Hourly to flat-rate pay

[bam]

Most of my techs are paid the flat-rate hours they turn. I had three techs that I recently switched to flat-rate from hourly. One was my shop foreman, one was a trainee whom I gave six months to train being paid hourly before I made the switch and the other is my lube tech who was working at about 53% productivity before the change and is now at about 110%.

All three techs were very unhappy at the switch. My shop foreman quit, the trainee has given me his notice and the other tech is grumbling constantly about the change. Add to the mix the fact that finding qualified replacements is next to impossible and I'm struggling.

Paying techs for the hours they turn is better for my financial statement (gross profit retention) for sure but is this discontent with the flat-rate system a trend or isolated? How are you guys running your shops? What advice would you offer?

[texaslp]

I can understand the lube tech and the shop foreman being unhappy IF they have other duties. If so you might need to do a salary plus flat rate(not just to keep them happy but to be legal with Wage & Hour.)

[robc]

First, I would assume that in balance the guys are making money. We all know this business is up and down, but if they are averaging ok hours, then the problem is likely in their mindset of money management.

The new kid just needs to learn that aspect of the business. Some never learn.

The lube tech should be thrilled to be 110%. Shouldn't he be making more money now that before?

The foreman would be toughest unless he was paid a portion of the total shop FRH, otherwise he wasn't a foreman - he was a tech who wasn't be paid to babysit others.

------------------
** Rob, Editor Dealersedge/WD&S **
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[btk]

All of our technicians are hourly with a flat rate incentive. The pay plan is written so basically they are going to get paid which ever is higher. Their flat rate hours produced or their actual clock time.If the technician is worth anything the hourly guarantee is meaningless. I have never had to pay the guarantee because all the techs produce well over their actual time. But it does give a technician some piece of mind. The only techs that dont produce more than their actual are the lof guys but they are pretty close now because they now perform minor services and tire installations.

[bam]

The shop foreman was paid on shop productivity as well as flat-rate. He made more money for six of the eight weeks after the switch. He claimed he didn't like the stress of "having" to turn more hours than he ever did before.

The lube tech is consistently making more money. We have him performing most of the work he sells now -- flushes, etc. But when there are gaps in his schedule or cancellations, he sits and glares at the advisors as though they are to blame.

[btk]

Sounds like it is time to let them go! Techs are a dime a dozen and you can find plenty of good ones.
Good luck

[texaslp]

It may be time to let them go, HOWEVER I want to know where you are that techs are a dime a dozen????

[btk]

That was a joke-I was trying to see what response that comment would get. In todays
climate it is difficult to find good techs so having a hourly guarantee like a said in a previous post seems to take the mystery out of their paycheck-it is kind of a win-win for the tech.

[scotstrong]

What the foreman who left because he "couldn't take the 'stress' of having to turn more hours" may quickly find is that since he cannot find another foreman's job that he has to produce EVEN MORE than if he had stayed. Let's see how he likes the stress of that situation.

As an aside, after observing and working within the flat rate system for over 25 years, why does it produce so many cry babies and high-maintenance individuals compared to virtually any other type of production-based pay method?

Scot Strong

[This message has been edited by scotstrong (edited 08-04-2006).]

[texaslp]

BTK, sorry to hear you were joking. I was going to send you a dime .