Pay-for-Performance EXPLAINED by Mike Andes! [HOW P4P WORKS]

Hey everyone, it's Mike Annies. Welcome to p4p software.com. And today, I want to show you a demo of the software, show you exactly what you can expect once you become a member here at p4p software.com. So let's jump right into it.

Because the reason that you're probably starting with P4P is one of two things. One, you're tired of micromanaging, looking over people's shoulders, tired of people being lazy, tired of wondering why jobs take 10 hours when they should take three or four. That's the first reason.

The second reason is potentially that you want to just pay your employees more without having an arbitrary like rule of like, "Hey, ask me for a raise and I'll give you more money." Having some sort of performance-based pay structure. P4P, performance-based pay. That's exactly what we do. Pay for performance.

And so right now, I want to show you really quickly inside the software. Actually, show you the reason why P4P exists, and that is to be able to reward your top performers. This is what is going to lead to better retention for your team members. You're gonna keep your best players, as well as weeding out all the bad players, the ones that are lazy, are bringing down efficiency, or hurting your profitability.

So let's go and jump into it. This is in p4p software.com, and this is the report section. And we're going to run through this demo of how to get to this stage in terms of setting up your time cards on a daily basis. But inside of your reports, this is what I want to show you what is possible with P4P. And I just chose a random pay period here to show you, uh, one of our locations that has, you know, in this specific pay period, 824 hours worth of work completed. So there's a two, two weeks of each pay period is two weeks. They had 10 hours of overtime and $4,000 in performance dollars was doled out and paid out to the team, uh, because of P4P. If they would have just been at their hourly rate, base pay, it would have been $4,000 less. So instead of $19,000, it would have been like $15,000. So this is a substantial pay bump in this case, almost a 25, 30% increase in pay, simply because of P4P.

Let's look in deeper. Let's go ahead and open up a couple of these reports and see actually what people were making. Let's look at Tyler here. So you can see here, we have two weeks. He worked 28 hours the first week, no overtime hours. And if you multiply 28.4 by his base pay, he would have made $511. Now, this specific location pays $18 per hour. Keep that in mind.

Now, on P4P, which again, we pay one-third or 33% of labor revenue to the employees on P4P, he earned $694 in that same week. That means he had performance dollars of $183. Great, he made an extra $183 bucks because he was performing well and working efficiently.

The second week, he worked 32 hours, again, no overtime. And now this week, he earned $576 on base pay plus overtime, which obviously there's no overtime in this case, uh, which means he earned $548 on his total P4P. And earned more than that on his base pay. So his base pay was actually higher than his P4P in this case. There is no performance dollars. And we actually take into account the fact that you add up all the P4P and and all the base pay plus overtime for the entire pay period. These are the numbers you use. All right, we do not take the higher of this one and then the higher of this one. We simply add up over the whole pay period all the base pay plus overtime and all the P4P. And the difference here is the performance dollars. All right. So that's why you didn't get $183. You only got $155 because in week two of the pay period, he actually had more money being earned on the base pay plus overtime compared to P4P. So just keep in mind that P4P is calculated over the whole pay period. This is why the software exists is to do all this math for you so you don't have to think about it.

Let's keep moving on and go through some of these other employees. We got Austin here. He worked for 30 hours approximately both weeks. And check this out. He earned $540 on base pay and a thousand additional dollars, or sorry, a thousand dollars on P4P. Which means he earned literally twice as much, like $35 an hour if you do the math on this. Just take a thousand dollars, that's his total P4P for the week, divide that by 30. It's what, like 30, yeah, $35 an hour basically for that week. Same thing, very similar in week number two. Worked about 30, 31 hours. His base pay was about $549, and he earned a thousand dollars on P4P. And the reason I'm showing this, you can see here, he made performance dollars in both pay periods. In this case, and now performance dollars, he earned almost a thousand extra dollars on this one pay period because he was working hard, efficiently, he didn't go into overtime, and he was just crushing budgeted hours.

Let's go ahead and keep looking at a couple more. All right, this one's again, no overtime in this case. No one worked overtime. 70 hours for the whole pay period, about 35 hours per week. You can see here again, every single week we have, we're tracking the base pay plus overtime versus the total P4P. And at the end of the pay period, we're taking the higher of these two numbers. She's like, "What do I pay my employees?" You're simply going to pay them the higher of either base pay plus overtime or the total P4P at the end of the pay period. All right, at the end of the pay period, that's very key because they're going to be individual days where they might be really, really good on P4P and other days where they might make more on base pay plus overtime. It doesn't matter. At the end of the pay period, the software calculates everything to be able to tell you which of these two you need to pay your employees.

And let's try to find one that has overtime. Let's see if there's someone that worked overtime and I can show you because I know there's 10 hours for the whole pay period. So there's got to be someone in here that worked overtime. Uh, here we go. Okay, so check this out. We got Dylan here. Worked 32 hours the first week, and then 40 hours of regular hours. But he also worked 4.8 hours of overtime. So basically 45 hours because of that overtime. If you do his base pay plus overtime, it already calculates the fact that there's an extra 4.8 hours there that need to be paid at time and a half, or $27 an hour. So it's already being calculated. Now, because he worked overtime that second week, he ended up not only not getting performance dollars, he was actually making more on base pay plus overtime than he was on total P4P.

