The Flat Rate Pay System, Does it Promote Quality or Reward Quantity at the Expense of Quality?

by on August 8th, 2013
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This question has come up in many discussions with various automotive industry people. Is the current flat rate pay system for automotive technicians in need of change or replacement by a better system? This is an ongoing discussion for the ASE group within online social group.

Most technicians that responded expressed a need for a change in the pay system for technicians. Many technicians felt that the system rewarded Shorty workmanship and penalized the technician who focused on quality workmanship. Some technicians felt the system was fine and expressed that the system offered a method of measuring their performance and allows consumers to be billed fairly and allow for competitive shopping. A large number of respondents expressed that it creates a large number of automotive “HACK” in the industry. These types usually get hired and work for six months at a shop and get all the “gravy” work. Once the come backs start coming back they usually move on and the quality technicians need to clean-up the mess.

The system doesn’t allow people in the industry who are specialist in areas to charge for that additional education and equipment needed to perform specialized services for example electronic systems analysis. Flat rate covers the parts replacement time somewhat. Most flat rate times are based on a relatively new vehicle. It doesn’t take into consideration oxidization of bolts and other parts. Most technicians are given a set amount of time to diagnose a complex electronic system in a vehicle or the shop doesn’t even charge the customer and expects the technician to diagnose free.

This discuss also revealed that the technicians with the higher abilities and equipment are given the more complex repairs and all of the diagnostic work. Most of these technicians watched a technician of lesser abilities make a bigger pay check than them. Why? they were working on vehicles that had a capped flat rate for diagnostics and this time allotment was not enough to cover the needed testing. On the other hand the less capable technician was basically hanging parts which the flat rate pay systems cover very well.

Some shop owners that responded to the discussion also felt this pay and billing system was unfair also. Several shop owners use the system as a guide and charge for the level of technician and actual time for performing the diagnoses or repair. Other shop owners felt it was the technician’s responsibility to perform at the flat rate schedule and their pay check reflected their abilities. But all of them agreed that pricing diagnostics was tricky.

This is an ongoing discussion and it appears that the consensus at this point is that the pay system needs to be overhauled to a better pay system and billing system. If you join the discussion you will find many suggest for a new system. If the industry adopts a billing and pay system based off of the medical industry I think everyone in the industry would be happy! Comments welcomed.

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