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General Forestry => Forestry and Logging => Topic started by: Gouterk on March 18, 2018, 10:31:55 PM

Title: Paying operators
Post by: Gouterk on March 18, 2018, 10:31:55 PM
Hello, brand new poster here. A little background for reference. My husband and I own and operate a cut to length Logging operation in MN. My husbands been cutting since he was 16 but we've been cutting as a couple since 2010. We hired his brother in 2016 to run our forwarder and just this year we hired on a second operator to process wood. All together we have 2 processors and 2 forwarders. My husband processes and I run forwarder part time. Unfortunately we had a difficult winter and were constantly plagued with breakdowns. Currently both of our operators are on a salery base pay plus bonuses. But as you can imagine we ended up eating a lot of none production hours and paid out for people to sit at home. We're almost wrapped up with this cutting season and know we need to overhaul the way we're paying  people. So I guess my question boils down to, what's an affective way to pay operators ? How do you account for all the variables we deal with in the logging industry ? Would absolutely appreciate hearing some advice and insight on the topic. 
Thanks! 
Title: Re: Paying operators
Post by: starmac on March 18, 2018, 10:42:51 PM
That is a tough one for small operators, you almost need to have some other way to keep them busy if they are on payroll.
Title: Re: Paying operators
Post by: Southside on March 18, 2018, 11:04:45 PM
Welcome to the Forum Gouterk,

Simple answer is they need to take ownership in their jobs.

What about coming up with a production / income scale that works as an incentive to get the operator to work like it's their own company they are working for.  Figure out what a fair / typical week of income in typical conditions would be and the production for that machine.  Then develop a scale that pays for production, adds some for quality so they don't just go for volume, and an incentive for fuel or waste savings within BMP guidelines that you establish.  Say stumps no higher than X, damaged leave trees under Y %, etc.  Allow so much daily time for maintenance which will encourage them to actually pick up the grease gun and check the oil,  when they realize that by paying attention to what needs fixing before it before it gives out they get to earn more income, they will pay attention to what is going on.  At the same time you earn more income as now you have a sort of partner out there in the machine and not just a warm body.    

Now things will break down that nobody expected and that needs to be addressed.  But when a hydraulic hose is showing cords through it and the guy just keeps running until she throws oil like a geyser then he has no ownership in what is happening, especially if he can go sit home and get paid anyway.  But the guy who has taken ownership in his job will call you and tell you that you need to get a 1" hose, 48" long with JIC fittings on both ends when he notices she is going to fail and it will cost him income.   

Employees who have a sense of ownership take pride in what they are doing, it builds self esteem, and makes things a lot more enjoyable.  

You can even add in a year end profit sharing program when certain goals are met, this profit program has to come after equipment needs, etc for the company are met, don't starve your iron to make it happen. 
Title: Re: Paying operators
Post by: snowstorm on March 19, 2018, 07:07:37 AM
i see your picture is the one in timberline magazine ............
Title: Re: Paying operators
Post by: TKehl on March 19, 2018, 08:01:20 AM
I'll throw out a different view.  If I'm on someone else's equipment, I run it like it's mine or better.  I also work like I've got ownership in the company identifying and correcting issues and inefficiency.  If you told me we were shifting to a more production based pay structure AND I was on equipment with frequent breakdowns, I'd be dusting off my resume REAL fast.  If they are good, ask yourself if you can afford to loose them...  May make sense to add a backup piece of equipment or upgrade.

Now if you suspect intentional equipment abuse causing breakdowns, the answer is REAL simple there.  Equipment that sits looses less money then one being abused.   ;)

Most people fall somewhere in the middle of this range.  Then Starmac has already offered the solution.  Maybe have them cut firewood.  The owners of several area shops also have farms and if things are slow, they put their employees on fence rows and such.
Title: Re: Paying operators
Post by: Firewoodjoe on March 19, 2018, 09:30:50 AM
You can't exspect someone to work production pay if it's not there fault for lose of production. Salary + production I really like. We all gain we all loose but it also shows you want them to make a wage  while things are rough.
Title: Re: Paying operators
Post by: chevytaHOE5674 on March 19, 2018, 10:25:58 AM
My old boss offered to pay me based on production. I told him sure that would be great, but everytime I have to stop producing because of a breakdown, parts run, make a hose, or even general maintenance then I start my time clock and bill him for my time as a mechanic. And a road mechanic gets paid pretty well....

He quickly realized that is was cheaper to keep paying me salary as he was and find things for me to do in the downtime.
Title: Re: Paying operators
Post by: log cutter on March 19, 2018, 11:28:07 AM
 In my area we pay operators by the hour or by production. A good operator will make around $25 to $30 an hour. If they mechanic they get paid their hourly rate and if they sit they can draw their unemployment from the state.

 Some outfits pay a bonus on production but you have to walk the strips to make sure the operator  doesn't high grade the strip. Nothing worse than going back over a job and finding piles,bundles or logs that have been left. 

 I have a friend who didn't think he could afford $30 an hour for a processor operator . He finally bite the bullet and hire one and the operator double his production. So the moral of the story is some guys at $30 an hour are bargains and some guys at an $1 an hr will bankrupt you.    
Title: Re: Paying operators
Post by: WV Sawmiller on March 19, 2018, 11:54:23 AM
   Not an area I am active in but I always said the idea is not to cut costs but to increase profit. Sometimes spending a little more will result in much bigger profit in the end. We have all bought some special tool or piece of equipment to help us work faster and better expecting for it to more than pay for itself in the long run.

  In the opening thread he she said he she was paying salary plus a bonus so I assume there is already an incentive for the operators to produce more. A different way to compute the bonus might help production and reduce expenses and down time.

   You might sit down and discuss with the operators and just explain the down time is killing you and ask their suggestions on what they/you can do to reduce the maintenance costs and down time. That is getting them more deeply involved. Since it looks like one of the operators is family I assume he is already willing to speak up if he sees a way to help.
Title: Re: Paying operators
Post by: nativewolf on March 19, 2018, 12:57:19 PM
Great to see you on the forum, not enough women in forestry much less logging.  

Not much to add other than perhaps the salary structure isn't really the issue but equipment budgets might be.  I'd redouble efforts to get ahead of things during the summer, all filters, fluids, greasing, cleaning, etc.  

Comments on finding other activities is also good advice, we move people around all the time. 

