Question
We have a small company and have been in business for about 15 years. Most of our employees have been with us for 6 to 12 years. I just caught some of them cheating on their time cards. They all get a 15 minute break on the clock twice a day and are to take a 30 minute lunch off the clock. I found that some are timing back in after 15 minutes and also punching several other people’s time card while they are still eating. They are now ticked off at us because we docked them 15 minutes.
I don’t want to have to re-train new employees right now, as we are very busy. Business is pretty good and we are just now turning things around and getting caught up with our bills. The past few years have not been good and we have not made any money for a while. Now that we are busy, the employees are all asking for raises. While we were slow, we did the best to keep everyone busy and not lay anyone off, which cost us a small fortune. I think that since we have told the employees that we can not afford to give any raises right now, they figured they would just try to screw us in the mean time.
Does anyone have any good ideas in managing employees? There seems to be a very thin line between managing them and ticking them off.
Forum Responses
(Business and Management Forum)
From contributor S:
We have a biometric time clock. The employees have to put their hand in it and it scans their hand. You can't punch in for others because they are all different. It also sends their time straight to the bookkeeper's computer, so she knows if they are off by even a second.
Make it a written company policy. All shop employees get two paid 15 minute breaks each day and one unpaid 30 minute break each day. Employees must punch their own time card when going on break and returning from break.
Check your labor laws to make sure you are in compliance. The policy should state that the 30 minute break is mandatory. If it is an unpaid break, it is unpaid for 30 minutes whether they take the full 30 minutes or not. If they take more than 30 minutes, that time is also unpaid. Only the supervisor can authorize an employee to be paid during the 30 minute break by signing the employee's time card.
Your written policy should state what will happen if someone is caught committing time fraud. 1st time - written warning, 2nd time - written warning and a day off without pay, 3rd time - termination. Punching someone else's time card - termination for the person who punches the time card. Those who you already caught should be written up immediately.
It is more cost effective to use biometric clocks, disciplinary procedures, surveillance cameras, etc. than to just fire otherwise excellent workers at the first sign of a problem, as you stated in, "If an employee can't be trusted to track his own time, you don't want him working for you." Do you have a crystal ball to tell you who can be trusted 100% of the time?
Do employees have any idea what goes on to be able to run a company? I would be willing to bet they would be shocked to see how much work it is.
Just for the record, I only used being a second out as an example. I don't care if someone comes in a little late, as long as they are accountable for it. An employer is not a babysitter, but with the attitude we get from some employees, we are forced to do things that even the playing field.
There was a post here recently by an owner who fired half his workforce for smoking dope while on break, as he should have! I say, get rid of the bad apples and replace them. With the economy like it is, you should not find it hard to replace them. But be sure you take the time to do background checks on anyone you choose to hire to be sure you are getting the quality people you need.
He is using a mechanical time clock and they are cheating. Do you thing they would not cheat if they hand wrote in the hours? There is one person, or maybe more, that are the "leaders" of this. Fire them.
I had this issue several years ago. Remember back to when you were an employee, not an employer. All you understood was the net pay in your paycheck and the gross sales of projects. None of us knew about operational overhead. We all thought the boss must be making a ton of money. Isn't that why we all went on our own?
When I had this same issue I tried to explain to the employees how much it costs us to run, to no avail. So instead I opened our books, complete disclosure. I didn't show them individual pay scales, but all the labor in one number. Then I created a spreadsheet that showed exactly what every hour broken down into 15 minutes of operation time costs me X how many hours per week X working weeks per year (minus vacation and holiday pay). This rate chart was posted at several work stations throughout the shop with the final costs in bold numbers.
Example: 4 employees wasting 15 minutes a day is an hour a day x 5 days x 47 work weeks is 235 lost man hours x hourly costs
Numbers don't lie! When I laid it out this way, the light bulb went off in their heads. The rate was left out for about a half a year. When I would come out in the shop and they were in a group not working and goofing off, I would walk up, pull out my wallet and say "here, steal the money right out of my wallet." Overboard reaction? Possibly. Could they argue my point? No. Did it work? Yes.
After this got through we discussed adding on more benefits. When your employees understand how much it costs to run and how improvements in productivity adds more to the bottom line, enabling you to offer them more, they become self motivated. Micromanaging like I did is not a long term solution (at the time I had no choice). It was that or go out of business.
