Pay for Performance for Your Team By Ron Sturgeon
A
ll of my articles are based on my experi- ence. I share them to help you get ahead. I started with nothing and didn’t get to col- lege, so I know you can achieve maximum success, regardless of your education.
You have sat in class after class, talked to other yard owners about switching over to paying employees for performance, and you are still paying them hourly, thinking all your employees will walk out or that making this change might cause chaos in the business. Yes, just like you, I was slow to change to pay for per- formance. I had all the excuses you are making, all the reasons why I should not disrupt my employees, because they were giving me all they had, but was I wrong! I still remember the day Keith and I changed to a pay-for-performance system for our employees. In 1998 our delivery driver was having trouble making all the stops. We soon found out why. He was going to his girl- friend’s house and taking naps and we were paying him for it! We changed his hourly pay immediately to pay for performance (pay per stop) and he erupted. He quit on the spot, but we kept going and hired someone else with
the new pay plan and have never looked back. The new person thought incentive pay was great because he didn’t have the “baggage” of the former employee. So why risk the change?
As owners we have faith in our employees. We do not follow them around to see if they are spending their time efficiently or wasting our money. Instead of monitoring their work, we give them raises and hire more employees because “They just can’t get it done.” If you are paying your employees hourly, take a day and just follow them around. You will be surprised at how much they don’t do. The switching to pay for performance will increase your bottom line. How? It will reduce the number of employees while increasing productivity. Pay for perfor- mance will weed out the under performers and you will be amazed by what your strong employees are capable of handling. The driver on pay for performance must keep accurate records for delivery time, miles, etc. Drivers will generally have to load and unload trucks. We have helped many yards implement pay for per- formance across their operations, including dismantlers, parts pullers, drivers, and salespersons. In fact, it’s one of the best ROI changes we teach owners, over and over, site by site. It’s not unusual to see clients get our fees back in a week or less with the changes they implement.
Ron Sturgeon has been a successful business owner and past auto recycler for more than 35 years. He has he built several Fortune 500 companies. Reach Ron at rons@ MrMissionPossible or (817) 834-3625, ext. 232.
Automotive Recycling
May-June 2021 // 47
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