It's the weather related issues that hurt us the most.
Title: Re: Paying operators
Post by: Gouterk on March 19, 2018, 02:54:09 PM
Thanks for all the feedback! Its great to get the insight from those who understand the industry, and who don't mind a women logging ;) ... I definitely get where your all coming from. Its a difficult business just from the sheer amount of variables we all deal with. Our goal is to pay our operators well for good work and have them benefit from the success of our business as well. Our experience this year has been a salary doesn't produce the motivation to put in the extra hours needed after lost production but due to breakdowns our production based bonuses were never met either. So whats a fair and balanced approach to paying for downtime ? Its our Fabtek 153 that caused the bulk of our production loss. Its on the brink of being rebuilt at this point haha. 

Im starting to entertain the idea of a back up processor. Can anyone speak to that specifically ? 

We've also been discussing the idea of diversifying to take some of the pressure off wood production.  What are some profitable tie ins to logging in your experience ? 
Hope you guys can continue to weigh in, really appreciate the insight. 

Thanks  
Title: Re: Paying operators
Post by: Gouterk on March 19, 2018, 02:56:52 PM
Quote from: snowstorm on March 19, 2018, 07:07:37 AM
i see your picture is the one in timberline magazine ............
Yeah that's us, didn't expect to be recognized :D 
Title: Re: Paying operators
Post by: Gary_C on March 19, 2018, 03:58:58 PM
Quote from: Gouterk on March 19, 2018, 02:54:09 PMm starting to entertain the idea of a back up processor. Can anyone speak to that specifically ?

I've never run a Fabtek 153 but people I know that have run them consider them to be a maintenance nightmare and they don't measure worth a crap. However all processors take a lot of maintenance and having two machines is usually twice the trouble. I think you would be better off to upgrade to a newer, better machine with less maintenance downtime.

I've run a Valmet 546 (hose eating machine and maintenance nightmare) and now run a Ponsse Ergo that has served me well. I do know that Ponsse has a high number of good used machines for sale due to very high sales of their new Scorpion machine. From my perspective, the Ponsse's are much better on breakdowns but they all take some maintenance along with the hard use.

Title: Re: Paying operators
Post by: snowstorm on March 19, 2018, 05:22:33 PM
Quote from: Gouterk on March 19, 2018, 02:56:52 PM
Quote from: snowstorm on March 19, 2018, 07:07:37 AM
i see your picture is the one in timberline magazine ............
Yeah that's us, didn't expect to be recognized :D
how is the barko working out for you? sometimes its better to have more than one iron in the fire. i plow and sand 31 miles of road. it can be very stressful but its also a very good cash flow business.  the check comes every month and it always cashes 
Title: Re: Paying operators
Post by: CX3 on March 19, 2018, 05:34:10 PM
I'm still a firm believer that a guy working alone for himself can make more actual profit than a big company with new machinery cutting a hundred loads a week.

There are lots of guys around here feeding their families well with just a skidder and a saw. There are no processors, forwarders, etc.

Somebody said it best in another post. You have to find the profit. Some expenses are a bargain others bankrupt you. Good topic.
Title: Re: Paying operators
Post by: Grizzly on March 19, 2018, 05:48:01 PM
Salary to me equals fixed monthly cheque with no connection to production. As a manager I was paid a salary.
Hourly = paid for each and every hour on the job regardless of production. As a lumber yard worker I was paid hourly.
Commission = production or performance based pay. As a salesman and as a truck driver I was paid on this basis.

Some of you have been truck drivers paid by the mile and have also worked the woods. I've hauled logs but never run any harvest equipment. When paid by production I always made better money. Always. I was given responsibility for a machine and made sure it was ready for work each and every day which included contacting a shop for work I could not do and scheduling work into my existing runs. Like has been said I was given ownership and I accepted that role and made money with someone else's piece of equipment. The only reason I made money is because I was making the owner money. Now after all that; here is the question. Does performance based pay not translate into the wood harvesting world? We had a lot of variables in trucking too.
Title: Re: Paying operators
Post by: snowstorm on March 19, 2018, 05:50:00 PM
Quote from: CX3 on March 19, 2018, 05:34:10 PM
I'm still a firm believer that a guy working alone for himself can make more actual profit than a big company with new machinery cutting a hundred loads a week.

There are lots of guys around here feeding their families well with just a skidder and a saw. There are no processors, forwarders, etc.

Somebody said it best in another post. You have to find the profit. Some expenses are a bargain others bankrupt you. Good topic.
i may have agreed when i was your age. when you get to 50 or 60 things change
Title: Re: Paying operators
Post by: TKehl on March 19, 2018, 06:12:49 PM
Quote from: Grizzly on March 19, 2018, 05:48:01 PMDoes performance based pay not translate into the wood harvesting world? We had a lot of variables in trucking too.


I think the biggest difference is equipment availability.  Worst case on a truck if it will be down a while is to pick up a loaner.  On our farm if the baler shoots **** right before a rain, I have five neighbors on speed dial.  However, as the equipment gets more specialized, there are fewer options and frequent breakdowns when pay is production based will cause the best people to leave first.  

Not saying it can't work 100% production based, but takes a sharper pencil...  A lot of people out there live paycheck to paycheck and will take lower pay as long as it's steady.
Title: Re: Paying operators
Post by: starmac on March 19, 2018, 06:25:44 PM
Grizzly I can't answer that question, but have always worked based on production, whether working for myself, be it trucking or turning wrenches, I wouldn't take an hourly job. I did work hourly in construction for a number of years, and even while I wa super, I might as well have been working on production, as that is what my wages were derived from and if the production hadn't been there neither would I have been, it is what makes the world go around.

I worked 12 years for one smallish construction company, and was guaranteed 40 hours a week, but only once that I can remember did I not work over 40 hours, and that was during one of the big floods in 79, and even then the only reason I didn't put in my 40 hours was I was on an out of town job, so couldn't be diverted to anything else. 
Title: Re: Paying operators
Post by: Grizzly on March 19, 2018, 06:38:48 PM
Quote from: TKehl on March 19, 2018, 06:12:49 PMI think the biggest difference is equipment availability.

