Friday, September 5, 2008

Innovative Technology Solution Creates Atmosphere of Trust: An Interview with Lee Clark, President of Garber Brothers Precision Concrete

Garber Brothers Precision Concrete Inc. is a top-quality concrete contractor with offices based in Greenville, Ohio and (coincidentally) Greenville, South Carolina. Lee Clark, president of Garber Brothers talked with Fred Ode about an innovative time-card entry web interface, PC Time, that the company developed in 1999 and is currently marketing to contractors of all trades. When linked with compatible job cost accounting software, PC Time has the power to streamline payroll and production data entry for real-time job cost reporting. But the real advantage, according to Clark, is the product's ability to increase employee motivation and efficiency on the job.

FRED: Can you describe to me what PC Time is and how it works exactly?

LEE: It's a web interface that our guys use, either from home or from a kiosk at the office, to enter their time. Each of our locations -- in South Carolina and Ohio -- has its own kiosk. At the end of the day, employees can enter their time using the office kiosk, or if they don't want to do it there, they can go home, log in to our system and put their time in. Each kiosk is set up and locked down so they can only do certain things. It's a portal, or a place to get on the Internet. The office kiosk is actually just a computer with a screen that's mounted under glass, to keep dust out, and it has a vinyl roll up keypad.

FRED: Is it easy to use? How exactly do employees enter their time?

LEE: Employees select specific cost codes to put their time to. They only select the cost codes that are available to them. In other words, if one job only has four cost codes, those are the only ones available to choose from. Once their time has been entered, they get to see what their production rate is running at on that phase.

FRED: The program actually calculates labor productivity?

LEE: Yes, and this is where the motivation factor comes in. When production rates are good -- and PC Time will show if there is a savings in labor cost -- we give them half of the savings. They are going to get a bonus based on that.

FRED: How is that production rate determined?

LEE: It's determined by what we have in total costs spent to date against our estimated costs. If they have 60% of quantity in and only 50% of costs in, then they have 10% savings in labor. So all we have to do is take 10% of that total labor cost and represent it to them based on a percentage of hours each guy worked. If one guy worked 28% of the hours, he's going to get 28% of the bonus. Each guy may take a look at that and decide if he needs to take another guy on. An employee might say, "We can get this done with three laborers, not four, so I could get 32% instead of 28%." We can then take that fourth guy and use him somewhere else. So the employees get that money; the savings will be in their pocket.

FRED: Sounds like it encourages laborers to work efficiently and work as a team. What about individual skills and performance?

LEE: Another component is skill-based pay. Every guy is paid based on the number of skills he has. We have established a value per hour on learning each of the different skills in our industry, which is concrete. For example, if a guy knows how to set forms, use a laser, etc., he might earn 25 cents more an hour for this or 50 cents more an hour for that. But employees need to have 200 hours or more on each particular skill. Our system tracks all that and lets them see it on a daily basis.

FRED: How does it integrate with your accounting system (FOUNDATION)? How do you pull information in from other systems without creating a lot of work?

LEE: The whole system is written in .NET and in SQL. We are basically running the system between the two, through Internet information services and SQL, which is why we chose an accounting system that was SQL-based for seamless integration. In essence, the system goes out and extracts all of the data fields that we need from FOUNDATION, such as employee name, user code, etc. In fact, each employee's login is that person's employee ID and the last four digits of his or her Social Security number, all pulled from FOUNDATION.

The minute we set up a new employee in FOUNDATION, that employee is able to get on PC Time, because it's direct. All the information the employee sees -- the jobs, the cost codes, the cost classes -- is pulled from FOUNDATION. And time sheet information entered by the employee flows to the Payroll module. We hit one button on Tuesday morning, and that creates an import file. Our payroll clerk goes to FOUNDATION and imports the file in, processes it, and automatically takes it to a direct deposit file. It is sent directly to banks, and it automatically gets spread out to accounts and through ACH. It's all done within probably one and one-half hours.

FRED: That's pretty impressive. How large is your weekly payroll?

LEE: We have anywhere from 500-700 entries each week. All with different cost codes, including everything the employees worked on. So between our system and FOUNDATION, an employee's wages are calculated automatically, including incentive pay, overtime, vacation, etc.

FRED: How do you verify that what the employee has entered is accurate?

LEE: The superintendents verify the employees' time on a daily basis. When they go in to verify, if they see an error or a discrepancy, they correct it. Let's say an employee put in that he worked nine hours and he only worked eight. The superintendent changes the hours from nine to eight, and it creates a memo note that comes up on that employee's home page when he logs in the next day to put his time in. It tells him why it was changed. So if he wants to go dispute it, the matter can be resolved right away. It eliminates the problem where an employee gets his paycheck and says, "Hey, wait a minute! My paycheck is not right." We don't have any of that anymore.

