contents IV. ORGANIZATION ANDI.

PERSONNEL
introduction

Chapter 1 Introduction to Organization and Personnel 04-1

Chapter 2 Manpower Planning

2.1 Number of Units in Operation 04-2
2.2 Number of Repair Orders per Month 04-4
2.3 Number of Technicians 04-6
2.4 Manpower Guideline 04-7

Chapter 3 Job Description

3.1 Service Manager 04-9
3.2 Administrator 04-10
3.3 Cashier 04-10
3.4 Service Advisor 04-11
3.5 Workshop Controller 04-12
3.6 Workshop Foreman 04-12
3.7 Technician 04-13

Chapter 4 Personnel Management

4.1 Working Conditions 04-14
4.2 Remuneration Package 04-16
4.3 Motivation 04-18
4.4 Welfare 04-20
4.5 Recruitment 04-21
4.6 Employee Development 04-22
4.7 Performance Evaluation 04-23
4.8 Termination Policies 04-24
 ORGANIZATION AND
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Part IV. ORGANIZATION AND PERSONNEL
Chapter 1 Introduction to Organization and Personnel
The Organization and Personnel chapter describes the methods for establishing the optimum
dealer organization for attaining dealer objectives and for ensuring that an optimal number of
required employees are hired to maintain maximum performance of the organization.

The service department can provide quality service only if each of its many
varied functions are carried out skillfully, in a well-organized manner.
Efficient organization requires that;

● Every employee must know his specific responsibilities in detail.

● Every operation in the Service Department must be assigned to specific
personnel and be carried out by them

The organization of the Service Department should be planned by a Service Manager so as

to obtain the most effective results according to the circumstances of each dealership. To
achieve this, a Service Manager is required for all dealerships, and the required number of
service personnel to be directly engaged in field work should be decided on according to the
dealership’s size and needs.

A typical organization for dealership service is shown as below:

General
Manager

Sales Service Parts Office

Manager Manager Manager Manager

Service Workshop Workshop Administrator

Advisor Controller Foreman Cashier

Lube Body
Mechanic Electrician
& Wash & Paint

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Chapter 2 Manpower Planning
Manpower guidelines are calculated on the basis of the conditions by the following funda-
mental elements.

● Number of Units in Operation

● Number of Annual Vehicle Sales
● Number of Repair Orders per Month
● Number of Technicians
● Number of Work-bays

2.1 Number of Units in Operation - UIO

As described in the Part II, “Facilities”, the number of Kia units in operation in the territory
directly relates to the amount of service and parts business, the equipment required, the
number of work bays and technicians that the dealership needs to properly service the Kia
customers.

The number of Kia units in operation diminishes gradually as the vehicles reach the end of
their life cycle. Naturally, every product, including the motor vehicle, has a finite life period
before it has to be subject to disposal. In general, vehicle depreciation takes place over 12
years until it is finally scrapped. The vehicle survival rate shows the proportion of vehicles in
actual operation as time goes, and is derived from Kia’s business experience.

VSR
0.8

0.6

0.4

0.2

0
0 year 1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years 9 years 10 years 11 years 12 years

[C.f. Kia Vehicle Survival Rate - VSR]

Past Year(s) 0 1 2 3 4 5 6 7 8 9 10 11 12

VSR 1 0.99 0.97 0.94 0.88 0.8 0.69 0.56 0.44 0.32 0.21 0.14 0.06

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The following example tells how you can calculate the current number of units in operation in
your territory using the vehicle survival rate and the number of annual vehicle sales. The
number of annual vehicle sales can be obtained directly from your sales department. At this
moment, a Kia dealership’s sales data is taken at random for an example, which shows a
gradual growth in its volume through eight year business with Kia.

Calculation:
Total No. of UIO in the Dealership’s Territory
12 years

= Σ Current No. of UIO corresponding to the Certain Year

0 year
12 years

= Σ(No. of Annual Vehicle Sales × VSR)

0 year

Provided that the warranty expires in three years,

2 years

No. of UIO in the Warranty Period = Σ(No. of Annual Vehicle Sales × VSR)
0 year
12 years

No. of UIO out of the Warranty Period = Σ(No. of Annual Vehicle Sales × VSR)
3 years

In this example:
Total No. of UIO in the Dealership’s Territory
= 432 + 417 + 405 + 366 +311 +246 +79 + 63 + 25
= 2,344

