3x Labor
Lansdscape 3Foreman3x Labor
Lansdscape 2Foreman3x Labor
Irrigation 1Foreman
Labor
OfficeManager
Water Featuer
Fencing
Masonry
Excavation
Pavers & Walls
Equipment
Professional
Receptionist
Admin. Asst.
Sales Manager
Organization Chart 2022
President
DesignManager
OperationsManager
OfficeManager
Sales Manager
SubcontractorSupervisor
Drafts-Person
LandscapeSupervisor
HardscapeSupervisor
Estimator
L.A.
Take offContracts
Hardscape 1Foreman2x Labor Drafts-
Person
L.A.
Hardscape 8Foreman2x Labor
Hardscape 7Foreman2x Labor
Hardscape 6Foreman2x Labor
Hardscape 5Foreman2x Labor
Hardscape 4Foreman2x Labor
Hardscape 3Foreman2x Labor
Hardscape 2Foreman2x Labo
Landscape 1Foreman3x Labor
Landscape 7Foreman3x Labor
Landscape 6Foreman3x Labor
Landscape 5Foreman3x Labor
Landscape 4Foreman3x Labor
Landscape 3Foreman3x Labor
Landscape 2Foreman3x Labor
Irrigation 1Foreman
Labor
Ehhance-Ment
Foreman1x Labor
Mechanic
Irrigation 2Foreman
Labor
Ehhance-Ment
Foreman1x Labor
Irrigation Sevice
Foreman
Water Featuers
Fencing
Masonry
Excavation
Interior Plants
Equipment
Professional
Elecrical
Mainteance
Carpent
Receptionist
A.R.
Sales Person
Admin. Asst.
Data Entry
Datat Entry
A.P.
Sales Person
Sales Person
Sales Person
Las Vegas Landscape2009
Job Description
• A job description should be set up for each key position in the company.
• The job description should be set up before the employee is hired.
• Can be used as an interview tool.
• Develops consistency in the interview process.
• Should include both the roles and the compensation.
ABC Landscape Job Description
• Maintenance Supervisor• Employee Name: Joe Jones Date: October 21, 2017• Position title: Maintenance Supervisor• Reports directly to: Jim Harris• Supervises: Maintenance foreman and crews.• Coordinates with: Darlene Woods, Debbie Singer• Department: Maintenance• Employment status: Full Time• Job description• Manage maintenance division. Resolve customer quality and
service issues. Generate maintenance estimates and contracts. Complete site visits. Generate Snow estimates and contracts. Complete snow coordination and operations.
General responsibilities• Daily management of labor, equipment, subcontractors
and materials.• Review phone messages daily, distribute information as
required.• Review Route sheets: Maintenance, Enhancement,
Pruning and Chemical.• Schedule Maintenance, Enhancement, Pruning and
Chemical crews• Meet with clients to assess their needs and scope of
requested work. Prior to commencement of season for existing customers.
• Coordinates and price subcontractor information when required.
• Prepare estimate using ABC Landscape approved estimating system, and provide detailed estimating information to be used for job costing.
• Prepare proposal and other supporting documentation for client presentation.
• Present maintenance proposal to client. • Follow-up with all client proposals after two-weeks.• Make changes to proposal when required, and obtain signed
contract from client.• Collect deposit amount at time of signing of contract.• Hand in deposit checks to office, for deposit.• Prepare project packet containing required production
information.• Coordinates with office to create customer master file.
Project Management:
• Complete schedule book daily, and communicate landscape assistance prior to schedule meeting, on larger projects.
• Communicate with clients relating to schedule, quality, sales, and other items as required.
• Coordinates with purchase agent to ensure complete material ordering and organization.
• Verify with office that utility location call has been made.
• Follow-up with purchasing and production prior to project commencing to ensure that all materials, equipment, subcontractors and labor requirements have been effectively planned.
• Obtain permits as required.
Project process:
• Communicate was client the status of the project as required.• Generate to change orders as required, and obtain signature
with deposit for all change orders.• Provide copies of all communication for client for customer
master file.• Communicate with office on the upcoming progress payments
for project.• Whenever possible, and as project requires meet with clients
to resolve any issues or concerns, and also to collect progress payments.