The superintendent also evaluates or verifies the employees' skill level. Let's say a guy said he laid out the footings; he used a transit and laid them out. The superintendent will grade him by giving him a red, yellow or green check box. If he picks red, it means that employee really has no clue. Yellow means the employee can execute it but it still takes a little supervision, and green means the employee can perform work without any supervision. That's an ongoing evaluation. The employee will see that if he averages his 200 hours within the green, then he is going to receive the raise. But, if he still requires supervision, he knows it won't happen. If he can't do the task, he won't get the raise. It's his limiting factor. Instead of coming in and asking for a raise, every day he gets information and feedback regarding how close he is to getting a raise.

FRED: What happens if someone forgets to log in and enter his or her time?

LEE: Then that person can't put his or her time in the next day. And if the superintendent forgets, no one can enter his or her time in the next day until that's been done. That way, the sheets are being done and approved on a daily basis. So instead of waiting until the end of the week for everyone to enter their time and get it approved, it's all done daily.

FRED: Did you have a hard time getting employees to do this?

LEE: No, they have embraced it.

FRED: Even people who are not used to using computers?

LEE: It took a little while longer with some older employees, but the web interface is so easy to maneuver. It really involves very little keystroking. It's mostly just using the mouse and clicking buttons. An employee can log in and enter his time in probably less than five minutes. And the superintendent will come in and approve every one's time in about fifteen minutes.

FRED: After a while, I'm sure it just becomes a habit that employees do at the end of the day.

LEE: That's right. And because of the production factor, employees are anxious to see how they did that day. If they are hitting their production rates, the text actually comes up in green, and if they are not, it comes up in red. So most employees when they bring the time ticket up, they want to see green. If it comes up in red, they look to see what they have to do to get to green.

FRED: So all of this information is available to employees through the web portal?

LEE: It's actually a whole website. When they log on, they get a home page with news items that we share -- pictures, news of company picnics, all kinds of stuff. On the first page, we list employee anniversaries and birthdays, and all that information is pulled through FOUNDATION, our accounting system. It comes from their hire date and their birth date. The other thing we have on there, which is interactive, is a place for employees to go and make vacation requests. They can select dates and ask for paid or unpaid leaves. It will automatically create the payroll entry so we don't have to worry about time card imports or someone forgetting about inputting for that vacation day. And it shows them how much vacation time they have left so you don't have employees coming in and asking where they stand. It also shows them links to health care, dental insurance, 401K. They can actually go to any of those sites and look for doctors or dentists.

It's also a great way to communicate as a company. Some guys are leaving at 4:00 in the morning, others at 8:00 in the morning, and they are going to jobs that are in opposite directions. So they don't get to see each other. Maybe only in passing. This is a way we can communicate. Here's what these guys are doing over here. Here's what this crew is doing over there. Here are pictures of a job. Here's how it has grown.

FRED: And it's really an interactive website because you are collecting and disseminating information.

LEE: Yes, it's a total, full-circle interface. Another great benefit for us is that it allows us to keep a daily job sheet for every job, and it's all done electronically. So if we have to provide a data sheet to take to the general contractor to prove that work was done, for legal aspects, we have it. It shows every single employee who was on a job, how many hours they worked, what cost codes, and which phases were worked on. They often have a lot of notes on them, which can be typed in easily. For example, the job sheet might say, "We hit a gas line; something went wrong." And they can be printed off by job and used for dispute resolution.

FRED: How much time does this process save the company, do you think?

LEE: It's not really about the time. It's about the culture that it creates. It creates a very open, trusting culture. And that's not to say that it's perfect. We are constantly looking for ways to create more trust. But the whole purpose is to create trust, to get everybody working in unison together. So we're all working for the same thing: making more money and increasing profits.

FRED: Can you quantify it in dollars saved or revenue boosted?

LEE: I would say it stops erosion of production rates based on employees who get disgruntled. You should see far less erosion. Can you measure it? I don't know. I do know that a lot of headaches that many construction companies have to deal with when it comes to employees, we don't have. And it's all based on trust. You give trust, you get trust. If you keep employees down, they are going to do the same thing to you. They are going to steel saws from you. Because they feel like "You owe me."

FRED: Many contractors complain that they cannot hold on to good, reliable employees. It's one of the biggest concerns facing the construction industry according to some national surveys.

LEE: Yeah, and the solution is to either beat them with a stick or tease them with a carrot. The stick approach just doesn't work; it's a bad way to approach management, and the company can't grow that way. Labor attitudes have changed. The new labor pool of 18 to 35-year-olds, the Gen Xers and NEXTers, they come from a society where their parents have lost jobs, they've seen turnovers and they've seen what happens when companies are not loyal to employees. With that in mind, what they want is trust. They say, "I'll trust you, but give me some information. Let me see that the effort I give is recognized and rewarded." And it's not all about pay. A lot of it is about self-esteem. What this system does is it builds self-esteem. Guys, especially, like to beat on their chests and say, "Today I busted my ass, and the system shows me that I did. Look at all that green!"

FRED: PC Time sounds like a win-win solution for the company and the employee.

LEE: What's missing in a lot of companies is the loyalty factor, where workers think in terms of "we" and not just "me." This helps to get everyone together to work as a team. But it still takes care of the "me" because workers are getting a reward for their effort.

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