Embedded Files
Last Revised: 10/1/16
Purpose
Purpose
The purpose of this policy is to establish the requirements for Field Mechanics to receive the Monthly Incentive Bonus that Flogistix offers to all eligible Field Service Mechanics with assigned rental units.
Policy
Policy
This policy applies to all Flogistix Field Service Mechanics that are eligible for the Flogistix Monthly Incentive Bonus for field service mechanics.
Introduction:
Flogistix has developed a new Monthly Incentive Bonus Plan effective 10/1/2016.
Flogistix wanted to introduce a new plan that gives the mechanic new incentives to be able to add to the value of their monthly bonus.
Under the Previous Plan before 10/1/2016: (as noted as Previous Plan)
Under the previous plan this is what was needed to receive the PM bonus:
Complete the Group Safety Training
Complete monthly Safety Skills
No recordable or vehicle accidents
Complete 90% of the assigned unit PM’s
If all of these were completed you received a bonus for all the PM’s that were completed if the goal of 90% completion was met.
Under the previous plan the mechanic got paid for every unit on their assigned list that was not overdue if they achieved the 90% completion goal.
45 day and 90 day PM’s were paid to the mechanic every month even though the PM may have not been physically performed on that month.
Previous Plan:
What if a mechanic helped out and did a few of another mechanics PM’s so they could meet their 90% goal?
What did they receive?
“Zero”
What if a mechanic helped out and did start ups on units that were either going to be assigned to that mechanic or another mechanic?
What did they receive?
“Zero”
What if you a mechanic did an emissions tests on their assigned unit or on another mechanics assigned units.
What did they receive?
“Zero”
What if a mechanic did their PM’s, but at months end they completed less than the goal of 90%.
What did you receive?
“Zero”
Flogistix decided to change this.
With the new plan the Safety requirements have not changed. This will be the same as the previous plan.
All group training and safety skills need to be completed by month end.
No chargeable accidents or vehicle accidents.
Under the new plan there will be the opportunity for each mechanic to earn extra dollars to their Monthly Bonus.
This is how a mechanic can earn his PM bonus under the new plan…
Base: PM’s and other tasks performed, will be the base amount that can be earned.
Tier 1: Performance Adder based on old Quarterly Bonus program.
Tier 2: Run-Time & Connectivity.
Tier 3: Rental margin for assigned units & business unit.
How the Mechanics base is earned
PM’s performed:
Each unit type will now have a higher dollar value for the PM amount than the previous plan.
The 90% PM completion of assigned units to receive the PM bonus has now gone away.
The mechanic will be awarded the dollar amount for the PM’s that they physically complete each month.
All PM’s that are physically completed by the mechanic from that mechanics assigned PM list will be given the full dollar amount for that PM.
If a mechanic completes a PM that is not on their assigned PM list, they can now receive half the dollar amount for that PM.
If a mechanic completes a PM on a third party or customer owned unit that is under a PM contract they will receive half the PM dollar amount for the size of the unit. Third Party equipment not under PM Contract is not eligible for bonus plan.
If a mechanic does a new start up on a unit it doesn’t matter if it is going to be their assigned unit or another mechanic, they will receive the full PM value for the size of the unit being started up.
If a mechanic completes an emissions test (Quad J) on a unit, it doesn’t matter if it is their assigned unit or another mechanic, they will receive half the PM value for the size of the unit having the emissions test.
If there is a PM on an assigned mechanics PM list and the unit is past due no more than two weeks there will be no dollar penalty.
If there is a PM on an assigned mechanics PM list and the unit is running and is past due by more than two weeks there will be a dollar deduction of twice the PM amount.
Example:
FX12 GED - $40
Type Earned Amount
Assigned Unit PM +$40 Full amount
Unassigned Unit PM +$20 Full Amount
Start-Up +$40 Full Amount
JJJJ Emissions Test +$20 Full Amount
3rd Party Contract PM +$20 Full Amount
Over Due by 2 Weeks -$80 (Minus Double Amount)
Base amount:
•Add the value of assigned PM’s completed by the mechanic
•Add the value of Third Party PM’s completed by the mechanic
•Add the value of start ups completed by the mechanic
•Add the value of emissions tests completed by the mechanic
•Subtract if any PM’s assigned to the mechanic that are over two weeks past due
With all those added together this will become the base amount for the month.
Tier 1: Performance Adder
If a mechanic made all the goals on the old quarterly bonus they would have been eligible for a $500 quarterly bonus. With the new plan, the $500 will be divided by 3 equaling $166.00 per month, this will now be a potential adder.
To receive the adder the following goals will need to be achieved. The adder is weighted as follows:
50% Business Unit profit margin
30% 90% PM completion of assigned units
20% At least one truck inventory count for the month
Business Unit profit margin
To receive the weighted 50% amount for BU margin, the business unit margin will need to be at or above the monthly Target amount. The Target amount is determined by the average of the Business Unit margin for the 3 previous months. If the BU margin is at or above the target amount then the mechanic will be eligible for the 50% weighted amount for BU profit margin .
50% of $166 is $83.
90% PM Completion of Assigned Units
To receive the weighted 30% amount for PM completion, the mechanic will need to have a PM completion percentage above 90% for the mechanics assigned units. If the mechanic’s PM completion percentage is at or above 90% then the mechanic will be eligible for the 30% weighted amount for PM completion.