• Review GPS reports daily.• Set up crews as required.• Resolve crisis management items as required.
Sales follow-up:
• Meet with clients upon completion of project, to ensure client satisfaction and to collect final payment.
• Site inspections required for each maintenance contract on a 6 week cycle. Additional inspections may be required.
Employee Performance Determination
• Division profits and sales
• Customer satisfaction
• Customer Retention
• Field labor vs. Gross sales
• Project Inspection requirements
• Employee roles and responsibilities
• Equipment management
• Safety
Miscellaneous Items:
• Pick up payroll checks.
• Conduct daily equipment inspections.
• Drop / PU equipment for repair as required.
• Employee Training
• Employee discipline and accountability
• Meetings: Sales, Schedule, AR
Employment Information:
Salary: $1150/week paid by check $59,800.00 / Yr.Snow hours: Paid additional $15.00/hr.
Commission: TBD. Based on Corporate and Maintenance profits.Hours per week: In season (March to November or December) 55 hours
Winter season (December to February) 40 hours. Normal start time: 6:00 amPaid holidays: As per Employee manualVacation: 10 days.
5 days to be taken July to September.5 days to be taken December to February.Vacation may be carried over to following year and can only be used in a maximum of 5 day block.
Sick Time: 3 daysHealth benefits: NoneOther benefits: None
Training sets level of Accountability:• One way to differentiate your company in its
marketplace is the knowledge of your workers.
• Learning about new products or techniques, being certified and more knowledgeable will increase your company’s credibility with your customer base.
• This will create a better experience for your customers, and better efficiencies in production.
• Training should become a part of every company's culture.
• The first step in training is to develop Standard Operating Procedures (SOPs) for the company.
• The SOP is a very detailed description of common tasks performed within the company.
• These would include: – Administrative tasks
– Sales tasks
– Production tasks
• In many cases the new employee is assigned to a crew and immediately starts working on current projects.
• A new field employee should always initially work on the training foreman’s crew.
• This will allow the foreman to evaluate the new employee’s skills, knowledge and talents.
• Proper training would also then be provided to fill any existing gaps that may exist.
• I am often asked what happens if I train a new employee and they leave.
• My answer is always: what happens if you don’t train them and they stay.
• This issue can be very frustrating for business owners due to the investment of time and money.
• Some employees will leave, some will even become your future competition, but hopefully you can get a good return on the investment you are making in training that employee.
5 Steps to Effective Training
• Clearly explain the job function.• Show the employee the job function.• Delegate function to the employee. • Observe performance of employee.• Catch employee doing something right, and give
immediate praise.– If the employee’s performance is not adequate, do
not reprimand. – Show the employee the job function again.– If the employee’s performance continues to be
inadequate,re-evaluate whether this is the correct job function for this employee.
Standard Operating Procedure Layout
Subject: (this would include a brief outline of the SOP)
Purpose: (this would discuss why the SOP is necessary)
Scope: (this would include which crews or type of work is impacted by the SOP)
Policy: (this would regard the corporate position for the SOP, including requirements and possible discipline)
Definitions: (this would include any terms relating to the SOP)
Tools: (this would include all the tools and equipment required to perform the SOP)
Materials: (this would list all the materials required)
Procedures: (this would be the main body of the SOP. This should include a step-by-step description of exactly what is required to complete the SOP.)
Developed by:Approved by:Date Approved:Last Update:
It is not necessary to include all the sections listed above.The basic outline listed above should be used as a format for all SOP's.
• The SOP should be developed by the employees performing the tasks.
• Owners and managers should not develop SOP’s.
• If the employee creates it, they buy in and use it.
• The SOP should be reviewed and agreed to by all. This includes sales and production.
• A master binder of SOP’s should be created.
Why Job Costing is Critical ?
• Provides the most current information about your company.
• Provides information for managers, not accountants.
• Provides information that can be used as a management tool, for change.
