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"Smart Parts" Tip Of The Month |
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Are you happy with your Pay Plans for your Parts Employees? More important, are THEY happy with their pay plan? That's right!...are THEY happy?
Most Parts Pay Plans are set up basically on a salary or hourly basis with perhaps a bonus if the Parts Department achieves the goals set by management or owners.....Sound familiar? You're not alone! One thing that we all have to remember is that our employees will always "work" their pay plans and unfortunately, in most cases in our Parts Departments, we get what we give! Let me explain further....
If I'm paying my staff on an hourly basis, the employees objective is to "work" the clock. It doesn't matter how much they produce in that "clock hour" because they will still get paid! If I pay them a salary, the objective is to just "show up" and they will get paid. The only "incentive" may be a bonus IF they achieve the individual or overall department goals. In most cases, parts employees don't even know they achieved the goals until the month is over!
In most dealerships, the Service Department is responsible for most of the overall Parts Sales. Parts Employees see technicians getting paid on Flat Rate or other incentives, Service Advisors being paid commissions and bonuses, but where is the incentive for the parts employee? What about the Inventory Clerks, Parts Drivers and Stock Personnel?....Where's THEIR incentive? Don't misunderstand, I'm not suggesting to increase the department personnel expense, we just need to "back in" to the numbers to split the salary portion of the pay plan and ADD sales incentive. In other words, maybe a 60/40 split, salary and commission! The commission portion could be anything from overall service shop hours billed to sales and gross numbers.
The bottom line is that you should WANT your employees to "work" their pay plans....we just need to add some incentive and motivation to get them more productive! For example; how much faster would you think your parts counterperson, parts stock person AND parts driver would work to get that part to the technician if they were getting an incentive on shop hours billed? How much more shop productivity could be achieved?
This month's FREE "Take Away" will help you find out if you have the right number of Parts Employees AND what positions they should have within the Parts Department. Most of us know "how many" to employ with NADA's Guidelines for sales and gross per empoyee, but at what position? Do you have a 2:1 Sales to Support Ratio in your Parts Department?
All you have to do is request this month's FREE "Take Away" (click on Below) and we will send you our "Smart Parts" Parts Staffing Metrics Evaluation Form. This FREE Evaluation is customized to your Parts Department based on your sales and gross numbers.
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"Ask Dave" |
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Skip Everett from Kelley-Grimsley Auto Group in Odessa, TX Asks:
"Dave, How can I get my Employees more motivated...Do you think that changing their pay plan would help"?
Abosulutely, Skip!! Pay Plans are one of the biggest "driving forces" to motivating our employees! Not only does it motivate them to higher achievement levels, it encourages them to succeed and gives them higher self esteem. Changing to an "Incentive Based" Pay Plan can encourage our employees to also take more "ownership" in their job and provide more positive feedback to the overall dealer growth!
These incentive based pay plans can be easily developed by "backing in" to the overall compensation of each part employee by combining incentives along with their base salary or hourly wage. We already do it for our Sales Staff both in Sales and Service, why not Parts?
The Parts Department has a key role in the overall productivity in the Service Department. The overall performance of ALL the Parts Department employees can dramatically effect shop productivity up to 10% or more! For example,could you imagine how much more motivated your employees would be in getting that part to the technician as efficiently as possible if they were getting an incentive on billed shop hours?
Remember, we get out what we put in and allowing our Parts Employees to participate in this sales environment will positively impact your overall staff productivity and result in higher sales and gross numbers.
Thanks for your question, Skip and Thanks for choosing "Smart Parts"!...Don't forget to send in YOUR question in to: Ask Dave! at www.smartpartstraining.com for a chance to win YOUR FREE 60 Minute webinar with Dave! |
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Got "Service" Absorption? |
For more information on ways YOU can increase YOUR "Service Absorption"....visit our website at: www.smartservicetraining.com
and see how ACG can help you make
"This Year Your BEST Year Ever!"
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