DealersEdge Professional Forums

We are trying to revamp our pay plans for our counter personnel. Currently we pay them a salary every week and at the end of the month, they receive a bonus based on the parts sales from each of the fixed departments. The percentage is based on the length of their employment and their performance. Our problem is, are gross is down this year due to our wholesale business and that beings their earnings down. We are trying to find a better pay plan that is beneficial to both the employee and us. Any ideas? Does anyone group their fixed operations together and pay a percentage of the total gross? Your help would be appreciated.

What is the goal in changing pay plans? Also what are the organizational goals that you are trying to support with the pay plan? These are the things that need to be addressed in a pay plan for counterpeople. You mention that wholesale is down, is that a conscience decision or a market condition that is causing the decline? If you are letting the business go away then you need to pay for the items that are going to replace that (retail sales, service FRH's, etc). Decide where you want to go and build the pay plan on that. One thing to be careful of is that you know what you will be paying when success is achieved in the chosen area of emphasis. Nothing feels so "good" as a pay plan change because you are making to much when the goals are accomplished. Also by paying on sales or gross you create the type of tracking expense that causes this type of pay plan failure, when the factory or manager increases parts prices or markup all the employees paid on sales or gross get a raise as well.


Mike

You might want to consider a multi-part pay plan. Factors such as: What is the basic Counterman worth (cost to you in your market). 70% of the pay could be based on doing an average job (define average). 20% could be for increasing his/her sales by a specific amount (%) over average and the balance a bonus for exceeding a specific goal. Richard Owen has quite a bit of experience with pay plans for parts and service. he can be reached at rlomni@aol.com
Mike Nicholes

We have recently instituted a bonus plan for our tech/parts counter people based on Technician Satisfaction. We survey the techs with a simple, written 10 question survey monthly using a 0 - 4.0 scale rating our parts people, their attitudes, their ability to provide service to the technician and the techs perception of the parts department's contribution to dealership team effort. Our thoughts were that a happy tech is more productive, thus more profitable to the dealership.
It took some soul searching on my part to hold the parts department up in front of the mirror for inspection, but it has actually worked out much better than I thought it would. Our last "top box" score was 3.25 in June up from a 2.8 in April. Anyone interested in more details can contact me at weidner@richnet.net.

Mark Homesley

Ref: Parts Pay

Here in the UK...

My counter staff are on a basic salary paid weekly & also receive a monthly bonus based on department profits. A bonus scale is set for the parts operation. For every level of profit they achieve in the parts department they then recieve the bonus awarded to it. This system is superb. It ensures all parts counter staff are eager to make a sale & up sell as much as possible to retail customers over the counter. They also look for upsells on vehicles and as we introduced pre service inspections infront of the customer this has proved a great move. Our non parts booked on RO's is basically zero, if anything they are ruthless in what is booked out.

Contact me if you'd like to know more.