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Pay Plan WizardContents - over 30 Pay Plan Spreadsheets! Example #1 BDC Manager Example #2 Inventory Manager Case Study #3 - Internet Manager "Paul" Paul wanted to quit because he just got a check for $2500 - which came up to less than minimum wage for the hours he worked last month. His old pay plan had over 80% of his income determined by gross profit and F&I income less direct expenses and based on a percentage determined on how many units they hit (a matrix plan.) He was quitting because the previous month had high lead costs (that were actually two months worth) and low gross profit (due to a special program) and low volume (due to a lack of inventory.) If he had been on a smoother tri-method – those ups and downs would not have affected him so much. In addition he complained about having to do so much clerical work that he wasn’t paid for like updating the website and managing the other two Internet salespeople.
SalaryStep 1 - Enter Desired pay and Determine Salary I’ll use my friend, Paul, as an example. I agreed to work with his dealer and come up with a better pay plan (and hopefully salvage Paul’s job.) Paul wanted to make between $3500 and $5000. You can enter any amounts in these two boxes. The next step was to determine what percentage of his pay will be salary, commission and bonus. I asked his dealer to start listing everything he wanted from his Internet Manager and put a value between one and ten on each item with 10 being the highest. Here are some of the results and I’ve grouped them in the tri-method Salary; stability (no turnover) – 5, complete paperwork – 5, conforming with regulations – 7, teamwork with the sales department – 5, keeping the website current – 9, quick responses to emails – 8. Enter the amounts under the Salary column and see how the percentage of Salary increase and decreases as you play with these amounts. CommissionsThe next step was to take these objectives and come up with a pay plan that is not only easy to calculate, but lets the employee know exactly how much they are making. Using the percentages above as the budget and the values from the dealer, I came up with commissions percentages. Play with these amounts (enter into the white boxes only) and see how close you can come to the guide of 35%.
For example, the dealer didn’t put much value on F&I and Aftermarket since he felt that was controlled by the F&I department. I made the percentage of commission on this amount very small (it had been as high as vehicle gross before.) The dealer also didn’t think the manager had much control over the department’s net profit, but lots of control over selling gross, so he wanted a high reward for keeping Internet advertising, commissions, and lead costs down. BonusFinally, the dealer wanted the Internet department to put out lots of units to reach other step dealer cash for the dealership, so he set a high bonus for reaching a certain amount of units each month. The rest of the bonus was for their CSI scores and gross profit averages.
Pay Plan Wizard contains over 30 Pay Plan Spreadsheets like this!
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