WHY OUR AUTO DEALERS ARE FAILED IN TERMS OF RECOGNIZE PERFORMER & LAGGARDS WHILE PAYING INCENTIVES-INTRODUCING PROFIT LINKED INCENTIVE STRUCTURE

1. WHY OUR AUTO DEALERS ARE
FAILED IN TERMS OF
RECOGNISE PERFORMER &
LAGGARDS WHILE PAYING
INCENTIVES

2. PLIS
PROFIT LINKED
INCENTIVE
STRUCTURE
2

3. EMPLOYER
OBJECTIVE OF THE
PAYING INCENTIVES
• Motivation of employees
• Increase in Profitability & Productivity
• Enhancement in customer delight
3

4. CURRENT MARKET
SCENARIO
73% of the parameters across business
drivers are absent in auto dealerships currently.
Mismatch in incentive parameters with
business objectives leading to sub optimal
performance
4
Profitability Productivity Customer Delight
Sales Turnover
Accessories Turn over
Parameters currently absent
Parameters currently in practice

5. PREREQUISITE OF INCENTIVE STRUCTURE
5
Motivation of employees
Identify & reward performers
Aligning individual performance to business objectives -Profitability,
Productivity and Customer delight

6. PROFIT LINKED INCENTIVE STRUCTURE (PLIS)
– A PARADIGM SHIFT
6
To design an incentive scheme linked to profits ensuring higher incentive
payout for higher profits
Self-funding
Aligned with business
objectives
Recognizes
Performance
To widen the scope of performance covering profitability & productivity
To recognize and reward performance based on their contribution
including support staff
Benchmarked To maintain incentive levels in line with the market scenario
Facilitate transition To ensure changes in incentive structure are reasonable w.r.t existing
payouts for dealer workforce

7. KEY STEPS OF INCENTIVE CYCLE
7
Profit
Planner
Arrive
Incentive
Kitty
Know
Designation
Wise share
Set
Parameter
wise
weightage
Set
Targets
Design
Incentive
Scheme
Update
Actuals
Calculate
& Payout
Incentives
Simulate profit planner to estimate profitability levels
for different performance scenarios
Arrive at the incentive kitty for respective business
verticals as percentage of margin
Divide the incentive kitty among various designations
for the business vertical
Inform the respective HODs about the average
incentive available to design the incentive scheme
based on business requirements
At the end of the month, countercheck the actual
payments against achievement level
Based on the feedback, modify the weightages/
parameters/ incentive kitty to ensure accurate
incentive scheme

8. DEGREE OF FREEDOM (DOF)
8
The incentive scheme provides
3 degrees of freedom (DoF)
Kitty as a % of net
retained income
Designation-wise
incentive share
Parameter-wise
weightage for each
designation

9. DESIGNATION WISE PARAMETER WEIGHTAGE
9
Recommended
Existing
65%
1%
2%
6%
12%
2%
1%
11%
Volume
True Value
Others
Sales Turnover
Finance Cases
Insurance Cases
Ext. Warranty Cases
Acc.Turn over
43%
12%
8%
7%
6%
4%
3%
3%
3%
2%
2%
Volume Discount
Acc.Turn over Lead Management
Finance Cases Finance Penetration
Sales Turnover Others
Booking to delivery Time Retained Income
Acc.Discount Finance Process
True Value Ext. Warranty Cases
Customer Satisfaction Finance Income
Insurance Penetration Gross Profit
Operating Profit Insurance Cases
Stock Holding Inventory Management
Retail Market share Acc.Others
Insurance Income Penetration
Commission

10. THANK
YOU
WWW. SATIATECONSULTING.COM
A RAHMAN
+91 9900246597
https://t.me/Satiate_AutoNew
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