Yeah. Some difference there. I never had access to loaners and such as I worked more like an owner/operator. But you're right, it is a difference.
Title: Re: Paying operators
Post by: Firewoodjoe on March 19, 2018, 06:41:06 PM
Just cut your salary amount back. Say $300 a week then the rest production. Anyone who pays 52 weeks a year no matter the situation should be considered a good employer. And your employees should recognize the fact your trying to give them pay even if it only keeps the wolves off the door. Then when your rolling good they'll be more appt to work more hours to make up for there time off.
Title: Re: Paying operators
Post by: chevytaHOE5674 on March 19, 2018, 06:55:23 PM
My trouble with running somebody's older processor and being paid based on production was the owner couldnt/wouldn't fix things himself and didn't have the patience to trouble shoot things himself. We had our share of breakdowns and I did almost all of wrenching (think crane removal, boom rewire, uprighting flipped forwarder, rebuilding hydraulic cylinders, replacing injectors, welding, etc). Had I been paid production there is no way I would have spent all that time working for free as nothing was being produced. The weeks when we ran without any issues I would have surely made better money on production.

I was paid "salary" I guess being I got an equal check every week but I didn't get paid when we were off for spring break up, I had to collect unemployment. Some weeks we only put in 30 hours others were 60+. I used to track my hours just for my own knowledge and overall I averaged just over 40 hours for each week I got paid. I used to bring bent/worn bars and broken chains home and fix them on the short hour weeks, also would change oil/brakes/u joint/ball joints etc on the work Truck to make up hours when needed.
Title: Re: Paying operators
Post by: Gouterk on March 19, 2018, 07:16:44 PM
Currently our pay structure is a base salary averaged out over 12 months and payed out once a month even during our down season. Like I said before we just aren't seeing the extra effort when things are running smoothly. Also my husband ends up shutting his machine down all too often to help with repairs and trouble shooting that people don't want to take ownership of. I realize some of this is a management issue and people need to understand the expectations of the job. But obviously we haven't given enough insensitive to take more responsibility for the loss of production. We're just in a whole new ball game and haven't quite hit our stride yet. Starting to miss the days we ran chainsaws and we're debt free  :D
Title: Re: Paying operators
Post by: Gouterk on March 19, 2018, 07:22:33 PM
Quote from: snowstorm on March 19, 2018, 05:22:33 PM
Quote from: Gouterk on March 19, 2018, 02:56:52 PM
Quote from: snowstorm on March 19, 2018, 07:07:37 AM
i see your picture is the one in timberline magazine ............
Yeah that's us, didn't expect to be recognized :D
how is the barko working out for you? sometimes its better to have more than one iron in the fire. i plow and sand 31 miles of road. it can be very stressful but its also a very good cash flow business.  the check comes every month and it always cashes
The Barko has been working out well for us. It's had its issues too but overall I would say we don't have any regrets. Our area suddenly has almost no one running a lowboy moving equipment for guys. We're really considering buying our own truck and getting in on the market. 
Title: Re: Paying operators
Post by: chevytaHOE5674 on March 19, 2018, 07:51:47 PM
How many months or weeks do they work a year? And how did you arrive at your base salary? There must be some expected minimum yearly hours you want the employees to work?

Are they putting in those hours and the production just isn't there?



Title: Re: Paying operators
Post by: Gouterk on March 19, 2018, 08:36:39 PM
Quote from: chevytaHOE5674 on March 19, 2018, 07:51:47 PM
How many months or weeks do they work a year? And how did you arrive at your base salary? There must be some expected minimum yearly hours you want the employees to work?

Are they putting in those hours and the production just isn't there?
Quote from: chevytaHOE5674 on March 19, 2018, 07:51:47 PM
How many months or weeks do they work a year? And how did you arrive at your base salary? There must be some expected minimum yearly hours you want the employees to work?

Are they putting in those hours and the production just isn't there?
We agreed upon a salary before hiring then divided it by 12. We typically expect to only work 9 months out of the year. Our Fabtek operator has only been with us since early fall so I don't really have good numbers on him. Our forwarder operator worked a maximum of 1,850 hours this cutting season. Due to all the breakdowns our Fabtek operator is severely behind in hours and production. We had weekly production goals set in place but due to the machine it's self they weren't met. Both operators are paid a very competitive wage for our area. What's considered reasonable expectations in a situation like this ? 
Title: Re: Paying operators
Post by: jason.weir on March 19, 2018, 09:00:27 PM
Quote from: Gouterk on March 19, 2018, 07:16:44 PMwe just aren't seeing the extra effort when things are running smoothly.

trouble shooting that people don't want to take ownership of.

people need to understand the expectations of the job.
These are your issues and changing the pay structure probably won't fix things.

Great employees automatically understand expectations, take ownership & give 110% effort.

Poor employees don't and the more you pay them the worse they get, you can't incentivize them either because they really don't want to work any harder then they do now.

You need to find better employees & so does most every small business out there, it's got to be the hardest thing for any company your size.

When you find them pay them well & they will make you money - until they realize they can make more $$ working for themselves..

-J
Title: Re: Paying operators
Post by: chevytaHOE5674 on March 19, 2018, 09:30:31 PM
With that agreed upon salary what were the agreed upon hours/expectations? 

Generally even a salaried employee has some ball park hours that they agreed to work. If not most employers would expect salaried employees to put in 80+ hour weeks.

To me it sounds like you have a machine with too much downtime and it will be very hard to find a good production operator that also wants to play mechanic. The best operators are in demand and aren't going to deal with that kind of machine long, they will work for somebody with a newer better machine so they can just cut wood. I always told my boss if I wanted to wrench all day in the mud/snow/bugs/etc I would go be a road mechanic and get paid accordingly.
Title: Re: Paying operators
Post by: Southside on March 19, 2018, 09:49:17 PM
Quote from: Gouterk on March 19, 2018, 08:36:39 PMWe agreed upon a salary before hiring then divided it by 12. We typically expect to only work 9 months out of the year


Now this will probably sound harsh, but I learned this lesson a long time ago, and I believe many large Fortune 500 type companies work on the same principle, just at a different level.  As a rule, you have to keep most employees a bit hungry.  Now I don't mean they can't pay their bills and such, rather I mean they are not getting everything they want unless they are really giving 110%.  

