BEST OF THE WEB: Damage Control

One recent thread on the Lawn & Landscape message board touched on employee policies. Specifically, participants shared opinions on how to deal with employees who break or damage equipment. Here’s what industry professionals have to say on the topic.

"If something is damaged, do you require employees to tell you about it within a certain amount of time?" asks Andrew Aksar, owner, Outdoor Finishes, Walkersville, Md. "I’m thinking I need to implement a new policy where when an employee damages equipment, materials or any property, they must report it within 30 minutes."

Matthew Schattner, owner, Mat’z Snow & Lawn, Kansasville, Wis., says one-half hour is too soon. "I say have them report damages at the end of the day when they check in back at the shop," he explains. "We’ve had some minor boo-boos, and the clients usually call you that evening if there is a problem. So, if you have them report before they leave, it still gives you time to formulate an answer for the customer."

Aksar writes that he began considering such a policy after an employee caused some minor damage to a client’s property. The incident happened a week before Aksar found out. Aksar spent two hours buying materials to repair the damage. "If they fail to notify me, then they pay for all costs associated with the damages. Anyone have any policies regarding property damage?" Aksar questions fellow board participants.

Sal Mortilla, owner of Long Island, N.Y.-based Landscaping Unlimited, responds by writing: "I don’t think the law will allow you to recover repair and damage costs from an employee. That’s what insurance is for."

However, Mortilla explains that when a claim is less than $500 the company usually absorbs the cost as part of the overhead to avoid increased insurance rates. "So far, we have not had any damage done to a property, so I’m not sure how I would react," he says. "I guess it depends on the circumstances."

But Aksar says he is more concerned about accidents being reported than the lost dollars. "These guys need accountability," he writes. "If they’d simply tell me when it happens, then it’s usually no big deal. But to let days go by and I discover it on my own – that’s not good."

Contractors should require the foremen to note any damages on work orders when they occur, suggests Chad Stern, owner, Mowing & More, Chevy Chase, Md. But sometimes keeping a close eye on equipment can also help catch damages early on, Stern says. "I do a lot of monitoring so sometimes I just find out that stuff by myself," he writes. "I usually inspect equipment and job sites to see if something is wrong."

Sometimes contractors need to accept the damages for what they typically are – accidents, says Bill Schwab, owner, Naturescape Landscape Co., Solana Beach, Calif. "Every person we have here is trained on the equipment they use as well as what clients expect of our company," Schwab writes. "We have had a few mishaps, but you can clearly see how sorry they are about the damage, and we all learn from it and move on. I can’t remember the last time something was destroyed negligently."

Some message board participants suggest giving bonuses to foremen for completing projects early and then deducting pay from those bonuses when damages occur.

But Aksar says early-completion bonuses can backfire. "Doing bonuses based on early completion or timely completion is, in my eyes, a big no-no," Aksar explains. "In this industry, someone is estimating these jobs, and this requires competency and experience. There is no way that a human being can accurately estimate production hours on every single job. If a job is under estimated, then this means the foreman does not get his or her bonus. Is it their fault some pencil pusher was way off with his or her calculations?"

Besides, Aksar adds, finishing a job early could result from overestimating. "It all goes back to job cost calculations," he writes. "I don’t want my guys rushing through a job. That’s not how our success is derived, and that’s not what drives us."

But Schwab disagrees that "beat-the-budgeted-hours" incentives can have a negative effect, adding that it’s been an integral part of his company’s growth. "If we had a revolving door with employees, as many companies with a flat hourly rate have, we would have had to place focus on getting workers rather than the crux of the business," Schwab explains. "Those bonuses keep the guys around for more than the money. They stay because we provide a pleasant work environment that has no boundaries when it comes time to earn and learn. Flat rates or hourly pay did not do that for us. With bonus incentives for beating budgeted hours, employees can work up and exceed their potential."