is paying PER DAY better than paying PER HOUR?

Hey, everyone, it's Mike Andes. And today we're gonna be talking about the differences between paying someone by the hour versus by the day versus by the job. Now, while we're doing that, we're gonna watch Elan get mowed, and you have the chance to win the MBA for entrepreneurs course valued at $499. All you gotta do today is guess the square footage of the property that we're going to be showing. Now, last week, we had a winner, and the name of the winner is Jason roth. He guessed 25 minutes, and he was the closest to guessing how long the job took the crew to mow. So you can watch that video. But now, today, you've got to stay focused while we're watching and listening to what we're talking about with day, hourly, and by the job rates. When we're paying employees, we also got to be watching. How many square feet do you think this property is? Whoever gets the closest is going to win the MBA for Entrepreneurs course. Link in the description, because Jason last week won all the door hangers, all these door hangers to@lawn caremedia.com he won all of these designs, so you can check those out, too. Congratulations, Jason. Email me, and we'll get you set up. All right, without any further delay, let's go ahead and get this lawn stocked and start talking about day versus hourly versus by the job pay on your home improvement business for your employees. Here we go. All right. Now, the most common way to pay your employees is typically by the hour. Now, what are the pros of this approach? Why is it a good thing to pay someone by the hour? Well, it's really, really simple. Because, like, look, the longer you work, the more money you make. If you're gonna have to work long days and a really long week, you're getting time and a half. And it's really simple in terms of calculations. Like, usually you get a time clock, and you're like, okay, you worked 40 hours. Multiply that by a certain rate per hour. Let's say it's $15. Boom, $600. There's your paycheck. Obviously, you're gonna take out taxes and all the rest of it, but it's really easy to calculate. And that's the best thing about hourly is the fact that it's so easy to literally just tell someone an hourly rate. And it's easy for the employee to compare apples to apples when it comes to different types of jobs. Because, like, what do you pay per hour versus what do you pay per hour? It's very easy to compare. There is no apple to apple comparison when it comes to a job. Because job, no job is created equal. One job might have a better dollar per hour rate, but they might have way less opportunity to grow, expand inside the business, get to the next stage of your career, or make more money down the road in the form of a management position or learning skills that would actually add to the employee's future earning potential. So there's always trade offs in every single job. Some might have more benefits, some might have better hours, some might have different types of work, some might have more upward mobility. All of these are different factors when it comes to a job. Unfortunately, when you start talking about dollars per hour because it's so easy to compare, a lot of employees will just look at the dollar per hour rate. And that is a very easy trap to fall into as an employer is like, okay, we're just gonna focus on the hourly rate. And that's a very short term thinking in my opinion. Because you're going to get a lot of people. Yes, but are you going to get the right type of person that is wanting to actually improve themselves, become integrated inside your culture and move up inside the organization? Are you going to find the people that are actually looking at things beyond just dollar per hour, like benefits? What type of hours is there? Upward mobility, what type of work will we be doing? Can I become a manager? Can I make more money down the road? These should be things that a really good employee is actually thinking about beyond just dollar per hour. But it's really easy to compare. Dollar per hour makes it really simple and it's really, really easy to track. Now let's talk about dollar per day. You're going to have a day rate and you're going to tell employees, look, I'm going to give you $150 per day that you work. This is even easier to calculate because literally you don't even have to have them punch in and out. You can just tell them, look, how many days did you work this week? Four. Okay, great, 150 times four. $600. Again, very easy to calculate. Here is the downside though of in my opinion, the day rate. And I do believe, like if I had to do on a sliding scale, dollars per hour is probably way down here. Dollars per day is probably up here. But in my opinion, paying by the job is the best way to do it. And we're gonna get to that. But the downside of dollars per day, in my opinion is now it's a matter of well, how much is the boss going to make me work every single day? Because that per hour rate, that $150 is great if I only have to work five hours, but what if I have to work 12 hours because we're behind on a job? Well, now all of a sudden, most employees are going to calculate that dollar per hour rate in their mind, and if you're making them work a lot of hours, they're not going to be happy. And so again, there's this tension that is created with both dollars per hour and dollars per day, which when it comes to paying employees, when it comes to dollars per hour, the constant tension is this. The employer wants the job to get done as fast as possible because they make more money, whereas the employee wants the job to take as long as possible because the longer the job takes, the more hours that they