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I'm going to hire a new tech soon. I've been through the wringer with employees. We're a smaller shop and at times struggle with organization. We're currently expanding and the work demand has been so high for over 3 years now we've got to move forward.

 

In the past we've paid hourly - bit us in the butt with productivity. We're too nice. These pay ranges were $10.00-$15.00 per hour.

We've paid base of $400 + book starting at $15.00 and moving to $20.00 paid anything over the $400.00

We've tried team book @ $15.00 - $20.00.

 

Either one or the other is always unhappy. This time I plan to better implement tech work sheets, and use these to help keep the employee better versed on their time.

Any suggestions on a pay plan that will satisfy employees and encourage productivity? We're at $65 hourly - and will be going up soon.

 

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Hourly doesn't provide any performance incentive. I don't think we have expended as much time and effort on any other subject. Working with our coach, we developed pay matrices for techs and SAs that enable us to meet our margin goals and reward them for performance. It's one off those things that illustrates that you can't be an expert on every facet of shop management and you need to get expert help.

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I don't have any real world examples to give you, especially not that will apply to your situation however:

I've read (and common sense would dictate) that one of the better pay plans seems to be

Hourly base (living wage or close to it) + large team bonus + small personal bonus

 

This gives your employees stability through bad times, incentive to work as a team (very important), and also incentive to better themselves.

The team bonus can be based off productivity, hours billed, margins etc, while the personal bonus could be based on getting training, personal efficiency, etc.

Then you can make the personal bonus contingent on having zero comebacks, and a 90+% customer satisfaction rating.

 

Glad to see you're raising your rates as well, not sure how people live off $10-15/hour being a primary breadwinner.

Edited by bstewart
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My response is going to start off like a property management seminar. I have some residential rentals and the absolute key to being successful in SFH (single family home) rentals is to have the right tenant. The right tenant pays on time, doesn't worry you, keeps the yard and house in excellent order, and stays with you for many years. I am very successful because I have the right tenants.

 

Success in a shop is similar in that you need the right employees. All of you know that. When I advertise for a tech, I let them know that I want someone who is hungry, who will bust his butt, who will keep the shop clean, who wants long term employment, will be a willing team member, and who is ready for a very busy, fast-paced, take no prisoners environment. Most of these kind of techs have a job and are not looking. But I'm like the Marines. I only need a few good men!!

 

I pay my guys three ways. Hourly, percentage, and spiffs.They make a good hourly check every Friday, and the first Friday of the month they get a percentage of their labor for the previous month's volume. My goal is for each tech's monthly bonus to be enough for his rent or mortgage payment. They work hard for it and really look forward to it. Every Monday they get paid spiff money for the previous week. These spiffs are paid on all flushes, fuel services, shocks, struts, air filters, cabin filters, and wipers.

 

This is what works for me so I wanted to share.

 

Hi-Gear

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I pay my guys per hour billed or a minimum whichever is greater. Their hourly flat rate per hour billed is $34/ hour. Their minimum is 60% of that which is $20.40 per hour. They work 44 hours a week. The flip from hourly to the flat rate works out to be 27.6 hours billed. If they bill over that, they get the flat rate amount. If they bill under that they get the hourly rate. So their minimum is $938.40 no matter what.

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I pay my guys per hour billed or a minimum whichever is greater. Their hourly flat rate per hour billed is $34/ hour. Their minimum is 60% of that which is $20.40 per hour. They work 44 hours a week. The flip from hourly to the flat rate works out to be 27.6 hours billed. If they bill over that, they get the flat rate amount. If they bill under that they get the hourly rate. So their minimum is $938.40 no matter what.

where do I fill out the application?!

These are all great ideas, my problem (maybe more of a personal worry) is I can't afford for them not to be productive. We're small. $550+ is a big chunk a week if they can't complete even $550.00 worth of work a week. We're really working hard on implementation of systems that help them suceed. The jump is just a bit intimidating.

 

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A very important facet of this is that your pay plan should insure that you are paying your techs overtime at the appropriate rate. If you get caught in a wage/hour dispute, the burden is on you to show that you met the overtime requirement. A good pay matrix will take care of this automatically.

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A very important facet of this is that your pay plan should insure that you are paying your techs overtime at the appropriate rate. If you get caught in a wage/hour dispute, the burden is on you to show that you met the overtime requirement. A good pay matrix will take care of this automatically.

