locoboy
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| posted on 1/2/11 at 02:30 PM |
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performance related pay ideas??
Please excuse the lengthy post, Any ideas appreciated once you have read my situation.
Guys,
Im looking for some advice on suggestions i can give to my boss!, Not ‘those’ kind of suggestions because i have plenty of them on hand as it is!
I work for a very small company (3 fulltime and 1 part time) staff, our business is breaking 4x4’s and selling the parts via ebay, phone. We also buy
salvage vehicles that can be repaired and put back on the road. Occasionally we would repair a vehicle but more often we just resell it.
My boss is ultimately in charge of things but does very little without consulting me and he does value my opinions ranging from what vehicle we should
bring in for breaking next down to what prices we should charge for certain items.
My day to day duties are, managing the ebay side of the business answering the phone and dealing with customer parts enquiries and compiling
quotations, anything to do with using the computer (no one else is computer literate!)
In terms of the volume of business we do, our ebay account has some 4000+ positive feedbacks and gold power seller status with an ebay turnover of
between 10K & 15K per month, we have a turnover on direct sales of 10K per month via phone sales/footfall through the door and export customers
that i have built up. These figures are parts only and exclude complete vehicle sales.
So as you can see we are turning over a healthy amount of money for a small company. The profit is unknown to me, we are making a profit but that is
one thing he does not share with me or consilt me on!
I feel I am more than a key player in the business and the business would definitely suffer if i were to leave or not do my job as conscientiously as
i do. For the last 12 months i feel my efforts are going unnoticed and I would like to approach my boss regarding some form of performance related
pay.
Because my job is so varied (for example next week i will be spending most of the week erecting a mezzanine floor!) I cant think of any way that my
performance could be measured let alone performance targets set for me to achieve some form of performance bonus. My boss is not very business savvy,
so if i cant think of these ides, then he is certainly not going to be coming up with anything himself.
Most people who work in sales would have a money based sales target and will be working from a structured sales price list with a range of prices
including a bottom minimum price and associated profit margins. In our business it is almost impossible to work out how much profit you make on a
vehicle that you break for spares because the vehicle can cost you more one week than the next and you can buy a vehicle with a blown engine or one
with lots of non sellable condition parts resulting in you not having the full range of parts to sell from every vehicle.
As far as i can see your profit margin can only be calculated retrospectively. With this in mind it is very hard for us to set a structured price
list too. We have been doing this for 4 years now and specialise in certain vehicles so we have a healthy (sorry that should read ‘I’) understanding
for the value of the parts we sell.
I genuinely feel that on the sales i make i am far more profitable than my boss (its only us 2 who do the selling) and my boss is all too keen to
throw stuff away that i know has a value and have often proved this point by selling stuff he has lined up for the scrap bin!
In short I need to find a quantifiable way of measuring my performance thus allowing me to go to him with some ideas to allow us to agree some
performance/profit related targets in order to ultimately get financial reward for my effort.
I am not one of these ‘more wants more’ individuals who is out to get something for nothing, I genuinely feel i am being undervalued, money is tight
and if i can claim a portion of any profit over and above a certain level then everyone is a winner.
There will be members reading this who are unemployed and would love my job and will no doubt tell me so and tell me to shut up moaning.........
I am not justifying my position but my terms and conditions are not very good, basic holiday, working conditions leave a lot to be desired in terms of
health and safety and basic amenities such as heating, i have not had a pay rise for 2 years, i don’t get sick pay, I work longer hours than i get
paid for, i am left in full charge when my boss goes on holiday.
Like i say im not wanting any more than i feel i am entitled to and if i can make headway with this it will definitely benefit the company and as a
result of that it will benefit me and make it a more enjoyable day at work for me too.
Any ideas?
ATB
Locoboy
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nick205
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| posted on 1/2/11 at 02:49 PM |
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First up would be a Profit Related Pay bonus paid quarterly IMO. As you say, difficult to forecast your profitability so easier to work
retrospectively. Typically the profit level for the quarter is translated into a percentage and you're then paid that percentage of your total
pay for the quarter. The more profit you generate the bigger the percentage and therefore bonus payment. Only pitfall is he will have to share the
profitability figures with you for it to work.