accumulate, the more money they make. So it's really going in different directions. There is no collaboration on the same ideal or goal because the boss wants it done faster and the employee gets compensated more the longer the job takes. So we're going in different directions when it comes to dollars per day. Now the friction is whether or not you're being overworked or under worked, or if the boss thinks you're lazy and not getting enough jobs done in a day, then they start complaining or tracking the truck or, you know, squeaking up on someone's job and just checking, making sure they're working, making sure they're not on their phone. Like, I don't like to do that. I like to be able to trust someone to go work out in the field and not be like, well, why did they, why did they get nine jobs on the day but yesterday got 11 jobs done? Or why did I see them at the gas station? Why did they go to the drive through? The drive through. Like, the reason that you would think that as an employer is because you're paying them per day and you want them to get as many jobs done in the day as possible. And the employee is trying to get as little done in the day to get their daily rate. So it's like, look, okay, well if we got to work and get 10 jobs done, well, let's just get these, let's just get eight done and we'll call it a day. And then we get still paid the same amount. You say, well, they have to get the 10 done. Okay, well what happened? How do you increase efficiency? You add 11 or 12 jobs to their schedule. What do they do now? You're overworking them now they're not happy because like, see, boss, this is what you're doing. You chart, you're giving me a day rate and now you're just adding more jobs to my schedule. That's not fair. And they're right. They're completely right. And so some people are like, well, they have to do 10 jobs in the day and I give them a day rate and that never changes. Okay, well, how do you improve the efficiency of your business? How do they improve their skills and actually become more efficient at their job and learn to become more profitable, thereby being able to increase their earning potential? And where are you, as an employer, able to actually educate them on cutting out waste, reducing all of the wasted time and energy and motion that goes into a regular day? Whether you're mowing lawns or trimming bushes, or you're cleaning houses or you're cleaning, cleaning out gutters, there's always waste throughout the day. And that is, in my opinion, why paying someone by the job is the best way to pay them. We call it P4P pay for performance. We create a whole website. You get all free training, p4pssoftware.com training. It's completely free. And it talks about how you pay your employees by the job. They get a percentage of the labor revenue of everything that they make. They make a hundred dollars, they get a cut of that. And so the more efficient they are, the more money they make in a day, guess what? They the more money they earn. So therefore, the harder you work, the more money you make. Now I as an employer am pulling in the same direction as them because they want to be as efficient as possible. They want to get as many jobs done as possible while keeping the customer happy. That is the parallel goal of the business owner and the employee. Now I don't have to micromanage. Now I have to track their truck and, you know, try to see what they're doing or worry about why they're on their phone or why are they taking so long in the morning or why I saw them going to the drive thru. They're just burning the clock. I don't have to think about that. Like, look, if you want to work harder and make more money, then go for it. You can get more jobs done in a day. You can be more efficient. You can cut out waste, watch some YouTube videos and figure out how to become more efficient. And if you don't want to be, you want to go through the drive thru, you want to take five breaks, you want to take a smoke break, you want to go to the gas station four times, okay, that's up to you. But you're just not going to make as much money because you're getting a percentage of the labor revenue that you earn for the business every single day. Now we're both aligned. The harder you work, the more money you make. We're both aligned on getting the job done efficiently and to a high quality standard. So there are no callbacks. That in my opinion is the best way to pay dollars per hour, dollars per day. There's always going to be friction between the employee and the employer. And that's what breaks apart companies. That is what breaks apart the employer and employer dynamic to where people think they're against each other. The employee thinks that the employer is always against them. The employer always thinks the employees are quote unquote lazy because they're always going in different directions, they're wanting different each other and the relationship is not a mutually exclusive. This is what we're doing together and we both have the same common goal of getting this done efficiently into a high quality standard. If you want more information about P4P pay for performance, where you pay by the job, check out P4P software.com training. It changed my business, changed the relationship I have with my employees, making them more money, making the business more profitable and in allowing then us to have a product profit sharing program that put that money back into the pocket of the employees. That in my opinion is what has allowed great cultures to come about, is when the employer and the employee is on the same page, we're going the same direction. I'm Mike Andes, check out p4pssoftware.com I'll see you tomorrow.