Now, when we look at the entire pay period, same thing applies. Even this first week, he made $74 in performance dollars. At the end of the pay period, when we look at all of his clocked hours and overtime, he earned $1,700 versus only $1,600 on P4P. So on this paycheck, he would earn $1,764. The likely reason that could have happened here is, you know, maybe there's bad weather, maybe he was just inefficient, maybe he's just still learning or he's getting trained up. Potentially a job went really bad and it caused them to go into overtime. And now employees don't want to go into overtime, and you as the owner don't want them to go into overtime. So the whole goal of P4P is getting people going in the same direction and being able to pay your top performers significantly amounts, amounts more money, like literally a thousand dollars more. Austin made on this one paycheck. Why? Because he didn't go into overtime. He worked very efficiently. He made sure that all his jobs got completed. He got in the door and out. He, I, I specifically know Austin came to work very early. He'd get all of his truck set up, all his equipment ready to go, and he was out the door immediately. He would pack a lunch to make sure that there was, you know, no gaps in his day. He'd ensure that he'd look at all his job notes before coming to work, so make sure his day was efficient. If he had a project, he would make sure that he looked at the project notes, the videos, make sure he had all the materials. There was no wasted time, no wasted motion. And when he got to the job, he worked hard. That individual deserves $30, $35. Now, they deserve more money than the person that's going to sit in the truck all day long and be on their phone and play, play them, you know, computer games or whatever they do on their phone, TikTok or whatever. He deserves more money. And that's what P4P allows you to do. People like Austin, that work really hard, are going to get rewarded for it. The people that just bumble along or aren't really, you know, motivated, they're going to hit base pay, and they're usually getting weeded out from the team because the team doesn't want to work with a low performer because it now affects their paycheck.

So I'm gonna go ahead and break down more about what P4P does, but I wanted to give you a quick glimpse at the whole reason why we're doing this, and that is to be able to give our team members that are really high performers, a remove that ceiling, remove that glass ceiling for so many that they hit, especially in labor-based jobs. Maybe the going rate is $15, $16 in your, in your area. They're, they're capped. They might earn $22, $23 if, if they work five years. Whereas with P4P, if they just crush it from day one, they're hard-working and efficient and really diligent and improving themselves, they can easily make $25, $26, $27, $28, $30, $35 an hour. And Austin literally had worked for us less than six months. That's the power of P4P, rewarding your hyper-performers.

Now, let's dig into the software. What makes all of this possible? So it's very easy to run your pay period at the end of the, or run payroll at the end of your pay period because literally you're going to submit your total amount of hours and what you're paying them in bonus. Because see the performance dollar over here, how you're actually going to submit this to payroll is you're going to submit as he works 60.95 hours. There's his, his base pay plus this is going to be a bonus on his paycheck. So whether you're running through QuickBooks or Gusto or some other, uh, payment processor and payroll processor, this is simply going to be a bonus. That's how you're able to do this. And that's why, as we'll get into later on, callbacks, yellow slips, etc., that's all what comes, this money right here, the performance dollars. That's what's on the table when it comes to P4P. This money can be removed because it's a bonus. And the bonus can be removed if there's callbacks, yellow slips. Like if next week, or every one of these weeks, Austin was, you know, doing damage cases and going really fast and messing stuff up in people's properties, I'm gonna take out the $900. I'm gonna take out, okay, you broke, uh, someone's windshield. That's gonna cost you $300. All right, he's no longer making $990, he's gonna make $690 because I take that $300 out of the performance dollars. That's the power of P4P. And everyone that's worried about, "Oh no, quality is gonna be so bad." No, trust me. When guys know that they're making $999, $990 extra on a paycheck, they're making sure they don't make damage cases or callbacks because those are where the deductions start to happen and remove that bonus from their paycheck.

Before we get too much in the weeds about P4P inside the software, I want to show on the whiteboard sort of a basic breakdown of P4P. And I hope that it helps you understand why the software is important because the manual calculation of this, of this, is absolutely possible. You can do it on Excel spreadsheets and all the rest of it. But I want to explain why we made this software to make this process a lot easier so you're not doing math every single day. Because honestly, P4P, pay for performance, sounds great in theory. But if it takes you longer to calculate things than it does the savings every single day from the crew, it's not worth it. It's a waste of your time. And so the software is designed to save all of this manual entry. I'm going to explain how it works on a manual perspective, and then we'll jump into the software and just see how efficient it is at running this.

So you, in less than one minute per day per employee, can run the math required for P4P. Which means if you have 10 employees, 10 minutes per day, you should be able to do all the math that is required to run pay for performance. At the end of the paycheck, like we just showed you, take the higher of either base pay plus overtime or P4P and send that to your payroll software system or your accountant, whoever's running your payroll.

