PAYDAY

It is Monday November 1, the sales and F & I department are wrapping up the final deals for the month at Payday Motors. The service parts and body shop departments are beginning the process of finalizing the prior months’ business and the general office is preparing for the month end onslaught of deals and other prior months’ business.

The dealership policy is to pay the sales staff and other employees who are paid bonuses on the 10^th of the month. As such ten days later, on the following Wednesday, the employee can expect to receive a piece of paper in the form of a paycheck or pay stub if direct deposit is utilized rewarding them for their efforts. Payday Motors implemented the policy of paying bonuses and commissions on the 10^th of the month twenty-five years ago.

Now that we know the policy at Payday Motors let us digress and ask why the employee works at Payday Motors. Is it because the dealer is a nice person or is it because of the dealerships proximity to the employees’ home or is it because the employee is a car enthusiast? Or, or, or? Those factors may or may not come into play but the bottom line is Payday. At best all other reasons are ancillary.

There seems to be two schools of thought when to pay commissions and bonuses. The first is once the employee is paid, the incentive for this months’ business is disrupted because they are flush with cash and it will be a day or two before they get hungry again. The second thought is to pay them as fast as you can so their mind isn’t on - when am I getting paid. The faster they are paid the faster they can get their mind on this months’ business. I opt for the second method. The sales staff and those receiving monthly bonuses work hard for their money and want to get paid.

I always liked to pay the employee the day after the books are closed. At the latest two days after the books are closed. Thus if the first day of the month is a Monday and the books are closed on Wednesday the 3^rd or Thursday the 4^th the employee would be paid on Friday the 5^th.

Today I wonder why Payday Motors still pays their employees on the 10^{th .}