Prime example, I had a guy that every time something broke down he would just stand around, never pitch in to help, you would tell him to go do A,B,C, and look over 10 minutes later and half of A was done and he was keeping his hands warm in his pockets.  We always had overtime available, this guy never worked any of it.  One day I received an unemployment benefits claim in his name, so I went over to him and asked what it was all about given that he was actively employed.  His answer was "it's supplemental pay", :o.  When it came time for the hearing I explained that I have numerous open overtime shifts available every week and he never works any - I was told he does not need to work anything beyond 40 hours and he was entitled to the "supplemental pay" given that he and his girlfriend had a child on the way.   

Like was said above- you can't motivate someone like that, and cutting your losses is the best option, that person will never take ownership no matter how hard you try.   
Title: Re: Paying operators
Post by: jason.weir on March 19, 2018, 10:39:37 PM
Quote from: Southside logger on March 19, 2018, 09:49:17 PM
Prime example, I had a guy that every time something broke down he would just stand around, never pitch in to help, you would tell him to go do A,B,C, and look over 10 minutes later and half of A was done and he was keeping his hands warm in his pockets.  We always had overtime available, this guy never worked any of it.  One day I received an unemployment benefits claim in his name, so I went over to him and asked what it was all about given that he was actively employed.  His answer was "it's supplemental pay", :o.  When it came time for the hearing I explained that I have numerous open overtime shifts available every week and he never works any - I was told he does not need to work anything beyond 40 hours and he was entitled to the "supplemental pay" given that he and his girlfriend had a child on the way.  

What? Unemployment benefits for someone working 40 hours a week?  Supplemental pay?  Free $$ because he doesn't wanna work overtime?  Never heard of such a thing.  I sure hope that's a State thing.  No wonder people hesitate to hire employees..

Sorry for the hijack...

-J
Title: Re: Paying operators
Post by: Gouterk on March 19, 2018, 11:24:37 PM
Quote from: chevytaHOE5674 on March 19, 2018, 09:30:31 PM
With that agreed upon salary what were the agreed upon hours/expectations?

Generally even a salaried employee has some ball park hours that they agreed to work. If not most employers would expect salaried employees to put in 80+ hour weeks.

To me it sounds like you have a machine with too much downtime and it will be very hard to find a good production operator that also wants to play mechanic. The best operators are in demand and aren't going to deal with that kind of machine long, they will work for somebody with a newer better machine so they can just cut wood. I always told my boss if I wanted to wrench all day in the mud/snow/bugs/etc I would go be a road mechanic and get paid accordingly.


Yeah I totally hear what your saying. Obviously we didn't enticipate the unusually high amount of breakdowns. Up until the purchase of our Barko in 2016 the Fabtek was what we made our entire living off of. We tried to keep expectations realistic knowing it's an older machine prone to breakdowns but there just wasn't any fool proof planning for what we encountered. I would have to ask my husband what the agreed upon cordage per month was. Obviously the loss of production isn't on our operator but what's the incentive to put in long days when things are running good when the check stays the same ? I'm just searching for the healthy balance to keep things fair yet motivating. 
Title: Re: Paying operators
Post by: barbender on March 19, 2018, 11:56:45 PM
Gouterk- first off, welcome to the forum, and I also recognized your operation from that Northern Timberline article😊 I run a forwarder for a large operation over in Itasca County, we have both CTL and conventional crews. We have a variety of ways employees are paid, but to my knowledge, the only operator we have on production based pay is a slasher operator (which has way fewer variables than a processor). All of our CTL operators are on hourly pay as far as I know, and it's the only way I would go as an employee. We get OT pay over 40 hours, that's our incentive to push hard when it's needed. I'm a pretty simple guy, and I like the system of- I work, I get paid. I don't work, I don't get paid. If I was getting a salary, I'd still feel like I should be out killing it in the winter working 80 a week, but I would really struggle only showing up 30 a week in the summer to balance things out. I'd say, pay your guys the best hourly wage you can afford, and let them draw unemployment in the spring if you're down for 3 months. That seems to be the most common method over this way, anyhow.
Title: Re: Paying operators
Post by: BargeMonkey on March 20, 2018, 01:09:34 AM
 The grief and headaches I've watched my parents go thru with some employees would make the average person want to sell out, bogus unemployment, abuse of disability insurance, outright calling us out on FB, my father has been in business since 1975 and I grew up seeing it all.

We are more "sand and gravel / excavation" than logging / sawmill, I'm the only one in the woods, Im 1 of 6 employees with 3-4 others who will work part time as needed. I can't wrap my head around paying anyone salary in the woods, we are adding 15-18 more people shortly for a diff business and the managers will probably be salary but the average person no way. We built this other business with the idea if we have employee problems we keep the best 1/3 of them, sell the core items and still more than cover the payment with less headaches. You can't ever let an employee think they have you in the corner because that's the end. Employing family can be a disaster especially if they have 0% financial stake in the business.

"Southside" hit the nail on the head, you need guys who are hungry and willing to work as a team for YOU, nothing wrong with a bonus or incentive pay but YOU are the one employing them and holding the bag at the end of the month, if they don't like it within reason they can go down the road, sometimes a harsh dose of reality does wonders, sometimes it gets everyone onboard, we are pretty open with the guys and it works out well. Everyone of our guys but 2 truck drivers are able to float, one bales for us in the summer, others can drive and swing dirt, weld, one of our pit guys literally is the keeper of our shop. We learned a while ago that payments aren't always a bad thing, we try and trade 2-3 machines a yr so the big repairs doesn't kill us, 10yrs ago we started having a mechanic come in and do the heavier work / maintenance, it actually saves us money and we have a maintenance program in place which works out great falling under MSHA. Do your guys perform their own maintenance ? Is their job title clearly spelled out for them ? I'm getting at do you have a way to say "you knew this was going to break / didn't say anything and you ran it anyway" so now you sit home this week. I worked for "big oil", we had paperwork involved for just changing a light bulb, you messed up enough you where gone.

There is a huge qualified help shortage out here, even just a laborer who will show up consistently is getting harder to find nevermind a skilled operator. Wages are all over the place around here in NY, 19-23 bucks an hr with benefits / bonuses / perks is about the going rate here, the hourly rates don't exist for 30+ an hr.

Title: Re: Paying operators
Post by: Matt601 on March 20, 2018, 04:55:55 AM
Quote from: CX3 on March 19, 2018, 05:34:10 PM
I'm still a firm believer that a guy working alone for himself can make more actual profit than a big company with new machinery cutting a hundred loads a week.

