Pay Plans

Matt Lowery
I would be interested in hearing how you motivate and keep your employees working hard without the added money incentive. I know I wouldnt do well in a system that pays me the same as my coworkers if I am outperforming them.
Christopher Murray
I agree, to a degree, Matt. The culture all around us is changing especially with the "Millennials" obviously, Matt, if I could find, recruit, train and develop more individuals that feel the same way you and I do I would, but I can't! It is my contention that the bulk of all dealerships underperform to an enormous degree in their sales departments because of the number of underperforming salespeople they allow to survive, month after month, because those salespeople have found a way to survive off of draw! I have seen it in EVERY store I have ever been in over the last ten years of travelling in over 10 markets and over 80 stores! The commission based pay plan is quickly on the way out for most dealerships, mine included, if we are to survive and compete favorably in our markets.
Matt Lowery
So how exactly are you looking at changing it? Going straight salary? What kind of pay do you plan to give? Are you doing the same for your managers? I assume they are paid off Gross now, is that changing as well?
Christopher Murray
I am attempting to collect as much input as I can before I plan anything.
Matt Lowery
Ill be interested to see what you come up with. Im a believer in performance based pay, but thats not to say there arent other successful ways. Please let us know what you decide.
Jeffrey Byrge
Christopher, I don't have an easy answer, but were I in your shoes, I would determine and take the average total salary from your team, divide your sales force into three groups (Above average, average, below average) and come up with a salary (plus a small spiff for volume) that gets close to what your team makes within those three tiers. The idea is that you take care of your best people, while giving those below something to shoot for. With this framework, you will get turnover in the below average tier, which is great! People will get paid based on a median average of their work, whether that is yearly, quarterly, whatever. You can call it tiers, Gold/Silver/Bronze clubs, etc. The idea is to drive perfomance while protecting your bottom line and retaining sales people for the long haul, so there has to be clear wins for the sales force.

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