Pay Plan questions

[Jeepman55]

Gentlemen,

I have inherited some pay plans that were instituted by DP before we became patners. Give me some valid input on...

1) Fixed Ops Mgr
2) Service Mgr

Always hate to ochange pay plans but these are rich plans and fixed is a net loser.

[baddjonez]

There are so many ways to pay it is hard to say without some particulars. What kind of store do you have, domestic, Japanese, and European all operate differntly.

Shop size, tech number, hours produced, ratio cpl to warranty.

If it is a net loser why? New building, low service volume, TOO HIGH PAY PLANS FOR EVERYONE?

I am sure we can give you something. It is going to be based upon what you want them to do or change.

[$teve]

An effective pay plan should...
1. Focus on the goals of the business improved profitability and customer satisfaction
2. be easy to track and administer
3. be competitive to attract and retain high-perfroming employees
4. be flexible, allowing for periodic "bonus" to maintain enthisiasm or provide emphasis
EX:
Base - approx. 30% of monthly pay. $X per Labor Hour or % of Selling Gross (Gross - Svc Dept. Controllable Expenses).

CSI/Warranty - if above target, add 50% to Selling Gross Incentive. Ditto, Warranty. If both good, Selling Gross % is doubled (Approx 30% of mthly pay)

Bonuses - for setting records; e.g., $750 for beating last year's monthly profitability, record month in profitability, record month in customer satisfaction. Approx 10% of mthly pay.


Hope this helps...


------------------
$teve

[Jeepman55]

We are domestic dual. Have 7 techs currently plus 2 CAP students. Fixed ops mgr 2 advisors plus parts mgr and 1 counterperson. Pay plans are a problem as they are % of gross. Dealership has been challenged for some time but we have turned the corner since new team has taken over. Need to implement some strong processes but I want to have the foundation in place either with current Mgrs or new ones. Need to come up with realistic pay plan for ones I have or ones I must go get.

[baddjonez]

If you did not want to move away from what you have now just can adjust the % based upon reaching realistic goals. Sometimes I back into it based upon shop capacity to set my goals for my team. If they hit their goals they get their full %. If not they get less. Always remember to dangle a carrot to bump the % too if they exceed thier numbers by a certain amount. At least they have a familiar plan and it won't rile them up too much.

[Strap22]

Read the Parts pay -plan in General Manager forum. Same kind works for Service and will get you in line. Understand if the employee is aggressive and sees that he can write his own pay check he may make more than the GM. If he does it will be because he earning every penny.

[jtr8178]

As a service manager, I want my pay based off of performance. As the store grows and becomes more profitable, give me more money. I suggest setting up something realistic to always have a carrot in front of the manager.

[fordpts]

7 techs? Why on earth would you have a Fixed mgr AND an parts mgr. That's usually an indicator in a small dealership either the parts manager does not know how to be one OR the Fixed op's mgr does not spend any time in parts. That's where I would look first.

Also, if fixed ops is a net loss, I would place the 2 students on flat rate with a bonus attached for productivity.

The advisors should have a pay plan based on labor and parts gross(not sales), CSI, and on a scale which increases with growth.

The service manager should have a similar plan as an advisor, however instead of the gross, use the net or selling gross after controllable expenses.

The Fixed ops mgr should be paid on the net of both the parts and service dept. along with incentives for growth and CSI as well.

Just my 2 cents

[KevvyG]

I agree with Fordpts. Now, are both fixed ops departments net losers?? I mean one of them has to be making money. If not, the first thing I would do is sit down with the 2 Managers and ask them exactly what they do. Identify where the fixed ops is bleeding out and put the onus on them to fix it. They have to understand that it is wrong for them to expect a big paycheque when they are losing money. How long do they think a store can run like that?