The best course of action may be to ask you Gran to tell the boss how you feel about the situation seeing as she has some kind of relationship with him. In addition, I would recommend that you write a letter as 999tigger suggested, as face-to-face you may get upset about the situation and say something you might regret later on. In the letter you could say that, in future, nothing of the kind would happen again, you realise why having your hands in your pockets may come across as lazy, and that you are very motivated to prove that you would be a valuable employee.
If there is still nothing that can be done then it would be time to move on and look elsewhere.
Out of interest, were you given a contract?