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How do you handle End of Year Bonuses?


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This year I am giving away things that have take home value as Bob Cooper likes to call it :)

 

One of my techs loves going to the movies so one of his bonuses will be a gift card to the movies. Every time he goes to the movies and use the gift card he'll think, "hey my boss is a pretty good guy" :)

 

One of my techs has a new born baby, I'm probably going to give him among other things a Babies R Us gift card. Also he really loves his professional as an auto tech and has a passion for the business. I saw him eyeing a nice jacket from Mac Tools. I may get one of those for him too. Maybe get some of his patches sewn on for him since he likes to walk around with his ASE and shop patch.

 

Money is a great bonus however its fleeting. Its seen once and its gone whether they use to to buy something or they put it in there bank account they will hardly ever think about it again.

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The bad thing about money bonuses is that there is no way to evade the taxman, so a $100 bonus is $70 in your employee's pocket and about $117 out of yours, but we do money because that is what most of our folks need at Christmas time. We put it in their check a couple of weeks before Christmas so they can spend it as they please. I like the gift card idea, but (call me paranoid) I don't like things I would have to explain in an IRS audit.

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Unfortunately, the owners stopped giving bonuses. We used to get them and they were appreciated. The owners say they apply more money to our 401k plans, but not everyone participates in the program. I know the younger guys, the ones with little kids and all the expenses thereof could certainly use the additional cash. I've been around for a long time, but even I appreciate the money and the gesture more than a 401k contribution. I don't know, it just feels like a thumb in the eye.

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Salaried, hourly with or without an incentive tied to it we seem to cover the gamete when it comes to compensation plans at our facility seeing how we run a collision repair division along with a preventive maintenance general repair center and the easiest thing we seem to all agree on is that year end holiday bonuses are done based upon a percentage of gross income regardless of who you are on that food chain. This year we did a 1.5% so on a 80K they received a gross check of $1,200.00 and a 20K helper picked up $300.

 

These percentages do have targeted numbers tied to them within the operation that each person in each department has complete access to and within your area of the operation you have control over with obviously the seasoned staff members begin watching on January 1st.

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  • Have you checked out Joe's Latest Blog?

         3 comments
      Got your attention? Good. The truth is, there is no such thing as the perfect technician pay plan. There are countless ways to create any pay plan. I’ve heard all the claims and opinions, and to be honest, it’s getting a little frustrating. Claims that an hourly paid pay plan cannot motivate. That flat rate is the only way to truly get the most production from your technicians. And then there’s the hybrid performance-based pay plan that many claim is the best.
      At a recent industry event, a shop owner from the Midwest boasted about his flat-rate techs and insisted that this pay plan should be adopted by all shops across the country. When I informed him that in states like New York, you cannot pay flat-rate, he was shocked. “Then how do you motivate your techs” he asked me.
      I remember the day in 1986 when I hired the best technician who ever worked for me in my 41 years as an automotive shop owner. We’ll call him Hal. When Hal reviewed my pay plan for him, and the incentive bonus document, he stared at it for a minute, looked up, and said, “Joe, this looks good, but here’s what I want.” He then wrote on top of the document the weekly salary he wanted. It was a BIG number. He went on to say, “Joe, I need to take home a certain amount of money. I have a home, a wife, two kids, and my Harly Davidson. I will work hard and produce for you. I don’t need an incentive bonus to do my work.” And he did, for the next 30 years, until the day he retired.
      Everyone is entitled to their opinion. So, here’s mine. Money is a motivator, but not the only motivator, and not the best motivator either. We have all heard this scenario, “She quit ABC Auto Center, to get a job at XYZ Auto Repair, and she’s making less money now at XYZ!” We all know that people don’t leave companies, they leave the people they work for or work with.
      With all this said, I do believe that an incentive-based pay plan can work. However, I also believe that a technician must be paid a very good base wage that is commensurate with their ability, experience, and certifications. I also believe that in addition to money, there needs to be a great benefits package. But the icing on the cake in any pay plan is the culture, mission, and vision of the company, which takes strong leadership. And let’s not forget that motivation also comes from praise, recognition, respect, and when technicians know that their work matters.
      Rather than looking for that elusive perfect pay plan, sit down with your technician. Find out what motivates them. What their goals are. Why do they get out of bed in the morning? When you tie their goals with your goals, you will have one powerful pay plan.
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