30% of $166 is $50.
Inventory Count
To receive the weighted 20% amount for Truck Inventory, the mechanic will need to have completed at least one truck inventory of the mechanics assigned truck. If the mechanic completes one truck inventory of the mechanics assigned truck then the mechanic will be eligible for the 20% weighted amount for truck inventory completion. This will involve the area warehouse person or area manager.
20% of $166 is $33.
If any of those are achieved the mechanic will be paid for the ones that were met.
50% Business Unit Margin = $ 83.00
30% PM Completion = $ 50.00
20% Truck inventory = $ 33.00
Total from Tier 1 $166.00
The totals from Tier 1 will then be added to the base amount. This total will be the new base amount for the next tier.
Tier 2: Connectivity & Run-Time
Due to some areas having coverage issues or older units without LOGIX panels, units will be assessed on an individual basis for 3 components:
1.Connectivity – “Is unit communicating to Flux?”
2.Run-Time – ”Is the unit meeting run-time expectations?”
3.Software Version – “Is the unit running a recent version of PLC Software?”
Unit value will be added up and added to bonus amount.
Connectivity
Units will be assessed at beginning of the month. If unit has communicated to Flux with 48 hours, it will be considered to have connectivity.
Every unit assigned to you that has connectivity is worth $1.
Example: If you have 25 units and they are all communicating to Flux, you earn $25 towards your bonus amount.
Units must have connectivity to be eligible for the additional Run-Time and Software components.
Run-Time
Communicating Assigned Units will be assessed at beginning of the month.
Units will have a individual value based on their Run-time for the month.
Run Time Value
98%-100% $5.00
96%-97% $4.00
94%-93% $3.00
92%-93% $2.00
90%-91% $1.00
Less than 90% $0.00
Software Version
Communicating Assigned Units will be assessed at beginning of the month.
Units with a PLC Version equal to or newer than minimal acceptable version will be worth $1.
Example: If you have 25 units that are all running an acceptable PLC version number, you earn $25 towards your bonus amount.
Management will set the minimum acceptable PLC version for both GED and Electric units and will make it known in advance.
This will change over time as Engineering releases new versions.
Units values for Run-time & Telemetry will be added up.
Example:
25 Units Communicating = $25.00
10 Units with 98%-100% RT= $50.00
10 Units with 96%-97% RT= $40.00
4 Units with 90%-91% RT= $ 4.00
1 Unit with less than 90% RT= $ 0.00
15 Units with updated software= $15.00
Total $134.00
The totals from Tier 2 will then be added to the base amount. The total will be the new base amount for the next tier.
Tier 3: Rental Margin
There are 2 components to this tier:
1)Mechanic Assigned Unit Margin
2)Business Unit Margin
Mechanic Assigned Unit Margin
This can be an adder or subtraction depending on Profit Margin of the mechanics assigned units.
The Target for the profit margin on the mechanics assigned units will be based on the average of the assigned units profit margin for the past three months.
If the profit margin is above the target amount then the mechanics base from Tier 2 will be multiplied by the percentage of target achieved.
Mechanic Assigned Unit Margin
Example:
Mechanic Assigned Unit Margin Target: 60% (Average of last 3 months)
Mechanic Assigned Unit Margin Actual: 65%
Percentage of Target: 108% (65 is 108% of 60)
Bonus = Base x 108%
The Assigned unit margin calculation can also deduct from your base if it is lower than your 3 month average (Target).
However…
If a Mechanic’s Assigned unit margin for the month is better than the previous month, there will be NO DEDUCTION. We want to reward improvement.
Example:
1) Target 60%, Actual 55%, Previous Month 58%: Deduction from Bonus
2) Target 60%, Actual 55%, Previous Month 54%: No Deduction from Bonus
This can be an adder or subtraction depending on Profit Margin of the Business Unit.
The Target for the profit margin on the Business Unit will be based on what the average of the Business Unit profit margin was for the past three months.
If the profit margin is above the target amount then the mechanics base from the first part of Tier 3 will be multiplied by the amount listed.
If the BU unit margin is below the target amount then the mechanic will get a deduction from the base amount.
Business Unit Margin
Example:
Business Unit Margin Target: 60% (Average of last 3 months)
Business Unit Margin Actual: 65%
Percentage of Target: 108% (65 is 108% of 60)
Bonus = Base x 108%
Overview of Bonus Structure
Qualifier: All Safety requirements met and no incidents
Base = Work Performed (PMs, Start ups, Emissions)
Tier 1: Performance Adder
Bonus = Base + Tier 1 Total
Tier 2: Connectivity & Run-Time
Bonus = Bonus + Tier 2 Total
Tier 3: Margin
Bonus = Bonus X Percentage of Assigned Unit Margin Target
Bonus = Bonus X Percentage of Business Unit Margin Target
Responsibilities
Responsibilities
Management - Management is responsible for implementing, supporting, and enforcing the requirements of this policy to their respective locations/area.
EHSS - Responsible to assist in the implementation of this policy meeting required safety goals.
Field Mechanics. - Are responsible to follow the follow the requirements outlined in this policy.
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Date:
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