No. of UIO in the Warranty Period = 432 +417 + 405 = 1,254

No. of UIO out of the Warranty Period = 366 + 311 + 246 + 79 + 63 + 25 = 1,090

Past Year(s) 0 1 2 3 4 5 6 7 8 9 10 11 12

VSR 1 0.99 0.97 0.94 0.88 0.8 0.69 0.56 0.44 0.32 0.21 0.14 0.06
No. of Annual
Vehicle Sales
432 421 418 389 353 307 115 113 57 - - - -

Current No. of UIO

corresponding to 432 417 405 366 311 246 79 63 25 - - - -
the Certain Year

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2.2 Number of Repair Orders per Month
The number of repair orders per month, which means the number of vehicles brought in, can
be estimated considering the current number of units in operation and other market-related
factors.

Annual Visit Frequency (2.7) - AVF

This is the number of times that each Kia vehicle in operation visits the dealership’s work-
shop for service each year. The annual visit frequency, which charges customer for either
service or parts, appears to be about 2.7 times in the recent survey results as shown below.
The regional data for the annual visit frequency or your own business experience can be
used for more specific calculation.

Region Annual Visit Frequency

Global Average 2.7

East Europe 4.7
West Europe 1.8
M. East & Africa 4.4
Asia & Pacific 3.4
C&S America 3.8

Customer Return Rate (82%: during warranty, 66%: after warranty) - CRR
This is to determine how many customers return to the dealership where they purchased
vehicles for receiving after-sales service. It shows how well the dealership retains its customer
with offering satisfactory services. 82% is the global average customer return rate during the
warranty period, generally the first three years after new car purchase. The customer return
rate based on the Service CSI survey is shown as below.

Customer Return Rate (%)

Region Same maker, Same maker,
Same dealer Different dealer Non-dealer Others

Global Average 82 12 4 2
East Europe 89 9 2 -
West Europe 85 11 3 1
M. East & Africa 89 7 3 1
Asia & Pacific 73 17 7 3
C&S America 74 16 7 3

Kia expects that all Kia vehicles sold will return to the Kia certified dealership to receive after-
sales service. However, the facts are Kia vehicles do not return at the rate expected. Recent
industry studies and our experience have shown that the customer return rate is 82 percent at

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most during the first three years of ownership and declines sharply each year thereafter with
warranty termination. In general, the proportion of CRR shows about a 20% decrease after
the warranty period expires. Therefore, the dealership must make every effort to keep up the
customer return rate that they achieved at the beginning as well as increasing the goal rate
that they set to achieve. In practice, you can adjust this rate to your dealership referring to
your own business experiences for more accurate calculation of the number of repair orders
per month.

Number of Transit Customer Visits per Month

Transit Customer means temporally visiting or passing-by customers in the dealership’s
territory. Their use of the dealer’s service comes about when they are subject to a car accident
or emergency when traveling or staying temporarily away from their own residence. Visits by
these customers are not normally repeated, but it is possible to monitor the number of such
visits. According to the location of dealership, the number of transit customer visits can be
either negligible or significant figures to decide the number of repair orders for the
dealership.

The following shows how you can estimate the number of repair orders per month using these
market-related factors;

Calculation:

No. of Repair Orders per Month

during warranty
No. of UIO in the Warranty Period × AVF × CRR
=
12 Months
after warranty
No. of UIO out of the Warranty Period × AVF × CRR
+
12 Months
No. of Annual R.O. for the P.D.I. of New Vehicle Sales
+
12 Months
+ No. of Transit Customer Visits per Month

In this example:
No. of Repair Orders per Month

1,254 × 2.7 × 0.82 1,090 × 2.7 × 0.66 432

= + +
12 12 12
+ No. of TCVM (≈Negligible)

= 321 + 162 + 36 + 0 = 429

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2.3 Number of Technicians
The number of technicians can be obtained by dividing the sum of labor time with a technician’s
capacity, and the sum of labor time can be derived from the number of repair orders. The
following factors relating to labor time should be considered prior to calculation of the num-
ber of technicians.

Average Time Taken per Repair Order (2.3 hours)

This is the average of labor time sold on a repair order regardless of warranty or region, refer-
ring to Kia business experience. It also includes labor time taken for work preparation as well
as work itself. The Average Time Taken per Repair Order can be a barometer to point your
dealership’s work efficiency and, if it is far off from your own figure, apply yours to the equa-
tion to match the number of technicians with the service demand of customers.

