Did you know incentive pay plans are both monetary and nonmonetary? Your business must be profitable and have a clear vision with the right culture set in place for incentive plans to work. How are benefits, bonuses, and incentives different? Keep listening to find out how to incentify your employees to achieve their dreams.
Watch the Episode on YouTube
Key Talking Points
- Motivation- based on relationship, culture, and attributes that empower them.
- You must be profitable to have financial rewards
- Your business model needs to be sustainable, growable, and expandable based on labor- you need to be profitable in labor
- Performance-based pay: pure pay for what they produce, to hourly based with an incentive scale that gets them to $50 to $70 an hour.
- Interview- paid training, employment programs for career growth, ask about their dreams and their ‘why’ and plan their incentive pay
- You’re not hiring a technician, you’re hiring for a career and lifestyle
- Employees are looking for security and longevity
- Bonuses: it’s the cherry on top, monthly/annual hours into training raises base hourly, ASE master raises base hourly, longevity bonuses for tenure, tool bonus based on hours or punctuality, consistency bonus: produced 50 hours or more for 2 to 5 weeks in a row earn up to another $5 an hour, leadership & personal development incentive: be a better version of themselves, Apprentice toolbox they get to keep after 5+ years, etc
- 74% labor GP on highest-paid tech- take 74%-100% = 26%, $40/.26= labor rate to be at 74%
- Modifying pay- what is the intent? Can it continue to change? Are there potential negatives by adding to the pay if something goes wrong in the pay plan? You can’t compromise and be a giver and taker.
- Incentive plans don’t work if the employee doesn’t know how to track themselves. Teach your employees to watch themselves in the simplest way.
- Give freedom- expand to quarter or every 6-month programs to take into account vacation, sick time, etc. Don’t make it a disincentive plan
- Critical sick time, health spending account, ‘pay the vacation,’ health benefits plan for families, team bonuses
- Your incentive plan should build your bench of technicians wanting to come work for you. One pay plan doesn’t work for everyone. It also needs to be tied to your vision for the business.
Connect with the Podcast
Check out today’s partners:
More Time. More Profit. Shop-Ware Shop Management getshopware.com