• Holds all employees accountable.
• Reconnects the project process.
EstimatingSystem
ProvidesProductionInformation
(LMES)
Field Collection
Of Production Info.
Job CostSystem
Job CostReports
Review with Production /
Sales
Review HistoryWith
Estimator
JOB COST CYCLE
• Man-hours:
– Sample Bid:
• 20 Companies
• Used cost based estimating method
• Same Material Cost.
• Difference Labor Hours and OH Recovery
– Paver Patio, Wall & Plants:
• Price High: $39,163.84
• Price Low: $15,358.00
• Man-hours High: 432 MH
• Man-hours Low: 145 MH
Job Costing
LaborPayroll
Equipment
Subcontractor
Profit
OHRecovered
MaterialAP
BidVs.
Actual
Warning:
• The more information not reported, the more profitable the job is.
• Labor hours are double checked against payroll hours – Your employees will let you know if they are short hours.
• Materials are double checked against invoices, delivery tickets, statements, and inventory sheets.
• Supervisors are key to double checking the work dailies and enforcement.
• The underperforming employees will resist.• Conduct JC and share both good and bad
projects.
Asphalt Crew Performance
• Non billable repair of poor quality installation.
• Installed 900 sq.ft of asphalt.
• 16 men.
• 8 Trucks
• Arrive @ 8:00am
• Depart @ 5:00pm (136 MH)
• Asphalt arrived @ 4:00pm (Prep: 120 MH)
• Production Rate: 6.6 sq.ft. / Man hour
Work daily completion.
Labor
• The only method I have found to ensure accurate and complete work daily information is to combine job costing and payroll information.
• The foremen would fill out the work daily for the entire crew.
• The information is then used both for payroll and job costing.
• If the crew is working on multiple projects, a different work daily is used for each project.
• If a crew visits multiple sites every day, such as a mowing crew, a different work daily format is used.
• Most work daily formats have a time card table. This is used to mark down the start and end times for each person on the crew.
• Any hours not paid, such as lunch, are deducted from the total.
• For example:
– An employee starting at 7 a.m. and finishing at 5 p.m. with a 30 minute lunch deduction would list 9 1/2 hours.
• The man hours are entered by operation code.
• Adding up each employee’s time for each operation code would be the number of man-hours worked for the day.
• These hours are exactly the same as payroll. Your employees become the best double check system for the accuracy of this information.
• The information listed for each employee is then compared to the timecard section on the work daily.
• These hours must match.
• The work daily must be completed each day.
• There is no way to know if the work daily is being completed each day unless it is handed in each day.
• Do not let the foreman keep the work dailies until the payroll period ends or the project is completed.
• The work daily should then be handed to a person with knowledge of the project for review.
• This is usually the salesman or supervisor.
• The work daily review should take place prior to the work daily being handed into the office.
• The data entry person would have no knowledge or ability to validate the information.
• I would recommend the foreman complete the morning's activity at lunchtime.
• The afternoon’s activities would be recorded while the crew is cleaning up.
• The completion of the work daily should take no more than 10 minutes.
• The work daily must be completed at the project site.
• The accuracy and completeness of the information will decline significantly if the work daily is completed at a later time off site.
Foreman WD System
InventorySheet
Work Daily
ReceiptsFor
Purchases
SuperviorVerification
DataEntry
Paperwork
InventoryAdjustment
Report
Job Costing
Payrol ReportPosting
Human Resource
Verification
Payrol Report
EmployeeVerification
Purchase OrderReport
Issue vendor
Payment
Physical Count
Verification
AccountsPayable
Department
InventoryDepartment
JobDetail
TransactionReport
Job Profit& LossReportIssue
Pay Check
Foreman Paper Trail
Job Cost reports• Division.
• Non Billable versus Billable Field hours.
• Project Profit
• Bid vs Actual
– By Supervisor.
– By Estimator.
– By Salesperson.
– By Foreman.
• Residential versus Commercial.
• Work area type.
• Subcontract versus In-House.