Working Days per Month (22 days)

This is how many days technicians work per month on an average. We assume that technicians
work 5.5 days during one week, and 4 weeks make one month in general.

Working Hours per Day (8 hours)

This is the general working hours per day for technicians on a worldwide basis.

The following shows how you can estimate the number of technicians corresponding to the
number of repair orders;
Calculation:

No. of s Technicians
No. of R.O. per Month × Average Time Taken per R.O.
=
Working Days per Month × Working Hours per Day
No. of R.O. per Month × 2.3
=
22 × 8
= No. of R.O. per Month × 0.013

In this example:
No. of Technicians = 429 x 0.013 = 5.58 ≈ 6 Technicians (Rounded up)

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2.4 Manpower Guideline
The following chart gives the basis of manpower planning in relation to diverse market situ-
ations. But, beware that this guideline can not be the best choice for every dealership as
each business circumstances differs.

No. of Annual Vehicle Sales 100 200 300 500 800 1,000 1,500

No. of Units in Operation 800 1,600 2,400 4,000 6,400 8,000 12,000

In the Warranty Period 296 592 888 1,480 2,368 2,960 4,440

Out of the Warranty Period 504 1,008 1,512 2,520 4,032 5,040 7,560

For Warranty 55 109 164 273 437 546 819

No. of Monthly For Non-Warranty 75 150 225 374 599 748 1,123
Repair
Orders For New Vehicle P.D.I. 8 17 25 42 67 83 125
Total 138 276 413 689 1,102 1,378 2,067

Daily 6 13 19 31 50 63 94

No. of Work bays 3 5 8 12 20 23 35

Total No. of Service Personnel 5 7 13 18 28 31 47

Service Manager 1 1 1 1 1 1 1

Administrator - - 1 1 1 1 2

Cashier 1 1 1 1 1 1 1

Clerk - - 1 1 1 1 1

Service Advisor - 1 1 2 3 4 6

Workshop Controller - - - - - 1 1

Workshop Foreman - - 1 1 2 3 4

Technicians 2 4 6 9 15 18 27

Lube & Wash 1 1 1 2 3 3 4

Body Repairer - - 1 1 2 3 4
Painter - - 2 2 4 6 8

NOTE
●It is assumed that the number of annual vehicle sales is fixed by certain amount through 12
business years with Kia to estimate the number of units in operation.
●It is assumed that the warranty expires in three years.
●Number of Work bays = No. of Technicians x 1.3
●Technician implies only mechanic and electrician by the definition of Kia’s Technician
Recognition Program.
●Manpower for the body and paint work is separately considered just for reference because
those work loads differ considerably according to the dealership’s circumstances.

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Chapter 3 Job Description
A Service Manager’s job is to get work done through employees. Regardless of the approach
used, work will not be effectively accomplished without directing those who must do the
work. Employees work best when their job function is clearly defined, so a job description for
each employee in the department is a must.

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3.1 Service Manager
The Service Manager is responsible to the top management of the dealership for running,
controlling and administering the Service Department and accomplishes the effective ope-
rations of the Service Department by gathering all the power of the personnel in the depart-
ment.

● To manage and operate the Service Department.

Function ● To ensure that quality service at a reasonable price is offered to
customers while maintaining a profitable operation.

Reports to ● General Manager

In charge of ● Service Advisor, Controller, Foreman, Administrator and Cashier

● Good customer relations ability

● Personnel management ability
● Ability to plan and control
● Product knowledge
Qualification
● Administrative skills
● Merchandising & promotion expertise
● Bachelors Degree or equivalent experience
● Master Degree is preferred.

● Supervise and manage department.

● Establish financial and operational objectives, and prepare monthly
forecasts.
● Control performance of department. (Daily operating control, efficiency
and productivity control, warranty report, telephone survey)
● Establish job descriptions and keep up to-date.
● Select and train key personnel.
● Evaluate performance of employees, based on job descriptions and
departmental objectives.
Duties &
● Outline training programs for the service department and coordinate in
Responsibilities
dealership technical training, such as product knowledge courses for
sales department.
● Handle difficult customer complaints.
● Determine the need for new tools and equipment and arrange the
purchase of such materials.
● Cooperate with the distributor service manager for following Kia service
policies.
● Disseminate technical information referring to Technical Service Bulletin
from Kia Motors.
● Attend training that the distributor provides for service manager, such as
Service Academy or New Model Service Training.