Let's go ahead and look at this. This is exactly what we show our team out on the front lines and inside of p4p software.com training. There's a free course and a ton of tutorials about the nitty-gritty of detailing exactly how to calculate a lot of this stuff. But let me do a higher overview just for this demo sake so you can understand more as we go into the software.

So on this given week, now this is just one week. We're going to assume this pay period is just one week long. Typically, we do two weeks in a pay period. But let's just assume it's one for the sake of this 40-hour week. What's going to happen every single day is you're going to calculate P4P and base pay. P4P, again, is simply a percentage of the labor revenue that is generated by the crew. So if someone earns $100, and I'm giving them 33% of labor revenue, they'd get $33 on their paycheck. Okay? Now, remember that this is labor revenue. This is not gross revenue. This is labor revenue. Now, and the reason that's important is because gross revenue includes things like material markup, estimate fees, dump fees, other things that you might tack on. But the actual labor revenue, that's what they get a percentage of on P4P. So you can literally look at this like, "Okay, well, on Monday, if I take $180, multiply that by three because they're giving them a 33%, I could basically calculate exactly. Okay, what is it? 5 times 3, 240. That's $540. I know right off the bat that this employee made $540 in labor revenue for the business. The reason I know that is because they're getting one-third of that on P4P. So on Monday, they made $180. Now, they only made $144 on base pay. Now, the reason about is because they worked eight hours. Eight hours multiplied in this case, the base pay, we're assuming is $18 per hour. So I could do here is I could assume that the base pay here is $18 per hour, and I could also assume here that we're giving a 33% of labor revenue to the employee. So on the bottom here, we're going to take of this example, assuming they work eight every single day, keeps the math really simple on the whiteboard. Keep in mind that the downloadable app on iOS and Android will allow your employees to clock in and out every single day. So that way, this is automatically calculated. You don't have to worry about calculating base pay because they're going to clock in at the beginning of the day, go to your CRM app, and do all their jobs. At the end of the day, they're going to clock out, and this will automatically calculate their base pay and create the time card for you to be able to just enter this number. And I'll show you that in the software. It's very, very simple.

But as we go throughout the week, this specific employee did the next day to only $140 on P4P versus $144 on base pay. Why? Maybe it was raining, maybe they were slow that day, maybe they aren't feeling very good, maybe they had to go do a callback, there was a yellow slip, they had to go back to the customer's property and fix a mistake, took some time off of, you know, what they would otherwise have earned on P4P. So that's why it's red here. It's lower than base pay. Then on Wednesday, they just crush it again. They do a very good job on P4P. They earn $600 in labor revenue for the business, therefore they get $200. They literally earn $56 extra on this given day. Again, we're assuming eight hours each day is being worked on base pay. Now, if there was overtime in addition to the 40 hours that's worked in this week, again, the software automatically calculates the amount of hours above 40 and makes sure that time is tacked on to this total right here. Because at the end of the day, all I care about is the total of P4P and the total of base pay at the end of the pay period. Then I take the higher of those two numbers. And that's what I give to my employee.

So in this case, for example, on Friday, I had a really bad day, potentially made a damage case, maybe had a manual adjustment down like because they damaged something. And then you have to take off $50 because they damaged something of the client's property. Maybe they ran over a garden hose and broke it. And okay, well, we gotta replace it. $50. Maybe that was a manual deduction. Therefore, they did not do well on Friday. Again, all I'm doing every single day is making, taking the time card for base pay and P4P. That's it. At the end of the pay period, you're going to calculate all these things together and have $850 for P4P all added up, and $720 if you added up all the base pay plus overtime. Again, if there's more hours and they're less efficient, this number will be higher. If they had to go into overtime, that number would be higher. At the end of the pay period, all I'm doing is looking at what is the higher of these two numbers, P4P versus overtime of P4P versus a base pay. In this case, P4P is higher than base pay by an amount of $130. We call this performance dollars. So there's $130 of performance pay, performance dollars on this given pay period. The employee is able to make an extra $130 because they're efficient and they are profitable. Now, if they would have made more damage cases, if they would have had yellow slips and messed up things on the property and took a bunch of time, that $130 dollars is on the table to be taken away from them if mistakes were made. That's how you ensure that quality is retained. And it also ensures that you stay compliant with your local and your state and government laws is that you do not guarantee. This is bonus. There's an extra amount that is taken away in the event of damage cases or yellow slips and callbacks. You never take away money from their actual paycheck, which is guaranteed. The base pay is always guaranteed. But the performance dollars is on the table. And it makes sense. If you're getting more money on bonus for performance, it makes sense you shouldn't have been, like, messing things up or doing a sloppy job. So this money is to make sure that you retain the quality standard that you want for your company.

