The tyranny of incremental payroll and how to escape it.

Imagine you're building a 2-kilometre-long perimeter wall. The foundation and rebar are already in, and you're in charge of the masons. They have to lay blocks, cast stiffeners, render both sides of the wall, and install a cast-concrete capping.

There are 10 persons on the mason team, and you estimate the entire job will take 100 days.

You've agreed on rates per square meter for the wall work, and per running meter for the capping.

Payroll is every two weeks.

So, every two weeks, you have to go out there and measure how much work has been done. This takes significant time, and each successive payroll becomes more complicated. The masons are doing four different operations, and each one is at a different stage of completion. To avoid double paying, you have to take scrupulous notes of exactly which sections you've already paid for.

Soon, you're spending three or four days just measuring work and putting it into a spreadsheet; time that you should be spending checking on quality.

But it gets worse.

You actually have no way to enforce quality.

At the end of every two weeks, the team leader is going to remind you that he has 10 people on his payroll, that he's done a lot of work (that you need to measure) and that you need to ensure his payroll is enough to cover his team. I guarantee that even if there are flaws in his work, he still is going to get paid. Maybe you'll hold back a little and say to him, “When you fix this rendering that's gone hollow on this section, I'll give you the balance.” But he'll get the bulk of his money. Maybe he's put up 200 meters of wall over the 2 weeks. You're going to pay him, even if some of it is not done right. After all, he's done a lot of work. And he has a lot of people to pay.

So instead of you supervising the contractor, it's the other way around. You're there to measure his work. And to ensure that he gets paid. That's your job.

When the wall is 90% done, then your real nightmare starts.

They're all kinds of defects all along the wall. They're even some sections that ought to be demolished and rebuilt, but that's unthinkable! (Think of the time you will lose, not to mention the wasting of materials.) And the portion of his pay that you may have withheld will NOT be sufficient to get him to go back and fix his issues. (He has ten guys to feed, remember?)

So the final insult is that after paying him to do incomplete work, you are now going to pay him new money to go back and fix it.

Here's how to fix the problem: divide your 2-kilometer wall into named chunks. If your payroll is every 2 weeks, divide the wall into lengths you think can be done by the team in three or four days max. In our example, we'll let this be 80 meters. You're going to end up with sections numbered 1 through 25. You must mark these sections on the ground.

Now, assign the team to do Section 1. Make it clear that they are NOT allowed to touch Section 2, until you have signed off on Section 1. Keep visiting them each day. Point out the defects, and remind them in an apologetic tone that “You do know that I won't be able to sign off on this section until all the defects are taken care of, right?”

To make your position even stronger, hire another team and put them on Section 2. The team that completes their section 100% will be the team to be assigned a new section.

Suddenly, you are in control. I guarantee that as you walk the section, the team lead will be walking beside you, noting all your comments and moving to remedy them immediately, so that he does not miss payroll.

Not only that, your payroll spreadsheet is now a breeze: you already know the total cost per section, so there's no measuring and computing. And keeping track of what you already paid is also much simpler.

Best of all, when you get the last section done, the job is done. No going back to fix stuff. It's just done.

C-Birt is built around this principle: split tasks into discrete chunks with precalculated rates, never (and I mean NEVER) pay for incomplete work, and relieve Project Managers of payroll preparation so they can do their real job: ensure work is done right the first time. As for project speed, the contractors themselves will ensure that: they are fully aware that if they fall behind, someone else will get their work.