There are lots of guys around here feeding their families well with just a skidder and a saw. There are no processors, forwarders, etc.

Somebody said it best in another post. You have to find the profit. Some expenses are a bargain others bankrupt you. Good topic.
Im a one man out fit. I have a truck and 50 hp tractor. Most people will not believe but most weeks I cut and load and truck to the mill 250 tons of wood. Last year I hired a guy to help. Know what I sold 250 tons a week. Its all how you set up I'm not set up to have more people. Now I work 7 days a week but that's OK too i rather work by my self then deal with having to stay on someone butt all the time.   
Title: Re: Paying operators
Post by: chevytaHOE5674 on March 20, 2018, 05:44:10 AM
I would switch them to hourly plus OT if warranted and then let them draw unemployment during the spring. That way they get paid for the time they put it, and have incentive to work more. Also keeps the employee from feeling like they are getting taken advantage of. That's how just about everybody I know does it here.

My old boss use to try and pressure me to "make up for lost production because of downtime." Well I was present and wrenching through the downtime so in my eyes there was nothing to "make up" for.... I put in the same or more hours during those times..... one of the many reasons I walked away from that gig.
Title: Re: Paying operators
Post by: snowstorm on March 20, 2018, 06:41:18 AM
if you are only writing them a pay check once a month that needs to change. a lot of people can not manage money. they will spend it all the first week then look for a pay day loan to get by...........do you really need to run that fabtek????
Title: Re: Paying operators
Post by: Skeans1 on March 20, 2018, 07:48:49 AM
Myself I'm salary but I cut 6 to 7 days a week 12+ hours a day with all mechanical fixes from top to bottom on a machine from undercarriage, engine, pumps you get the idea done by me. Our employee who runs forwarder is hourly with production based bonus in my eyes is the only way to go set it so it's the same is there's torn up equipment they go down the road, if there's too much stand damage in a thinning they go down the road or loss pay. Out here even the guys thinning for the large outfits 20 sides are all production based pay scales you have to make your guys hungry to do the work if they're down for something like a hose then they feel like just like you do. If you don't do something like this it's a fast way to loose your shirt or your business.

Here's the best question what kind of break downs is the 153 having hose related? Pump? Valve? Undercarriage? Rotex? Electrical?
Here's another thing same employee running our Fabtek head goes through hose about once a week or so, owner operator on that machine it's a month plus you think as well as watch where and what youryo trying to do with the head.
Title: Re: Paying operators a
Post by: longtime lurker on March 20, 2018, 10:12:27 AM
I'm going to tell you what I do. Different country, different rules... some might translate, some might not... but its a different way around the same set of issues. I thought long and hard before I went this way - both on what I wanted which was a small crew of dedicated and competent staff that stayed with me through thick and thin plus the opportunity to take on others as required. You want to hold good people they need to be paid well. You want loyalty you got to treat them right. You want them to treat your business like it's their business... make it their business.

I dont believe in production bonuses, or payment based solely on production in any form. As a employee I used to get some real serious money out of production... and beat a lot of gear to death to get it. As an owner of equipment I know that often 90% of the production and a bit more love for the gear is more profitable.

Sooooooooo... I dont pay production bonuses. I pay profitability bonuses. I make profit, then we make profit. I cop a hiding then we all get our base pay and suck it up.

I trade as a company. I have two share classes... one has voting rights attached, one only has a proxy. As managing director I hold 35% of the voting stock outright, but I also hold the voting rights to the 40% of stock that only has a proxy vote. (My partner holds 25% voting stock.)
That 40% is there specifically to be held by permanent staff. It can only be sold by me or to me so I dont have any worries that way. It turns an employee into a shareholder which has some positive benefits for us in terms of insurance premiums and a few other tax breaks as well and is actually a pretty effective structure under our tax law. Basicly its a pared down profit participation scheme, with dividends paid on a bi-annual basis

The company is only an operating vehicle. It doesnt own much - it leases the mill land and buildings from family, it leases the mill equipment and harvest equipment from me. So owning a share in the company doesnt mean you get to own the skidder you sit on but you do own a % of the profit it makes.

But what it really means is that the guy over there on that machine... owns 10% of that machines profit and 10% of the profit of the machine beside him. It gives him an incentive to be friendly with his grease gun, and troubleshoot problems, and take a bit more care in his work. It gives him a reason to supervise the casual fill in guys we might occasionally hire a bit better, and lead them from the front because... he isnt just a foreman, hes a part owner. Aint no-one works harder then a guy whos working for himself right?

it's maybe not right for everyone ... and you'd really need professional advice before implementing something similar... but its been pretty good for me.
Title: Re: Paying operators
Post by: mike_belben on March 20, 2018, 12:15:09 PM
Lot of insights here and many that conflict which each other just goes to show that people are different.  What works for one group dynamic is a disaster somewhere else.  

1.  The fabtek sounds like a problem, but i can understand if a machine upgrade isnt possible right now.  If its that expensive to pay for and run...  Could a hand cutting crew replace it for a while?  I know the production goes down, but could profit go up?  You wont be making a payment on a parked machine and a couch bound operator anyways. 


2.  Is this guy youre paying to stay home worth keeping?  If so id bring him into the discussion.  Me personally, it'd be "bill, we need to talk.  Im at a point of having to decide on changing the pay, the machine or the employee and i want your input."  

Im not saying you owe the guy a job, but i am saying its more effective to hear it from the horses mouth what will make him hammer out the numbers, than to speculate on the internet.  Its possible he may not be the right horse.  But youll want that dialogue with him (or her?) directly. I get nowhere in life with suggestions and carrot danglings and unvoiced expectations.  So i just spit it out. 

3. That said.   Paid days off.  "Hey bill.  I cant pay you to sit home, its gonna sink our ship, Period.   here are your choices.  

A. You keep your current pay and take broken days off for free.

B.  We lower your overall pay rate and you can stay home with pay when we are broken.

C.  I will set up a firewood operation back at the shop.  When the fabtek is down or its too wet, youll go to the shop and run splitter under the lean-to.

