How to use short-term incentives effectively

I would recommend that these incentives run no longer than three months at a time so that they cannot seen as being part of the long-term commission and incentive structures.

They should be simple and focused so that the results are evident in terms of improved performance by the business and increased earnings by the staff member. In my experience, these incentives often result in raising the bar to new heights – the improved performance became the normal performance.

It is imperative that these incentives are self-liquidating. I suggest it should be that 20% of the improved performance as the incentive and that 80% should go to the bottom line. Obviously, each situation is different and depending on the scheme, the split could differ substantially. Whatever the split, it is important that the staff member feels the benefit if it is achieved.

To keep the motivation going, performance with respect to these incentives should published to the team daily or weekly at least. Create a sense of friendly competition between the participating staff and celebrate successes with daily and/or weekly feedback.

Here are a few simple ideas:

• Parts sales per technician.
• Weekly hours sold per tech (will push costing to cost job cards quickly).
• Points allocated for the different vehicle ranges to push ranges that are perhaps slower moving and where stock availability is not an issue (these would be additional sales - GP that you would not normally earn). Pay on points score.
• Achieving consecutive weekly targets to avoid the month-end rush and to improve monthly results.
• Debtors days improvement for debtors clerks.
• Service advisor and costing clerk incentives for WIP, hours sold, consumables sold etc.
• Incentives on slower moving parts stock items to encourage “prospecting” by parts sales staff.

I speak from personal experience – short-term incentives can be amazingly effective for the dealership. I would highly recommend that you identify areas in your business where they could be effective.

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