Short story to get the point across. A little while after this all went down, we went on a two week vacation. I called 1-1/2 weeks into it and no one was at the shop. So I called one guy at home (and woke him up). I asked him if everyone was sick and he said no. I completely lost it and went into a tirade. When he got a chance, he told me what happened. They took it upon themselves to take a look at all the work to get done and created a strategy to get it out the door faster (since I was not there micromanaging).
I showed them reality, and they showed me they understood. Now my long timers are no longer hourly. They are salary. Their goals are not set by hourly production - they are set on production $ volume. It's simple - the more they do, the more they get. They look at the big picture. They think in terms of a career, not a weekly net paycheck.
When new employees come on, I don't need to micromanage the clock. Existing employees tell me what is going on without me there because they know it hurts their own bottom line. This works for a small operation. I am thinking of adding biometric or similar just to track sub tasks to tweak pricing formulations.
Point being, remember back to when you worked for others. Employees are not mind readers and they do not understand what it costs to run a business. If you want them to understand your perspective, you must use facts (numbers), not verbal communication. Those who understand stay on and flourish; those who don't, you fire. After 7 years since this happened, it is to the point that when I do show up at the shop they get annoyed because I bother them wanting to talk about BS. I have become the weakest link in the operation. Now I just need to fire me.
I do think that in a small shop, 6 or less, a time clock is a waste of money. With that size the guys should be policing each other if they all feel they are part of the team.
I had an employer many years ago that did just that - he would let us all know the shop is doing well, and we should be able to weather a slow down with no layoffs. Sometimes it was that a job didn't go well. We need to look at our hours and organize better. He let us know that we all played a part in how successful the shop was, therefore no cheating. Overall I think that the time clock problem is a sign of a bigger problem somewhere else. You can fix this by putting a head on a pike for all to see, or you can dig a little further.
All around increased benefits (family health, more vacation, retirement plan, etc.). We set production increase goals. When they hit it and consistently maintained it, they got more benefits.
If you want career minded employees, you need to offer the opportunity for one. More importantly you must make them an integral part of the improvement process by enabling them. The good ones naturally rise to the occasion; the losers stand out like a sore thumb.
As a small shop in the South, I am pretty sure that we pay a little less than larger shops in other parts of the country. We pay from 9.00 to 15.00 per hour, but we are very flexible. The guy who runs the saw comes in very early in the morning and would work 60 hours a week if I let him. (Lots of kids to support.) They all look at each other’s time cards to see what everyone else is doing. I have thought about a different system so they could not see what hours others are working.
They all want raises all the time, but that does not keep them from going out to lunch every single day, and they all smoke. I am not their parent, but they are wasting more money going to lunch and buying cigarettes than a raise would ever pay for. Almost all of the work is very repetitive. Load a panel in the CNC and push a button. Load 4 to 10 sheets in the beam saw and push a button; feed panels into the edgebander when the green light goes on. It is not rocket science and really, if someone were very bright, they would get so bored in about 5 minutes on any machine in our shop.
Have the foreman talk with someone who is late to come in to work or early to go to lunch and have them explain the importance of "time." If the suspect person continues to break the rules... fire them. To have a clock that keeps track of time really tells someone that it's okay to be late if you want. You just won't get paid for being late. That's no incentive, is it? Shops that just keep time of the arrivals and departures but don't keep track of the time that's spent on each and every job are just ending up shifting numbers from one column to another.
It's imperative to know the total time spent on job number #007 from start to end, not if someone came into work a few minutes late because traffic was terrible due to the accident on the roadway.
A biometric clock sounds like a good way to go, but only because it seems like a simple way to do things (less chance for error, like someone punching someone else's card on accident, and no cards or sheets to keep track of). I'm in the camp that believes that if you're always freaked out about your employees stealing from you, then they're probably going to steal from you. Either you're hiring people who are prone to it, or you're creating an environment of distrust.
I don't *like* to be worrying about my employees stealing from the company, so I don't. We're small enough that if anything gets blatant, it will become readily apparent. If the company gets bigger, then the management of the company needs to be structured so that stealers or cheaters are culled systematically.
It is naive to think that just because you have a trusting nature, and a healthy work environment, that everyone that works for you will turn into angels. I certainly don't go around freaked out about the possibility of someone stealing from us. Totally the opposite. But when it does happen, it bothers everyone at my company, not just me.
Over the 15 years of business, our biggest losses from theft have been from outside the company. Cars in the parking lot have been broken into. We got the landlord to extend the fence, which fixed that problem. A crackhead broke into our building and was in and out for 3 days, took our van full of tools over Thanksgiving holidays, but he is now in jail.