Now, this is a very simplistic way of looking at how to calculate P4P. We show this to our crew to be able to, for them to understand how this is all calculated. At the end of the day, this is what's happening. Total budget hours completed multiplied by your hourly rate that you're charging the customer equals the total labor revenue that is earned for that employee. So if you do not use budget hours, all you need to know is how much labor revenue you're charging to any given job. This is what we call simple mode versus the advanced mode inside of p4p software.com. If you do not know your budget hours or your estimated time on every single job, you can simply pop in the total labor revenue that is is on the estimate. So if you have a $10,000 job and you know $4,000 of it is labor, $6,000 of that is materials, you could just put $4,000 in simple mode inside the software. But ideally, you know budgeted hours because if you know budgeted hours, you're going to have some really cool metrics and data down the road to compare if someone's efficiency based on their budget hours versus their clocked hours. So ideally, all your jobs do have budget hours and you're able to use the advanced mode of P4P. Don't worry about that down the road. Inside the tutorials on the P4P software.com training, there's a bunch of videos about the difference between simple mode versus advanced mode and how you'll run the software slightly differently. Basically, advanced mode is you have budget hours on all your jobs.

Now, based upon the total labor revenue that we have, we can then multiply that by the amount that we're giving, the percentage that we're giving to the employee. Now, we're going to assume this is 33% that we're giving one-third of the labor revenue to the employee. If we do that math, now we go to crew daily earnings. So let's go ahead and run some actual numbers. Let's assume that there was six total budget hours completed in one day's worth of work. This could be a mowing route, this could be a project, this could be whatever, cleanup, trimming a bush, whatever it is. Total budget hours completed today, let's just assume it's six budget hours. So if I take six budget hours, multiply by what I'm charging the customer per hour, which is $80, that would mean my total labor revenue in this case is $480. Now, if I take that $480 and I multiply by one-third that I'm paying my employees, 33%, that's going to equal $160. What that means is there was $480 worth of labor revenue. I'm giving one-third of that to my employees, which means they're going to earn $160 for this day, no matter what.

Now, we can actually break this down to what are they actually making per hour then? Well, if you take the crew daily earnings, and we're assuming in this case it's a solo one-man crew. If there's two, you would then divide by how many individuals there's obviously, uh, on the crew. But daily crew, the crew's daily earnings divided by the total clocked hours. Now, this, this right here is where the money is made on P4P and it's how quickly can you earn this money? And we work as efficiently as possible because that's going to give you how much you earn per hour. Because look, if I know I'm earning $160 for the day as an employee, and it takes me eight hours to get the job done, like I clock in for eight hours, I clock in at 8 o'clock and I clocked out at 4 PM. I worked for eight hours. That would mean if I take $160 that I get for this, this work that was completed, divide that by eight, that's $20 per hour. I just earned $20 per hour.

Now, if I can do that same amount of work because I'm efficient, I make sure I show up on time, I make sure that I have a plan in place, I've looked at my job notes, I'm very efficient, I make sure I don't have to do any callbacks, I talk to the customer and do a walkthrough, all of those things. If I do the job in six budget hours instead of eight, sorry, if I do it in six clocked hours, and instead of clocking out at 4 PM, I get back at 2 PM. So I clock in at 8, clock out at 2 PM, that's six clocked hours. Guess what? $160. I still get the same $160. I completed the job. Let's go. $160 divided by six. That employee has now made almost $27 per hour because they figured out to be how to be more efficient. And this is how you pay your top people more money is you're allowing them to make sure that they can be as efficient as and profitable as they possibly can be, and they get rewarded for it. Because this person that gets done in six hours, they either A, could be off early for the day, or B, they might go get another couple jobs done instead of getting, you know, six budget hours completed for, they get seven or eight. So there's always ways to make more money for your top performers using P4P.

The software allows you to be able to have the employees clock in and out, and then all you have to do is every day enter this one number, and that is how much labor revenue did that employee earn. Because if I know how much that total labor revenue was, the software will do all the other math. It'll calculate overtime, it'll calculate at the end of the pay period which one's higher, it'll calculate when you're doing deductions because of manual adjustments and damage cases, or maybe there's non-billable hours like they're doing shop maintenance and things like that. You're allowed to do a manual adjustment higher. It's going to do all of that math for you. So at the end of the pay period, as long as every single day you have simply added in how much labor revenue they earned, you will be able to just give that report to your payroll processor or your accountant or your tax bookkeeper, and they'll run payroll for you just fine. There'll be a bonus on it for performance dollars, and your employees will absolutely love it.

The thing that the software does is it's going to do all of this very quickly and seamlessly for you, whether it be recurring jobs or a long one, two week, three week, five week. We've had hundred thousand dollar projects before being done inside of P4P. It's absolutely possible. It's just a matter of learning the system and then making sure that you have labor revenue defined for each job, ideally budgeted hours and your hourly rate.

