An effective area repair shop requires high productivity. Fundamental to achieving this is having good personnel—a scarce commodity. The job is seasonal and offers little career opportunity. Management’s only selling points are plenty of skiing and life in a resort town. The only motivational leverage is money, not necessarily how much you pay, but the way you pay.
The conventional method is to pay by the hour. This represents one end of the pay spectrum and has advantages. The quality of work can be controlled, the cost of running the shop can be budgeted and there are no special bookkeeping problems. A final consideration is public relations. Part of the recreational experience is mixing with the local color and most mechanics don’t mind passing the time with your customers—especially if they’re getting paid for it.
Hourly wage scales also have disadvantages. Mechanics who are being paid close to minimum wage are not overly ambitious. They may not experiment with different procedures to make the shop efficient. They probably will not give shop layout much thought either. At the very least, they’ll accept the status quo, and may even purposely work inefficiently to get overtime pay.
Paying employees by the piece represents the other end of the pay spectrum. When a mechanic mounts a pair of skis he is paid X amount, when he sharpens a pair of skis he receives Y amount. As a general rule, management should figure on one-third for itself, one-third for the shop and one-third for the mechanic. The advantages of this pay scale are obvious. Using pay incentives, some repair shops have quadrupled productivity. Those which normally carry five or six mechanics, reduce their staff to one full-time and one or two part-time mechanics.
There are also disadvantages to piece-work pay. Quality control can be a significant problem. It takes time to do good work, and mechanics will rationalize they are not being paid for quality, but rather production. Public relations might suffer. The local color who used to tell customers jokes now must get back to work. Special bookkeeping procedures also have to be developed. Management may have to get used to signing checks in excess of a thousand dollars a week.
These methods of payments represent the ends of the spectrum. There is also the center. Management can pay a base rate and then a bonus for the amount of work done. This compromise works well at some shops.
A second compromise, which many shops are adopting, is to pay a low base salary and a bonus based on the total weekly gross. The mechanics are motivated by the piece work incentive, but more important, they work as a team for the shop. Individual piece work problems, such as one mechanic siphoning off all easy money mounts, disappear. Mechanics look for efficient systems. Petty theft is reduced because stealing from the till is stealing from the other mechanics. Unproductive workers, can be culled out through peer pressure. The shop gets a boost in add-on sales: “As long as we’re adjusting the binding, why don’t you have us sharpen the edges? We can have them ready the first thing in the morning.”
The major problem with this payment system is that new bookkeeping procedures and bonus percentages have to be set up. But this problem is more than made up with increased productivity and sales.
Other variables to consider in developing fair pay policies for shop employees are: Do you use mechanics to help on the sales floor? Are they ever used to count cars or stuff envelopes? What is the work flow like? Will you have enough to keep a mechanic busy when he is being paid by the piece?
Look at the problems, options and variables. Then, decide on a payment method for shop employees.
