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WWYD – Tech A and Tech B
WWYD – Tech A and Tech B
Both techs disliked the flat rate system and negotiated with their employer to be paid hourly at a rate that will basically equal their average flat rate pay. Tech A used to average 50 hours per week and now averages between 45 and 50. Tech B also used to average 50 hours per week and now averages between 30 and 35.
Tech A pretty much keeps working at a steady pace all day. Tech B usually turns good times when he is on a car, however his test drives now take twice as long as they used to and he always brings his cell along. When he completes a car 45 minutes before the end of the day, he doesn’t start the next car – he wanders about the shop until it’s time to punch out, and says he’ll start on it in the morning. Sometimes when he completes a 1.5-hour job in 1.0 hour, he wanders around the shop trying to look busy until 1.5 hours have passed. His restroom visits have greatly increased – and he always brings his cell. Bottom line – he manages to not work on cars for 1 to 2 hours every day now. But, he does want to get paid that new hourly rate for every minute he is punched in regardless for whether he is working on a car or not.
Not one other thing has changed in this shop other than the pay system. The employer is thinking it’s time to put tech B back on flat rate. Since production from tech A has dropped a bit and tech B will be going back on flat rate, he is thinking he may as well put them both back on flat rate.
How would you advise this employer to handle the situation?
For more discussion on tech pay
https://www.automotivemanagementnetwork.com/forums/topic/is-a-50-hour-tech-worth-75000/#autoshopflatrate
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5 Replies
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This is a perfect example of why performance based compensation plans are best and most effective. Reward and compensate the employees for the value and $$ they bring to the organization. If more money is desired bring more value (rate of pay/$ per hr / skills / certs) or generate more work (turn/bill more hours / quantity).
I would recruit for a new technician, if better ability, attitude and work ethics than tech B I would replace.
I would put all technicians back to a performance based compensation structure.
Flat Rate is not perfect, recommend hybrid plan that is majority individual compensation, small amount (~10%) a team compensation, and reward above and beyond standard pay for productivity (hours worked v.s. hours billed / paid)
Educate and train your staff on their performance based plan, explain to them using your recent case study as to why you have chosen this type of pay structure, or you can, or you can hire someone to micromanage the shop and pay everyone hourly or salary.
-A 🙂
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It appears your techs are trying to hold you hostage from reading your post. I am not a fan of flat rate pay because it breeds shortcuts and poor quality work. However a pay plan based on tech efficiency would work and you could put all your techs on it. If you give in and pay them a salary you will definitely see a deterioration in productivity. The techs need to be held accountable for their actions. If you see a tech “dogging” a job you need to address it right away. Stand your ground. I would also be looking for replacements. Do not keep this employee on too long. He is a toxic employee that will turn the others the same way.
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Looks like some good responses from others here. Not sure I have a lot more valuable information. Like you said, assuming nothing has changed in the shop, then show them the facts. Ask them why they think their billed hours are down and have them give you evidence. Show them what you know. Put them back on flat rate and use some kind of system or software that can accurately track their production every day so they know where they are. Quicktrac software does this well.
I have a tech that’s leaving cause his production is down this year. Our sales have gone up and up, 30-40% over the last 3 years and we’ve only added one oil change tech which should increase the other techs actual production. All the other techs seem to be billing good hours. He’s been offered a guarantee of $80K at another shop. Good luck with that, he made over $70k here last year but I’m not going to guarantee that, he’s not that good a tech.
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This is the way I do it. They will always eat but if they do their job they eat well. If they really well. Give them a day off after a month .I have found that to be more valuable than money.
Give them base % of their avg pay as a base and then for every 5 hr give them a bonus that rises ie: o-20 hr base plus $5 per billed hr. then 26-30 hr $6.50 when they get to 50 hr they will make more than they used to. They never make more than a certain percent of your effective labor rate. You can play with the numbers to make it work best for you.
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Most of the rest of the employed world is held to a productivity standard while being paid a steady wage. I would fire tech B. Tech a will pick up his production a little and you should have no difficulty finding a replacement tech that will meet your standards to stay on hourly instead of flat rate.
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