Puente Hills Essay

909 Words4 Pages
Case Synopsis: Howard Hakes, Vice President of Puente Hills Toyota is looking for ways to mange attitude, or more specifically how you prevent the “cancer from spreading” Faced with challenges in regards to motivation we are primarily focused on the incentive program currently in place. The incentive programs in place allow for Puente Hills Toyota employees the opportunity to make more money compared to other local dealerships. The current incentive program is quire difficult to understand, as the case described endless ways commissions and or bonuses are paid out. The following chart represents the current state: Sales Staff Base 20% gross profit Gross Profit Asst. Sales Mgr Base 7% gross profit Gross Profit Gen. Sales Mgr Base 2.25 Portion of dept profit after expenses, before taxes All Dept Desk Sales Mgr Base 1.2-1.5 Portion of dept profit after expenses, before taxes All Dept Used Sales Mrg Base 5% Portion of dept profit after expenses, before taxes Used Sales Only Service Techs $10-23 per flag hr No Pays/Provides own tools Service Advisors $2000/month 6-8% Customer/Manufacturer or Internal Service Manager $3000/month 3.75-4% Portion of service dept profit Management Concerns: Stale follow-up on behalf of the sales team Missed opportunities relative to sales approaches Questionable CSI value—high value leads to “coaching” Regardless of the “few” issues, Howard is confident he has one of the best managed dealerships in the country. The current incentive system in place uses 7 different incentives structures and has 8 different “groups” with varying base salaries. If I were a service tech, I may be upset as the majority of customer satisfaction is created with the service aspect of the dealership. We also note that the current incentive system uses gross margin for the incentive calculations, whereas the sales team is also not

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