Mike Andes (speaker) answers a Facebook-group question about handling employee lateness and last-minute call-outs within a pay-for-performance (P4P) and quarterly profit-sharing system. He argues for precise, enforced standards (no subjective ranges) — e.g., strict cutoffs for lateness and a requirement to give two hours’ notice to avoid an unexcused absence — and describes a case where a 15-second late arrival cost an employee half their quarterly profit share. Andes ties punctuality standards to team fairness, culture, and retention and points viewers to other videos and P4P materials for more detail.
Questions this video answers
May 19, 2022.
$19 per hour.
About $22+ per day ("$22 plus daily").
Two hours' notice.
Half of the employee's quarterly profit share is deducted (i.e., they lose 50%).
Chapters
Hey everyone, it's Mike Andes. Today we're going to be talking about how you can make sure your employees show up on time and don't have unexcused absences where they just call out last minute.
This question actually came from Landscape business Courses Facebook group, which you can join for free on Facebook. And this is the question Jose wrote in and said, what's your policy on being late calling in? I have several guys that are otherwise rock stars on P4P. That's pay for performance. You can learn more about that p4psoftware.com but are constantly late. I don't feel like taking away their performance pay would be enough of a blow to them. Our base is $19 per hour and they're making $22 plus daily. So this is a great question. And for most of us as home improvement industries, we really struggle with getting employees to show up on time and then not calling out last minute, putting the rest of the team in a bind because now we're all scrambling for supplies, materials, trucks, et cetera, and having to reschedule jobs. So this is my response. I'm going to talk about some of the differing opinions that came against my thought process. So I said, we use profit sharing program to discourage unexcused absences or tardies. Last year someone showed up 15 seconds late, cost them $600 plus on quarterly profit sharing. Half is deducted. Check the two page P4P document or the P4P book for more information about profit sharing. Now, one person wrote back and said, I apologize for saying this, but that's ridiculous. 15 seconds. If I was an employee, that would make me delusion. I wrote back and said, but where do you draw the line? 1 minute, 2 minutes? A standard is only upheld if it is enforced. Otherwise is a suggestion. He stayed on, talking about the employee that was 15 seconds late. He stayed on and wasn't late again and again. I'm not reading these to make this person look bad. This is a matter of a good debate. This is a good topic of debate. Then he wrote back. He said, there's obviously context here that I'm missing and I agree on standards, but I wouldn't penalize a guy for 15 seconds. That's splitting hairs. I wouldn't even give a warning for that. If a guy is under 5 minutes late, I wouldn't penalize between 5 to 10 minutes late. I would penalize, but only after having given a warning and had a conversation that would have been a red light on the way to work or a watch out by 15 seconds. Getting penalized $600 for 15 seconds would be a slap in the face for three months of hard work. At least that's how I'd feel. So I responded back and I said, I will try and make a video about this. Good debate. So if your team meeting is at 6:50, they aren't late until 7:01. That would be 11 minutes. But they're okay at 6:59 because that would be nine minutes. Buffers are subjective and if I am going to tie to someone's pay or their livelihood, I want to be crystal clear what the standard is. 6:51 is late. Yes. 6:50 and 15 seconds is as well. And so it went back and forth. You can check it out on the Facebook group. There's other people chiming in. I want to talk about that today. Because basically what we do is we have pay for performance where every single day the employee make is a percentage of the labor revenue that they earn for the business. However, because they could be on a crew with somebody else, one person could show up 15 minutes earlier than the other person, get the truck ready, get all the materials and the equipment ready for the day, and then someone else show up 15 minutes later, hop in the truck with them and they make the same amount on P4P. So what we do to ensure that everyone shows up on time is like, look, if you're one second late and you are going to be deducted half of your profit sharing. Not P4P, not pay for performance. We do not touch it. It's like sacred. But when it comes to your profit sharing, we give a quarterly profit sharing to the frontline fuel workers every single quarter and they have to work through the entire quarter. And when they get to the end of the quarter it simply comes back to did you call out? Which for us they have to give us two hours heads up. You don't call out prior to two hours. Like if you were up all night throwing up, you could let us know you don't need to wait until 2 7:55 and you're starting 8 o'. Clock. That would be considered an unexcused absence and you would lose half of your profit sharing. The same thing goes for being late. If you are one minute late, you're going to be considered late. And that is a definitive standard in my opinion. Employees want standards. They don't want ranges. They don't want. Well, it's based on some subjectivity. That's what I just get so disillusioned by as an employee. It'd be like, well, what is the standard? I want to succeed. I want to achieve more. I want to excel inside this company. I want to make more money. But I need standards. I need very targeted, clear goals and metrics by which I'm being measured by. That determines my pay, that determines who gets promoted. These are the things that employees, I feel my opinion, that's what they want. They want to know how to get to the next level of their career. They want to know how to make more money. And if we have arbitrary, subjective standards in our business, that's what leads to disillusionment. That's what leads to frustration because someone wants to make more money. And the only way to do that is to talk to the boss and ask for a raise. It's like, well, I have no control. I can't control how much money I make. That's why P4P is so important. It's very defensive. It's a very standard metric way of determining someone's pay based upon their performance, not if they like the boss or the boss likes them, or if they need the money or they ask for a raise or if they've been around for a long time. The same thing goes for being late and for unexcused absences. Like, employees want standards. They want to know what's acceptable and what's not. They want to be able to judge each other and themselves on what is the standard. And like I said in my Facebook message, I truly believe that if a standard is not upheld and you don't fire and make punishments based upon that standard, it is not a standard. This is suggestion. And if I'm going to give ranges and subjective measures of performance, it's very difficult for an employee to know how to get ahead, to know how to succeed at their job. And so, yes, this specific case happened, we give that quarterly profit sharing as long as they did not show up late or have an unexcused absence. If they have one of those an entire quarter, it halves their profit sharing. Now, the specific quarter that I was talking about, we had over $1,200 in that quarter for profit sharing. As long as they just showed up and they did not call out and they showed up on time. Most of the teams are at 15, 20 minutes early. So it's not too much to ask someone just to show up on time. Most people show up early. They're rolling out of the shop by the time that we are requiring them to be at work. Like he said, the context that he's missing here is that on P4P. Showing up late when you're working with another crew member, another team member is going to lead to there being friction because now one team member is doing all the prep work when someone else is showing up late. That's not fair. And that's ultimately what will happen. Tear apart a culture, a team, where there is not standards, there's not objective standards, and there's not clear and measurable ways to determine how to succeed inside of that organization. That's a culture that becomes fragmented. That is a culture where people start to get disillusioned. That's a culture where people start to look for other job opportunities, where they can actually see a path forward inside that company to be able to make more money and get ahead in their career. If you want more information about P4P, check this video out here where I go through the entire thing of what pay for performance is. I'm going to make another video soon about profit sharing, but check this out, because that is the cornerstone, that is the foundation of everything when it comes to performance pay in comparison to just paying people by the hour. Check it out here.
