OFFER THE RIGHT MOTIVATION TO YOUR STAFF

I’ve heard that question over and over from our shop owner clients. And at its root, isn’t that the secret to running a successful shop?

But that question takes many different forms from the best training programs for your service advisors, to building company culture, to offering bonuses and salary raises.

There’s one trick that can accomplish all three: an incentive pay plan.

The right pay plan can empower your employees to improve their own performance, while at the same time take ownership over the success of the business.

Easier said than done. I know because over the years of owning a shop and consulting with shop owners, I’ve seen just about every pay plan known to business. Most of them don’t work, because most of them focus solely on the money.

Don’t get me wrong, that is clearly a crucial part – you need to find the right pay plan to motivate your employees without cutting into your bottom line. But a raise, regular bonus, or slightly higher hourly rate doesn’t give them a reason to keep working harder year round.

So set aside everything you think you know about pay plans, and think about what you really want. Learn how to stop micromanaging, improve morale, increase sales, and build a culture of success in your shop.

Stop Micromanaging
Done right, an incentive-based pay plan does three things: 1) it trains your team to act exactly the way you want them to act; 2) it holds them accountable; and 3) it motivates them to do better and keep improving.

With the right system in place, employees can track their own results to know if they are winning. It doesn’t require a manager watching over their shoulder to make sure they are doing what you need them to be doing. That incentive is hanging above them all the time.

That being the case, the pay plan should be clear and easy to understand. I’ve seen some incentive-based pay plans with so many tiers and conditions that the tech has no way of knowing how much his paycheck will be until he takes it to the bank. Those kinds of plans only cause discomfort, stress and unhappy employees.

If the tech understands how he is going to get paid and if he’s won or lost every day, he has a huge motivation to win. That means meeting and exceeding his goals. Achieving that next rank, earning the reward, and taking those extra tasks straight to the bank.

Incentives can be used to encourage the behavior you want. Higher average repair order, parts gross profit, percentage of sales, and so on. With the right structure, your pay plan can positively affect key benchmarks that will help grow your entire shop.

Increase Sales
What is it that you want your technicians to do? You want them to fill your pipeline.

The pipeline for your shop runs from the street to your front counter to the tech to the advisor to follow up and back again. Every car that comes into your bays is an opportunity to fill your pipeline with more sales.

You want your technicians to perform thorough, honest inspections with good write ups. They need to find work they can do in the lube bay, find work they can refer to technicians, and find work for the service advisors to educate the customer about.

The customer might not say “yes” to every service you recommend, but guess what happens to that work? It flows right back into your pipeline. If your technicians are doing a good job finding work and your advisors are properly educating about the value of the service, the customer will be back.

The problem is, most technicians see inspections as a waste of time. Why would they want to spend valuable time checking a car instead of performing the billable work that gets them paid?

Done poorly, an incentive-based pay plan can encourage what we all know to be “pencil whipping.” Technicians will chose to rush through inspections to check off boxes instead of performing the thorough inspection you need to fill the pipeline.

Done well, an incentive-based pay plan reinforces the value of thorough inspections. It means training and educating your employees about the benefits to them, but then it gives them the measurable goals to track their own results and take home a bigger paycheck.

Improve Morale
Incentive-based pay plans can go wrong very quickly. If techs have so many hoops to jump through to meet the goal, your incentive-based pay plan can actually become a disincentive.

I’ve seen it play out enough times to know that you don’t want disincentives built into the pay plan. If the technician or advisor doesn’t hit the target, their commission is already lower. When there is an added disincentive built into the plan, it becomes a double whammy and it only spirals down from there.

Goals need to be achievable in order to be effective. If the employee has no chance of meeting the goal, morale takes a hit. They have no reason to even try because they know they can’t win.

The best pay plans are never all or nothing. They have components in place so every employee has an opportunity to win even during a tough time.

In good times, they win even bigger! The goals give them a reason to strive harder, push the limits, improve their own efficiency, and innovate to find new and better ways to beat their personal best.

Here’s a secret: THEY CAN DO BETTER. Even the super-star techs and stellar service advisors can improve. That’s the beauty of the incentive-based pay plan – there are more ways to win!

Culture of Success
Incentive-based pay plans take the success of the shop as a whole and put it inside every individual employee. The success of the business is no longer a big, looming uncontrollable factor, but a controllable and personal goal. Every employee has ownership of the success of the business.

In my time consulting repair shops, I’ve gotten to know a lot of technicians and service advisors. Every single one is competitive by nature. They are driven, organized and want to succeed.

The beauty of an incentive-based pay plan is that it turns that competition inward, compelling each individual to find new ways to beat their personal best.

Every employee has targets to hit. They have everything they need to know if they are winning, so they will work hard to make that bonus.

When your entire team is working towards personal improvement, the company thrives. One tech will find a slightly faster way to perform a service and share with the other techs in the bays. They will learn the best ways to multi-task to squeeze more billable hours into every hour worked. Productivity will go up.

I can’t tell you exactly what your pay plan should look like because every shop is unique (and because labor laws are different in every state). I would have to sit down with you personally, review your numbers, meet your employees, and learn your business. But I can tell you what the right incentives look like in practice.

It looks like happier employees, happier customers and happier owners. It looks like a bigger pipeline, bigger paychecks and bigger bank accounts. Incentive-based pay plans are more than the rules on how to pay your employees; it’s your blueprint to building a culture of success.