So let's go jump into the software. I'm going to show just how this is broken down and all you need to do on a daily basis for this all to work. Because this gets complicated in numbers and math and ratios and you got to do all the math in your head. You don't need to do that. Literally, all you need to do is enter in one number every single day for your employees. They clock in and out on the app, that creates the time card for you. You take that time card and you pop a number in. If you do that every single day, at the end of the pay period, the software does all the math for you. And furthermore, it takes that math, creates analytical data, and then tells the employee how they can improve. It tells them, "Hey, look, on these specific days, here's what you could have done to improve. Here's the employees that you should work with because it's going to allow you to become more efficient because they're crushing it on their budget hours. They've been here for a long time. They're making a lot of money. You should go talk to them." It's going to give them feedback that you kind of want to say, but you don't really can't. You can't, like, you're their boss and it wouldn't take it well from you. But the software can tell them how to be more efficient. The software can tell them where they can improve. If their quality is being low and they're having a lot of damage cases and yellow slips, the software can do all of that for you.

So let's jump into the software and show you what you need to do on a daily basis for each employee. Again, this should take you less than one minute per employee per day inside the software, and it will do all this math and back-end work for you.

All right, so now inside the software, the time cards tab. And this is going to be what you, you will see the day after each, each day is completed. So let's say, for example, we're doing this on February the 17th. This would have been now February 18th is when we're running the time cards. So the day after the work is completed, I'm going to go in here, I'm going to run my time cards and complete P4P. It's very, very quick. The reason it's quick is because Lee Park, and this for example, would have clocked in already on the mobile app by clocking in at the beginning of the day and clocking out at the end of the day. If there's any breaks, you can also do that from his mobile app. It'll calculate how many clocked hours. You can see here how many clocked hours he has on the schedule from yesterday as an amount of time that he was actually punched in. And you have to track this to be compliant with state and federal law because you got to track for overtime, you got to track for things like workers' compensation, you've got to track clocked hours. But when they do this, it creates a time card automatically inside of the software.

Now, if they don't have the mobile app, or you want to manually create a time card, you can absolutely do that manually by creating the time card. But I highly recommend having your employees download the app so that way you're able to get the time cards automatically generated for you. Then all you need to do is add a few bits of information.

Now, this is going to be a, a route. This is going to be someone that has multiple stops in one day. And then we'll show you how the projects work. So this, for example, let's just go ahead and hop into a software system and figure out where do I get the, the numbers? Right, I know what my hourly rate is. I'm gonna charge $80 per hour. But where's my budget hours? So I'm going to go and hop into Service Autopilot. This works for just about any software system as long as you track your budget hours, you'll be fine.

Now, I'm going to go ahead and select all the jobs that were completed on this specific mowing route in this case. It was with Austin. But let's go ahead and look at it and I'm going to click show stats. He completed 6.72 budget hours on this specific day, completed $537 worth of revenue. I'm not really looking at that though. I'm looking at the budget hours because I want to make sure it's all labor. All right, again, budget hours multiplied by your hourly rate to the customer will equal your total labor revenue.

Let's hop back into P4P. All I need to do right now is go ahead and enter in how many budget hours, which in this case was, I completely forgot already. 6.72. Let's hop into here. 6.72. All right, you'll see it already did the math of how much labor revenue was was calculated. And if that's ever different than what's inside your software, keep in mind that this is tracking only the labor revenue. It is not tracking all the other material markups, chemical fees, dumping fees, estimate fees you might be tacking on. So that's why sometimes this labor revenue number might not necessarily match what's inside your CRM in terms of billing out to the customer. Okay. Now, if there was two crew members, this would be really simple. You could just add two here and do all the math for you. Let's assume that Lee did this all, this project by himself. We'll go ahead and click save changes. And everything will be, you'll see it goes from orange where it says information needed to now information completed. That's all you need to do each day. And if you do that every single day of the pay period, that's it. It's very, very simple.

Now, if there's other layers, let's go ahead and look at that. Because what happens if I want to add an additional rate? Like some of my work is being done at $80, some of it is being done at $60 or $70. You can have different types of services. You can absolutely do that. At an additional rate, you could add a project. I'm going to show you that in a second. You can add a project management bonus. This allows you to be able to have very highly skilled employees and pay them, uh, much more than your, the average worker. Because everyone's like, "P4P, that means if two people go there, they're getting paid the same amount because they split the labor revenue." You're right. But with project management, you're able to say, "Okay, if there's jobs that are over a certain amount of budget hours, like let's just call it 50 budget hours, I'm going to assign $2 per budget hour as a project management bonus." For a 50-hour job, that's $100. At the end of the paycheck, you could literally tack on as a project management bonus to the person that did all of the walkthroughs with the customer, planned the job, got there early, and set up all the equipment, all the rest of it. So project management bonus, very important to be able to pay your guys a lot more that are highly skilled and have very skilled labor, as well as have a lot of experience. Because if they're more experienced, they should be managing these type of jobs.

A trainer bonus. Same thing. If someone's training, they can give them a bonus. A manual adjustment, either positive or negative. Positive would be things like referral bonuses, upsell bonuses you give your crew, or potentially even manual adjustments for things like non-revenue producing tasks, like sharpening blades or equipment maintenance or, uh, maintenance around the shop space. You can do that. Add an internal note. Add a note to the employee so they can see it. This is useful for giving a note to the employee about what their yellow slip or the deduction was on P4P. Very important if you're taking off $30 because they broke something on a customer's property, give them a note. You can also add a break here if they didn't do it already inside of their, uh, clocking in and clocking out. But ultimately, those things are one-off that happen occasionally. Typically, you're literally just going to put your hourly rate and your budget hours for the day, and you're good. That's it.

