Get your team to work as one

In a previous column, I discussed how I was able to transition away from a flat-rate pay plan without losing a single technician in the process. The team-pay system we use is a bit different than the ones I hear about at many other shops, so I thought it might be helpful to share a few details in case you’re considering a similar change at your shop.

First, most shops that shift to a team-pay plan tend of have multiple teams within the shop. They might treat the body techs as one team, and the paint shop as another, or they might have multiple teams that each include some body and paint department staff.

I can see some value in that. But as a business owner, I come back to sports analogies a lot, and for me, I want our shop running as one team, all with the same goal. A sports team might have an offense and a defense, but the points all go up on one scoreboard. Everyone is working toward the same thing.

So all our flagged hours go into one pot for the entire shop. When a car gets painted, a body tech is getting paid off that, and when a vehicle gets reassembled, the paint department makes money, too.

How the money in that pool gets apportioned out to each employee is based on their clock hours and their skill level. Everyone has an hourly clock rate, and they receive that rate for every hour they are on the clock.

How much above and beyond that they receive is based on the efficiency of the whole shop, the whole team. If all employees combined for a pay-period have a total of 1,000 clock hours, but the shop produces 1,500 flat-rate hours, then the shop was 150 percent efficient, and everyone receives 1.5 times their clock rate for every clock hour they worked.

The beauty of the system is we’re not dependent on a single individual tied to a particular job. They’re also able to pick out what they do best and what they enjoy doing. If a guy is great at doing mudwork, that’s what he ends up doing. Not all day every day, but that’s the bulk of his job. Typically those guys don’t like R&I’ing parts or working on the frame rack. That’s left to guys who may not like doing mudwork. My fastest R&I guys can do that all day, without feeling like they need a pick-up bedside job now and then in order to make a good paycheck.

As I mentioned in the previous column, the results of the pay-plan change were pretty immediate and dramatic. At one of our shops, for example, we were able to take a facility that everyone thought was basically maxed out at about $4 million in annual sales and actually easily produce $6 million out of it. My techs are working fewer hours, making more money, and enjoying a better quality of life.

This system also fosters a culture of training. Our A-level techs realize that if they can help less-experienced employees improve, they all make more money by increasing the shop’s overall efficiency. That leads to a mindset of, “The faster he knows what I know, the more hours we turn.”

I have to reiterate that all this requires a high level of trust. My employees had to know that no matter route we took with the pay-plan, they could trust me. I remember once when one of my seasoned techs saw a new-hire meticulously keeping track of every hour he logged. It was great to hear my long-term employee tell the new guy, “You won’t do that for long. Ryan is going to treat you fairly. I’ve been here 10 years and I’ve never been shorted once.”

That’s what it’s all about for me. When they trust in me, and trust in themselves and in each other, we can accomplish things that others aren’t.