Mike Andes breaks down pay-for-performance for landscaping crews: if a job budgets 8 hours at $50/hr, that's $400 in labor revenue, and the employee gets roughly one-third of it ($133) whether they finish in 6 hours or 10. The faster you work, the more you earn per hour.
One third (1/3) of labor revenue.
$50 per hour.
8 hours (budgeted).
$400.
Approximately $133 (one-third of $400).
How does your P4P work? So basically, the general gist of it is that the employee gets a percentage of the labor revenue that they earn for the business. So do you do mostly mowing or landscaping? Kind of both, yeah. So basically, the hardest part about switching to P4P is getting your budget hours on every single job. So both for mowing and landscaping, you'd be assigning a certain number of budget hours. And what that means is like, hey, I go to a job like, how long is it going to take? Eight hours. Okay, great. Let's assume you have a $50 per hour labor rate. Well, that's $400 in labor revenue. And then we say, okay, well, we're going to give one third of labor revenue to our employees. Okay, great. Well, 1/3 of 400 is what, $133. So they're going to get $133, and it doesn't matter how fast they do the job, Right? So if it takes them five hours or it takes them 10 hours, or takes them 12 hours, they're getting $133. It's up to them to be as efficient as possible and therefore make as much money as possible.