Then from here, you would generate your payrolls. And once we click generate payrolls, we can then click over here to payrolls and we're going to be able to see Lee Park, his score. And there's a whole video in the tutorial section about what score means. And there's no manual adjustments. Very, very simple. If you scroll down here, you can see his breakdown. He did seven hours and 17 minutes in the shift length, his hourly rate, budget hours, his team pay was $177 on P4P for P4P. And then his clocked hours was only $131. So he literally earned an extra, was it $40, $46 because of P4P. All right, he earned $177 on P4P versus if he would have just got base pay at $18 per hour on these clocked hours, he would have only earned $131. So again, this is doing it all in the back end. You don't have to think about this. You could just do this for all your employees very, very quickly. One time card every single day. They'd all show up right here, and you just go one right after the other, generate the payrolls. Then you go to payrolls, you'd see all this information, and then you click send reports. When you send the reports, you're able to send to all the, all the employees, to just your managers, or to the entire crew, or to just specific individual employees, just in case you're trying to run tests on somebody or you don't want them to see the reports quite yet. If you're running these numbers in the background, you can absolutely do that.

All right, so that is how a time card is created. It's very, very simple. And then using that math, using that data, this is what's so cool about the software. If I jump back into my home, this is the dashboard. I want to walk you through the dashboard and show you how it is used. At the very top, you have your, uh, your scorecard or your employee efficiency. This is your scoreboard. And the employees on their mobile app, they do see the top three people. The reason this is important is that they don't get disillusioned and think that P4P is some like whimsical, you're lying through your teeth, never attainable thing. They're going to see the top three people like, "Man, they're making $22, $23 an hour. If I'm making $16, $17, there's possibility to make more money in this business." If I'm brand new to a company and I can see the top three people and like, "Man, they're making five, six, seven dollars more per hour than me, I can absolutely do what they're doing every single day. I watch what they do. I emulate what they're doing with their work ethic." This is why we show the top three.

Now, if you want to see as the manager on the desktop version, I can click complete list and see all of the employees and what they're getting paid. I can also see over the course of time how much they've been, what they've been doing, what their numbers are. So let's go ahead and open up, let's say Kent here. So I can see over the course of time what his dollars per hour has been, what his labor revenue has been, and track it and see if he's performing well, if he's improving, or if he's decreasing in performance. These are things that are really, really valuable. Obviously, during the winter in the seasonal months, you're gonna have a decrease in efficiency. But during those summer months, they can make a lot more money. They're able to see these, these, uh, graphs as well on their individual mobile app for themselves. But you're able to see it for every single employee over time to be able to see what, who your top performers are.

Down below, these are the monthly metrics for your entire team. The effective hourly rate, which is again, I'll explain in the tutorials, explain what these numbers are and how to track them. And it's all being done automatically tracking. But then interpreting this data is extremely important. That's why I get really excited when it comes to 3D notifications, data-driven decisions, where we're actually going to tell you what you should be doing inside your business based upon these numbers.

Now, efficiencies down here. This is really, really bad efficiency. Why? Because they're in the middle of winter, very low efficiency. They're moving things right now. They're getting a bunch of equipment, they're doing a lot of equipment maintenance. So this is your weekly and monthly, so rolling seven and 30-day efficiency scores. And these numbers here is basically just your budget hours divided by your clocked hours. So budget hours or jobs have been completed divided by the clocked hours, the amount of work that was actually clocked on the P4P app. So that allows you to be able to track how efficient are you? During really efficient times, you might be at 95, 100, 105% efficiency, where you're getting more budget hours completed each day than the amount of clocked hours on the schedule. Like that's insane. That's when guys are making $35, $40 an hour. During the winter, as you can see, they're only making $20, $21, $22 because there's just not as much opportunity to crush budgeted hours and their efficiency on average is much lower because they just started training. I know specifically this location, they started training 10 more employees, so it's really slowed them down because they're getting ready for spring rush. This is again, all stuff that I can know because of the math I'm getting from this data.

