By Bob Atwood
Are you meeting or beating NADA financial performance guidelines? If not, why not, and what can you do about it? Every department has its challenges. In service, maybe the marketing isn’t bringing in customers. Maybe there are delays at the parts counter. Or maybe the techs aren’t motivated to hustle. Just as financial incentives can pick up a salesman’s pace on the showroom floor, pay for performance can incentivize the service department.
Pay your people for what’s important to you. If you’re paying salary or hourly, and that’s all you’re paying, then your employees’ motivation is to come to work on time and leave on time. That’s true for service advisors, technicians, foremen, managers, warranty administrators—all your service employees.
It’s the dealer who is penalized in an hourly or salary shop.
Paying for performance establishes expectations. It establishes accountability. Then the people who perform at or above a level of expectation are rewarded.
How to convert your hourly techs to flat rate:
- Tell your hourly techs what their pay is for turning 40 hours at their hourly rate.
- Then tell them that you’ll pay them a dollar an hour extra for every hour over 40 hours turned, retroactive to the first hour turned.
- Once the technicians start producing more time than they’re actually on the clock, that is truly flat rate, and it’s easy to change them over to flat rate.
- Show them the value of the incentive, and watch them reach for all-star performance.
To find out how your dealership‘s compensation stacks up to the competition, get your copy of the 2012 Dealership Workforce Study Industry Report! Log in to www.nadauniversity.com, go to Resource Toolbox and click to purchase (requires GM/Exec or Dealer access level). The Industry Report is complimentary to Dealership Workforce Study participants.
Instructor Bob Atwood teaches Fixed Operations 2 (Service) in week 3 of 6 in the NADA Academy program and can be reached at email@example.com. Visit NADA Academy to download the schedule and applications for all programs.