Auto body shop employee bonus scheme

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Joined: Thu Nov 01, 2007 10:25 am

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PostPosted: Wed Oct 25, 2017 4:35 am
I run a bodyshop and have always paid my staff as well as I can afford and they have always been happy with their salaries. However I would like to try and introduce a bonus scheme to incentivise them and increase productivity. I have never had a bonus structure before so don't really know where to start in writing one out....does anyone have any pointers? or can anyone tell me their schemes as a starting point?

Thanks!



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Posts: 764
Joined: Sun Dec 16, 2012 4:46 am
Location: Canberra
Country:
Australia
PostPosted: Mon Oct 30, 2017 8:15 am
I have one that I think works fairly well. It simply compares costed hours with actual billed hours.

Below I've copied the text from the sheet that we give to each employee to explain how the scheme works. It should be self-explanatory.

Bear in mind that we charge at $94/hour and wages range from $18/hour for a detailer through to $35/hour for an experienced painter. Oncosts add up to around 25%. You can adjust for your local rates/conditions.

Administration of the scheme is relatively simple since we can list billed hours easily each week and it's not difficult to apportion these by employee.

The scheme rewards quality by penalising reworks - believe me, it only takes one or two of these before they get the message, especially if that rework has cost them a top level bonus. It also encourages teamwork - it's in every employees interest to have all the team at the highest productivity level, so they self-discipline anyone who's just along for the ride. It also encourages them to complete and hand in the Job Sheets - if not done those hours don't get counted and there's no carry-over to the following week.

I'd like to add some way of making them accountable for their contribution(s) to costs - to try to reduce waste, but haven't found a simple way to do that yet.

Productivity Bonus Scheme

Each job is allocated a standard time value, plus allowance for size/difficulty if necessary.
Allocated times may be adjusted where unforeseen difficulties are encountered.
Allocated time is the time in which the job is expected to be completed.
Allocated time is based on chargeable hours.
Employee completing job (or part job) is recorded on Job Sheet.
At end of each week total productive hours are tallied for each employee for jobs completed and invoiced in that pay week.
To qualify for Productivity Bonus each employee must achieve a minimum 60% productive time (22.8 hours in 38 hour week).
Once employee achieves 60% productive hours, bonus will be paid on all productive hours.
Bonus rates are
0 – 59% No bonus paid
60 - 79% $4.00 per hour on all productive hours
80% and over $8.00 per hour on hours over 60%
If all employees achieve a total of 90% or more productive hours, an additional bonus of $100 will be paid to each employee.
All amounts are before tax.
Time spent on re-works or rectification will be deducted from employee’s total for week.
Total possible hours will be adjusted for Public Holidays and approved leave (including Sick Leave where Medical Certificate is provided).
A Job Sheet for internal work may be completed and this time will be allowed for in totals. Completion of these Job Sheets is employee’s responsibility.

Examples:
1. Employee achieves 19 productive hours in week
a. 19/38 = 50%
b. No bonus paid
2. Employee achieves 30 productive hours in week
a. 30/38 = 79%
b. Bonus is 30 hours x $4.00 = $120
3. Employee achieves 36 productive hours in week
a. 36/38 = 95%
b. Bonus paid is 22.8 hours x $4.00 = $91.20
c. Plus 36 – 22.8 = 13.2 hours x $8.00 = $105.60
d. Total bonus for week = $196.80
4. Employee A achieves 95% productive hours and Employee B achieves 92% productive hours
a. Both employees are paid additional $100 bonus
5. Employee A achieves 95% productive hours and Employee B achieves 89% productive hours
a. Each employee is paid for their individual performance
b. Neither employee receives the additional $100 bonus
Chris

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