Now, the part that I'm really excited is the notifications. Because all of this information is fine, but what, what do you use it for? How is it useful in your business? The notifications is where it's at. There's two different types of notifications for the employees and for you as the manager. Notifications that come to you as the manager are going to come to the top right here in the under the bell. And it's going to tell you exactly what you should be doing based upon new team members that might need encouragement, team members that are declining in performance, uh, team members that should work with other team members in order to be able to learn and grow, uh, team members that literally have never done a yellow slip for two, three months and they should have recognition. These are going to give you the exactly what you should do. For example, this says, "Last week, your top performer was Will." Employ, this is a test account. "Your lowest performer was Will." Employ a different employee. "It will be good to mix up the crews and see if the low performers can learn from the more efficient crew team members." So these are the type of notifications you're going to get on a daily basis. For example, "Lonnie Patterson's first pay period just ended. It is recommended to go over their paycheck with them and explain P4P versus hourly base. Make sure they ask questions and understand how to make more money. It is important. It is common that the first two to three paychecks are at base pay due to figuring out systems, jobs, efficient methods, etc. Encourage them to talk to the highest performers." These are the type of notifications that you might forget about. And this is why most people think P4P doesn't work because notifications like this don't come in. They're just trying to do this on a spreadsheet or like on, you know, a notebook. And this is going to tell you, "Hey, look, this person is new and they haven't hit, they haven't gone above base pay and made any performance dollars for their first three paychecks. You need to talk to them. Understand what they're going through. Ask them if they have questions. Point them to other people that might be able to help them improve." These are the type of data points that you as a manager need to have. And if you want to ever let your business be ran without you and hand it off to a GM, this is the type of information they need to ensure that your team and your culture is built around P4P and people trust the system.

Now, the other part that is brand new, it's so cool. 3D again stands for Data Driven Decisions. We take all this data and then we make the decision analytics that you need to be able to make the right decision in the company. So this is now the ability to have these notifications go into your employees telling them how they can improve, how they can be more efficient, who they should work with to be able to make sure they make more money, giving them tips to reduce yellow slips and callbacks and tracking the math and say, "Hey, like you're crushing it this month. You're doing that on average $3 more per hour than last month." Or maybe you're declining over the past five weeks, your performance is degrading. Maybe it's a good time to check in with your manager, ask how you can improve, talk to other high performers. These are the type of notifications that again, you want to say to people, but it just is, you know, politically incorrect. And you're like, "I know it's the right thing. I know it's going to be better for them. They'll make more money." But it's like, "How do I tell someone that they're not, they're not efficient and they're not getting out of the truck fast enough? Like they're on their phone too much?" Let the math do it for you. And let the notifications be the thing that tells them exactly what to do.

So under the notifications, you're gonna see all of these notifications come in. There's none pending right now. But what will happen is you can accept them or you can decline these notifications. You can see all these ones are being accepted. Now, I can almost hear some people saying, "Well, I do projects. I can't do P4P. It only works for recurring services and maintenance and we have a route." Well, let me go ahead and show you the real power of P4P software, and that is the ability to do long projects, multi-day jobs, very efficiently and through P4P. So what we're going to go ahead and do is do a large job. Let's go.

ahead and just call it Mike Andes. I'm going to do a paver patio and let's do like a hundred budget hours and our labor rate is going to be 100, which means it does the math for us. It's gonna be ten thousand dollars of Labor Revenue. So I'm gonna go ahead and submit that. It's created the project. It is now an active project.

All right, if I go back to my home here, you can see on my dial I have 100 budget hours assigned to Mike Andy's job and there's none but no budgeted uh time has been allocated. Why? Because no one's clocked into this job. There's no time that's been allocated.

So let's go back to our time cards and let's go ahead and go to the day that we had Lee working. Let's go ahead and go to the 17th. This is the day we had Lee working. Let's go and go to the 18th though. Let's pretend this is the next day. He's gonna start working on Mike Andy's project. So let's go ahead and Lee again would have clocked in already on his phone. This would have already been generated, but it's going to just manually create this time card for the sake of this example. And you might occasionally have to do manual time cards if people forget to clock in or something like that. But let's go ahead and create a time card for the 18th and see what happens when you have a large project because the last thing that you want to do in P4P is you have like six or seven employees that have all kind of worked different amounts of hours at the job and it's like, well, how do I split up the labor revenue? How do I split up the money? Because I already know based on on ten thousand dollars in labor revenue, I already know that one third of that's going to the employees, 3,333 is going to the employees. But how do I break that up when someone worked there eight hours, someone else worked there 24 hours, someone else worked there 30 hours, someone else worked there at 14 hours? Like, how do I do all the math? That's what the software can do for you.

Because now, guess what? When you get a time card for a project and all they did was work at a project all day long, you can literally just add, add a project. And then from this, this drop down, select any active jobs. And that's all you need to do. How many hours do they work for the job? Well, they worked the entire seven hours at that project. That way, again, you could have them do six or seven hours here and then work, add and add another route and or another project they went to. You can absolutely do very flexible in your time cards. But if this is like they went and worked at the project this day, this is all you would have to do. You don't have to do your hourly rate. You don't have to do budget hours because that's already figured into the project. So I just click save and there you have it.

So if you're doing routes like we showed before, you just need one number, the labor revenue, and that's all calculated through budget hours, time your hourly rate. If you do not have budget hours, you can do simple mode inside of P4P and just manually enter in the labor revenue. Now, again, if it's projects, it's very simple. I'm going to allocate these seven hours to that project. At the end of the project, when the project is completed, I just need to mark the project complete and it'll break all the P4P up appropriately to all the different employees that were on the job site.

