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 performance. 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 girlfriend’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 performance 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 performance 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, Mr. Mission Possible, has been a successful business owner for more than 35 years. As a small business consultant, he can deliver wisdom and advice gleaned from an enviable business career that started when he opened a VW repair business as a homeless 17-year-old and culminated in the sale of several businesses he built to Fortune 500 companies.
Ron has helped bankers, lawyers, insurance agents, restaurant owners, and body shop owners, as well as countless salvage yard owners to become more successful business people. He is an expert in helping small business owners set the right business strategies, implement pay-for- performance, and find new customers on the web.
As a consultant, Ron shares his expertise in strategic planning, capitalization, compensation, growing market share, and more in his signature plainspoken style, providing field-proven, and high-profit best practices well ahead of the business news curve. Ron is the author of nine books, including How to Salvage More Millions from Your Small Business.
To inquire about consulting or keynote speaking, contact Ron at 817-834-3625, ext. 232, rons@MrMissionPossible.com, 5940 Eden, Haltom City, TX 76117.