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Posted

I recently read an article that said that giving a technician a pay guarantee each week promotes complacency and leads to lower production.  In other words, if they don't produce, they don't get paid.  Really?  While I do get the logic, I don't agree. 

I am not going to promote one pay plan against another, but for me, if I require a technician, or any employee to be at my company a certain amount of hours, then they will get paid for every hour they are there. Now, I do believe in performance-based bonuses; so if someone produces more, they need to be rewarded for that. 

What I have found is that business success and maintaining high production levels requires hiring the right employees, and having the right culture combined with the right leadership.

Your thoughts and comments? 

 

  • Joe Marconi changed the title to Why Not Give a Tech a Pay Guarantee?
Posted

I was a service writer at a Mercedes dealer years ago, the pay plan there was the light line techs were given a 40 hour pay, even if they failed to flag that amount of hours, the next tier was set a 45 and the heavy techs were set at 50 hours pay. The owner was a nice fellow and wanted each employee to want to come to work, but also wanted zero, none, no comebacks. His thoughts were if your sure your going to at least flag 40 hours there was no reason for any short cuts, rushed jobs and the possiblily to cause a comeback. that just ticked off the customer and made the dealer look bad. I have to say the entire service department worked extremely well and everyone seemed interested in doing a good job. And that was back when labor rates were in the mid $60 per hour range. None of the other dealers in the "Motor Mall" did that and seemed a lot of the techs in those other dealers were always coming in applying for a job. We rarely had any turnover in our techs.

  • Like 1
Posted
13 hours ago, weighit said:

I was a service writer at a Mercedes dealer years ago, the pay plan there was the light line techs were given a 40 hour pay, even if they failed to flag that amount of hours, the next tier was set a 45 and the heavy techs were set at 50 hours pay. The owner was a nice fellow and wanted each employee to want to come to work, but also wanted zero, none, no comebacks. His thoughts were if your sure your going to at least flag 40 hours there was no reason for any short cuts, rushed jobs and the possiblily to cause a comeback. that just ticked off the customer and made the dealer look bad. I have to say the entire service department worked extremely well and everyone seemed interested in doing a good job. And that was back when labor rates were in the mid $60 per hour range. None of the other dealers in the "Motor Mall" did that and seemed a lot of the techs in those other dealers were always coming in applying for a job. We rarely had any turnover in our techs.

A great strategy, based on culture!

Would you say that the technicians consistently produced the hours that were needed to maintain sales and profits? 

Posted
7 hours ago, Joe Marconi said:

A great strategy, based on culture!

Would you say that the technicians consistently produced the hours that were needed to maintain sales and profits? 

Oh yes, very few ever actually collected the guaranteed hours, but it was there as a security for the guys that really took the time to ensure quality work and not be penalized for the hard job or that one that kicks your butt. It made that whole service department seem to click like a well oiled machine. I liked working there. 

Posted

It's against the law to pay less than minimum wage.  If flagged hours total less then minimum wage the minimum wage would be paid.  When I worked at a dealership, we had to both flag hours and punch a time clock for the actual number of hours were we were there.  If the total amount we were paid, in dollars and cents, divided by the number of hours worked was less than minimum wage we would get paid minimum wage.  That was our guaranteed minimum.

  • Like 1
Posted

I don't know now if that pay structure could/would work for the employee and the owner any more. But with some constructive discussion it might? 

Posted

There are infinite ways to set up a pay structure for techs, and for all employees. It would be hard to pinpoint what's best for a particular shop.

When I owned my auto repair company, I found that paying people a very competitive base wage, with the opportunity to earn more through increased production (for techs), and having sales goals and gross profit goals for service advisors and managers. I also believe in team bonuses. 

With that said, I did also track comebacks and customer service scores (online reviews).  You can't make the objective of more sold hours and sales, without considering the quality of your repairs and service, and also the customer experience. I was not a fan of a pure flat-rate plan, but there are shops where this is an effective pay program, with the right culture. 

Please note: Every pay plan should be received by a labor law attorney or human resource company. 

Posted

I'm sort of old fashion.  We paid very well by the hour except for builders.  We paid our transmission rebuilders salary.  Nobody in our shop made less than $25/hr., and some made $40/hr.  Money speaks volumes when compared to a dangling carrot.

Once we were without a builder for several months and couldn't find one.  Finally one day I get a call from a guy out of Phoenix.  Long story made short, I had to offer him top Phoenix wages to get him to move up to SLC.  He was getting paid by the hour.  Some weeks he'd make $2K, most weeks it was $1,500 or less.  For $102K/yr. salary I hired him.  Money talks B/S walks.

 

  • Like 1
  • 10 months later...
Posted
On 10/22/2022 at 6:46 AM, Joe Marconi said:

I recently read an article that said that giving a technician a pay guarantee each week promotes complacency and leads to lower production.  In other words, if they don't produce, they don't get paid.  Really?  While I do get the logic, I don't agree. 

I am not going to promote one pay plan against another, but for me, if I require a technician, or any employee to be at my company a certain amount of hours, then they will get paid for every hour they are there. Now, I do believe in performance-based bonuses; so if someone produces more, they need to be rewarded for that. 

What I have found is that business success and maintaining high production levels requires hiring the right employees, and having the right culture combined with the right leadership.

Your thoughts and comments? 

 

Here's a 9-month-old video of a Wisconsin shop owner who pays his techs a salary.  Moreover, he's thinking about going on an 8-hour day and only 4 days a week.  Yet he's going to pay for 40 hours regardless of them working only 32 hours.  The video states by 2025, our industry is going to be short of 800K auto technicians by 2025.  Take a look at this short 2:14 video below...

 

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  • Have you checked out Joe's Latest Blog?

         0 comments
      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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