Bonus plan idea

[Guest]

The service manager came to me this morning asking if I could think of a way to do a bonus program. We have BEI and they want to drop that system for something else. Here is what I came up with so far it still needs work so any input would be helpful.

We are switching to closes tech so no more assigned machines. Most of our techs can work on all the different equipment.

Every month a service tech starting bonus will be $500 but that amount will be changed based on how well they do in the month.

Call back
Production time
Copies per month

Call back= If you have more then 10% call backs you will start losing a % of your bonus if you come in lower then 10% you will get a higher bonus.

Production time= You will need to be busy 7 hours a day. If you are not busy that much you will get a lower bonus

Copies Per month= We will take the total copies in a month divided by the number to service techs. That will give a base number that you should have done in a given month. If you did more then that you will get a higher bonus if you do less you will get less.

The dollar amount of $500 is just a starting point that might change. As for the percent it might go up or down will also be set but not sure what the amounts will be just yet. We are paying out about $4000-4500 per month in tech comp right now and they want to lower that number.

I am hoping this will want the technician to work on more machines and do them right the first time. I took out the hold for parts that some systems use as I didn't want them to worry about "If I order this part it will hurt me" I would rather them think "If I don't order that part and replace it will hurt me so I better order it". The idea is the more copiers you repair the more money you will make.


Like I said this is a work in progress so how can I make it better?
Thanks

[ZOOTECH]

Re: Bonus plan idea

The service manager came to me this morning asking if I could think of a way to do a bonus program. We have BEI and they want to drop that system for something else. Here is what I came up with so far it still needs work so any input would be helpful.

We are switching to closes tech so no more assigned machines. Most of our techs can work on all the different equipment.

Every month a service tech starting bonus will be $500 but that amount will be changed based on how well they do in the month.

Call back
Production time
Copies per month

Call back= If you have more then 10% call backs you will start losing a % of your bonus if you come in lower then 10% you will get a higher bonus.

Production time= You will need to be busy 7 hours a day. If you are not busy that much you will get a lower bonus

Copies Per month= We will take the total copies in a month divided by the number to service techs. That will give a base number that you should have done in a given month. If you did more then that you will get a higher bonus if you do less you will get less.

The dollar amount of $500 is just a starting point that might change. As for the percent it might go up or down will also be set but not sure what the amounts will be just yet. We are paying out about $4000-4500 per month in tech comp right now and they want to lower that number.

I am hoping this will want the technician to work on more machines and do them right the first time. I took out the hold for parts that some systems use as I didn't want them to worry about "If I order this part it will hurt me" I would rather them think "If I don't order that part and replace it will hurt me so I better order it". The idea is the more copiers you repair the more money you will make.


Like I said this is a work in progress so how can I make it better?
Thanks

Looks good with maybe only minor adjustments - do you have any job openings?

[Shadow]

Re: Bonus plan idea

this would be a bad idea if you are going away from assigned machines.
if a tech is on a recall, was he/she there before?
or are they following behind some one else?
I would suggest keeping assigned machine but do it by area, ie: zip code.
give them each an assigned geographic region.
what happens if you are the assigned "clean up guy" that follows behind and fixes the recalls?
does that recall count towards your decrease in bonus?
if a tech goes on a call to a machine that you normally look after, does it count towards their
increase in bonus?

just some points to bring forward and look at.
I axed the bonus program where I used to work, because I ended up having disagreements with the techs
as to how a call would count or discount towards their bonus. I had it changed to quarterly bonus based on
daily start times, billable calls and client satisfaction.

[warhawk]

Re: Bonus plan idea

Sorry to say we aren't hiring right now.


I agree the unassigned machines is a bad idea but I'm not management so I don't have a say. I was a tech here for 5 years but just moved over to IT. As I won't get any thing out of the bonus I was ask for ideas.

