Bonus the techs? I am not sure how you do that and get them to make the correct repairs with their eyes open.
Flat rate for Independent garages and dealerships is the norm where it’s easier to institute because all the customer wants done is what he ask for…. nothing more, nothing less. In a fleet, though we ask for our technicians to protect the assets and it is up to us to manage the productivity of the techs. As long as the shop is large enough, we are managing the techs by assigning work, that is providing the supervisor is not lock behind a desk doing busy work and is involved on a minute to minute basis.
When supervisors are incentivized, or try to incentivize a fleet tech, lower cost will only be short lived. It becomes simple: “DO the minimum, DO nothing.” I have seen it happen…lower costs, but unhappy drivers while enroute repairs and road calls climb. I know of no fleets that have found a way of bonusing technicians to gain productivity. Instead productivity is often confused with accountability.
I personally have developed incentive bonusing plans that were tied to warranty collected from providing more details and better parts tagging. The same would go for tires in a much simpler way, mostly capturing correct documentation. Another form of incentivizing is based on road calls and PM compliance, not in the amount of time spent on each PM, but the quality as measured by the repairs between repairs and road calls related to PM performance. However all of those plans were front line supervision.
The problem is those plans didn’t generate enough savings to dribble down to the floor level, and once you achieve a high level of performance, there is nothing to measure, or give away. And in the techs’ opinion it is never enough as costs are not well understood and any plan always appears to be considered unfair.
The techs feel that everyone else gets a bonus; the drivers get bonuses, fuel incentives, safety, on time delivery and a parade of others. Managers get bonuses for making weekly budgets (which only drives productivity and quality of repair downstream).
If you want to incentivize technicians, there are some things you could do based on lateness, days off, safety, hours charge on repair orders, but those are all areas that we pay for in the base pay. So I say put it in their pay.
Putting it simply, pay the compensation, coach for success and explain deeply the reality of business today. Also provide a clean environment, keep the building warm (or cool), and provide the right tools for the best personal performance. Most fleets have a hard time approving an air torque wrench. How is that for an incentive to torque wheel nuts?
The only way to incentivize the tech is to turn your operation into a flat rate shop. No fleet has ever done it successfully with lower ongoing costs or could afford the complexity and labor to manage it.
In a dealership it is not about productivity, it’s about absorption. Charge as many hours as you can, write as much as you can, and try to flat rate charge and get paid for 60 hours in a 40 hour week. That’s that game, the way their shops cover all of the dealership costs. In most cases the fleets expect to pay that flat rate cost, and in return most dealerships do a good job.
I tend to believe in managing people so they understand the cost of a minute. If costs per minutes are recognized, taught and drilled into the spending clan, then they’ll really understand that today as much as they are needed, they are not in control of their own destiny. Among many other factors, it’s failure of management to lead their techs that puts companies in a position where they have to sell, merge or outsource.
If there anyone who successfully runs a flat rate at a fleet shop, I would like to hear about your success. Just use the comment box below.