The Pay for Performance (PFP) Pilot Study Project was launched in order to test the hypothesis that a Technician who has received targeted training and has an incentive pay package tied to efficiency scores will outperform a Technician who doesn’t and thus add more revenue to the Dealer’s Service Department. This project consists of two phases: Phase 1- the Pay for Performance Pilot to test the above hypothesis, and if proven true, Phase 2- the NMEDA Certification Pilot to identify and standardize targeted training that is associated with improved Technician efficiency scores and increased SD revenues.
- Hourly pay packages are typical for Service Department (SD) Technicians in the Mobility Equipment Industry
- Because most SD Technicians have no stake in the business or incentive to perform more efficiently and are not trained or held accountable for performance, many SD’s are supported by Sales and are not operating as profit centers.
- Many Dealer SD’s do not invest in targeted Technician training or reward performance and experience high Technician turnover through transfers within and without the industry.
- Because there is no industry-wide recognized standard certification pathway or typical PFP career pathway, the industry may not always attract or retain the best & brightest possible new Tech recruits
- Therefore, the need for Phase 1- PFP Pilot to test and prove the hypothesis that an engaged Tech with some targeted training investment and pay incentives will yield better long term ROI for the Dealer, and Phase 2 to create a standardized certification program for technical competence to attract and permanently retain the best Technician talent possible for our members.
Study Design, Definitions, & Background
- Three NMEDA member Dealers in the US & Canada were invited in Jan. 2012 to participate in a six month test/control Pilot study and form the PFP-NC Sub-Committee Project Team. (Pay for Performance and NMEDA Certification Pilot)
- These Pilot dealers were invited to represent various sized member operations including: small/local single site (Courtland Mobility), medium/regional multi-sites (Superior Van & Mobility) and large / national multi-sites (Mobility Works)
- The Project Team met monthly between Jan. 2012-April 2012 to determine scope and scale of the Pilot and select included products to be measured with required trainings.
- The Project Team determined that 7 products would be included and Manufacturer Standard Hours would be used to measure efficiency scores.
- The 7 products and Standard Hours were: MPD or SureGrip HC at 5.0 Std. hrs., Bruno Joey Lift at 4.0 Std.hrs., Bruno TAS installation at 7.0 Std.hrs., DPA Braun lift and Interlock at 8.0 Std.hrs., Bruno Curbsider installation at 4.0 Std.hrs., Generic Inside Scooter Lift at 4.0 Std.hrs., and a SureGrip or other Left Foot Accelerator at 2.0 Std.hrs.
- Test Technicians were given the opportunity to receive a Pay for Performance hybrid package of base salary plus bonuses based on monthly improvements in efficiency. Test Techs were also given employer-sponsored manufacturer trainings for each of the 7 Pilot test products. Two of three Pilot participants had both Test and Control Techs.
- Each Pilot Dealer devised a customized Pay for Performance plan for their Test Technicians to reward improved performance over the 6-month pilot.
- Control Technicians were paid hourly and given no PFP rewards or targeted training.
- Efficiency Scores for Test and Control Techs were tracked monthly in a specially designed Pilot Scorecard spreadsheet.
- Efficiency was measured as: Efficiency = Billable Hours Produced / Clock Hours Worked – Comebacks. Example: If a Tech installs a Hand Control in 4.25 hours and creates 4 Billable Hours with no comebacks, he would be 94.1% efficient for that specific job. (4.0 / 4.25 = .941)
- PFP Pilot was conducted from May 2012-Oct.2012 at Superior Van & Mobility with Test 1 (Test Tech at South Bend, IN) and Control 1 (Control Tech at Ft.Wayne, IN), Courtland Mobility with Test 2 (Test Tech) and Control 2 (Control Tech) both at Burlington, Ontario and Control 3 (Control Tech) at Jacksonville, Florida.