Pay Plan

[bobdavis2010]

Hay guys I'm just trying to get some pay plan ideas for a new employee although he has knowledge of the parts business just new to us. We are a small dealer ship just my self and a parts advisor. The last advisor I had him on salary and commission/of his gross that worked out OK just couldn't keep him motivated. I want to keep the new guy motivated in selling accessories as that is a huge factor in our dept. Any ideas, Thanks guys.

[PartsPlant81]

Pay him hourly and then between 1.5 - 2 % of dept. gross profit.

[cville1987]

See in my store we only have 2 people in parts and we're open 11 hours a day and 6 hours every Saturday, so hourly is out of the question because god forbid someone get overtime. So I had to switch my guy to salary and commission. I pushed for a higher commission to be more in line with our other store that pays fairly. So mine is $1500 month and 3% of gross plus he gets a bonus that works like this....

if we hit $7500 gross he gets $50 the following monday, if we run higher groos then the bonus climbs $25 for every $1000 in gross over the $7500.

The other store starts theirs at $10,000 because they are much busier than we are. It needs to be somewhat difficult to reach but attainable. Hitting 10 at their store is a normal occurrance now, but hitting 7500 here is tough, but I'm not going to change it for now.

[steve@gmdealer]

Is that $7500 gross per week?

[cville1987]

Yes it is. We are a little store. Numbers are sad. But it gives them a goal, something to watch and judge how the department is doing and if we do well, they get a little extra in their pocket Monday morning. At the other store I've seen bonuses that hit $250+ in a week. I don't think this one has ever topped $125.

[Stevenspeaking]

What about something like 50% salary, 40% team commission, and the last 10% an individual incentive. This incentive can be set up to change with your current requirement of the employee. It could be anything from accessory sales to making it in on time for work. Just tie the 10% to what you need them to do.

[PartsPlant81]

What about something like 50% salary, 40% team commission, and the last 10% an individual incentive. This incentive can be set up to change with your current requirement of the employee. It could be anything from accessory sales to making it in on time for work. Just tie the 10% to what you need them to do.

The individual part is always a touchy subject because then you could create a negative work environment if one employee is hitting the incentive and others are not it will create some friction. It is always better to share the incentives and create more of a team environment.

[Mike Nicholes]

In making pay plans it is very helpful to have a detailed job description that you can use to define what is expected and what is being paid for. Let me know, anyone, if you need help in making a pay plan. It's free, emailed to you directly
Mike
miknik@aol.com

[Stevenspeaking]

The individual part is always a touchy subject because then you could create a negative work environment if one employee is hitting the incentive and others are not it will create some friction. It is always better to share the incentives and create more of a team environment.

Then make it a smaller portion only 2%. The idea is to have a tool in place that you can work with a person one on one. The tool is for what you as manager determine to be the need at the time. The team aspect is covered by the 40%. What if you have one person who doesn't quite carry their own weight in the team or even is only perceived that way by other employees. This could also create some friction. The idea is to give them some control over their own pay even if it a very small %.

Not all pay plans fit everyone across the board. Some require less pay with more time off. I see them as a negotiation that works for both parties in the end.

[PartsPlant81]

Then make it a smaller portion only 2%. The idea is to have a tool in place that you can work with a person one on one. The tool is for what you as manager determine to be the need at the time. The team aspect is covered by the 40%. What if you have one person who doesn't quite carry their own weight in the team or even is only perceived that way by other employees. This could also create some friction. The idea is to give them some control over their own pay even if it a very small %.

Not all pay plans fit everyone across the board. Some require less pay with more time off. I see them as a negotiation that works for both parties in the end.

I agree that not one plan fits all but you need to be careful with different incentives for multiple employees because then you create a classic case of a scenario of a flat rate shop without a dispatcher. There is always at least one technician getting all of the "gravy" work turning 90 hours a week when the other techs are only getting guarantee. Creates a hostile work environment.