Is Everyone Doing Their Share?

Rick NewsletterEqual lifting is a term that I’ve come to use quite often lately. And if I stop to think about it, it really is pertinent to so many facets of dealership service departments. One of those areas is technician production. The dilemma to so many service managers is “How do I define equal lifting when so many of my technicians are at different skill levels and different levels of production?” And that’s not the easiest question to answer, but it certainly DOES have an answer.

Let’s look at the steps to determine it: First, we need to determine the number of hours the service department needs to produce to ensure it meets its financial goals. Let’s assume that you’ve already set your goal at $286,920 in labor sales for the month. Using your DMS, determine your overall effective labor rate and the rest is a pretty simple calculation:

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Now let’s determine the number of hours per day. Once again, a pretty simple calculation. Just take a look at the calendar and determine the number of working days in the month. If you work a partial day on Saturdays you’ll need to do a little more math to determine how much of a “regular” day that represents, but generally speaking, you could just use the regular M-F work days for this simple calculation:

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Here’s where most managers have some trouble. Let’s say they have 15 technicians. Many will take the 143 hours needed and divide it by the 15 technicians and just say “I need 9.5 hours per technician per day. So that’s my daily objective per technician.” The challenge with this logic is that there are likely a few technicians in the shop that will easily beat the 9.5 hours without much effort. And yet there are others that would struggle to hit that number even on a good day. The number needs to be motivational to every technician so that they are all striving to achieve it. When this happens, the store is far more likely to achieve its goal of 3,000 per month. So how do we “normalize” it so that it fits every technician?

One method is set an individual objective for each technician based on their recent history. The good news is that this is some pretty easy math. Start by acquiring each technician’s clock and flat rate hours for each of the last ten weeks and put all of that data into a chart like the one below:

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Next, determine that technician’s individual productivity (many people will also call this proficiency). By performing the following calculation:

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From there you can determine that technician’s average day and average week in that period of time:

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Once you’ve done this for each of your technicians, you are now armed with the data to develop individual production objectives. Start by ranking your technicians from highest productivity percentage to lowest. Divide that list into thirds and take the average day for the highest ranked third and increase each of them by 5%. For example:

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Using the calculation above, move the middle third up by 10% and the bottom third up by 15%. What you’ve effectively done is increased your current performance by 10% and taken this as a baseline to develop an expectation of performance.

Now just hold a quick private meeting with each technician and chat with them about the need for the objective, and what it represents. Keep in mind that as an employee, there is a tremendous amount of psychological compensation that comes from meeting a performance objective every day. Once you’ve determined that each of them feels they can achieve that number without having a decrease in quality, and that the number represents a number that provides them with an acceptable level of income, you now have production objectives.

Take a moment, and add up all of the objectives together and you now have an expected level of performance for the shop. Let’s say in this case, all of the objectives add up to 155 hours. Obviously, if each technician is able to achieve their objective (no matter how big, or how small) we will over-achieve our sales goal. But ultimately, the big payoff here, is that you are able to manage the outcome, by managing the individual daily performance that leads to it. You have now determined “equal lifting” for each technician!

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