Having Owned And Operated Construction Companies We Understand Employees

The question is how many can you afford and how do most construction office and field workers view you, the construction company owner?

Most employees view construction company owners as the enemy, greedy, self-centered no good business man or woman who does not care one bit about them. In fact in my experience the opposite is true and in most cases contractors tend to care too much and do too much.

Having owned and operated several construction companies I have experienced a lot of upset, angry and violent employee outbursts including staring down the barrel of a loaded gun.

Over the years since we sold our last construction company a lot of former employees have contacted me to relate stories of how much they appreciate our time together and how much they learned from being a part of our organizations. We still maintain contact with some of them and consider them to be personal friends.

Roughly 20% see The 80-20 Rule were decent, hardworking, good solid, reliable, trustworthy men and women that and to this day I still have great admiration and respect for them. I did everything within reason to see to it they were treated fairly, paid well, and had the resources they needed to do the work.

Profit Sharing And Salary

One thing that came up early and often was employees wanted to share in the profits, not the losses mind you, and be on salary. That way they could distance themselves from being responsible for their day-to-day personal production.

A lot of people want to "Redistribute The Wealth" but not the workload or the responsibility.

Let's Put Profit Sharing In Terms Everyone Can Understand

Suppose that every day, nine of your employees and you go out for dinner. The bill for all ten comes to $100. If everyone paid in their bill the way they produce results, it would go something like this:

The first four employees who produce the least would pay nothing.
The fifth would pay $1.00
The sixth would pay $3.00
The seventh $7.00
The eighth $12.00
The ninth $18.00
The contractor would pay $59.00

So, that's what they decided to do.

The nine employees and the contractor ate dinner in the restaurant every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.

"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20.00"

So, now dinner for the ten only cost $80.00 and the group still wanted to pay their bill the way the produce results.

So, the first four employees were not affected. They would still eat for free. But what about the other six, the paying customers? How could they divvy up the $20.00 windfall so that everyone would get their 'fair share'?

The six employees realized that $20.00 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth employee and the sixth employee would each end up being 'PAID' to eat their meal.

The restaurant owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay:

The fifth employee, like the first four, now paid nothing (100% savings)
The sixth employee now paid $2.00 instead of $3.00 (33% savings)
The seventh employee now paid $5.00 instead of $7.00 (29% savings)
The eighth employee now paid $9.00 instead of $12.00 (25% savings)
The ninth employee now paid $14.00 instead of $18 (22% savings)
The contractor now paid $50.00 instead of $59.00 (15% savings)

Each of the six employees were better off than before and the first four continued to eat for free. But once outside the restaurant, the employees began to compare their savings.

"I only got a dollar out of the $20.00," declared the sixth employee. He pointed to the  contractor and said "but he got $9.00!"

"Yeah, that's right," exclaimed the fifth employee. "I only saved a dollar too. It's unfair that the contractor got nine times more than me!"

"That's true!!" shouted the seventh employee. "Why should the contractor get $9.00 back when I got only $2.00? Contractors get all the breaks!"

"Wait a minute," yelled the first four employees in unison. "We didn't get anything at all. The system exploits the poor!"

The nine employees surrounded the contractor and beat him up.

The next night the contractor didn't show up for dinner, so the nine employees sat down and ate without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that is the system works. The people who take the most risks and produce the most results get the most benefit from a cost reduction.

Attack contractors for being wealthy, and they just may not show up at the table anymore. We have systems to help contractors who want to make more money find ways to become more process dependent and less people dependent using Business Process Management Tools For Construction.

The Master Keys To Having Employees:

1. Focus on the products and services that serve your customers and clients and make you money!

2. Have a system to attract the right people and put them in the right position to make you more money!

3. Outsource everything that does not help acquire customers and satisfy their needs so that you can make even more money!

For more information on the Construction Psychology click here