We only work a 35 hour week, we take an hour for lunch and we're closed on weekends, so luckily we shouldn't have to worry about overtime!

 

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We used to pay per hour billed only, but found out that that plan is not legal in CA if we require them to do other things, like cleaning the shop.

 

Then we moved to base pay + bonus after certain amount of billed hours were met. Better, but a headache to keep track of.

 

Currently we pay hourly starting at $25+ for full-time. Our shop rate is $120/hr. But we run a little differently then some shops so this pay method works for us. Our techs clean, some of them write work orders and talk to customers. We are open on weekdays only (9am-6pm) and they get paid OT for anything over. It has been pretty smooth so far.

 

Every shop is different so you have to just find one that meets your shop's needs. Do you have techs that are just doing this to pay the bills? Do you have techs that are passionate and want a career out of this? For some people, hourly pay doesnt provide incentives to work their best. But have to also remember not everyone is motivated by money. You can pay someone well but if your shop is not a great environment to work in, that can also bring down performance. So there's a lot more to look at in terms of incentives and efficiency. Sorry if that doesnt help much!

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  • 3 months later...

It should be a win/win for both employees and business. We found the best way to do this is through billed hours. I which is really where the money comes from. So say techs get a base 17/hour and when they reach 35 billed hours we scrap the 17/hour and give them percentage of total labor sales from 20-30% of gross labor sales. Depending on the hours tech produces. This way techs have a good pay if shop is slow but does not hurt the shop. Basically pay can be from 17/hr all the way to 40/hr but it all depends on productivity on labor. Techs work hard to reach it and does not have to be in worry if shop is slow.

 

Oh advisors must have incentives to otherwise It wont work. You can have the best techs and pay plan but if advisor does not have incentive to do his best to educate, sell and provide excellent customer service then it wont work either.

 

Oh btw must have good marketing. Advisor cant do its job if phone is not ringing.

 

Sorry i think i went off topic. 😉

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This is good info. I only been in business for 3 months 2 Bay shop one tech and my self. I help the tech when I can other than that I run the shop as a servc advisor etc..

I was thinking if I have someone do the srvc advisor and have them ona salary, what would be a decent performance plan to have?

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You are all full of s.it

You play a numbers game with your techs, but in the end it is all about you getting paid.

Than you cry like little girls screaming why cant you get good techs.

Look, if this topic is all about screwing your workers than just say so, and I dont have a problem with that.

If you want to be fair and non of you do. But I will tell you.

Pay your techs 33% of labor. Period.

Work comes in , everybody makes money, no work no money for everybody. including you.

Plain and simple.

Can any of you handle that???

I doubt , and dont tell me about your expenses, Do you care about your techs expenses?

By the way , keep your bull sh1t comments to your self.

If you cant pay 33% it is no body's fault but yours.

 

Merry xmas you all little girls.

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Very much so.

Tell me I am not telling the truth.

I am getting pretty tired of shop owners crying about this and that , when at the end of the day it is all there fault.

Didn't any one ever told you guys that you get what you pay for??

Yeah I want to buy an S550 for a price of a Impala.

Not going to happen , no matter how much I piss and moan about it.

Many of you state , how generous you are by paying $15 per hour.

In Seattle over here it is minimum wage. I would rather go work in MC Donald's than being a grease monkey.

 

Merry Xmas girls.

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Very much so.

Tell me I am not telling the truth.

I am getting pretty tired of shop owners crying about this and that , when at the end of the day it is all there fault.

Didn't any one ever told you guys that you get what you pay for??

Yeah I want to buy an S550 for a price of a Impala.

Not going to happen , no matter how much I piss and moan about it.

Many of you state , how generous you are by paying $15 per hour.

In Seattle over here it is minimum wage. I would rather go work in MC Donald's than being a grease monkey.

 

Merry Xmas girls.

Let me guess you just finished watching the movie trolls. You've picked up some good pointers but your too obvious and not intelligent enough to pull it off. Go back under your bridge and leave trolling to the pros. Not some Wana be mechanic.
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I think the purpose of this forum is shop owners can learn from each other what works and what doesn't. I think its important to remember that different states have different laws and different markets. And shops and management styles differ from shop to shop. Which different owners take on different approach. We should take this forum as a learning tool to better this industry for its survival in the future.

