Motivating and rewarding employees requires work
While most of his fellow extension professionals focus on the science of growing-soils, diseases, crop varieties, etc.-Gregorio Billikopf, a farm adviser with the University of California Cooperative Extension, specializes in an equally critical area that often gets too little attention: labor management.
His work centers on two distinct topics that are nonetheless closely linked: worker productivity (how growers can motivate workers to get the most productivity from them) and interpersonal communication skills. “There’s a huge connection between these areas,” says Billikopf, who conducts studies and experiments on farms, just as any other researcher would when looking at an agronomic issue.
Most of the attention paid to labor in agriculture revolves around a shortage of workers, and there is less given to recruiting, motivating, rewarding and retaining good employees. “The first step is to figure out how to get a good employee to begin with,” says Billikopf. He says this is an area where most growers miss a huge opportunity by failing to test applicants. “Tests can be constructed where employers can have potential employees actually do the job, or portions of the job, before being hired,” he states. “If you manage to attract 20 people who come to your farm and you only want to hire five, you want them to first pass a test.”
Billikopf marvels at the number of business management books he’s read that never discuss testing employees: “They talk about training employees, paying employees, incentives for employees. But none of that does any good if an employee has no ability or motivation. It’s not about money – no matter how much money you throw at the problem, there are just some employees who can’t do the job.”
The test should not be like a college exam that evaluates how much a person knows, but rather a chance to see how prospective employees perform a given job. For example, says Billikopf, if the job is working in an orchard, the grower can start by showing all the applicants how they want a tree pruned and explaining why they want it done this way. “Then you can test their ability and how well they listened,” he explains. “During the explanation, they’ll all nod their heads and you’ll think they all understood, but if you give them a 20-minute opportunity to go out and prune some trees, you will see differences.”
Test your job applicants. If the job is working in an orchard, you can start by showing all the applicants how you want a tree pruned and explaining why you want it done this way. Then send them into the orchard to do some pruning and see how well they listened.
These tests provide an opportunity to gauge attention to detail, conscientiousness, and ability. “You want to look at the quality of the job as well as speed,” says Billikopf. “What you want is a combination of the two. Speed doesn’t do you any good if the quality isn’t there; but even if the quality is there, if the worker is slow then you have a problem.”
Seeing samples of the work can be revealing. “Give workers an opportunity to show you what they can do. Just instituting that one thing – not hiring without a test – will do more for a farm operation than any other thing you can do,” states Billikopf.
In the end, all farms are looking for workers who are productive. Productivity = Ability x Motivation. That’s the formula Billikopf shares with growers based on his decades of research on farms. “If someone has no ability, then their productivity will be zero because any number multiplied by zero is zero. And if they have zero motivation, productivity will be zero.”
His research shows that, on average, the best employee will be somewhere between four and eight times better than the worst employee. “So unless you’re hiring people who are capable, then you are paddling against the current of the river with the rest of your management practices,” says Billikopf. “You’ll be fighting an uphill battle to find ways to make things work through pay or through seminars or through all sorts of things.”
But once you hire the right person, then pay, training and supervision – which are all critical – can be effective, he says. “If you have someone who can do the job, then it makes a lot of sense to make sure they’re motivated to do it.”
A big part of motivating employees has to do with interpersonal skills, says Billikopf. That means explaining not only how, but also why, and taking the time to be sure employees actually understood the explanation. “Workers will respond much better when they have supervisors who know how to come over and say things in a kinder and softer way but still firmly,” he states. “The key is to find supervisors who know how to discipline without people losing faith.”
In all professions, there is a tendency to take the best worker and make them a supervisor. However, the skills needed to do a job usually aren’t the same as those required to manage employees, says Billikopf. “A grower will often take the best pruner and make them a supervisor, thus losing their best pruner and gaining a terrible supervisor,” he jokes. “The qualities that make a good supervisor are very unique. It has to be someone who is not afraid to praise employees, someone who isn’t afraid to confront employees but does so in a calm manner that allows people room to respond. Some people just don’t know how to do that, and they can crush the motivation of workers.”
Money, says Billikopf, is the number one motivating tool, but that doesn’t mean simply throwing money at workers will be effective. “In my experience, there are huge misunderstandings among farm employers in how to motivate employees through pay,” says Billikopf, noting that this is true in countries all around the world.
“Piece rate is ideal for fruit and vegetable operations; it was invented for us,” says Billikopf. While it doesn’t work in dairy or livestock agriculture, fruit and vegetable operations can benefit tremendously from piece-rate pay systems if they are individualized, he stresses. “Oftentimes people don’t know how to properly design piece-rate pay. Sometimes the grower worries about speed and feels if they pay employees by the hour the job will never get done. But they also worry that if they pay by piece rate, the employees will go so fast that the quality is terrible. So they come up with what they think is the best solution: hourly plus a piece-rate bonus. And that is universal – it’s done in every country.”
According to Gregorio Billikopf, a farm adviser with the University of California Cooperative Extension, paying a straight piece rate with a quality bonus makes the employee a beneficiary of good quality.
For the grower, this would seem to be the best of both worlds, with an hourly rate as an incentive for maintaining quality, as well as piece-rate pay to motivate employees to be speedy. While it sounds good, Billikopf says, “When you look at it carefully, it turns out that you’re actually paying more for the effort of slow employees, and you’re paying less for the effort of the fast employees.” Billikopf has published a detailed paper called “Designing an Effective Piece Rate,” available at http://bit.ly/7Db4Pe. This and dozens of other free resources related to managing farm employees are available at http://nature.berkeley.edu/ucce50/ag-labor under the “Articles” tab.
