Reducing Employee Turnover Part 1: Using Support and Encouragement
Managers or owners should start by rewarding employees for the initiative they take, even if they make mistakes as they try new things. I understand that mistakes can be costly, but so can missing an opportunity to improve your dealership. Your goal is to encourage your employees to take some risks as long as they are not illegal, immoral, harmful or life threatening.
When an employee comes up with an original solution, even if it doesn’t work, find a way to reward him or her. Part of rewarding employees is to use the solutions they present. Nothing is more demoralizing to employees than to be asked what they think, then see the solution they offered disappear into a management hole, never to be seen again.
Don’t be concerned about letting employees know you don’t have all the answers. When owners and managers try to project a “know-it-all” image, they encourage employees to remain in a passive role and just do what they are told.
A dealership is comprised of a group of people who have come together to make money. And, as an owner, if you just let them come in, do what they do, and leave, that is all you will ever have — just a group of people. However, if you make a decision to mold the group of people into a team, you have something that has potential. Your goal is to create a team of leaders who think like owners, who are willing to step out and take some risks to try ideas. At times, they will fail, but at times they will succeed and they know they can count on receiving recognition and encouragement either way.
Your goal as the owner is to provide the game plan, the encouragement and the rewards, and to work to cultivate the competencies and skills that each of your employees brings to your business.
Understand that your employees will benefit from clear directions and the acknowledgement from you that they play a vital role in the dealership and have the ability to contribute in significant ways to the team. When employees know that their mistakes are viewed as part of their willingness to take a leadership role in their job, they will be more creative, take more risks, and be more invested in the dealership. Just as you have done in building your dealerships, they, too, will use mistakes to become stronger and more adept.
Practice becoming a great coach and work to develop your employees into the leaders you need to move your dealership forward into a bright and profitable future. Will it be easy? No. Will it be worth the time and effort? I guarantee it.
Compensation Plans for Support Roles
Everyone wants to make more money regardless of what people say. Is it the number one motivator for most people? No, but it’s not the last thing that employees want or think about either. If you are going to keep your best employees and want to motivate them to become even better, compensation and rewards have to be part of your strategy.
Not every employee in the dealership has a direct impact on the day-to-day revenue of operation. Some, like those in accounting or those who make deliveries, have an impact, but it’s not something that can be easily measured.
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I want to take a moment and make sure that we recognize that not all forms of compensation have to represent additional money. Again, while more money for most people is a good motivator and makes the hard working employees feel like you value them, it’s not always easy to come up with extra cash. There may be times when cashflow is tight, so you chose to give an employee a paid half-day off instead of money. You were going to pay them anyway and a half-day off on a Friday can have the same impact that a $50 cash bonus would have. It’s more about recognizing their efforts however you can.
If money is something you would like to add to the compensation plan of your employees who are in support roles, consider adjusting the plans you have in place in service, parts or sales, giving an appropriate amount to the individual based upon the performance of the department.
As an example, you might have a person that is hired to take care of the organization’s service lot. Their job may include keeping the outside area organized and picked up, making sure that the equipment is moved in and out on a daily basis, and helping load and unload customer equipment. In this case, you might build a bonus program for the person and tie it to the average tech efficiency of the service department.
Since they are supporting the techs from an organizational standpoint, it only makes sense to build a bonus so that when the techs are producing well and making more money, the individual that is playing a secondary role has a chance to make more money. Keep in mind, it doesn’t have to be a lot of money, but by tying it to the shop’s performance, they take some ownership in making sure they do everything possible to help the shop produce more labor.
You could do the exact same thing with a parts support person or even an employee who helps set up equipment for the sales department. It may take a little imagination to come up with a program. Just make sure that it is tied to the profitability of the department they support and then show them how they can help those around them be more productive. If there is a competitive bone in their body, they will go out of their way to help others knowing that some of the profits will go to them for their efforts.
As you look at employees that cross over several departments, then I would encourage you to create a bonus pool. In a bonus pool, you take a little from each department and then on a monthly basis divide it up between those in the group. This is common to do with people involved with bookkeeping or accounting. Each department is supported by their efforts. What they do is not directly revenue generating, yet nothing would happen without their efforts. They are just as critical to the success of the dealership as any other person.
In all my years of working with dealers, I have yet to find a position that I couldn’t create a compensation program for that reflected on the profitability and performance of the dealership. Your goal is to have people walk away from your dealership excited about the experience they have had. That impact rests directly in the hands of the most valuable asset you have — your employees.