Pay Plan For New Hires

Compared to probably 95+% of the dealerships in the country, my thinking on pay plan is definitely outside the box. To me, that puts me in the top 5%! I like it there. Let me share a pay plan idea with you and let you decide if there is any value in it for you.

For your new hires, a strong pay plan will help you retain and grow your best people. Here is an effective plan. The first two weeks will be strictly training in the classroom and on the lot to learn the product and basic procedures. The second two weeks will be on the job training in prospecting, and other marketing and merchandising tasks in the business development matrix. This will be done with a full time coach which is an experienced sales person on your staff who gets paid extra for this task or by the manager. During the first month, there will be a reasonable training allowance. I recommend a minimum of $2500 to $4000 depending on who the new hire is.

After the first month, they will not be totally on their own, but will begin doing much more solo. The second month, their pay will be based on tasks completed. Each in person prospecting call will have a dollar value, along with each phone call, working on the lot merchandising, along with all of the tasks on the business development matrix. You can use the same dollar amount above that you used the first month and determine which tasks are more valuable than others and then determine what the dollar amount is for each in that when the new hire, hits the target of the number you want them to hit, they earn the same amount of money. If they choose to do more than this, they would earn more, but the money comes from the actual tasks being completed.

You can't pay on sales in the first three months and expect people to stay unless they have a large savings account and they have a very strong desire to work for you. It isn't effective. But, if you pay for the tasks that ultimately lead to making sales, you are creating a work effort pattern that will feed the new hire for life along with the dealer. It is totally win-win. Teach them to fish.

All along from day one, you are watching and testing the new hire to determine how you can help them succeed. You will also be finding out very quickly if they are doing as you need them to do. If they are not and it cannot be corrected quickly, now is the time to make a change and begin again with a fresh candidate. No more will you be hanging on to people who are failing. This plan helps stop that from happening.

I suggest that you keep them on this pay plan for at least three months and perhaps longer if you determine that would be beneficial for both of you. Build a strong and solid foundation of work efforts that you know have dividends over time. Prospecting is not a quick fix, but it will build a strong business with consistent efforts. Focus on the activities and the responses from those activities. This will pay the dealership well and help create strong, healthy, long-term employees.