D. I cut you your check today and wish you well. 

What do you want to do?"
Title: Re: Paying operators a
Post by: Gouterk on March 20, 2018, 12:30:31 PM
Quote from: longtime lurker on March 20, 2018, 10:12:27 AM
I'm going to tell you what I do. Different country, different rules

This is great! I would say our overall goal would be to set up a somewhat  similar system. I would need to research and better understand what you have in place, but profit sharing is something we have discussed. We have no interest in just hiring people to do a job, I would much rather invest in people looking for opportunities to grow in a business. We thought we had people that were willing to go the extra mile with us in exchange for the opportunity's we can offer. But we're concerned that may not be the case. Essentially we're trying to determine if we're failing as business owners or if we just don't have the right fit in employees. Or most likely a combination of things! 
Title: Re: Paying operators
Post by: TKehl on March 20, 2018, 01:41:27 PM
They are out there, but they are not common.  When you find them, many/most that would jump at that opportunity are either already doing something on their own or will eventually leave to do something on their own, but will be great while you have them. 
 
It may make sense to look for people with struggling small businesses (handyman, painter, etc.).  There are a number of people that struggle in a small business due to a lack of business sense, but they have the drive.  That could be a perfect fit.  Also chat up the best person at an auto parts store etc. to see if they'd be interested.  Your best people will already have jobs and may not be looking.  Sometimes it takes some hunting (poaching).   ;)
 
There was a time, I would have jumped at an ownership opportunity like this.  I'm still have a J.O.B., but work for myself as well.  I'd have to weigh any opportunity against where I expect to be in 5-10 years plus the risk of being partial owner with input but not control...
Title: Re: Paying operators
Post by: Southside on March 20, 2018, 02:28:17 PM
Just a comment on your mention of a low boy.  If that is something you need to have a payment on in any way then think really, really hard about going that route at this point in your business.  I know from experience how it is easy to convince yourself that "if this happens, that happens, etc we are golden" and "there is no way it all won't happen".  Well - I am here to tell you that all the bad things can and will line up at the wrong time.  

Having another payment and hoping that piece of equipment can subsidize other parts of the business is extremely risky.  I have to suspect there is a reason for the lack of available low boys, it may not be a lack of work for them, but rather a lack of profit generated by them in your area.  

Not trying to tell you what to do, just speaking from experience in having been where now find yourself.  
Title: Re: Paying operators
Post by: Gary_C on March 20, 2018, 03:35:54 PM
Never lose sight of the fact that as employers, your job one is to eliminate obstacles, bottlenecks, whatever you want to call them to high production. If that harvester is the choke point because of downtime, you will never get more production and make more money by taking money away from your employees. If you had excess production capacity that was sitting idle, then you could think about pushing your employees for more production with incentives.
Title: Re: Paying operators
Post by: Bradm on March 20, 2018, 04:45:23 PM
Quote from: Gouterk on March 19, 2018, 07:16:44 PMAlso my husband ends up shutting his machine down all too often to help with repairs and trouble shooting that people don't want to take ownership of.

How much production is lost when your husband has to walk away from his duties to assist in maintenance?  Does this create a bottleneck or loss of product to process somewhere else down the line?  Do you know what this lost time works out to in a dollar/hour equivalent?

Quote
I realize some of this is a management issue and people need to understand the expectations of the job. But obviously we haven't given enough insensitive to take more responsibility for the loss of production.

It's good that you recognize that there is a management issue at play.  Unfortunately, 100% of it is on you and your husband.  You need to be clear with the employees as to what is expected of them as well as how you will treat (pay, benefits, bonuses, etc.) them and what happens when expectations aren't met.  This may be one of the hardest things you will have to learn to do.

QuoteWe thought we had people that were willing to go the extra mile with us in exchange for the opportunity's we can offer.

In my area, minimum wage jumped about 30% ($11.70 to $14 per hour) on Jan 1 of this year.  I have spoken with many small business owners, from sawmills to fabricators, who had good employees, making well over the minimum, turn sour because their wage wasn't going to jump 30% as well.  It didn't matter what kind of opportunities were available or whether their individual profitability increased, they felt they deserved a 30% increase in pay because the entry level wages went up 30%.

QuoteEssentially we're trying to determine if we're failing as business owners

It's good that you are asking this question.  It shows me that you're trying to do what it takes.  Failing owners generally refuse to ask for help nor do they acknowledge that they bear responsibility for problems.  If you haven't already, sit down and figure out what your true costs are, both before and after employee costs (2x gross pay is generally a safe assumption).
Title: Re: Paying operators
Post by: starmac on March 20, 2018, 05:08:38 PM
I must have missed something, which is easy to do.
You have 4 pieces of equipment, right?
You and your husband each run a piece, and you have 2 employees on the other two, right?
How come when one breaks down, you pay an employee to take off and not work?
Why is he not taking over your husbands processor while he repairs the other?
even if your husband does not do repair work, why would you and him continue to run a piece of equipment and send a paid employee home?
Me thinks I need a job like that.
Title: Re: Paying operators
Post by: Gouterk on March 20, 2018, 06:31:10 PM
Quote from: Gary_C on March 20, 2018, 03:35:54 PM
Never lose sight of the fact that as employers, your job one is to eliminate obstacles, bottlenecks, whatever you want to call them to high production. If that harvester is the choke point because of downtime, you will never get more production and make more money by taking money away from your employees. If you had excess production capacity that was sitting idle, then you could think about pushing your employees for more production with incentives.
Yes, these are all excellent points. And just to clarify our goal is not to pay our operator less but to offer better incentives and more ownership in the job. I'm definitely better understanding that until we see much more steady production from that machine we must keep our operators salary in place to be fair to him. It just really eats at your insides to pay out regardless of production. But that's on us and our nightmare of a machine. 
Title: Re: Paying operators
Post by: Gouterk on March 20, 2018, 06:41:52 PM
Quote from: starmac on March 20, 2018, 05:08:38 PM
I must have missed something, which is easy to do.
You have 4 pieces of equipment, right?
You and your husband each run a piece, and you have 2 employees on the other two, right?
How come when one breaks down, you pay an employee to take off and not work?
Why is he not taking over your husbands processor while he repairs the other?
even if your husband does not do repair work, why would you and him continue to run a piece of equipment and send a paid employee home?
Me thinks I need a job like that.
Well feel free to apply :D because you basically have it right. I guess essentially neither our operator or my husband are very comfortable with him running our Barko. And once we're down to one processor there's no need to stick anybody in a forwarder. I only forward when there's enough work for 2 machines. My husband does most of our own repair work so there always something to do. I guess we feel like it's our business and we should carry the load first. He just puts in the overtime running his machine being he is the most efficient at getting wood down. Or we're just young and dumb hahahah. 
Title: Re: Paying operators
Post by: Ken on March 20, 2018, 07:56:51 PM
Excellent post.  I've dealt with all these issues over the years.  Gouterk if I was you I would think hard on getting rid of the old machine.  That sounds like the bottleneck.  When I plan my jobs the harvester is expected to harvest x amount of $/minute over x amount of hours/week.  It is hard to make up those lost minutes when the new harvester is sitting while working on an old one.  If the operator is not qualified enough to sit in the seat of the Barko while the other one is down he is not qualified to be there imho  Thankfully I have a very good harvester operator who goes the extra mile and I like to think I treat him accordingly.  Best of luck.  This industry is tough.
Title: Re: Paying operators
Post by: Southside on March 20, 2018, 08:00:33 PM
Quote from: Gouterk on March 20, 2018, 06:31:10 PMwe must keep our operators salary in place to be fair to him