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nick205
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| posted on 1/2/11 at 03:12 PM |
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Thinking further, could you (or do you) track the profit on each vehicle you break?
Maybe you could set a margin or series of profit margins per vehicle and relate that to a monthly or quarterly bonus figure, for example...
20% average margin = £20 bonus
30% average margin = £30 bonus
....and so on.
That way you get rewarded for making the company more money so you, your boss and the company all benefit
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daviep
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| posted on 1/2/11 at 03:17 PM |
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Probably not what you want to hear but I suspect you maybe flogging a dead horse. If your boss doesn't appreciate you as it is then you are
going to have to work very hard to convince him that he should give you more of his money.
Unfortunately the fact that your boss doesn't appreciate your efforts/talents probably means he thinks you are replaceable so threatening to
quit may not even work.
Are there any aspects of the buisness which he "thinks" that he manages but in reality it's you who is doing it? If so you could
suggest taking over these "extra" responsibilites and bargain for a pay rise.
Have you asked for more money?
Davie
“A truly great library contains something in it to offend everyone.”
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hobbsy
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| posted on 1/2/11 at 03:19 PM |
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He doesn't read this forum does he?
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r1_pete
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| posted on 1/2/11 at 03:20 PM |
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Leave and set up on you own, you have all the knowledge and skills.
Another idea around performance related pay, is around growing the business, which is easily measured through sales volumes, i.e. a percentage target
increase on the same month quarter or whatever last year, so for example if last January you generated £10K of ebay sales, with a performance target
of 15% and this January you'd need to have generated £11,500 worth of ebay sales to meet your target. Then agree what percentage of thet
increase you get as a bonus, 10% would seem a reasonable starting block.
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Liam
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| posted on 1/2/11 at 03:46 PM |
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To be honest setting up a structured performance bonus system in such a small company is going to be a load of hassle given the nature of the business
as you've described, and probably just isn't going to happen. You'd be better just having a straight talk with him, let him know you
feel undervalued and think you deserve a simple payrise.
Boss then knows how you feel, which is the first step. If he really values you and couldn't get on without you he may realise retaining you is
important and make you an offer. That's the ideal situation for you, but depending on the guy it just might not happen.
Just been through similar myself - I knew how valuable I was to the company and that I was underpaid (even compared to colleagues doing the same job).
Bigger company so there was a proper appraisal procedure where I made those feelings known. Despite my manager practivally agreeing with me, nothing
was done as I suspected would happen. I knew I'd need to give myself all the ammunition possible so I looked around (telling my boss I felt
I'd have to) and got an offer somewhere else. The original plan was to use that as a 'bargaining chip' - 'look, this is how
much someone else who doesn't even know me is prepared to pay me'. Sure enough the counter offer then came, but unfortunately for the old
company, the new offer was too good to refuse, so I started the new job last week! Hopefully your boss has a better grasp of staff retention and you
dont have to go that far.
The key was that I was honest and up front with my old boss, letting him know how I felt about the present situation and what I intended to do. Ball
was then in his court. The potential downside is you are pushed as far as I was but can't get the necessary 'bargaining chip' or you
love the job so much you wouldn't consider leaving (and your boss knows and suspects you're bluffing). If it plays out like that then
unfortunately your boss has you by the gonads more than he does now!
Good luck!
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locoboy
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| posted on 1/2/11 at 07:47 PM |
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Thanks for your input so far.
I think I should mention that the company is doing ok but I have spotted massive potential with little or NO investment just by doing simple things
right, and employing some very basic marketing/sales initiatives such as recording customers enquiries correctly and in a searchable way,
mailshotting existing customers, using our website to develop sales thus increasing profit as there are no commission feed unlike eBay. These are just
a few if the principles I would like to implement but I am NOT doing it without some form of performance related pay initiative. I have had ideas for
ages that I am reluctantly keeping close to my chest until I can get this sorted out.
I am keen for it to be linked to my individual sales efforts, kind of like a bonus for signing up new business because my boss is so keen to sell
stuff that often he will take ridiculously low offers and often lower than
He should on some goods whereas I will hang on until the right offer is received and a reasonable profit would be made.
