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Tech pay plans
I know that there are a lot of disscussion about incentive based pay plans. I want to go away from flat rate, but I don’t want to pay salary because I’m afraid my techs productivity will drop. I’ve got two good techs I want to keep, so I want to pay them fairly. Can I get some examples of an incentive based plan explained simply that work for all parties?
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3 Replies
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Here is a simple system that can be used as a foundation, then adjust to your liking:Let’s say salary would be $1,000 a week. Take half of that.
Let’s say flat rate is $24 per hour. Take half of that.$500 salary plus $12 hour for every flat rate hour produced is pay for the week. -
If your tech produces 50 hours per week at $24 per his gross is $1,200. Using this plan, the tech would have to bill 58 hours per week to stay even.
Flat rate is like capitalism. It’s not perfect but it’s the best we have. -
How about a blended system? I think I got the idea from Tom in another post. How about same tech and what he normally makes is $1000 a week. In NC we are required to punch a time clock anyway for insurance. Pay 40 hrs based on say 60% of his $1K. Figure the bonus on his remaining 40% to get the desired result and keep them motivated. You can play with the number infinitely. I made it match my budgeting and manage how many hours they are at work. Also when shop needs to be cleaned or inventory stocked they are still getting paid.
I switched my guys from a salary type pay to this in Feb and my production initially came up 70%. Has leveled off a little but I all of my techs are averaging billing 40-50% more hours than they billed last year.
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