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Before Russell McCloud, co-owner of Accurate Automotive Attention in Yuma, Ariz., implemented a bonus program to reward for timeliness, he had one long-time technician who would return late from lunch nearly 60 percent of the time. One month after the bonus program was launched, that employee’s on-time ratio leapt from 43 percent to 95 percent. A month later, he hit 100 percent and has remained there for nearly two years.
The program works because “they can see the dollar impact for not being on time,” McCloud says. Each technician can earn two points per day: one for beginning work on time in the morning and one for returning from lunch within one hour. At the end of the month, McCloud calculates each technician’s on-time ratio, and they’re rewarded as much as $1 for each hour booked the previous month. For example, a technician earns a $200 bonus for booking 200 hours the previous month, for always being on time and for achieving a 90 percent proficiency rating. The bonus increases and decreases with higher and lower on-time and proficiency ratings, but it hits $0 for anyone whose on-time rating is less than 70 percent or whose proficiency is less than 90 percent.
McCloud is among the ranks of shop owners who realize the power of incentive-based pay plans to motivate the staffs in his three service facilities. Creating the right motivational plan is key to building the right team, which in turn, is critical to your success as a shop owner, says Bob Cooper, president of Elite, a Rancho Santa Fe, Calif., company that provides business-building solutions for the automotive industry.
“You have to have great goals, and you have to have the right people on board,” he says. “You’ll never make it to the top on your own, my friend. You’ll need remarkable people working with you.”
Whether you’re looking to roll out a new compensation program or to improve your existing one, let’s look at the Do’s and Don’ts of building truly effective plans.
Create a Performance-Based Plan
This is Cooper’s No. 1 rule, and it is a must. Gene Morrill, owner of Certified Automotive Specialists in Glendora, Calif., learned years ago that hourly pay plans do not work.
“Technicians don’t care as much on hourly plans because if they just stand there, they collect $20 an hour,” Morrill says. “If they produce a superb amount of work, they make $20 an hour.
There’s no incentive to stand up and say, ‘Wow, look what I did. I did 60 hours in a 40- to 50-hour week. I outdid myself.’ It won’t challenge a mediocre technician. They’re just there for the J-O-B (just above broke). If you hire those kind of people, that’s what you’ll get–just above broke productivity.”
Reward for Behaviors You Want
As you design or redesign your program, reward for actions you want, rather than penalizing behaviors you don’t want, advises Tyler Robbins, president of Automotive Training International, an automotive fixed operations training and solutions company in Taylors, S.C., and Halifax, Novia Scotia.
“The most demotivating of compensation plans are the ones with ‘claw back’ elements,” he says. “When an employee risks losing pay as part of their incentive, the fear and/or resentment factor is clearly the ‘worst’ pay plans.”
Ensure All Plans Pursue a Common Goal
Incentive-based pay plan for managers, service consultants and technicians should be aligned toward the common overall objective and not so individualized that they conflict with each other, Robbins says.
“The managers and the service consultants pay actually have different objectives, and in many cases, each of the individual personnel within the shop are incentivized or motivated to achieve different results,” he states.
Encompass All Six Elements of a Great Plan
Cooper believes that every great compensation program includes all six of the following characteristics:
1) It provides basic compensation.
2) It gives each team member a chance to earn a higher income.
3) It offers an Exemplary Performance Reward for outside-the-box ideas.
4) It delivers secure employment — a financially stable business.
5) It rewards for loyalty — years on the job with your company are worth something special.
6) It provides leadership and a clear vision of the company’s goals. “If you’re one of the guys or gals that work with me, it’s my responsibility to know you know where we’re going and how we’re going to get there,” Cooper explains.
Show Your Team You Value Them
While this isn’t a tangible line item in a pay plan, Mike Brewster, owner of Gil's Garage Inc. in Burnt Hills, N.Y., says one of the best motivators for the staff is free to the company and pays huge dividends.
“It’s the investment of time spent with employees one-on-one by the owner or manager to get to know what’s important to them — their goals, their family, their hobbies, etc.,” he says. “It shows that you care about them and appreciate them as individuals as well as a team member.”
Cooper adds one important reminder than can be easy to overlook in a high-stress, pay-for-production environment. “You really need to have a profound understanding that they have a life, too.”
At Certified Automotive Specialists, Morrill emphasizes the importance of making his team feel like valued contributors to the business.
“They want to be known as professionals,” he says. “Anybody can pay a person money. I bring my people in and put high expectations on them. It works because we make them feel good, and we make them feel professional.”
This includes providing them with top notch equipment, encouraging their ideas and contributions, maintaining an open-door policy, distributing work fairly and providing comprehensive benefits and a stable work environment.
Utilize Non-Monetary Incentives
At Terry Wynter Auto Service Center in Fort Myers, Fla., they celebrate every employee’s birthday with a catered lunch from a restaurant of their choosing, and a Christmas party and other employee events throughout the year are designed to ensure the shop attracts and retains top talent.
Morrill subscribes to the same theory that after-work events build team spirit and foster better relationships with the employees and their families. His company sponsors two to three outings annually to such events as a minor league baseball game, the Santa Anita horse races and the area speedway. His team also has access to an on-site fitness center. Morrill picked up a 16-station circuit training system when the fitness center he’d been going to closed. He purchased the equipment and put it in place in a front office at this shop. His employees are all welcome to use it, a health benefit that also saves time because it’s on site.
Training can also be a powerful motivator, and most of the employees at Accurate Automotive Attention have attended “Rapport Leadership,” which McCloud describes as a very intensive, very powerful self-discovery and leadership training program.
Discover What Motivates Your Team
All individuals are motivated differently, although Robbins points out that the industry tends to think monetary pay plans motivate everyone. This is not always the case, and money alone rarely motivates for long. One inexpensive but effective way to bolster the impact of a monetary incentive is to combine it with recognition. Make sure the owner or manager acknowledges an individual’s success.
Beyond that, it’s important to learn what motivates each member of your team, as well as the entire group, and then create incentives that speak to those needs or desires. Some shops offer a group dinner out if monthly goals are met, Robbins says, while others offer additional paid time off for certain achievements. Personalized or group gifts can be successful, but it’s also challenging to find one gift that motivates every member of the team.
Brewster’s experience has taught him that an employee’s generation can determine what’s important to him or her. “Generally, the younger staff members place more value on money and time off,” he says. “Older staff members appreciate the rich benefit package.”
Keep Your Eye on the Goal
As you explore new ideas for your incentive plans, keep your goals in mind, too. This can help you decide which characteristics will achieve what you want them to and which are likely to be less effective. At Terry Wynter Auto Service, it’s reported that its pay plan is intended to meet a balance between paying for work achieved, maintaining quality and never giving an incentive, which could promote irresponsible sales practices.
