A sliding pay scale, based on improved efficiency, may be an effective motivator for technicians at tire dealerships and service shops.
Here's how it works.
I have referred to technician efficiency in previous columns. If you aren't aware of it, tech efficiency is a measurement that reflects a worker's performance repairing vehicles. Calculating efficiency is fairly easy.
First, note the labor time you charged the customer for the job. For instance, suppose that you charged 2.0 hours labor for a particular repair.
Next, note the time the technician actually spent doing that repair. Let us suppose that the tech actually spent two hours fixing the car.
OK, I'm using nice, round numbers for the sake of simplicity here. Now divide the labor charged or billed out (2.0 hours) by the actual labor time the job consumed (2.0 hours). So that's two hours billed out divided by two hours doing the repair, which equals 1.0.
Now take that result and multiply it by 100 percent. In this example, 1.0 times 10 percent equals 100 percent. Ideally, we'd like techs to be at least 100-percent efficient on every repair job. But in reality, many factors affect tech efficiency.
First and foremost, the ease or difficulty of the task influences efficiency. The more difficult the repair, the more challenging it is to reach 100-percent efficiency.
Second, a technician's experience, training and work ethic have an enormous impact on efficiency. Third, familiarity with the vehicle and the task are major influences. Fourth, access to the correct tools and testers affects efficiency.
Tire dealers and service shop owners may recognize and address some of these potential issues more readily and effectively than other factors.
For example, many bosses I meet realize that they have to promote ongoing training in order to improve tech efficiency. They may recognize that maintaining a crib of modern test gear helps techs diagnose and repair vehicles more quickly.
What's more, studying tech efficiency sometimes spurs the owner and managers to seek overall shop organization. (Literally, the technicians may be walking around too much searching for all the stuff they'll need for the job.)
A moment ago I mentioned the technician's work ethic. It's only human nature that some techs instinctively strive to achieve the best performance.
Meanwhile, other techs seem content to earn just so much—work just so hard—and no harder. However, in many cases most workers will respond to financial incentives to work harder and smarter than they have been doing.
To me, ongoing efficiency measurements are critical to the long-term success of any automotive service facility. Experience shows that over the long haul, monitoring efficiency identifies a variety of the areas—which I mentioned earlier—that need attention.
Measuring tech efficiency may reveal something owners and managers missed. Namely, it's time to hold a carrot in front of the horse.
It's time to incentivize technicians to work even smarter, steadier and more carefully than they have been. This means fewer smoke breaks and fewer mistakes, for instance.
Incentivize techs by offering higher labor rates for higher efficiency numbers. That means creating a sliding pay scale: As the tech's efficiency on a job increases, so does the paid labor on that job.
Implementing this plan likely will take some time, experimentation and fine tuning on the part of owners and managers. But it may be the most-practical, most-effective motivational technique you'll find.
Consider it, try it and let me know the results.