How can I explain this to my boss?
July 26, 2014 11:18 AM Subscribe
In short, the better I am at my job, the less money I make. I need help explaining this to my boss, and advice on offering him a solution.
posted by yesster to Work & Money (14 answers total) 2 users marked this as a favorite
Part 1 (Main)
I am a craftsman, working for a very small business. I am the only employee who does what I do.
The business (my boss) bids projects by the job, but pays me by the hour. Numbers to follow are for illustration only.
So let's say our shop rate is $100 per hour, and my pay rate is $25 per hour. Boss bids a job for $1200, of which $200 is for materials, and $1000 is for shop labor. That means he expects the job to take 10 hours.
If I were to do the job in 10 hours, $750 of that $1000 goes to the shop, and $250 for me. That $750 includes all allowance for overhead and profit.
If I were to do the job in 6 hours, now the shop gets $850 of that $1000, and I get $150.
I only get paid for doing work on these bid jobs. When the work runs out, I am out of work.
So by being faster, I've lost $100 and the shop has gained $100.
I want to discuss this with my boss. I would like to have advice on how to do so in a constructive manner. Constructive would mean having links to economics articles or other professional discussion of this kind of problem, along with suggestions for solutions.
I have been reviewing my work log to help establish some meaningful standards for an objective bid basis, if we were to go forward with a bonus system.
A second, but related problem: The boss tells me that I will be inheriting the business from him. I haven't seen anything in writing, but let's pretend it's true. The businesses current assets and liabilities nearly cancel each other out, so there's not a lot to inherit, aside from the value of continuing operations.
Let's suppose I have ideas that could turn the business around, improve profitability, hire more employees, etc. Why would I share these ideas with my boss? I would continue to get my current wage, all increase in profit would go to the boss, and then when I inherit, I would have to pay a hefty tax bill on business value that I created.
I hope this is clear enough to understand. I am reluctant to put more detailed personal or actual information in this post.
Any help with clarifying my thinking and understanding would be greatly appreciated. I am worried about how to address these issues when talking to my boss.