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3.2 Administrator
● To administer centralized service invoicing.
Function ● To administer efficiency and productivity controls.
● To administer warranty claims and all related programs.

Reports to ● Service Manager

● Administrative skills
Qualification
● Product knowledge

● Determine flat rate to be charged, consult with technician and/or

workshop foreman, if actual time exceeds flat rate time.
● Prepare required summaries and technical reports.
Duties & ● Prepare technician’s efficiency review upon request.
Responsibilities ● Assign labor operation number and trouble codes to warranty repair
order.
● Prepare warranty claims in accordance with distributor procedures.
● Administer warranty parts identification, storage and disposal.

3.3 Cashier
● To handle all service and parts related money transactions.
● To reconcile daily business transaction.
Function
● To administer petty cash.
● To maintain pertinent records.
Reports to ● Service Manager
In charge of ● Clerical Help
● Customer relations ability
Qualification
● Administrative skills

● Checks and closes out repair orders ready for payment.

● Receive customer payments for service work by acceptable method of
payment or credit.
Duties & ● Submit a daily cash receipts summary to the Office Manager.
Responsibilities ● Maintain customer service file.
● Maintain a warranty claims ledger.
● Follow-up on outstanding warranty claims.
● Assist in operation of follow-up system.

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3.4 Service Advisor
A full time Service Advisor should be employed when customer repair orders written daily
exceed fifteen. An additional Service Advisor should be employed for each increase of fifteen
customer repair orders providing that the department operating profit can bear this extra
expense.

● To deal with all customers and coordinate service work and time.
Function ● To act as liaison between service customers and dealership.
● To promote the sales of labor and parts.

Reports to ● Service Manager

In charge of ● Customers

● Good customer relations ability

Qualification ● Sales ability
● Product knowledge

● Maintain a service appointment list.

● Obtain the customer’s approval and signature after first making sure the
customer understands the dealership payment policy.
● Contact the customer for authorization whenever the repair order needs
to be extended beyond the agreed estimate and give him the new total
cost estimate and new delivery time.
● Record the results of the contact on the repair order and any additional
instructions authorized by the customer (or the customer’s refusal to
authorize additional safety related repairs).
● Follow-up while the repair is in progress to ensure its completion on
schedule in accordance with repair instructions.
Duties & ● Maintain customer file, (follow-up system) telephoning customers who
Responsibilities have not responded to a mailing; assure customer satisfaction by calling
customers who have had major repairs carried out on their vehicle.
● Settling customer complaints promptly.
● Explaining to the customer work performed and parts replaced when
presenting the invoice.
● Informing the Service Manager about trends in customer attitude,
customer appointments and shop performance.
● Informing the Sales Department of the customer’s intention or possible
intention to trade or sell.
● Perform test drive after completion of repairs if necessary.
● Attend training that the distributor provides for service advisor.
● Maintain neat and tidy appearance for greeting customer.
● Develop communication skill to reinforce customer relationship.

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3.5 Workshop Controller
A workshop controller is added to coordinate the proper dispatching of service work when
the number of service advisers exceeds four.
● To maximize workshop utilization.
Function ● To monitor timely completion of work in process.
● To assign work to technicians in accordance with their ability.
Reports to ● Service Manager
Coordinates with ● Service Advisor and Workshop Foreman
Qualification ● Ability to plan and control, product knowledge and administrative skills.
● Assign work to technicians according to their skill level, and to “time
promised” with workshop foremen’s consent.
Duties & ● Follow-up work in process and inform service advisers ahead of time if
Responsibilities “time promised” cannot be kept.
● Maintain shop capacity control, and advise service advisers of capacity
status throughout the day.

3.6 Workshop Foreman

A workshop Foreman should be employed when the productive staff exceeds eight in number.
● To direct and supervise the day-to-day activities of the technicians and
ensure quality workmanship.
Function
● To assist, train, counsel and manage workshop personnel.
● To properly maintain technical facilities, tools and equipment.

Reports to ● Service Manager

In charge of ● Technician, Lube & Wash

● Product knowledge
Qualification ● Personnel management ability
● Administrative skills

● Supervise apprentice training program.

