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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Joined: Tue Sep 16, 2008 1:17 pm
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
Line Maintenance A&P Mechanic and MOC Tech specialist.



No Turning Back
Posts: 835
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



Top Contributor
Posts: 4040
Joined: Tue Sep 16, 2008 1:17 pm
Location: Pahrump NV.
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PostPosted: Mon Jul 02, 2018 12:17 pm
Chris
I am not familiar with Australia work rules I know the USA's and it's different from State to state, and yes the Laws are Tailored to the Slugs here as well. Unions are good for that here too.
Perhaps a Longer Probation period is in order?
I have seen and been through Probation periods which were 90 days and some which were 6 months where the employer could be let you go for any reason within that time frame before being considered a Permanent full time employee.

You can tell if you have a Slug or a worker in Six months.

That said realistic performance goals are good, ones which look at the Big picture are even better. Like Bottom line shop performance, The Total dollar amount needed to give out bonuses every six months. Persons on probation don't get performance bonuses, every one has to do there time.

Post the numbers on a board in break room bottom line every 6 months.
What it keeps to keep doors open and lights on.
What your paying out for who's on Payroll, Taxes, Insurance, etc. not who's paid what.
Where the shop need's to be with consumables.
What it takes to give out real bonus checks every six months, How much Profit you have to make for you too give out real performance bonuses. They need to understand that just because you made a one Dollar doesn't mean they are gonna see there portion of that dollar No! They need to see a Goal of how much is required above and beyond certain amount before checks start being written.

Not everyone gets the same amount or percentage each has a Pecking order and each is Paid accordingly to what the Shop made.
Good employees are not found or hired they are Trained Partners in Business.

Instill the Fact that EVERYONE'S Job is just as important as YOURS!
Even the Guy or Gal that cleans the Toilets! Every one has a job to do everyone's Job is important.

I don't do Toilets and I'm not about too start either but I can tell you I aint staying in a Place with a Filthy Toilet So the person who cleans the Toilet his job is important!
I am also not staying were I cant make a living, I work to make money plain and simple Got a way for me to do my Job faster and cheaper so we can make more money show me how i will do it that way. I want to make more money I accept more responsibility and learn new skills.

No one wants to do anthers work including yours don't be afraid to do your job just because letting some one go is gonna cost you some cash that's BS! Its just business.
Your all there to make money Period they are either on board or there out of there its just that simple.

My Past employer did very similar deal and you would be surprised at how many were really on board with the bigger picture for that fat bonus check every six months.
It Blew me away when I ran into a problem and I Got help without asking just so product got out on time. When real money is on the line you'd be very surprised to see who is really paying attention to whats going on around them and how much they all actually think about that big payday when they get Two checks!

Stop hiring Employees, Take on Business partners
Dennis Barnett
A&P Mechanic, FCC General radio Telephone Operator
Line Maintenance A&P Mechanic and MOC Tech specialist.



No Turning Back
Posts: 835
Joined: Sun Dec 16, 2012 4:46 am
Location: Canberra
Country:
Australia
PostPosted: Tue Jul 03, 2018 2:54 am
Wise words, Dennis. Have to agree with everything you say.

Doright wrote:Instill the Fact that EVERYONE'S Job is just as important as YOURS!
Even the Guy or Gal that cleans the Toilets! Every one has a job to do everyone's Job is important.


Yep, as the one and only person here who is capable of cleaning toilets I thank you for the recognition. Pity no-one else here can even replace the bog roll when it's finished. :rolleyes:
Chris

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