My thinking is if a tech has a recall/call back they will have to go back to that machine. That way a tech can't go up to a machine see it needs a full pm and walk away hoping the next guy gets stuck with it. We don't have follow up guys but the field manager does do follow ups and helps on trouble machines.

Thanks for the ideas.

[Shadow1]

Re: Bonus plan idea

Bonuses should be based on things that actually affect customer satisfaction - At Ricoh (After the Ikon takeover) we get a lot of our ratings on things the managers want to see, but the customers could care less about. Things like Start/Stop time (were you at a call at 8:00 and 5:00) CAT Time (Customer and Travel - Were you doing customer related things all day) and FCC (First Call Completion - did you have to put the call on hold for parts, etc.)

Yes, you should work a full day - the company pays you to start at 8 and go home at 5. But what if you need to pick up your restock and it's on your way home? Gotta turn in paperwork, should you make a special trip to the office, or drop it before you head to your first call since it's on the way? There's a big difference between measuring ACTIVITY and PRODUCTIVITY.

Yes, you should stay productive all day, but there's so many things our tracking system doesn't account for. Parts pickup and keeping your inventory organized. Training. Even just communicating with your customers can eat up 30 minutes some days... It's patently obvious that Ricoh (Ikon) is more interested in how things look on paper than actually keeping the customers happy - My comment on the subject: "Paper is something you wipe your a$$ with." (and yes, I've said that to several execs.)

Yes, you should do your best to carry the parts you generally need, but the system should not encourage a tech to short a call to just make bonus. If you need to order parts to do the job right, do it - Bean counters don't seem to understand that keeping a machine up to PM actually saves money.

I'd suggest bonuses be done from:

QSR (Quality Service Review) where the manager goes behind a tech the following day at random and inspects the machine and talks to the customer before filling out some sort of standard review form and scores the call. Management gets face-time with the customer, gets to see what kind of work each tech does, and not only do customers appreciate a little personal attention but the manager can make suggestions to improve each tech's skills (as long as it's done that way - some managers want to ask the customer point blank what the tech got wrong and beat on them for it... that's NOT effective leadership)

CBC% (Copies Between Calls as a percentage of the rated PM interval for that machine.) Techs who can make the machine run better, longer will make for happier customers. Obviously a segment 7 machine will run more copies on it's worst day than a segment 1 machine will in it's lifetime, but that's why you do it as a percent to the PM interval. A tech who makes a production machine run 500k between calls gets the same 100% score as a tech who makes a desktop machine run 60k.

Average RT & TT (Response Time and Turn Time) The faster a tech can get to the machine AND get it back up and running the better - again, it makes happy customers when their machine is serviced quickly.

CIQ% (Customer Inquiries) If the customer has to call and question when the tech will be there, then that tech is not communicating effectively with them. Even if he's swamped and can't get there for a while he should keep the customer updated on his eta - if the customer is unhappy with it, that's when the manager should get a call... from the tech not the customer. Just make sure your dispatchers know the difference between a customer asking where the tech is, and a customer leaving a message saying they're going home early, come back Monday.

SIC% (Short Interval Calls) Nothing is as aggravating as having to call back the day after a machine was supposedly fixed, but it happens to all of us. Sometimes it's gremlins, or an intermittent problem, but sometimes it's laziness or not testing the machine properly - Keeping this number low shows the tech pays attention to the details.

I'd also suggest doing individual bonuses for each category - an out of town tech is obviously going to have more drive time than the downtown guys, so there's no way they can compete on RT, but my experience is the rural guys go the extra mile to keep the machine in good shape so they won't have to come back.