 

I am a tech first before an owner and understand this. Trust me. This is not only a tech to owner problem but an industry wide issue. How do we expect to pay high when customers don't. When our profession is viewed simple as "grease monkeys" by people in and outside of this industry. how about change the perspective that this profession is respective and deserves quality pay and advancement. Problem is we as techs have advanced so much in technology and "costs goes up to stay current" but have not increase in professional value. I think this should be the first step. I guess the question is how do we do this collectively nationwide to advance this profession and industry as a whole?

 

Maybe this is more suited for another topic on this forum?

 

 

 

 

 

 

 

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You are all full of s.it

You play a numbers game with your techs, but in the end it is all about you getting paid.

Than you cry like little girls screaming why cant you get good techs.

Look, if this topic is all about screwing your workers than just say so, and I dont have a problem with that.

If you want to be fair and non of you do. But I will tell you.

Pay your techs 33% of labor. Period.

Work comes in , everybody makes money, no work no money for everybody. including you.

Plain and simple.

Can any of you handle that???

I doubt , and dont tell me about your expenses, Do you care about your techs expenses?

By the way , keep your bull sh1t comments to your self.

If you cant pay 33% it is no body's fault but yours.

 

Merry xmas you all little girls.

 

 

Very much so.

Tell me I am not telling the truth.

I am getting pretty tired of shop owners crying about this and that , when at the end of the day it is all there fault.

Didn't any one ever told you guys that you get what you pay for??

Yeah I want to buy an S550 for a price of a Impala.

Not going to happen , no matter how much I piss and moan about it.

Many of you state , how generous you are by paying $15 per hour.

In Seattle over here it is minimum wage. I would rather go work in MC Donald's than being a grease monkey.

 

Merry Xmas girls.

 

 

You have an excellent point of view.

 

 

Where as NCAUTOSHOP needs to get a new set of pantys.

 

 

 

_2080, please keep it professional. Thank you.

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I think the purpose of this forum is shop owners can learn from each other what works and what doesn't. I think its important to remember that different states have different laws and different markets. And shops and management styles differ from shop to shop. Which different owners take on different approach. We should take this forum as a learning tool to better this industry for its survival in the future.

 

I am a tech first before an owner and understand this. Trust me. This is not only a tech to owner problem but an industry wide issue. How do we expect to pay high when customers don't. When our profession is viewed simple as "grease monkeys" by people in and outside of this industry. how about change the perspective that this profession is respective and deserves quality pay and advancement. Problem is we as techs have advanced so much in technology and "costs goes up to stay current" but have not increase in professional value. I think this should be the first step. I guess the question is how do we do this collectively nationwide to advance this profession and industry as a whole?

 

Maybe this is more suited for another topic on this forum?

 

 

 

 

 

 

 

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Just to be clear, I completely agree. Don't let the other clatter disrupt your comment. I'd love to pay our techs more (they currently make more than I do, but we're a small shop. There's only 3 of us!)

We also need to drive our employees in a direction that they take responsibility for the profitibility and production of the shop. They need to reap the benifits, I agree. But it's not always easy finding those good employees capable of doing that!

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Just to be clear, I completely agree. Don't let the other clatter disrupt your comment. I'd love to pay our techs more (they currently make more than I do, but we're a small shop. There's only 3 of us!)

We also need to drive our employees in a direction that they take responsibility for the profitibility and production of the shop. They need to reap the benifits, I agree. But it's not always easy finding those good employees capable of doing that!

Thanks! Yes of course. Great that your doing this for your techs!

 

Yes this clatter can make this thread unreliable. Lets try to keep it about pay plan types. ✌️

 

 

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Oh wow. Didn't expect to see those type of comments on this type of forum. Terrible attitude. I'm pretty sure if anyone here was just all about getting paid and trying to rip their employees off, they wouldn't be on a professional and informative forum like this. If you really wanted to make tons of money for yourself and not pay people what they deserve, we all know how to do that (which is entirely illegal) and it definitely doesnt involve spending time on a forum like this learning how to do things the right/legitimate way, and learning other business models, pay structures, etc from other professionals here.

 

Not all business owners intend to "screw" their workers, and not all techs are great techs. The issue with pay in this industry is way deeper than that, as already mentioned by others in this thread/forum. We're all here to learn and I doubt you have things 100% figured out if you think things are that "plain and simple" in running a business. Have some respect.

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  • 1 month later...