● Spot-check vehicles, especially those on which factory-suggested
maintenance has been performed.
● In excess of work expense, communicate with service advisor and service
manager.
● Control technician’s actual time spent on the job versus allowable operation
time.
Duties &
● Assign work on internal job orders.
Responsibilities
● Keep Technical Service Bulletins and workshop literature updated.
● Maintain bulletin board.
● Control special tools and equipment inventory, and initiate ordering.
● Maintain housekeeping standards in the workshop, technicians’ facilities,
and service car park.
● Conduct department technical training.
● Maintain continuous quality control on all repairs performed.
● Allocate actual repair work to technicians in accordance with their abilities.
● Analyze all comebacks and initiate measures to avoid repetition.
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3.7 Technician
● To perform vehicle maintenance and repair work in accordance with dealer
Function
and factory quality standards.

Reports to ● Workshop Foremen

In charge of ● Apprentice and Helper

Qualification
● Knowledge of product related maintenance and repair procedures, general
mechanical skills.
● Perform quality work in accordance with instruction on the repair order.
● Inform the workshop foreman about job difficulties.
● Inform the workshop foreman about additional repairs or services required.
Duties & ● Maintain an orderly and clean work area.
Responsibilities ● Keep personal and shop tools in top condition and inform the workshop
foreman of any broken or unusable tools.
● Training and supervising assigned trainees and apprentices.
● Handling customer’s vehicle with care.
● Vehicle testing following repairs is carried out.

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Chapter 4 Personnel Management

4.1 Working Conditions

Working conditions send a message as to whether or not you truly value
your employees and their contribution to your organization. Good working
conditions make people feel valued, and contribute to the overall moti-
vation, productivity and loyalty to the dealership. Management’s primary
responsibility is to develop working conditions that attract, motivate and
retain employees. This is the foundation of good personnel management. To achieve this
goal, both of the following must be addressed.

● Physical working conditions

● Psychological factors such as fairness and openness

1) Physical Working Conditions

It is comparatively easy to provide good physical working conditions for service employees.
Both the work areas and the off-duty areas need to be considered.

Work Areas It’s important to make the work areas as comfortable as possible through proper
lighting, ventilation, heating, decor, colors, and level of maintenance.

● Floors should be kept clean of grease and debris.

● Potential safety hazards (steps, hanging power and/or hydraulic cables, etc.) should be
clearly marked. Employee will take well care of the facilities and equipment of a service
department that is well equipped and maintained.

Off-duty Areas Employee facilities have a significant effect on employee morale, so that
they affect quality of work, productivity, and customer satisfaction in turn, although these
areas are seldom seen by the customers.

● Provide facilities catered for employees’ convenience and personal hygiene such as shower
room, locker room and employee lounge.
● Provide a game room or a gym for refreshment during their off-time unless it distracts emplo-
yees from their job in working time.

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2) Psychological Working Conditions
Psychological working conditions are generally more important than physical conditions. For
instance, if two dealerships offer similar physical working conditions, employees will gravitate
to the one which has better reputation for employee training. It is possible to attract capable
staff away from other employers with high compensation, but it will be difficult to retain those
for a good while without good psychological working conditions. Good psychological working
conditions can be a good trade-off in job deciding against physical working conditions. Various
factors should be considered to improve the psychological working conditions and two of the
most important are followings.

Quality of Communication The quality of communication has a great deal to do with

performance. It’s important to;

● Be out on the floor frequently and available to all

employees.
● Have a mental “open door”. (e.g. receptivity to employee
communications of all types)
● Ask questions to find out what’s going on, where problems
may exist, etc.
● Listen effectively, using silence to draw people out.
● Create social occasions to improve communication and build team spirit.
● Solicit employees’ ideas, suggestions, and solutions for specific problems.
● Evaluate people and situations objectively.

The more open the management style, the more responsive the employees will be to helping
achieve productivity, profitability and customer satisfaction goals.

Issue of Fairness Equally important is the issue of fairness in all dealings with employees.
While there may be some differences in conditions of employment established as part of the
pre-employment negotiation, once employees are on staff, it is important to interpret working
rules fairly for all. Fairness does not mean leniency or weakness, but means the establishment
of reasonable rules that can be consistently interpreted.

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4.2 Remuneration Package
A good remuneration package has three objectives.
● To attract good people.
● To retain them, once they are hired.
● To motivate the kind of performance that satisfies customers and
enhances profits.

Remuneration packages use three different elements which are base-pay, benefits and incen-
tives to achieve the three objectives above. The following considerations should be given
when designing a remuneration program.