In addition he seems to think that if a customer buys 3 gear boxes then they get a reduced price..... But why, when we buy 3 vehicles at auction we
don't get a discount! The gear boxes sell on their own at a steady rate so there is no need to reduce the price on bulk sales, all he achieves
is to reduce his overall profit margin and if my pay was related to overall company profits then he would be reducing my bonus by undertaking this
bulk buy bullshit pricing structure.
Here is an example of how I make more money for the company over and above anyone else, My boss sold an engine on the phone this morning (after me
writing the original post) for less than I would have but that's beside the point in this example. All our engines get sold complete with
alternator, p/s pump, manifolds etc which i think is right as it makes the customers fitting experience a lot easier which outweighs the potential
profit loss with the repeat business that it will bring.I looked at the engine he had sold and it had air con installed on it, I took the initiative
to ask if the customer was installing it in an air con equipped car? He said no, so given that the customer did not need it and it was a paid for
optional extra as new then it does not constitute part of a standard complete engine. I then whipped the a/c pump, pulleys, idlers and belts off it
and sold them to MY export customer in the states for £80. No VAT on the sale because it's export so instant 80 quid profit, not bad when the
original engine sale was for £425! An additional 20% just like that! Nomone else sees these opportunities for squeezing the additional 20, 40, 80,
100's out of items that would otherwise be given away free/thrown away.
In response to some of your suggestions
I like nicks idea of retrospective profitability calculations although this is not linked to me individually, yes if I increase sales then the guys in
the workshop will need to work harder/smarter in order to fulfil these sales but it is MY idea that has resulted in increased sales. Ideally I want
something that can be directly linked back to MY efforts.
I can't afford to set up on my own, a large permeate is required along with 20k's worth of environmental certification not to mention
capital investment in tools and machinery.
I don't want to ask for more money because the potential I can see when linked to performance related pay would far outweigh an annual
payrise.
To nick again, it's not possible to work out what profit we make per car because it could take 12 months to sell all of the parts from ONE
vehicle.
ATB
Locoboy
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AndyW
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| posted on 1/2/11 at 08:10 PM |
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Simple, all the bits he throws away, you retreive and sell on your own e-bay account, extra income. The trouble is it sounds like you have built up a
good business, and people will come back even if you were to leave, unless they have some where else to go. It looks like your making this person some
good money, I think its time to make yourself some money and start up on your own.
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froggy
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| posted on 1/2/11 at 09:24 PM |
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my advice as an employer would be to approach your boss with a proposition ,outline your ideas but dont give too much detail away and offer to take
control of the whole internet sales, pricing and marketing for a 3 month period to prove your ideas on the understanding that if you achieve the
growth and profit increase you say is possible then you get the pay rise that you think is fair.
that way there is no arguement wether your ideas have worked and you will know from turnover from the previous 1/4 how well your idea worked .
from your o/p i think i have an idea on turnover /profit as im in the motor trade and your wasting your time trying to get any profit share as your
boss might draw 50k before corporate /income tax .
i was in your situation working at garages and making money for others and really wanting to be my own boss but not having the money to start up and
had to build up enough savings to support me for the first year but 10 years on im the tosser making money of my staff and thats just how it is im
afraid 
[IMG]http://i144.photobucket.com/albums/r187/froggy_0[IMG]
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perksy
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| posted on 1/2/11 at 09:43 PM |
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Have a chat with your Boss about a pay rise
Have evidence to hand that shows what you have achieved and how you have helped the business prosper, also have ideas ready that you beleive would
enable further growth and profitability for the company
If He plays ball then great, If not i'm afraid you'll have to think seriously about a move
Trouble is alot of employers know that we are in a recession and are using this to their advantage at the moment...
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ReMan
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| posted on 1/2/11 at 10:02 PM |
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As said, unless your boss is going to start divulging top level business figures I think this is going to be difficult in such a small business.
But if you do have ideas that are really going to make a difference, try not to give them all away before you ask for a rise
Attributing the incraesed sales/sucess soley to your actions is going to be difficult
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