Pay Plans

[twkrantz]

Does anyone know where I could find some sample pay plans for parts and service personnel>

Thanks

Troy

[zohpy]

NADA has sample plans for all dealership departments.

[jay@tannerchevrolet.]

I cant find one for my parts department. I have looked at The NADA University

[79LilRedExpress]

Jay

Welcome to the forum

[steve_biegler]

http://www.dealersedge.com/Media/E-C...log/DAC1_0.pdf

Welcome to the Forum, lots of great people here! Hope this helps.

[jay@tannerchevrolet.]

STEVE WOULD IT BE POSSIBLE FOR YOU TO CALL

Jay 888-623-0545

[tnpartsguy]

I talked to Jay on the phone, and he said he thought he had the answer he was looking for, but I'd still like to review this.

*) Parts Manager pay plan. Depending on your volume and location the base pay should be $35~50K and should account for 60~75% of the pay plan.
Items that should be looked at and included in the commision/bonus struction-
1) Sales Volume total over prior yr;
Growth in Wholesale and Retail. Percentage of gross in these area's should hold steady - a big drop indicates that stuff is being given away for the sake of volume.
2) Shop Hours; I truely believe that a GOOD parts manager should be paid on how many hours the shop turns. It will instill in him or her how valuble that real estate is. Empty racks/ tied-up racks cost everyone money.
3) Expenses; again, another good indication of a GOOD parts manager is they don't waste money- they keep expenses under control, but they MUST have access to expenses and know what and why.
4) Bottom Line. The more the store keeps, the more the parts manager should earn. Call it profit sharing, ect, but if everything else is done right, the PM should share in the rewards.

[XDCX]

Originally Posted by steve_biegler

http://www.dealersedge.com/Media/E-C...log/DAC1_0.pdf

Welcome to the Forum, lots of great people here! Hope this helps.

Steve - that was an excellent link. Thanks for the information.

[XDCX]

Originally Posted by tnpartsguy

I talked to Jay on the phone, and he said he thought he had the answer he was looking for, but I'd still like to review this.

*) Parts Manager pay plan. Depending on your volume and location the base pay should be $35~50K and should account for 60~75% of the pay plan.
Items that should be looked at and included in the commision/bonus struction-
1) Sales Volume total over prior yr;
Growth in Wholesale and Retail. Percentage of gross in these area's should hold steady - a big drop indicates that stuff is being given away for the sake of volume.
2) Shop Hours; I truely believe that a GOOD parts manager should be paid on how many hours the shop turns. It will instill in him or her how valuble that real estate is. Empty racks/ tied-up racks cost everyone money.
3) Expenses; again, another good indication of a GOOD parts manager is they don't waste money- they keep expenses under control, but they MUST have access to expenses and know what and why.
4) Bottom Line. The more the store keeps, the more the parts manager should earn. Call it profit sharing, ect, but if everything else is done right, the PM should share in the rewards.

Good Karma for you for taking the initiative to give Steve a call.

Concerning your points above, I'm in total agreement. I like the idea that a Part Manager's pay is tied to the Service Department's production and I really like the idea that a Parts Manager is incentivized to control expenses.

Over the years I've known a lot of Dealer Principals who kept such tight control over their Financial Statement that department managers often didn't know what was getting charged to their department. And frankly, if they were getting paid on gross instead of net they didn't care.

I'm convinced it's in the Dealer's best interest to have all of his/her managers watching expenses and looking for ways to control costs.

[JoeRocket]

I've never understood how Parts Managers aren't paid, in some way, based on the health of their inventory seeing how much of a massive responsibility it is. Bonuses for percentage targets of obsolescence, inventory turn and off-the-shelf fill rates. Inventory health can cost a dealership vast amounts of money in the long term if handled poorly and is rarely rewarded if done well. I have heard of Parts Managers being paid a percentage of any pick-ups from a physical inventory, but that's not really the same thing. That would be risky.

[XDCX]

Originally Posted by JoeRocket

I've never understood how Parts Managers aren't paid, in some way, based on the health of their inventory seeing how much of a massive responsibility it is. Bonuses for percentage targets of obsolescence, inventory turn and off-the-shelf fill rates. Inventory health can cost a dealership vast amounts of money in the long term if handled poorly and is rarely rewarded if done well.

That's a great point and I agree with you, I don't think I've heard of a Parts Manager Pay Plan that factors in the dealership's inventory position. (I'm sure there are some examples out there, I just don't think they're very common.)

[tnpartsguy]

I used to have a provision for a bonus if my inventory was within 3~5% of what the GL showed and the OBS was under 10%; but since the days of RIM, that stopped.

[Daddy Butter]

Originally Posted by tnpartsguy

I used to have a provision for a bonus if my inventory was within 3~5% of what the GL showed and the OBS was under 10%; but since the days of RIM, that stopped.

Can you explain why this is no longer common?

[XDCX]

Originally Posted by Daddy Butter

Can you explain why this is no longer common?

I don't know if tnpartsguy has seen your post but I think his concern is that his parts obsolescence has increased since GM made changes to their RIM (Retail Inventory Management) program.

GM's RIM program is supposed to assist a Parts Manager in determining which parts need to be returned but the value of the program is subject to debate.

[zep33]

Originally Posted by XDCX

GM's RIM program is supposed to assist a Parts Manager in determining which parts need to be returned but the value of the program is subject to debate.

Not neccessarily which parts need to be returned, althought that's part of the program, it's which parts need to be stocked and too often, it's for a part that has only been sold 1 time and no one in their right mind would chose to stock it yet