The stuff that we lose internally is small stuff - someone's backpack, a DVD, stuff out of the refrigerator, a wallet, chisels, occasionally a nail gun. For the size of our business, it is small beans. You can be sure that if someone gets something stolen out in the shop, I better act damned concerned or they will think I am the king of jerks. Taking action is more often about responding in a caring way for their benefit, not mine.
But we were talking about time clocks.
"If the company gets bigger, then the management of the company needs to be structured so that stealers or cheaters are culled systematically."
That involves catching people in the act. If you haven't noticed, dishonest people tend to hide and lie about their actions. The precautions we take as business owners are just like locking the door on your car. If someone really wants to steal your car or break into your house, they are going to do it. Why make it easy for them?
Some of you have small businesses. If you only have 7 people and are not growing the business, you all get to know one another. It helps if they are skilled labor. You don't have a problem, and don't have to worry about it, and wonder what all the fuss is about.
We have grown very fast at times, and hire all entry level. There is not a labor pool of experienced door builders even in a large city. If you hire 12 people in a year, you hope and pray that you hired all hard working, honest people that always follow the golden rule, but it just doesn't work out that way.
If you worked for someone that was distrustful, would that make you start cheating and stealing? I doubt it. The cheaters and stealers were that way before they ever applied at your company. If you are lucky, they will not be around long, but usually it is because they are just poor performers or have poor attendance. But make it too easy to cheat, such as "give me your hours at the end of the week," and even good employees may find it too easy to take advantage of you.
For example, we have a motion detector module. If the worker stops moving for over 15 seconds, they are clocked out.
The Latrine option clocks them out when they enter the bathroom.
This tiny transmitter also tells us where each worker is all day. If we see more than 2 red dots (workers) in close proximity on our wall sized monitor, a small electric charge is sent through their nervous system which usually breaks up their chat session. If not, the system increases the current slightly every 15 seconds. At our plant, if you want to have a meeting, it better be important and it *will* be brief!
We have a very quiet shop these days.
Other benefits include the Anti Theft option. By linking sensors on our hand tools, if a worker takes a tool beyond the perimeter of the building, they are hit with the max current, until they return to the building. We have identified the thieves here by the burn marks on their hands.
This system is a godsend for us. Our productivity is great, our workers have developed excellent bladder control (only a few accidents early on). Tools do not disappear and everyone is moving all day.
We are told that other modules are being developed by the Designer (a North Korean Company), and look forward to upgrading soon. Just wanted to share this with you guys.
Any of you whip crackers out there ever try to motivate your employees from within by means of incentives? Ability to track their own progress and share somehow in the process and proceeds of productivity generally brings about positive change and results in improved morale and profitability.
Remaining slackers stick out like a sore thumb and more often than not change their attitude and habits due to pressure from their peers (who stand to lose when the machine is not well oiled).
Having a time clock is a no-brainer. Disciplining cheaters is also. But keep in mind that if you foster an environment which becomes a cat and mouse game, then that is exactly what you will get. The equivalent of hanging a sign that says "Do not fish off the balcony," and some are guaranteed to pull out their poles, bait the hook and cast that line.
Best results I ever received from my crews was by giving them the tools to do their job, track their progress, and treat them better than they expected. When new hires asked when was break time, I told them there was no set break time, they could take a break whenever they needed one. That may sound extreme, but the results were that they took less breaks and worked better and were happy. Happy crews made me money, and I shared it with them. Amazing how having fun at work eliminates so many problems.
People in general will rise or fall to the level of which you look upon and treat them. Laughing employees out of bad behavior is faster than beating it out of them. Hang a sign over the time clock stating: Notice - All employees found to be dead while on the clock will immediately be dropped from the payroll. Or, let the beatings continue until morale improves!
About an hour later the cheater comes up to me and says "why the time clock all of a sudden?" I told him that I figure I paid for lunch yesterday, I just didn't get invited. His response? "Well, why spend $100 on a time clock because you felt ripped off for $15?" (He was a $20/hr employee.)
Pick out the cheater whose services you can most easily replace, and fire him, and tell him why loud enough for the whole shop to hear. Ignoring the problem only makes it more expensive in the long run. I know several of you won't agree, but this is simply stealing from the owner, and remember that unlike the employees, we get what's left over after everyone else gets their chunk of the pie.
