by mbowers » Mon Apr 17, 2006 1:40 pm
A word on payplans: ALL payplans start with some target income in mind. The manager who creates the payplan will always have an idea what the total annual compensation should be.
The easy and obvious way to hit the target is with a straight salary, no commissions or incentives.
That's what I'd recommend for the office staff.
If you really want to add an incentive, keep it simple and keep it relatively small - 5% or less of total income.
Whatever achievement you decide to incentivize, it should be important to the dealership and under the employee's control. So a title clerk might be paid $13/hour plus $100 per month when all titles are sent to customers within 30 days.
The office manager payplans we have collected follow that pattern for the most part. Total pay is mostly salary with some incentive based on dealership performance (net income).
Proof of the idea that ALL payplans start with some target income in mind is evident in the office manager payplans I've reviewed. The percentage of the net paid to the office manager ranges from .3% to 3% and literally every tenth of a point in between. That's to make sure the total pay stays within a predetermined range.
How much should your office manager be paid? Figure out what the job is worth to the dealership and then back into the payplan. If the target is $50,000 a year, pay $40,000 in salary and up to $10,000 as some percentage of the store's anticipated net income.