As a business owner you one day realize that the only thing "fair" in life is that event you go to in the fall where folks get a ribbon for growing a zucchini and you eat too much fried dough before riding the tilt a whirl until the reality hits you that the fried dough was not such a good idea.  

Your first priority has to be to your business, if you go under your honorable desires do no good for your employee or yourself.  Try skipping a check one month to him and see how fair to you he decides to be.  
Title: Re: Paying operators
Post by: mike_belben on March 20, 2018, 08:02:20 PM
Amen.
Title: Re: Paying operators
Post by: chevytaHOE5674 on March 20, 2018, 08:15:23 PM
On the other hand if you dont pay him during the downtime (and find something for him to do), and the downtime becimes significant enough where his checks suffer then if he is a decent operator he will jump ship for somebody with a machine he can actually run and earn with.

I say that because if I was getting sent home unpaid all the time because of breakdowns I would be making phone calls asap and finding a different job. A good processor guy can always find work.......
Title: Re: Paying operators
Post by: Gouterk on March 20, 2018, 09:03:40 PM
We're just darned if we do and darned if we don't hahaha. Some more back story to all this is, the Fabtek was paid off when we upgraded to the Barko. We had a friend who wanted to purchase it so we shipped it off to him and he agreed to make us payments. Well due to issues (not the machine itself) he was unable to pay us. We soon realized we had a perfectly good machine that was debt free that we were giving away. So we offered a position in our company to this friend and brought the machine back under us and now he's the operator. So there's a lot more to the relationship then just some guy we hired. We've managed to create a nice web for ourselves. But all the feedback is great! I'm just trying to soak up as much wisdom and experience before we make any hard core decisions moving forward. If we need to we will park the Fabtek and call it good. But it's a tough pill to swallow. We spent $55,000 in rebuilding the head this summer. And put $20,000 into a new computer when the old one fried this fall. Probably have at least another $10,000 in other miscellaneous issues just this year. The engine is rebuilt, the undercarriage has been redone, new injector pump and a handful of things I can't remember. What else can possibly go wrong !?  :-\
Title: Re: Paying operators
Post by: Skeans1 on March 20, 2018, 09:59:35 PM
I don't remember a Joral computer costing that much for a fabtek a Parker iQan is available for cheaper then 20k as well, one thing I'd do is not always run to cat for parts all of the stuff for the machine was built by someone for cat.
Title: Re: Paying operators
Post by: Gary_C on March 20, 2018, 10:00:49 PM
Quote from: Gouterk on March 19, 2018, 02:54:09 PMSo whats a fair and balanced approach to paying for downtime ? Its our Fabtek 153 that caused the bulk of our production loss. Its on the brink of being rebuilt at this point haha.
Sorry to be so blunt but finding a way to pay for downtime is a fools errand.

Quote from: Gouterk on March 20, 2018, 09:03:40 PM
 If we need to we will park the Fabtek and call it good. But it's a tough pill to swallow. We spent $55,000 in rebuilding the head this summer. And put $20,000 into a new computer when the old one fried this fall. Probably have at least another $10,000 in other miscellaneous issues just this year. The engine is rebuilt, the undercarriage has been redone, new injector pump and a handful of things I can't remember. What else can possibly go wrong !?  :-\

Sorry again but the definition of insanity is doing the same thing over and over and expecting different results. One good processor should easily be able to out produce a good forwarder, not be a bottleneck because of downtime.
Title: Re: Paying operators
Post by: Firewoodjoe on March 20, 2018, 10:06:01 PM
My opinion is that barko has to run period! Who ever runs it. Hire a mechanic or put a different operator in the barko. Parking a machine thats new and productive to fix a old one dosent sound productive to me. Maybe wages wouldn't be a problem if consistency on the production was resolved.
Title: Re: Paying operators
Post by: Logger RK on March 20, 2018, 10:32:25 PM
How about running the Barko 2 shifts a day & sell the old one. I'm not a CTL Logger,but don't it usually take 2 forwarders to keep up to a good running CTL machine? 
Title: Re: Paying operators
Post by: Gouterk on March 20, 2018, 10:39:20 PM
Quote from: Gary_C on March 20, 2018, 10:00:49 PM
Quote from: Gouterk on March 19, 2018, 02:54:09 PMSo whats a fair and balanced approach to paying for downtime ? Its our Fabtek 153 that caused the bulk of our production loss. Its on the brink of being rebuilt at this point haha.
Sorry to be so blunt but finding a way to pay for downtime is a fools errand.