“Sometimes we think things make sense, but they don’t. Just paying by the hour is worse, because then there is zero motivation. But hourly plus piece rate is almost as bad,” says Billikopf. His paper includes charts showing that, under this system, workers who produce more are actually paid less for their effort. For example, if a group of workers is out harvesting fruit, the one who picks the most will make less per pound than the one who picks the least.
“Even the employee at first thinks, ‘What a nice farmer. They’re guaranteeing me a certain wage,’” he observes. However, it soon becomes evident that the system has the effect of limiting what fast workers can make because some of that money is going toward slower workers. “Employers don’t do that on purpose, and hardly any realize that’s what they’re doing,” he points out.
Conversely, under a straight piece-rate pay system, a worker who picked twice as much as a fellow worker would make exactly twice as much. “Under a straight piece-rate system, workers earn proportionately to what they contribute. The value of what they give you will be reflected in their paycheck,” says Billikopf. “You may have one person making $20 per hour that’s replacing two or three people who would be making much less, so you end up saving money because you have fewer employees.”
While a straight piece-rate system seems simple, designing it properly requires effort on the part of the employer. Take, for example, the harvest of peaches. “Sometimes the peach trees are just going to be loaded with fruit and will be easy to pick. The employer needs to have an understanding and a formula that takes into account how difficult one block of peach trees is to pick compared to another block. Or how difficult the harvest is one year compared to another year,” he explains. “That way, employees are not rewarded when the tree is almost falling to the ground because there are so many peaches, nor are they punished in years when there are very few.”
Depending on the crop and other circumstances, it can be easier or harder to come up with the best piece-rate pay design. With blueberries, for example, a grower could take a sample of how many pounds of blueberries can be harvested on one bush. “Where there are very few berries, you would need to pay more per pound (or per tray, etc.) of blueberries harvested,” says Billikopf. Whatever the crop, a formula can be devised, he states. “And over the years, you get better at it and employees trust you.”
The other thing that a straight piece-rate system requires the employer is supervision. “You need a quality control system where employees get feedback on their quality. Quality can even be part of the pay,” he states. However, he cautions, “feedback” is different than “babysitting.” If crew managers simply travel around the fields telling employees that certain crops they’re picking are too green or that branches are being pruned too short, the message is quickly lost. “Once you’re gone, the employees will continue to pick green fruit,” says Billikopf.
Instead of the babysitting approach of watching every bin, crate, and box, he suggests an alternative. “The better approach is for managers to tell employees that they are going to look at only a few boxes, and every box has a number. Then you can tell employees that if they’re picking the wrong fruit, you will teach them and help them, but if they continue to do it they won’t have a job.”
A more sophisticated technique is to pay a quality bonus. “If employees are doing poor work, they get discipline or termination. But if they are doing fantastic work – if their quality is really high – then for every box or pound they pick there’s a little bonus,” explains Billikopf. Again, he suggests that checks be done only on a small, random sample of what’s been harvested. “You may look at only three or four boxes of 200 that have been picked, but the employee never knows,” he states.
Paying a straight piece rate can lead employees to think it’s better to move a little faster and earn more money, even if it means getting disciplined every so often for poor quality. However, a straight piece rate with a quality bonus “makes the employee a beneficiary of good quality,” he says. “In the absence of rewarding people for good quality, you’re always going to be fighting an uphill battle. Because you get rewarded for quality, the employee should also get rewarded for quality.”
Of course, there are many variables that go into creating the right payment system, and every farm and situation is a little different, but the principles remain the same. “I want the farmer to come up with a system that is good for both the farmer and the employee in the long run,” urges Billikopf. “Because if it’s not good for the farm, it’s not going to work. And if it’s not good for the employee, it’s also not going to be good for the farmer, because they are going to have new people working every year.”
He cites the example of one grower he worked with who had a turnover of well over 100 percent in just a three-week harvest period. “If you can convince employees that they can come and make good money, they’re going to come back, and they’re going to know how to do the work properly,” he summarizes.
Designing the right system and sticking with it is absolutely critical, says Billikopf. “Sometimes when farmers see employees making a lot of money, they get scared and reduce their pay,” he observes. “Therefore, employees get the message: ‘I need to work slower. If I show the farmer what I’m truly capable of, then my wages will be cut and there will be more expected of me and I will get less money.’”
During the height of pruning or harvest season, fast and effective employees might make more money than the supervisor or even top managers. “But what growers need to do is look at how much it is costing them per acre or per pound picked,” he states, rather than what an individual employee might be making.
“I tell growers if you have employees making a lot of money, then congratulations. That means they trust you; they trust that you won’t punish them this year or in future years,” Billikopf explains. “If you ever reduce the piece rate that you offered employees because someone is making a lot of money, half of the people are going to quit, and those will be the half that felt they could work fast without being punished. The slower workers will stay and will never trust you again; they’re going to work like they’re being paid by the hour and go a lot slower.”
Billikopf advises growers to ask themselves one question: “When employees make more money, do I make more money?” If the answer is not “yes,” then the incentive system being used has been poorly designed, he explains.
He notes that growers who pay piece rate often don’t pay attention when minimum wages are increased, because all employees are making well above the minimum rate. “But when you pay by the piece, you basically are paying for the extra effort. And if you don’t raise the piece rate, then that extra effort essentially gets thrown away,” he notes. Little by little, over the years, hourly wages creep up, but the piece rate often stays the same, so the differential – the reward for extra effort – goes away.
Billikopf says, “Employers who understand all of this, who see the big picture, don’t tend to have issues with labor shortages, and they don’t have the problem of motivating employees.”