Keep it simple. If it’s too complex, people won’t understand it, and it won’t have the de-
sired results.
Make sure it is directly related to the job description, so it does not work against the goals
you want to accomplish.
Solicit employee input wherever possible.
Be flexible. Try to provide the compensation individually that each employee wants most.

1) Attract People
To attract quality people, the remuneration package must be competitive. It does not have to
be identical to competitors’ but it must be perceived as equivalent. For instance, the base-pay
may need to be higher than average if you receive less in the way of benefits. Or, if
psychological and physical working conditions are outstanding, it may be O.K. that the pay or
benefits is a little less competitive.

In order to make the remuneration package competitive, the dealership needs to know the
competitors’ pay plans, and there are several ways to get this information as shown below.

● Ask candidates while being interviewed about all aspects of their remuneration in their most
current jobs.
● If an employment agency is involved, ask them to report on salary trends.
● Talk to local technicians or other schools about starting pay for graduates.
● Read other employer’s recruiting ads

2) Retain People
Once the people you want have been hired, a well-designed remuneration package helps
keep them on your staff. There are some suggestions to retain capable people on your side.

● Be competitive about raises in pay, especially when your employees are being offered a job
from other employers.
● If high turnover of personnel is a serious problem, consider a longevity bonus.

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● Be alert for employee boredom and burnout, and take action to compensate for it.
● Enrich the job assigning new responsibilities such as putting service advisor in charge of
service meetings, and offer additional compensation for it.
● Promote a person who proves one’s capabilities.
● Utilize job-rotating to motivate personnel.
● Afford good opportunities for training.
● Provide vocational counseling, if necessary

3) Motivate People
The basic pay plan forms only part of the remuneration package. Motivators such as incentive
pay or bonuses do the rest of the job. When you compensate employees with the results
achieved, you must be fair and equitable to avoid an antipathy between the rewarded and the
unrewarded. Most employees share the information about their own personal pay plan. It is
therefore desirable to be prepared to answer employees’ questions regarding the pay plan
rationale.

Fringe Benefits Fringe benefits are a part of the basic remuneration package. Typical bene-
fits include paid vacation, paid holiday, paid sick leave, use of company car and so on. Fringe
benefits can be a major determinant of job selection when employers are competing fiercely
for the same labor pool. Those competitions may happen among dealerships, diverse types
of service outlets, fleets, manufacturing companies, etc. Fringe benefits cost the dealership
a significant amount of money, but employees often overlook their value. To address this,
prepare a statement once a year for each employee listing the value of the fringe benefits
received in the past year.

Incentive pay & Bonuses Incentive pay is usually an ongoing part of

the overall remuneration package, paid to employees when they achieve
specific objectives. Incentives may be a fixed pay, or a percentage of
some other factors such as sales. Bonuses represent additional remu-
neration that is usually paid at manager’s discretion. Bonuses may be
paid for specific accomplishments, but are not necessarily an ongoing
part of the remuneration package. Both of these are most effective when
closely tied to a specific type of performance or accomplishment. The
most common types of incentive pay and bonuses reward sales and productivity. It is important
to design your incentive programs to reward all the results that you are looking for but, most of
all, quality and customer satisfaction must be regarded as a prime object. For instance,
incentive pay or bonuses to promote service advisor’s labor or parts sales should not hurt
customer satisfaction by forcing him/her to sell more service than the customer wants.

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4.3 Motivation
A well-designed remuneration package has a number of motivational
elements in it. Incentives and bonuses are closely tied to motivating
the desired performance. Raises can also have a motivational effect.
However, it takes more than a good compensation plan to achieve
optimum employee performance and longevity, and it also requires less
tangible motivators. It is important to build a program that takes into account the
fact that different people are motivated by different things. Thus it is important to tailor
motivational programs to individual preferences wherever possible. There are two basic types
of motivators.

● Extrinsic motivators, which come from outside the individual.

● Intrinsic motivators, which appeal to something deep within the person.

1) Extrinsic Motivators
Extrinsic motivators include such things as employee incentives, pay
plans, productivity bonuses, and other types of rewards that can
be provided in the form of programs offered by management.
Most extrinsic motivators are part of the overall remuneration
package and they can be defined as rewards for performance
that come from the external of individual. Extrinsic motivations
are easy to use and usually effective, but tend to be somewhat limited in
their effects. For example, when employees earn raises in their base pay, they are motivated
for a short while. But they are soon apt to absorb the increase into a higher standard of
living and the motivational effect is gone.