Quote from: Gouterk on March 20, 2018, 09:03:40 PM
If we need to we will park the Fabtek and call it good. But it's a tough pill to swallow. We spent $55,000 in rebuilding the head this summer. And put $20,000 into a new computer when the old one fried this fall. Probably have at least another $10,000 in other miscellaneous issues just this year. The engine is rebuilt, the undercarriage has been redone, new injector pump and a handful of things I can't remember. What else can possibly go wrong !?  :-\

Sorry again but the definition of insanity is doing the same thing over and over and expecting different results. One good processor should easily be able to out produce a good forwarder, not be a bottleneck because of downtime.
Well even our brand new Barko has had its fair share of production costing breakdowns, things that were out of our control and not what you would expect from a new machine. So it would appear regardless of the equipment, breakdowns are a factor we must budget for and take into account.  And yes, the Barko when running can over produce the forwarder. Even despite every random thing that could go wrong going wrong we still have the money in the bank to cover our 2-3 months of downtime. But our goal is to achieve a whole lot better then just paying bills. 
Title: Re: Paying operators
Post by: Gouterk on March 20, 2018, 10:46:29 PM
Quote from: Logger RK on March 20, 2018, 10:32:25 PM
How about running the Barko 2 shifts a day & sell the old one. I'm not a CTL Logger,but don't it usually take 2 forwarders to keep up to a good running CTL machine?
If we found the right person but it would be difficult to find somebody able to work such off hours. Maybe in great quality wood you would produce enough for two forwards, but the wood and terrain we work with isn't the greatest. 
Title: Re: Paying operators
Post by: luvmexfood on March 20, 2018, 11:47:30 PM
A lot of different pay systems seem to be in use. In reading some of them I am pretty sure some of them do not meet the standards of the Fair Labor Standards Act. You have to be real careful with the definition of some one who is "salary". Look at in on the FLSA website. They have a lot of information and guides to assist both the business owner and an employee. 

There are some quirky things in there. For example, an hourly employee likes to come in 30 minutes early to get his machine ready. He is volunteering to do this and you don't pay him for it. That is a violation. An employer must pay for all hours worked. Even if they do it on there own. Back pay and penalties can get expensive.
Title: Re: Paying operators
Post by: Matt601 on March 20, 2018, 11:58:36 PM
Quote from: Ken on March 20, 2018, 07:56:51 PM
Excellent post.  I've dealt with all these issues over the years.  Gouterk if I was you I would think hard on getting rid of the old machine.  That sounds like the bottleneck.  When I plan my jobs the harvester is expected to harvest x amount of $/minute over x amount of hours/week.  It is hard to make up those lost minutes when the new harvester is sitting while working on an old one.  If the operator is not qualified enough to sit in the seat of the Barko while the other one is down he is not qualified to be there imho  Thankfully I have a very good harvester operator who goes the extra mile and I like to think I treat him accordingly.  Best of luck.  This industry is tough.
A good friend of mine has a small logging outfit. He is running 3 skidders, 2 loaders and 2 cutters. He has 5 trucks and hires others as needed. He always said he couldn't afford new equipment. Well a few years ago he bought all new equipment a big note. Well a few months ago he told me that he has never made as much even paying the note because of down time he is working not paying for it to be worked on. No one can make money working on there equipment. When the woods are dry you got to roll not work on stuff. 
Title: Re: Paying operators
Post by: barbender on March 21, 2018, 12:07:05 AM
Our processors don't typically out produce the forwarders. There's a lot of variables, with skid distance, number of sorts, and terrain having a big impact on forwarder productivity. Gouterk, I see a potential problem with how you have made employees of friends and relatives. I'm hesitant to work in those same situations, because I prefer to have friends and relatives versus an employer I'm mad at. If I go to work for someone, and all goes well and we end up friends in the end, great, but doing it the other way can lead to some hard feelings. Maybe the best thing you could do right now is sell the Fabtek to get some of that money back out of it, and let one employee go. A hard decision I realize, but if someone is going to be in a processor, It's not just an operator job. You're also a mechanic and electrical and hydraulic technician. Your husband getting pulled out of the main processor to go troubleshoot and wrench sounds like a distraction you don't need at this point.
Title: Re: Paying operators
Post by: mike_belben on March 21, 2018, 03:52:36 AM
its becoming more clear that instead of repo-ing your machine back, you took pity on a fellow and are now suffering for it yourselves.   Furthermore when the machine is down you take pity enough to pay him wages when he isnt doing a thing.  It sounds like he got the sweetheart end of the deal at your expense because youre too nice.

I think you might want to backtrack and fix the real issue.  Which is beginning to sound like this particular relationship.  
Im with barbender.  Let him go and park the machine as your husbands backup unit.  The wages saved on him will help cover a real mechanic to come work on whichever machine is down while wood is still being produced by your husband who isnt stopping as often.  

Meanwhile you were looking at lowbed.  Do you have a semi now for hauling logs?  Do you or he have CDL?

I have been a mechanic all my life and let me tell you i would love love love to just drive a truck most of the time.  If you find a good mechanic, get him his CDL and have him be your truck driver too.  Between driving, wrenching and PM's you will never run out of work for that fellow. Even if youre paying him $30 hour it will be critical work getting done while your husband churns out wood.  Remember your current repair situation means two machines parked and two wages to cover, thats very expensive.  

The variety of driving/fixing should make a day go by pretty fast and never create a monotonous rut of a lifestyle at work. Id love to be doing that for a good outfit when my kids are both in school.   
Title: Re: Paying operators
Post by: snowstorm on March 21, 2018, 07:11:11 AM
Quote from: Skeans1 on March 20, 2018, 09:59:35 PM
I don't remember a Joral computer costing that much for a fabtek a Parker iQan is available for cheaper then 20k as well, one thing I'd do is not always run to cat for parts all of the stuff for the machine was built by someone for cat.
the parts are built by skidmore for cat. i was talking to him at the equipment show in bangor last spring. so anyone with a fabtek might want to talk to him about parts
Title: Re: Paying operators
Post by: Skeans1 on March 21, 2018, 07:34:38 AM
Quote from: snowstorm on March 21, 2018, 07:11:11 AM
Quote from: Skeans1 on March 20, 2018, 09:59:35 PM
I don't remember a Joral computer costing that much for a fabtek a Parker iQan is available for cheaper then 20k as well, one thing I'd do is not always run to cat for parts all of the stuff for the machine was built by someone for cat.
the parts are built by skidmore for cat. i was talking to him at the equipment show in bangor last spring. so anyone with a fabtek might want to talk to him about parts
Jesse doesn't build the computers all of that is done by Joral who built the original computer as well as does the encoders, the new style is everything built in one box keypad and all.
Title: Re: Paying operators
Post by: teakwood on March 21, 2018, 09:38:17 PM
Quote from: Matt601 on March 20, 2018, 11:58:36 PMA good friend of mine has a small logging outfit. He is running 3 skidders, 2 loaders and 2 cutters. He has 5 trucks and hires others as needed

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