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Jared Hamilton
From: Jared Hamilton
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Jason Volny

Jason Volny National Training Manager

Exclusive Blog Posts

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Employee Compensation Process

Part 3 of a 3 part series on:

Implementing New Products and Processes in your Dealership.

Employee Compensation Process

This is the most important phase of the strategy. Unless there is some sort of compensation variance attached to the participation, completion, and reporting it will be very hard to get this off the ground and make it sustainable. Most of our managers only get paid for high sales, high gross, and high CSI. What do we have them report on? Sales, gross, and CSI. If you want them to focus on employee development, a portion of their variable pay must be tied to its execution. You can pay them on the execution of processes, such as course completion, task completion, performance reviews, or career management. Or,  Another option, pay them on the outcomes that delivered, such as, lowering turnover, employee engagement, or the speed at which employees get up to exemplary performance levels. Or, you can choose to pay them on both. No matter what you choose, choose something, otherwise, it will not work. It will just become another great underutilized tool in your managers tool belt.

For employees, it’s no different. If you only pay them for selling cars or writing ROs, that’s the only thing they will fixate on. Nothing wrong with focusing on sales, however, we all know, the more we train and grow, the better we all become. However, unless training and development is a part of someones payplan, it will go on the back burner.

Most of you will be familiar with the concept of a carrot or a stick, the metaphor that behavior is encouraged through either positive reinforcement (carrot) or negative reinforcement (stick). Try to avoid the stick as much as you can, however, if someone is not following your strategy to implement or follow the processes, even though it’s part of their pay plan, there must be some repercussion. This is where your basic management skills will come into play. For your manager, it may just take a stern talking to and making them understand the way it makes you feel, why it’s important for your organization and what is expected of them going forward. I’ve seen some managers not allow employees to talk to customers until their training is complete. No matter what you decide to do, your people just need to know that it is important to your growth, their growth, and the growth of the organization as a whole. Showing that you are paying attention will go a long way in retaining rockstar employees.

 

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