Are there any overall golden rules with respect to pay plans?
Yes, there are two big ones: Keep it simple and, if you can avoid it, don’t change your pay plans frequently. (We’ve witnessed many examples where complex and ever-changing pay plans lead to low employee morale and motivation, higher turnover, and cheating.) The pay plans must deliver a dealership compensation cost structure which, when applied to departmental gross profit levels, leaves a reasonable and satisfactory net profit and return on investment level for the dealership owners.
