Auto body shop employee bonus scheme

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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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Joined: Sun Dec 16, 2012 4:46 am
Location: Canberra
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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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Location: Pahrump NV.
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PostPosted: Fri Nov 24, 2017 4:53 pm
Whats wrong with just Paying and rewarding the ones who work why play games with there pay? I have always hated games at work I go there to make a living feed my Kids keep a roof over there head and hopefully get a head a little to buy some nice things.

Its not my responsibility to encourage others to do there jobs THAT'S Managements JOB! to get rid of the ones who are just along for the ride NOT MINE!
God forbid Management actually do something like getting rid of a guy who doesn't do his job or runs his mouth all day bragging how he could run the place better instead doing his job. Sorry but I cant stand weak Management or a Boss that wont pay skilled labor what they are worth.

Don't play games with peoples Pay! Pay them what they are worth and Be a manager Run your business as a business recognize what/who works Keep what does rid yourself what doesn't. Not all Tools are good ones or work as advertised Employees are just another tool, just like shop tools How many shop tools have you bought and Gotten rid of because they don't work or do what the advertisement said they would?
I know I have
Dennis Barnett
A&P Mechanic, FCC General radio Telephone Operator
American airlines, Line Maintenance A&P Mechanic & MOC Maintenance Operation Control Tech specialist
Allegiant airlines, Northern air cargo.



No Turning Back
Posts: 782
Joined: Sun Dec 16, 2012 4:46 am
Location: Canberra
Country:
Australia
PostPosted: Fri Nov 24, 2017 11:44 pm
I wouldn't argue with anything you've said, Dennis, but it isn't always that simple.

Our industrial environment means that sacking someone is difficult and treating them differently will bring cries of discrimination and the Union or Fair Work knocking on the door. Awards are specific on conditions and the employer has to work within such a framework.

Creating a team environment means that an employee who is not performing well, but has the ability to do so is much more likely to get peer support and mentoring. One who is "just along for the ride" will face a less helpful environment from his/her peers and is likely to make the decision to move on themselves, rather than that having to be initiated by the employer.

I would argue that by implementing an incentive scheme "management" is doing their job, making the workplace conducive to improved efficiency and, therefore, higher profits. By sharing those profits with the employees the overall sense is one of everyone on the same team, rather than an us and them situation.

Incentive schemes give the employee the ability to earn more and the employer to make more. It's a win/win.
Chris

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