[kyoceran]

Re: Bonus plan idea

whats wrong with a simple profit sharing scheme, this would cover the whole picture, remember we engineers are at our most efficient state when we are parked up with no contract calls to do, this enables a payout based on all factors, no profit no bonus

[vincent64]

Re: Bonus plan idea

I think the only bonus should be a Christmas bonus, used to work for a company that went with the BEI program, and I asked one question when they were going over it with us, How do you figure stupid calls in there, after all, you cant fix stupid.
After a while, I decided it was enough, and started looking, found a new place, doing same thing, smaller dealer, one brand of machines, and I love, no BEI, work is fun again.
A bonus program is great, hey we all can use extra money, but I agree with other, treat your techs well, pay them a good wage, let them get education on new machines out there, they will stay.

[kyrenecopy]

Re: Bonus plan idea

As a former Service Manager who has worked with BEI for years I must say that in my opinion stopping using them is not the best idea. Most companies that don't like BEI don't know how to properly use the service. We treaked it for a couple of years before we got it the way we liked it. It is unbelievably customizable. Yes there are stupid calls, operator calls that no tech wants to be stuck with but they can be filtered out. If you do 100 calls and have 2 operator calls they will in no way hurt your bonus compaired to having 100 calls and 35% callback rate or 50% no parts calls. It's a nice arguement by the techs but it just doesn't fly.
We tried so many different bonus plans over the years and they always seemed to be too time consuming to keep up manualy or just didn't work out. It was nice with BEI because everything was done for you. No, I don't work for or with BEI anymore, but I do feel it is one of the best benchmarking plans out there. Good Luck!

[Shadow1]

Re: Bonus plan idea

As a former Service Manager who has worked with BEI for years...

Again - it depends on how you use it. You spent a lot of time tweaking it, but most companies don't do that. We have a meeting with our manager every month to go over our "numbers report." We've nicknamed it the "you suck report."

It doesn't matter how good or bad we're actually doing we're going to get beat for it - even if the manager knows there's a valid reason for a certain result... "Yes I know all the schools are out, and so is capitol hill... and I see you turned in a lot of big PM's, but why didn't you average more than 4 calls per day... and your parts budget is outrageous with all those PM kits."

Just my opinion, but if you are a service department then your technicians need to be rated on the quality of their service FROM THE CUSTOMER'S POINT OF VIEW.

[kyrenecopy]

Re: Bonus plan idea

You know Shadow, I cringe every time I hear someone talk about having to do "X" amount of calls a day or else. That is not the way it should be done. I would rather have a technician do 4 calls a day or even 3 if the 3 or 4 calls he did the next day weren't all recalls! When you push to have 5 or 6 calls a day done you unintentionally cause the techs to do not such a good job of taking care of the machine/customer. They are always in a hurry to meet some stupid goal. As far as I'm concerned your number one goal should be customer satisfaction. Parts usage as long as it makes the machine produce the required number of clicks without seeing a service call is ok regardless of the parts. There are way too many companies out there that are tracking the wrong things for all the wrong reasons and they are going down fast. Look at Ikon and Danka. Konica and Ricoh are on the same path. Ah, to be working for an independent again that cares about their customers.................................

[Shadow1]

Re: Bonus plan idea

Look at Ikon and Danka. Konica and Ricoh are on the same path.

Ikon ran themselves into the toilet. They were literally circling the bowl and soliciting a buyer when Ricoh bought them. First they offered themselves to Canon (over 60% Canon equipment - made sense) but got laughed at once they saw how bad things were.

Ricoh bought them and for some crazy reason let them take over. Now Ricoh is losing business left and right, but can't seem to pull their head out of their a$$ and figure out why. OMG Ricoh! Can you really be that F***ing STUPID?!!

[Shadow]

Re: Bonus plan idea

Shadow1 I totally agree with you when it comes to Ricoh.
living here on an island makes news of a company's failure travel faster than you can think.
the company that I am associated with is independent with out a dealership, and we are picking up a fair number of Ricoh/Ikon accounts.
their techs have their hands tied and no one wants to change it for fear of losing a bonus or their good standing in the company.

when Danka here in canuck land pulled their restructuring BS I was one of those that took the fall.
" we are paying too much for certain technicians and we need to cut costs "
all of their " Bonus Plan " monies went to paying for the top heavy management plans.

as I stated before; a bonus plan should be based on Customer Satisfaction, not a bean counters report.

