Service and Parts Manager pay plan

We are looking to change our pay plan for our service and parts managers. Right now service is salary plus dollar amount per hour produced by the shop. Problem is our service and parts are not profitable and we are looking for a pay plan that is tied to profitability to motivate the managers to turn things around. I'm wondering what an appropriate pay scale would be. % of net profit? Small base + % of profit?

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Permalink Reply by Leonard Buchholz on October 22, 2011 at 8:38am

Good Morning Tanner,

Pay Plans for the Fixed Operations is as varied as the pebbles on the beach. At DealerPro we have come up with what we think is one of the best for motivating and compensating for performance for Service Advisors and Managers. It is a tiered plan based on performance with a small salary, typically no more than 30% of the total pay package.

Each tier is a performance based compensation percentage. You might start out with a 3% commission on Gross Sales and work it up to 5% based on total Sales performance. Many Dealerships tie a CSI bonus into the plan as well.

For the Managers it is the same. Salary at no more than 30% of the total package, tiered performance based compensation at different levels of Sales.

And because every Dealership is different, plans are customized to that Dealerships needs and what they believe is fair compensation.

Feel free to drop me a line at lbuchholz@dealerprotraining.com should you have more questions.

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Permalink Reply by Ganesan Ramaswamy on October 24, 2011 at 11:42pm

Have suggestions for both Parts as well as service whioch will make both mgmt and staff too happy and perform better. shall send u separately. give me a day or two!!.