Incentive Plans for Painters
Many shop operators have implemented successful bonus plans based on training and efficiency, but those incentive systems are often for body technicians, and neglect to incorporate painters. Jimmy Lefler, owner of the four-location Lefler Collision and Glass in Indiana and Kentucky, says that he constantly changed his painters’ pay plans to find one where they would be motivated to reduce their costly paint and materials usage. Nothing worked, he says, until he found a way to get their “skin in the game” and came up with a bonus plan for his painters. That bonus plan has not only resulted in more money for his painters, but he’s also been able to slash his gross materials bill by 30 percent company wide, month after month. Lefler discusses the plan and the effect it’s had.
I have six paint teams in four different locations that are all paid flat rate. I introduced this concept by bringing them all together for a luncheon and explaining the bonus program. I explained the cost of all the materials we used and I showed them where we were at to start with. Then, we set a goal of where we wanted to be, which was originally slashing our gross materials by 10 percent every month.
The concept is that they compete against each other. The way we calculate it is by taking the total dollar amount of paint materials consumed in a quarter by each team and dividing that by the total number of hours that each team turns in for pay. Whoever has the lowest cost of usage gets a bonus per team member. Then, if the other teams come in 10 percent or more below the national average for this KPI, they also get a smaller bonus. The way we figured this out was by striking a balance between paying the painters and still saving money. But honestly, if you can slash your material bill by 10 percent, that’s a lot of money every month and the bonuses are only a small piece of that.
We work with J. Hunter & Associates, a lean materials management company that provides us detailed reports every month. We have those reports emailed, and every month, we go over them with the painters and explain where we are. We hold a quarterly meeting and pass out the checks. Typically, a painter can pick up a couple thousand dollars per year. During that meeting, I require them to write out three things on Post-it notes that outline what they were doing to be successful in reducing their usage. I post those all on a board and we discuss each one. The reason I like this is because if you just go around a table and someone says, “I quit using two-inch tape,” another guy can easily say, “That’s what I do, too.” If they have to actually write down two or three things, then you get a whole lot more response.
Once their skin was in the game and it’s more money in their pocket, all of a sudden, things were different. You used to go through the paint shop and you’d see rolls of tape laying in the paint booth, getting baked, getting run over. All of a sudden, if they see tape on the ground, they pick it up, regardless of whose it is. They don’t allow any waste. It’s one roll that’s not coming off their numbers.
The ground rule is that they’re not allowed to change brands of products without management deciding it’s the right move. They’re not allowed to make a change in their materials. They can’t just switch to a cheaper brand of any kind of material.
I also put a five-gallon opaque container in each paint mix room. That way, when they mix their clear, if they mix an extra ounce or two, they pour it in the gallon. On the container, I marked every thousand-dollar mark so they could see how much that stuff is. And that was strictly for them to observe their own waste. Those visuals really help out. Typically if it’s not something that matters to them, a painter will mix an extra ounce or two so they don’t run out. That’s great in theory, but when you look at the cost of a sprayable gallon of clear coat, it’s a whole lot of money.
Finally, my other strategy was having them sign for every delivery from the jobber. That way they could see the cost of everything that was being handed to them.
The effect has been a drastic reduction. It’s thousands of dollars a month in savings. Competition drives the plan, also. If you just set a benchmark and they can beat that bar, that’s what they’re going to do. But if it’s a competition, you don’t want to be the last in any competition.
For any bonus system to work, it has to be very easily understood and measured. If you have to do complicated math figures, it becomes much more difficult. So, pull your reports and break everything down to make it digestible.
If you’re just a one-shop business, they can still compete against each other or I’ve also shared my numbers with friends across the country so they can have their teams competing against my teams.