Continuous incentives eventually are perceived as “part of the base package” and it will
become necessary to increase the size of the incentive in order to achieve the same results.
To make extrinsic motivations effective, it is important to be particularly careful in deciding
what kind of motivations will produce the best results. The followings should be considered
to make sure to devise meaningful motivators.

● Incentives or bonuses are to be big enough to make an impression

on the employee.
● If the incentive is “dinner for two”, make sure it is in a good restau-
rant.
● Give award in front of other employees such as special awards
ceremony at a department meeting.
● Use creativity to keep surprising employees with new types of
rewards that keep their interest high.
● Change incentives monthly or quarterly to keep up interests.

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2) Intrinsic Motivators
Intrinsic motivators appeal to employee’s pride, self-worth and
personal accomplishment and growth. The effects of intrinsic
motivators tend to be stronger and longer lasting than the effects
of the extrinsic ones and the cost are comparatively less. Intrinsic
motivation comes from the internal of individual, and they cannot
be easily granted by management. Intrinsic motivation is shaped
when employees perceive their working conditions favorable to
them, and those motivators are following as shown below.

Decision-making Give employees the authority to make as many decisions as possible

relating to their jobs. Coaching and helping them learn how to make those decisions effec-
tively will appeal to their senses of self-worth, pride and accomplishment. For example, allow
the Service Advisor to make decisions about “Goodwill” repair, alternate transportation,
adjustments, etc.

Individual Growth Growth is another intrinsic motivator that has a powerful effect if the
conditions are right. It means giving employees the opportunity to learn, to grow and to
become competent. Promotion is the most common example of a growth motivation.

Management Participation Management participation can also be strongly motivating.

Employees are to be free to give their own opinion in the dealership’s business administration
such as how to organize “On the Job Training” for new employees, how to conduct monthly
meeting, or how to promote service and parts sales.

In the best dealerships, intrinsic motivation is a major part of the overall motivational plan.
Employees are well trained and supervised so that they are given as much authority as possible.
A manager sees him/her self as an assistant rather than a director, and helps employees when
necessary, rather than giving specific instructions for every moment, and this offers tremendous
potential to the development of both dealership and individual. The following are advisable for
managers to abide by in order to make it all possible.

● Take the time that is needed for training and supervision. You will be paid back many times over.
● Allow employees to make mistakes. That is only way they will learn.
● Trust employees to do things on their own. That is what builds pride and leads to more im-
provement in performance.
● Be patient and build a team that is both professional and loyal.

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3) Balanced Approach
The fact that both extrinsic and intrinsic motivators are important suggests the balanced app-
roach to the remuneration package. Try to blend the two types of
motivational systems into your programs. Well-designed employee
MASTER recognition programs combine some type of reward from manage-
ment, with opportunities for individual growth. The following help
add the effectiveness to the recognition programs.

● Present a certificate or other type of written description of what the employee did to receive
recognition.
● Present the certificate at formal awards ceremony.
● Recognize several employees at the same time, it helps build on the group’s enthusiasm.

4.4 Welfare
A proper welfare systems for employees can induce every person in the organization to work
to his best abilities with a will to achieve the organization’s objectives given by specific
figures, such as total annual sales, the number of vehicles to be served, effective service
hours, or some kind of ratios and growth rates, etc.

Welfare facilities to ensure the worker’s well being are needed to maintain their morale at a
high level and motivate them to work to raise productivity. Facilities such as an employee
lounge with restroom and shower facilities are necessary. Otherwise they will tend to use the
customer’s lounge, restroom or even their cars to rest or loiter during breaks in work, which
could certainly displease customers.

The employee lounge must be provided with bulletin boards, displaying news on services,
current status on attaining monthly production goal, customer satisfaction survey results, etc.
These notices should be served as means to motivate employees to greater efforts.

In addition, regular medical examination for employees can prevent the spread of disease
and avoid lost man-hours. It is recommended that all employees should have a regular medi-
cal examination annually.
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4.5 Recruitment
To recruit the necessary After Sales personnel is extremely important. Please consider the
following qualifications when recruiting.

Aptitude Aptitude is the most important thing to look for in recruiting employees. Remember
that every man is for his own trade.

Experience It is preferable to select personnel with relevant previous experience, considering

age, diploma and qualifications to meet the requirement.

Identity A person, who has a good reference, has many contacts in the local district and
whose family is under stable conditions.