• Actual Equipment use
Employee Hours Report
Job Costing Determines:• Most profitable job size range• Smallest / Largest project size• Crew size efficiency• Crew / Foreman strength & weakness• In-house vs. Subcontract• Project type by profit• Lead source by profit• Verify equipment efficiency• Customer type• Long-distance versus local projects• Information for T&M Billing• Your “Sweet Spot”
What is your “sweet spot”?
• High end residential:– Project size $50,000 - $100,000.
– 30 minutes from Shop
– Design / Build
– Referred lead
– Referral potential
– Hardscape and softscape
– 1 month lead time
– Uncompromised quality and material selection
– 20% profit
• Provides metrics for prequalification.
• Must meet 6 out of 9 Criteria.
Non Billable Hours
• What is your % of non billable hours
• Set up items as projects
• Track OH items to measure time for:– Equipment
– Facility
– Inventory
– Meetings, Training, & Education
– Punch-list & Repairs
– Warranty not estimated
Bonus System
• Bonus pool should be based on corporate and divisional profits
• Bonus should include all key employees
• The method for determining the bonus should be communicated to all affected employees
• The bonus system should be consistent throughout the company
• A portion of the bonus should be issued based on projected profits, each quarter
• The majority of the bonus should be issued at the end of each fiscal year.
Measurement factors for the bonus• Project or divisional profit
• Customer satisfaction
• Customer retention
• Safety
• Attitude
• Tardiness
• Equipment
• Paperwork
• Specific job functions: AR collection days, Inventory loss, Sales volume, New leads etc.
• Improvement in certain areas of performance
• Personal improvement
• Additional Skills, Certifications, Education
Calculation of Bonus Amount
Item Grade Comments
Project Profit (x2) 8 Average Job 22%
Safety 10 No injuries this year. Attended all seminars
Tardiness 6 Late 7 times
Attitude 8 Overall better: Work on improving comm. With office
Equipment 6 Preventative maintenance behind schedule
Customer satisfaction 9 Excellent Rating on 78% of CS
Paperwork 7 WD info not accurate
Crew management 9 Improved performance
Obtain CLT Certification 10 Great Job
Total 81
Evaluation for Joe Jones Year:2004
Name Score
Joe Jones 81
Henry Dundee 66
Mark Grouser 58
Debbie Canter 88
Tom Smith 36
Juan Vessa 55
TOTAL: 384
Name % of Total
Joe Jones 21
Henry Dundee 17
Mark Grouser 15
Debbie Canter 23
Tom Smith 9
Juan Vessa 14
• Corporate Bonus Pool : $10,000
• Joe Jones receives 21%
=$2100.00
The corporate bonus pool is based on overall company profits.
This bonus pool may also be based on divisional profits
• Provides information to back up gut feeling.
• Allows for verification of improvement during changes.
• If you have employees you do not directly manage, job costing is critical.
• Provides accurate feedback on what you do not see.
• Analyze data over time to determine trends.
• Should be used to form the basis for performance based compensation.
• Job costing becomes your company’s scorecard.
Production Metrics• As your company grows, most business
owners become less and less directly connected to the field operations.
• It is still very important that an owner is able to review and understand field operations.
• I would recommend random site visits and customer meetings.
• Most production -related numbers will be generated by a Job Costing system.
Field related
• The “Cancer”
• Travel (morning circus and lunch)
• Field systems– Poor material handling
– Equipment problems
– Crew size
– Project planning
• Lack of accountability and measurement
• Lack of employee training
• Customer issues
• Poor workplace environment
Management related
• Lack of supervisory and management training
• Unclear job roles and responsibilities
• Poor incentive programs that focus on results
• Lack of accountability
• Upper management interference with day-to-day operations
• Lack of leadership and direction
• Lack of respect For the individual
Information related
• Lack of information to manage effectively– Project costs
– Labor targets
– Job costing
– Budgets
• Incomplete Job Package.
• No Preconstruction Meeting.
• Unwillingness to share corporate financial information
• Lack of vision into mission statement
•“It is not necessary to change. Survival is not mandatory.”
(W. Edwards Deming, Management Guru)