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Elite FI Partners | Behavioral Pay Plans

Updated: Nov 5, 2020


Behavioral Pay Plans

by Alex Magliochetti

Often I am asked why can’t I seem to get my employees producing and working together.

Assuming that the dealership is fostering a culture of working together and striving to constantly improve, it usually boils down to pay plans. Most pay plans that I see are based on generating some form of gross profit but not much else. Pay plans should be designed for the behavior you are seeking from that department and employee.

So what is a behavioral pay plan?

A behavioral pay plan is literally the blueprint of what actions you want to have happen.

In a commissioned position, I like to see a 40% base pay to take care of the employee's basic needs and 60% commission, which can be made up of whatever behavior you want and keep them motivated. Using a carrot and stick program that will reward the efforts above and beyond, and penalize for poor performance. As well it should spell out what specific behaviors you want to accomplish in that financial goal. There should be plateaus in the scheme of things that will stretch the employee to get better results. It’s amazing how many times I have seen goals that were thought impossible to achieve. Once stretched, and the department hits that goal, it now becomes the base to set the next bodacious goal!

A word of caution

When setting these goals and plateaus they must be achievable. Nothing can be more

demoralizing to an employee than goals that might sound good but are not achievable causing them to give up. The last key piece, there must be consideration of tying in pay plans between departments to foster good interdepartmental cooperation. The managers of each department must be rowing in the same direction. They should have “ skin in the game” of each other’s departments. With the department’s sharing a common goal it will generate 10x the departmental profits and employee satisfaction. This takes your store to the next level so you can truly succeed!

Alex Magliochetti : is a 35 year veteran of the automotive industry starting from auto tech to owning stores to now coaching and working with OEMs and Dealers.

Contact info:

(516) 241-8548

Send a DM if this resonated with you!

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Month End Approaching! What can we learn?

Michael Aufmuth | Elite FI Partners

If you have ever been in the car business you are familiar with the term "Its Month End." It is the time that all of us scramble to make, or squeeze every deal that we can. Everyone in the dealership seems to have a buzz like today is that day we drank that adrenaline and we are going to attack and make it happen! I love it! Everyone comes together as a team! Dealership vendors will shy away from being in a dealership on this day because they don't want to get in a dealer's way of making a month. I have always been the opposite person for two reasons. One, it's like when the fair comes to town and I love being a part of that energy. Two, what a great way to show people they are capable of pushing themselves to reach their goals as it is happening all around them that day. It is a great tool to reference when you are training a finance manager that is in a slump or struggling to get through to a customer. Our business is full of highs and lows. We are always pushing to be better at our jobs, customer service, product knowledge and so on. Treat every day like it's the last day of the month. Keep the energy and motivate your people to always look at the current day as the day that makes all the difference. Focus on a short term goal and not the overall picture! Treat every day like it is the last day of the month! Michael Aufmuth


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