Unless you sell every car, write every repair order, wait on every parts customer, you achieve your goals through the performance of your people. Are they crystal clear about your expectations? Do they know–because you’ve told them–what your minimum performance standards are? Do you know?
Right now, some managers reading this are thinking: “We don’t have minimum performance standards.” Think again. You have minimum standards because every business does. Your problem might be that you didn’t set them. When management fails to define the acceptable minimums, they are set by the worst performers who are allowed to stay. Their performance becomes the minimum standard by default.
Performance standards are not behavior standards.
Behavior standards are typically addressed in an employee manual or similar tool and establish rules for attendance, grievance procedures, vacation policy, and such. Performance standards focus on the results produced by each member of a team. Number of cars sold per month, average customer labor hours sold per repair order, and monthly CSI scores are examples. When you set–and maintain–a floor under the key result areas of individuals, you go a long way toward setting a floor under the results of the entire dealership or operation.
Points to consider as you set minimum performance standards.
- Be realistic. Be specific. Keep it short and simple.
- Communicate your standards to everyone affected–especially to prospective new hires before you hire them. Get your current employees to read, sign and renew every year.
- Monitor performance. Keep a scorecard and review it with every covered employee every
- Meeting with employees within 48 hours of month-end is essential. It is either an opportunity for you to say something like: “Thanks for another good month. Any problems I need to know about?” or “I see you fell short of our minimum standard. What can we do to help you succeed?” In either case, you write notes on the back of the scorecard, which you and the employee date and sign. If things don’t work out, you will want those notes.
See an example of minimum performance standards here. Change it to meet your needs. Adapt it for employees in other positions, such as service advisors, parts counterpeople, or F&I producers. Suspend or modify, if necessary, during periods of unusual business conditions. Notice, however, that this set of standards does not require feats of superhuman performance. It also accommodates the fact that even good people can have a bad month or so. But it conveys a clear message: Don’t make underperformance a habit.
Performance standards save time in the long run.
Developing standards, monitoring performance and meeting with employees every month takes time that some managers don’t feel they have. If that’s you, consider that the consistent use of minimum performance standards tends to save time in the long run because many employee problems become self-correcting. Underperforming employees are more likely to remove themselves from your payroll before you act. Involuntary terminations tend to be less contentious because all parties see them coming and most of the excuses have already been dealt with.
Remember how you asked those who were struggling what you could do to help? If he/she asked for extra training, you provided it. If it was something else you could accommodate, you did. When all the things identified by the employee as impediments to success have been removed, there is little room for argument if results fail to materialize. It becomes easier for everyone to recognize that things didn’t turn out as planned, shake hands and part company.
And don’t ignore your high-performance people. If you can’t spare five minutes a month to meet with them, say “Thanks for another good month” and ask how they’re getting along, maybe you need to rethink your priorities as a manager.
The job interview is the time to discuss performance standards.
Weaker job applicants, when they encounter an explanation of your expectations in the interview process, often take themselves out of contention. That may save you a future problem while creating one for a competitor. Stronger applicants–those with high standards themselves–tend to gravitate to stores where they can maximize their opportunities.
Your choice.
Every dealership has minimum performance standards. Management sets the standards in high-performance stores. In others, the standards are determined by those employees who contribute the least while being allowed to stay. Which system do you use?
As usual, the ideas in this post can be adapted for use in franchised auto dealerships, independent auto dealerships, heavy duty truck dealerships, aftermarket service, aftermarket parts, agricultural and equipment dealerships and similar business models.
photo credit: iStockimage 6085454/Alex Slobodkin