Unlike many other companies faced with the ongoing economic crisis, Enger Auto Service & Tire Inc. has opted not to cut its employees' pay and instead decided to increase it.
At the start of August, the company implemented an enhanced bonus program for employees to help boost sales after briefly considering a pay cut to help deal with the economic slowdown. Jim Enger, owner and president of the Mentor-based retail tire and automotive service dealership, said the company almost went through with the pay cut but decided against it to avoid causing hardships for its workers.
“There are so many foreclosures and bankruptcies, and I don't want my guys to be distracted with poor finances,” Mr. Enger said.
Mr. Enger said he believed cutting pay or benefits would “put the morale in the toilet” for his employees, and instead the company decided to increase the amount of money employees could earn in bonuses each month in order to motivate them to bring in more sales.
Prior to August, the program was mostly sales driven and allowed workers to add money to their store's “pot” each month through tire and automotive service sales, road hazard sales, new credit card accounts and other means. At the end of the month, the money would be divided among the store's employees.
Now the program is the same on the sales end but has been enhanced with additional avenues for stores to increase the size of their pot. Under the modified program, 10 percent of a store's net profit is automatically accrued each month, with the chance for the store to earn up to 15 percent of net profit in addition to bonus money generated from sales.
To add the extra 5 percent, a store must meet requirements in five categories. These categories—each worth 1 percent of net profit—are inventory control, customer service, store audits, store administrative wage control and cleanliness.
The percentage that each worker gets from the pot is dependent on how many years of experience they have. Workers are able to check the amount of money available by looking it up in the company's computer system, Mr. Enger said.
“It's very transparent and very visible of how much they'll earn for a given week or month,” he said.
Also, because the program is based on profit and sales, there is no limit to the size a store's reserve can reach.
“There's no reason in a successful store why (managers and sales people) can't make six figures with the right economic conditions,” he told Tire Business.
According to Mr. Enger, the enhanced program has already helped to increase morale for his employees.
“These guys are charged up and ready to go,” he said. “This is the first month of their new enhanced bonus program…. A lot of stores are giving it a very strong push.”
Enger Tire, which recently opened its 22nd and 23rd stores, has grown by more than 50 percent in the last 18 months, Mr. Enger said. Because it is still in growth mode, the company is still providing salary raises to its employees and also is continuing to hire new ones.
He said many highly qualified technicians from local automotive service and automobile dealerships have lost their jobs or have had their pay decreased.
“A lot of companies are saying, 'Why waste a perfectly good recession? This is a chance to lower our wages for the guys,'” he said. “That's not the way Enger sees it.”
In contrast, Mr. Enger said a recession is a good time to “compensate talent above the market norm” in order to bring in top-tier talent. One new Enger Tire employee, a former master technician from an automobile dealership, joined the company in order to get away from a struggling company.
“He said, 'I didn't want to wait until the ship finally sunk,'” Mr. Enger said. “It reinforces that the top-of-the-line guys don't want to wait until the last minute. They're constantly looking to improve their situation, and that's why they're the best guys.”
Mr. Enger said Enger Tire pays its workers competitive wages and that salary ranges at the company's stores are as follows: store managers, $40,000 to $80,000; ASE-certified technicians, $40,000 to $65,000; non ASE-certified technicians, $30,000 to $50,000; tire service workers, $20,000 to $35,000; and counter service people, $30,000 to $50,000.
All store employees start from ground level and are brought up based upon their ability to absorb the dealership's culture, product knowledge and customer service.
Mr. Enger himself makes more than $100,000 per year, but he said he also reinvests heavily into the business.
Enger Tire offers its workers benefits such as health care, paid time off, paid holidays, 401(k) plans, ASE technician training reimbursement and opportunities to earn trips to dealer conferences.
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