Volition An active person having the strong will to do his work is recommendable.

Others Basic knowledge of electrical, chemical and mechanical engineering is necessary to

work as service personnel. And occupational qualifications such as educational background
and certificates are optional but desirable. For instance, the mechanic needs at least 5 years
experience and a certified one who has obtained a technical certification awarded by a
national organization or other public organizations has an advantage over those who have
not. The following chart describes the proper attributes for each position role.

Character Judgment Responsibility Orderliness Cooperativeness Perseverance Aggressiveness Leadership Stability

Position (Tenacity of will)

General staff ○ ○ ○ ○

Service person ○ ○ ○ ○

Sales person ○ ○ ○ ○

Parts person ○ ○ ○ ○

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4.6 Employee Development
Highly effective and motivated employees are to be made through the
establishment of a formalized training program. All service personnel
must be given appropriate training based on pre-established training
and certification systems in order to raise their motivation and in-
crease their retention.

1) Standards
●The dealer should have a yearly training plan for all service and parts staff.
●The dealer should have an ongoing apprentice recruitment program.
●Performance appraisal should be conducted at least annually for all employees.
●New employees should receive a 90 days performance review, then annually thereafter.
●The dealer should have a termination policy that includes an exit interview.
●The dealer should meet the annual training target which is set out by the distributor.
●The dealer should provide a competitive remuneration/incentive plan for all staff.
●The dealer should safeguard every personal record as an important document.
●The wage system for each employee should be competitive within your local market and be
motivating for the employee.

2) Training Plan
Ensure that all your people, Service Manager, Parts Manager, Service Advisors, Administrator,
Cashier, Technicians, Car Washers, etc., benefit from proper training. While the bulk of training
expenditures will probably go to technical personnel, others should not be neglected either.
Training should be held on a regular basis, based on yearly training plans. The training policy
should address where a demand for training exists (e.g. weak-point improvement, changes in
staff, new products launch, etc.), who requires training, what is the most effective form of
training, and when the best time for training is. The following should be considered when you
make up the training plan.

● To keep pace with automotive technological advancements

● To maintain customer satisfaction
● To attract and retain quality employees
● To reduce the time spent resolving personnel problems
● To maintain a high level of employee morale
● To minimize misunderstandings and conflicts among employees
● To facilitate internal communication

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4.7 Performance Evaluation
Performance evaluation is an important part of personnel management, which is kept in each
employee’s personal record. Performance evaluation is one of the most powerful tools for per-
sonnel management, training and motivation.

1) Why and When?

New employees are generally given to detailed assessments at the beginning of employment
but those tend to be outdated with intermittent observations thereafter. Regular performance
evaluation, therefore, is necessary to maintain an accurate assessment on employees. Perfor-
mance evaluations are usually conducted for the times below.
● 90 days after a new employee is hired
● When personnel weaknesses become apparent
● When the dealership plans transfers or promotions
● Prior to offering remuneration packages
● Prior to personnel interviews on an annual basis

2) Who?
One of the employee’s immediate supervisors, such as Service Manager for Service Advisors
or Workshop Foreman for Technicians, is generally suitable to carry out the assessment un-
less there are any personal issues between them. Both objective judgment and diplomatic
negotiating skill are required for the evaluator.

3) What and How?

The employee’s working performance should be evaluated. Also, suitability for promotion
can be discussed as well as personal aspirations. This should be done fairly in written and
standardized form. If the performance evaluation relates to an ongoing set of objectives, you
should mark these as pending in the interview file so that you will be reminded of it periodi-
cally and follow up. This sends the message to employees that those evaluations are serious
and not just something to be endured once a year. The personnel interview for performance
rating should be something that leaves a lasting impression on employees.

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4.8 Termination Policies
It is not a good idea, for legal and other reasons, to dismiss an employee without cause. Ob-
tain legal counsel regarding the requirements for employee termination in your area.

● Have objective reasons for termination. Failure in conforming to clearly stated work rules or
performance goals is normally sufficient reason for termination, if those things had been
advised to employees and well-documented.

● Avoid termination if the employee demonstrates the right attitude and potential to improve.

● Notify employees in advance, in writing, if they are in danger of being terminated. The notice
should be signed and dated, with conditions of continued employment clearly stated, and a
deadline where appropriate. Offer a clear redemption procedure. A copy of this notice should
be placed in the employee’s file.

● Retain complete written records after the employee leaves in case of future legal actions.

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