[Shadow1]

Re: Bonus plan idea

You wouldn't believe how many managers we have that don't do anything at all except find ways to make themselves look necessary and generate more BS paperwork for everyone around them... Or maybe you would.

[vincent64]

Re: Bonus plan idea

Again - it depends on how you use it. You spent a lot of time tweaking it, but most companies don't do that. We have a meeting with our manager every month to go over our "numbers report." We've nicknamed it the "you suck report."

It doesn't matter how good or bad we're actually doing we're going to get beat for it - even if the manager knows there's a valid reason for a certain result... "Yes I know all the schools are out, and so is capitol hill... and I see you turned in a lot of big PM's, but why didn't you average more than 4 calls per day... and your parts budget is outrageous with all those PM kits."

Just my opinion, but if you are a service department then your technicians need to be rated on the quality of their service FROM THE CUSTOMER'S POINT OF VIEW.

The company I used to work for, was still trying to tweak it, and get it right, now when I go on a svc call, I get thanked for comming out so promptly, and for fixing there machine, we try to get to calls that same day, and most days we do, but for our little svc dept, BEI aint worth it.

[kingpd@businessprints.net]

Re: Bonus plan idea

I guess I'm a little bit different but to me a bonus is not for doing your job which you should be doing as best you can anyway. A bonus should be for something extra special or out of the ordinary that you did. Maybe coming up with a money saving idea or solving a really hard problem.

If there is to be a bonus it should be split equally amongst ALL employees. The CEO's bonus, the salesperson's bonus, the tech's bonus, the accountant's bonus, and the janitor's bonus (assuming staff and not outsourced)etc., should all be the same. My view is all parts are equally necessary to make up the whole organization.

I also believe that each person should be paid well and enough to support themselves and maybe a family (assuming they work full time).

I also believe that 40 hours or 4 days a week should be the absolute maximum that a person should have to devote to work.

I don't believe in paying or having people be somewhere from 9-5 for instance just for the sake of being there. I believe in hiring people to do a task and when the task is done then go home.

I believe a person should have a minimum of a whole month off every year to enjoy life before they die, I mean retire.

I don't believe in giving so many days a year for sick time because there's never enough sick time. It's simple, if you are sick you stay home and get better, if you aren't sick then you come to work.

I believe 95% of all jobs could be done while people are at home and would be more productive by doing so.

I believe in having standards that don't focus on short term but are evaluated over long term, months to a full year. If you don't meet those standards then you need help getting better or even ultimately being let go. For instance, if a salesperson should be selling 5 copiers per month and only sells 1, 2, 3, 4, or 5 then there should be no commissions on copiers 1-5 but maybe on #6 and on up. If that person is doing 3 machines every month maybe 3 is enough or maybe they need help or let go...it's relative to how the other people are doing. If others do 7 machines a month then clearly this guy isn't going to make it but I believe in mentoring and helping the person first.

I believe that as long as the employees get a fair wage and are rewarded not for work that is expected of them but for exemplary work that all the profits should go to the owner(s). Wages and bonuses are for employees; profits are for owners. Some places I worked distributed profits to employees if it was a good year. I don't believe in this. Profits should only be given to owners or reinvested back into the business. If an employee wants to share in the profit then they can put a 2nd and 3rd mortgage on their house and invest six figures into the business and potentially lose it all.

I honestly don't think there is any good way to have a bonus structure for a technician. You'll always be giving something up as a trade off. If your bonus is based on profitability to the company than service to the customer may suffer. If based on excellent service to the customer, parts supplies may go up hurting profitability. If the machine is a lemon or a bad model; and since most models these days are junk, the manufacturer's cheap assedness will hurt a tech's bonus structure, company profitability, and customer satisfaction.