We used to pay per hour billed only, but found out that that plan is not legal in CA if we require them to do other things, like cleaning the shop.

 

Then we moved to base pay + bonus after certain amount of billed hours were met. Better, but a headache to keep track of.

 

Currently we pay hourly starting at $25+ for full-time. Our shop rate is $120/hr. But we run a little differently then some shops so this pay method works for us. Our techs clean, some of them write work orders and talk to customers. We are open on weekdays only (9am-6pm) and they get paid OT for anything over. It has been pretty smooth so far.

 

Every shop is different so you have to just find one that meets your shop's needs. Do you have techs that are just doing this to pay the bills? Do you have techs that are passionate and want a career out of this? For some people, hourly pay doesnt provide incentives to work their best. But have to also remember not everyone is motivated by money. You can pay someone well but if your shop is not a great environment to work in, that can also bring down performance. So there's a lot more to look at in terms of incentives and efficiency. Sorry if that doesnt help much!

 

Do you ever have any issues with keeping technicians busy when there are no cars to work on? What do you have them do and how do you keep track of what has been done? We currently pay hourly as well and it sometimes it seems difficult to get technicians who are used to flat rate to understand that expectations are different when you are paid hourly......

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Do you ever have any issues with keeping technicians busy when there are no cars to work on? What do you have them do and how do you keep track of what has been done? We currently pay hourly as well and it sometimes it seems difficult to get technicians who are used to flat rate to understand that expectations are different when you are paid hourly......

 

 

This is the mix I have used in over 20 years.

 

1. Base salary, plus production bonus.

 

2. When retail customer flow is slow, and fleet accounts are up to date and there is shop slack. I make sure all items that need attention around the shop are fixed.

 

3. I keep a set of vehicles that need to be serviced before they are placed for sale. For example, if I have bought a 2006 Camry that is going to be sold, I have it inspected, prepared, repair/service, certified, set for sale.

 

This cycle has not failed me yet.

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This is the mix I have used in over 20 years.

 

1. Base salary, plus production bonus.

 

2. When retail customer flow is slow, and fleet accounts are up to date and there is shop slack. I make sure all items that need attention around the shop are fixed.

 

3. I keep a set of vehicles that need to be serviced before they are placed for sale. For example, if I have bought a 2006 Camry that is going to be sold, I have it inspected, prepared, repair/service, certified, set for sale.

 

This cycle has not failed me yet.

 

For your mix, is this correct: Base Salary = $800 + Production Bonus - How is this calculated? Is it based on if the technician turns a certain number of hours or is it based on efficiency on the hours that the turned? Do you add the base salary with the production bonus?

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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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      Have you discovered the power of training conferences? It’s not just the learning—it's the collaboration of minds, the shared experiences, and the connections that make them invaluable. 
      Show Notes
      Reflections on Vision Hi-Tech Training & Expo 2024 (00:01:32) Personal observations and experiences at the Vision 2024 conference. Hands-On Key Cutting Class (00:02:39) Description of a hands-on key cutting class, including the tools and sponsors involved. Scan Tool Class and Discussions (00:03:53) Discussion of various scan tools and their capabilities, featuring notable industry figures. All-Day Hands-On Pico Class (00:05:01) Description of a comprehensive all-day training session focused on Pico technology and vehicle diagnostics. Tech Talks Presentations (00:08:41) A series of presentations by industry experts on personal and professional experiences, including case studies and techniques. Trade Show Experience (00:15:48) Overview of the trade show, including interactions with various booths and industry professionals. Reflection on Training Resources (00:18:05) Discussion of training resources and their value for technicians, including specific recommendations. The discussion about technical training (00:19:13) Exploring the changes in technical training and the expectations for the next great trainers. The dedication and focus of a great trainer (00:20:23) Discussing the qualities and dedication required to become a top-notch trainer in the automotive industry. The impact of training conferences (00:24:01) Highlighting the importance of attending training conferences and the benefits of networking and learning from peers. Personal update and gratitude (00:25:08) Providing a personal update on a family member's health and expressing gratitude for support and interaction.  
      Thanks to our Partner, NAPA Autotech napaautotech.com
       
      Email Matt: [email protected]
      Diagnosing the Aftermarket A - Z YouTube Channel HERE
      Aftermarket Radio Network: https://aftermarketradionetwork.com/
       
      Click to go to the Podcast on Remarkable Results Radio


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