Okay, so if I go ahead and I go back to my projects, if I'm complete the job though, all I do is go ahead and edit. I'm going to change the status of the project to being completed. As soon as I do this, all the P4P will be broken up to whoever was on the job based upon their percentage. So if someone was there 50% of the time, they're gonna get 50% of the 3,333. If they were there for 18% of the time, they're going to 18% of that 3,333. It will do all the math for you. And P4P on a big, big project is broken up when the project is marked complete because then it knows exactly what percentage of money it goes to each employee that was on the job site.

So I hope that was helpful. Now, before I let you go, a lot of people will doubt people like, there's no way you can pay 25 or 30 per hour for what everyone else is paying 18 or 20 per hour. For the reason that you're able to pay more on P4P and the reason at the same time you're able to be more profitable is because waste is reduced. Sitting in trucks for 10 minutes before every job adds up. Being on your phone for three or four minutes after every job adds up. Stopping five times at a gas station a day adds up. These are all things that are removed when the incentive for the employee is based upon completion of the work and not just punching in more hours on the time clock. It makes no sense to pay someone by the hour because they want the job to take longer because the longer the job takes, the more money they make. Whereas when for you as the owner, the shorter the job takes, the more money you make. Whereas with P4P, instead of paying someone by the hour where they're trying to make it go longer, you're trying to make it shorter. Now everyone wants to make the job go faster and more efficiently and more profitably because everyone makes more money. That's how you're able to make more money as an owner and be able to pay more to your employees on P4P.

For me personally, P4P changed my whole relationship with the business, with my employees, my managers because I don't have to micromanage people anymore. If I see them on their phone, that's fine. Like, unless they're hitting base pay, I don't care because it's up to them. If they want to work harder, they'll make more money. If they want to be more efficient, they'll make more money. If they don't, that's up to them. The only reason they'll ever get cut from the team and it'll become a problem if they constantly are always hitting base pay because that's affecting everyone else's pay. And guess what? When you have a yellow slip system, when you have P4P, everyone inside the company wants to make more money. They want to be more efficient. And so when they're working with someone else, they bring each other up. And you're going to weed out all the low performers fast because no one wants to work with someone that's taking a bunch of breaks when the high performer is trying to make more money and be efficient and jump out of the truck quickly. And so you're going to weed out the low performers quickly. And I guarantee you, if you switch to P4P, you're probably going to lose 20, 30% of your employees that are your lowest performers that you thought were so great because they worked hard around you or they, you know, did an extra little extra on the shop or you went hunting on the weekends together so they got more money. It makes no sense. Whereas when you create a meritocracy by which the highest performers make more money and the harder you work, the more money you make, it allows more profit for the business and it allows the highest performers to make more money.

For me personally, we've now been able to have health insurance. We've been able to add paid time off, two weeks a year, gym reimbursement programs, a profit sharing program for our frontline team members to be able to give the profits back to them because there's just so much less waste in the business. There's money to do these things. I guarantee you that your highest performers are producing two to three times as much profit than your lowest performers and yet they might make two or three dollars more per hour or four dollars more per hour. It's crazy. Whereas when you give them the incentive like, hey, you can go for it, you can work as hard as you want and you can make more money, just watch your efficiency grow and remove the the notion you go like, check on your guys or track their trucks or check on their project to make sure they're working hard or like see what they're doing on their phone. And that's it's just garbage. It's micromanagement. No good employee wants to be under a manager that's micromanaging them. And no good manager spends their time if they're smart. No one wants to actually be like micromanaging their team. So it transformed my business. I truly believe it'll do the same thing for you.

It's not easy to switch. You're gonna have to figure out budget hours. You're gonna figure out how to break down labor revenue inside of your estimates. That might be difficult for you right now. I promise you, it'll change your business forever. And trust me, do not cut take shortcuts. Don't try to be like, oh, I'm not going to have them clock in and out on the app. I'm just going to do all the manual time cards. Well, that's gonna almost double the amount of time every day it takes you to run inside the software. Just have them punch at the beginning of the day. You have a time card and you allocate those hours either towards a project or you put in the amount of budget hours for a route. And you'll run the payroll. They send them the report. They see how much they're making. They're able to actively engage with, oh man, I worked really hard today and I earned an extra 50, 60 bucks on P4P. Let's go. Oh man, yesterday I dragged my feet. I was letting things get to me in my head. I let the weather get to me. I I didn't earn any P4P. In fact, I actually need more base than P4P and that's going to kind of hurt me for this paycheck. These are the type of things that now you can rely on your team. Be on the same going the same direction as you. Um, and I just truly believe P4P will be revolutionary for you and your business.

At P4Psoftware.com, we put every dollar right now into development. In fact, more than what we make, far beyond what we make, we put back into the product. Um, this is not a mass appeal of product. There's not thousands of users. We only have a couple hundred users using this and we put every dollar back into making the product better, improving the AI, artificial intelligence to get better notifications and improving down the road integrations with copilotcrm.com. I really look forward to seeing you inside of P4P and hearing in a year or two just how much of a transformative effect P4P had for your business.