Creating Pay Plans that Create Profitability

Say the words “We’re changing Pay Plans” in a dealership and everyone starts to run for the hills! This is typically because pay plans in our industry are usually designed with little thought, flexibility, or consideration for what you are actually trying to achieve. The pay plan is written around “So how much do you make now?” or “what does the average person make in that job?” instead of what really matters, Incentivizing, Motivating, and Rewarding employees to achieve GOALS!

Spend even a little time defining your goals, and then creating a pay plan in line with those goals, and your employees will reward you with improved employee retention, performance, and a winning culture! My workshop will provide you with the skills and tools to create Pay Plans that Drive Profitability!

For example, here are 3 tips for designing a successful pay plan:

  1. Position not Person – When designing the pay plan make sure you do it for the position not the person. In other words, just because Bob looks good on paper don’t give him a “Special” Technician pay plan to do the same job as your other Technicians of the same skill.
  2. Define Success – If we don’t know what success looks like, monetary compensation, performance achievement, and any other areas we expect, how can we know if the person achieved success or if the pay plan had any impact on their performance at all? And how do they know what they are trying to achieve? Define success and then monitor results!
  3. Win = Win – A successful pay plan will result in a win for both parties involved. So, the Dealership gets a win and the employee gets a win. If the employee earns more money than ever, yet the Dealership is far less profitable, you can bet dollars to doughnuts that the pay plan will be out with the trash in no time!

Remember these 3 tips when reviewing, adapting and creating pay plans for your Dealership! And Make sure to attend my DSES Seminar where I will share with you the skills, tips, and practical examples, for “Creating Pay Plans that Drive Profitability!”

Be Profitable!

Discover how Profit by Action is the right solution for your Automotive Dealership


By clicking Submit, you are agreeing to receive email notifications on monthly specials. Quick Tips & new product development.