incentive pay Help

[dewey9876]

Ok... I have a exterior car wash with 2 attached detail bays with 2 detailers. Detailers are expected to help in wash when car wash is busy or detailing is slow (think winter, all hands on deck)

Problem -Detailers currently make hourly rate with no motivation to work faster/ more efficiently when detailing and not motivated to take walk in express details.

I would like to set up a incentive plan so they get hourly rate plus a percentage of all details they do. = hopefully they will take on more details and work more efficiently. Work more - make more.

My fear is that when they are expected to help out with the car wash they won't make their incentive pay so they won't be interested in doing this. If I do this is sends the message that I am devaluing the work when washing. Detailing only grosses about 10% of gross wash sales so the car wash is my priority.

I may try paying them a higher hourly rate when washing and lower hourly plus incentive when detailing and have them punch in and out for each dept but this could turn into a monitoring nightmare.

Anyone have any other ideas or thoughts.
Thanks

 

[robert roman]

Problem is performance – detailers won’t work faster and resist assignments like express detail or helping out with carwash.

This is borderline insubordination but not uncommon because detailers are often prima donnas. Reason is detailers view themselves as trade persons rather than hourly laborer and they view express detail as short-cut work that is beneath them.

Besides personality/cooperation issue, other potential causes of poor performance are fluctuation in demand, division of labor and time management.

For example, you find it necessary to redeploy labor when wash is busy/detail slow.

However, this is difficult because detail and wash are separate and nature of work is very different. Also, time varies – wash 3-minutes, express 20 to 30-minutes, detail several hours.

So, what more sense, buying a trained quarter horse or finding and taming a wild one?

For example, if wash volume is 50K CPY, detail capture of 1 percent would equal 500 cars at $100/car equal $50K gross less 40 percent labor and 25 percent expenses equal $17,500 NOI.

If detail is 10 percent of business, then wash revenue would be $500,000 ($50K / 0.1) or 50,000 CPY at $10.00 average sales.

If express detail capture is 10 percent, sales volume would be 5,000 CPY at $20/car equals $100,000 gross sales less 30 percent labor and $5.00/car COGS equals $57,500 NOI.

So, express detail becomes 16.7 percent of business but more importantly NPV of business has been increased by $40,000 ($57,500 - $17,500).

Utilization also comes into play.

For example, 500 detail a year equal 1.6 CPD at 4 hours per car is 6.4 man-hours. Two detailers is 16 man-hrs or 40 percent use rate (6.4 / 16). 9.6 remaining hrs (16 – 6.4) divided by 4 hours equals 2.4 cars or potential revenue $240 (2.4 X $100).

5,000 express details are 16 CPD at 0.5 hrs per car equals 8 man-hours or 50 percent utilization rate. 8 remaining hours divided by 0.5 hours equals 16 cars or potential revenue $320.

Hope this helps.

 

[dewey9876]

This is great thank you!
How do I go from 1% detail capture rate to the 10% express capture rate? Commission based greeter?

 

[Jeff_L]

I'd flip your detailers to commission based only. That'll give them incentive to work, upsell customers, etc. You'll have to lay down the rules to not bother customers who obviously want to do it themselves, so they'll need a soft touch. Such as, whenever you have time next, bring your car by and we can get those yellowed headlights crystal clear again for you for just $$ and x amount of time.