VETS

Steven Cesare, Ph.D.

A business owner from Wisconsin called me the other day to discuss last week’s Tuesdays with Steve post on calculating a Year End Bonus. The business owner has a strong entrepreneurial flair, unbound by conventional paradigms that continue to paralyze many green industry executives, and is willing to entertain ideas he would never have considered several years ago. In particular, he has an extremely detailed job costing model intent on maximizing gross margin, is personally engaged in multiple networking associations to expand his company’s brand visibility, with an inclination to experiment with compensation systems that may improve operational productivity, employee income, and organizational value.

Beyond that framework, the business owner was pleased with the nuts-and-bolts content presented last week but sought clarification on preserving his company’s culture which is built up meritorious accountability, not distributing bonus payouts frivolously to employees who don’t deserve any reward.

Stated succinctly, he wanted to know if there should be any program disqualifiers that prevent giving a year-end bonus, other than simply not attaining the desired annual net profit threshold.

“VETs.”

That stands for Vehicles, Equipment, and Tools.

VETs is a cost containment best practice used throughout the green industry to monitor avoidable expenses related to waste, damage, and/or negligence caused by employees as they use company vehicles, equipment, and tools.

VETs is used as a disqualifier for annual bonus payouts when the year-to-date expenses related to waste, damage, and/or negligence (e.g., carelessness, sabotage, theft) exceed the stated acceptable standard put forth in the company’s annual budget, based on a rolling three-year average percentage. If the VETs expense surpasses the annual acceptable threshold, no annual bonus is given.

Take it easy. Slow down. Breathe in; now exhale. Good job.

The VETs standard is not tracking normal wear and tear on lawnmowers, vehicle brakes and tires, and weed eater twine. It focuses on lost or stolen equipment, broken tools, body damage or broken mirrors or rips in vehicle upholstery. The VETs criterion attempts to get employees to treat company resources with the same care and professionalism they would for their own personal tools, equipment, or vehicles.

Do you treat a hotel room, rental car, or restaurant bathroom the same way you do your own facilities?

Yeah right. No one does.

When it comes to giving bonus pay to employees, they should treat your assets as if they were their own.

Programmatically, I told the Wisconsin owner to have his Shop Mechanic and Department Managers inspect, evaluate, and track all their respective vehicles, equipment, and tools monthly (which they should be doing anyway!). All questionable issues (e.g., dents to a trailer, scratches on a truck, missing shovels, bent loppers or pole pruners, seized chain saw piston due to running an overly lean fuel mixture, bent or broken teeth on a hedge trimmer, bending the blade on an edger, leaks in back pack sprayer seals due to improper cleaning or pressure release) should be identified by department (e.g., construction, trees, maintenance, irrigation, enhancements), costed out for repairs, and presented publicly using a tracking gauge (i.e., thermometer diagram frequently seen when tracking charitable contributions to a stated goal).

Steve, my guys are too busy to review all the assets they use during the workday, work week, or month!

Oh really?

Hmm. I thought that was the essence of net profit.

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