It is extremely important to track and monitor the performance of each employee at your shop because it directly effects your profitability. You can use the formal Roles and Responsibilities list as a guideline for which metrics to review and we will concentrate on the Technician for this post.
This employee review gives you an opportunity to talk with the employee and quantify how they are doing. If done on a regular basis (say every quarter or end of each month), it will allow you to see trends in improvement or lack of change. You can also compare their performance against other employees at the shop which can come in very handy if you will be giving out raises at the end of the year.
The technician is the easiest employee type to review since they have one main role: complete installs in a timely manner with no mistakes. The purpose of the review is to see if they are accomplishing this goal and making you money.
If they are not performing up to your standards, this review will give you an opportunity to let them know and allow them time to correct the problem. If that employee is consistently underperforming, it will provide you concrete reasoning to let them go.
When conducting the review, you are looking for their Service Efficiency. That is, how many hours are they billing to customers versus how many hours are they being paid. Ideally, each technician should be 100% efficient. In reality, that number will change depending on how your shop operates.
It is imperative to have a system in place to track their time accurately. One of the main features of My Shop Assist is the ability to have technicians track time on each individual task assigned to them. That way, you can quickly and easily see how much work they are completing and how long it is taking. If you are not requiring them to track their time, you don’t have a clear metric with which to evaluate them and you may be losing money without even knowing it.
Time and Material Technician
If you are a restoration or fabrication shop, your jobs are all billed as Time and Material. This means that you are charging the customer exactly how many hours the technician is working on the job. It is critical for the technician to accurately track their time so you are billing correctly.
If you are having your technician fill out a time sheet at the end of the day (or worse, end of the week), there is no way to guarantee the information is accurate. You should try to implement a process where they accurately log each minute they are working on jobs.
In this scenario, you are looking for an efficiency as close to 100% as possible. Meaning that they are always doing something on a customer’s car when they are clocked in.
If your Time and Material technicians are not reaching that 100% efficiency goal, you need to ask yourself why. It could be for many reasons:
- They are tasked with sweeping the floor and cleaning the shop which can’t be billed to the customer.
- They are taking a lot of smoke, phone, or bathroom breaks and not working on jobs.
- They are waiting on specialty tools or materials to do the job.
- They are helping other technicians rack cars or look for parts.
Some of the reasons fall on the technician and some fall on you as the owner. Regardless, it is good to know why and work on fixing the issue.
You can also set a realistic benchmark percentage based on everybody’s performance. Keep in mind that it needs to be a goal that must be worked towards. While 100% efficiency may not be realistically attainable, 85% sure is. This means that each tech is billing at least 6.8 hours in each 8-hour day. If they bill more, great! If they bill less, work on finding and fixing the problem.
Flat Rate (or Flag Hour) Technician
If your shop specializes in a few platforms and repeats similar installs all the time, you should be charging the customer a flat rate for the majority of the installs. We understand that every car and install is a little different, but it should be a goal to create a Task List of your typical services along with estimated hours and prices. This will greatly improve your ability to review each technician.
Having “Labor” and then a unique description makes it very difficult to evaluate technician performance and adds a lot of unnecessary and repetitive data entry for the person making the invoice. Try to make a list of tasks and set the pricing to cover the majority of the install cases.
If you have a detailed task list and your technicians are tracking their time on each task, you can calculate their efficiency (estimated hours billed over hours at the shop) and their productivity (estimated hours billed over hours logged on tasks). As an example, let’s use Kevin Dubois’ time for October at his shop, Evolution Dynamics:
As you can see, two weeks were above 100% efficient, one was close to 100%, and one was way below. Looking at the average for the month, the efficiency comes in at 88%.
Considering he is a 1-man shop and does all of the overhead activities himself, this number is extremely high. This is because he bills the customers a flat rate no matter how long the task takes. He has perfected the installs and can do them quicker than anybody else while still maintaining a high level of quality. This allows him to charge according to his skills and reputation instead of by how long it takes.
This sort of average value is what you are looking for in a technician. If your goal efficiency is 90%, this technician comes very close and is doing a great job!
Productivity is another metric that can be reviewed. It is the relationship between how long each install takes versus the estimated time. This is how a dealership bills the customer and pays the technician. It helps incentive the tech to work faster but not make mistakes.
Ideally, you want your technicians to have a productivity level above 100%. This means that they are completing tasks faster than your estimated time. If they are not reaching this goal, it could be caused by many reasons:
- The tech is not skilled enough to complete the work quickly. If this is the case, they may need more training or guidance on the installs. This responsibility falls onto the manager to demonstrate how to do the install and help the technician work faster.
- The tech doesn’t have the specialty tools required. This again falls on the manager to either provide the necessary specialty tool or have the technician purchase it for his tool box.
- The tech is spending too much time on the phone, taking smoke breaks, or in the bathroom. This problem relates to the company culture and the employee’s attitude at the shop. Breaks should be kept to a minimum and can be outlined in the Employee Handbook.
- Your estimated hours are too low for the task. We often see this problem at shops where the owner/manager sets the expectation too high. It should be understood that the technician may never be as fast as you. If this is the case, increase the estimated hours (and the price of the task) to better align with realistic expectations.
- The technician is making mistakes that must be corrected. This falls on the technician to improve their attention to detail and work more diligently to do the install correctly the first time. Ensuring this happens is the responsibility of the owner/manager.
All of the instances mentioned above can be corrected fairly easily. But, you have to be conducting employee reviews to spot the problems.
We can’t stress enough how important it is to conduct regular reviews of the employees! It provides a formal, non-confrontational, and informative setting to determine what the problems are and how to fix them by providing clear, data-driven metrics. You should prepare all of the data beforehand and then sit down with each person to explain their performance.
After conducting the reviews, you may find there is one stellar technician who completes all the work quickly and right the first time. That person exemplifies the type of employee you want and should be rewarded for the accomplishment.
You may also find that one person is really slacking and not producing work according to your standards. Conducting the review will allow you to explain this to the employee and give them a chance to correct it. If they can’t meet your expectations, you may be better off letting them go and finding somebody better (or not even hiring somebody to take their place).
The goal of the review is to ensure all employees are contributing positively to your business. If you don’t ever conduct a review, you may feel like somebody is dragging you down, but you don’t have any concrete proof to back it up. By deciding on clear metrics to track, you can increase the efficiency of the shop as a whole and put more money into your pocket.
Throughout this post, we have highlighted the need for the technicians to accurately track your time. All of the reports and metrics mentioned above can be calculated using our My Shop Assist software. If you are interested in learning more, please visit our website or email support@MyShopAssist.com with questions.