Flat Rate - Is this something an honest business should use?

This topic contains 4 replies and was last updated by jim-owen 11 years 9 months ago
January 29th, 2010 4:50am
I started working as a mechanic before the start of flat rate billing and as a method of paying wages. Mechanics would work day in and day out with their tools in their toolboxes; the boxes were small and contained only the basic tools. All specialty tools were owned by the shop. Impact wrenches were just coming on the scene, and the shops that thought they had a use for them, had them.

Mechanics then had many of the same problems as now: work would come in slowly, and the guys would go to work. When work did not come in, these same guys would clean the shop, build tools or benches or whatever to keep busy. The bosses pulled their hair out.

Mechanics were then put on flat rate: working only when there was work to do and working only when paid. Shops got dirty. Shops were poorly set up and equipped. Mechanics quit often going from job to job, looking for something better.

The mechanics on flat rate learned that if they had more tools they could work faster, get more done and get paid more. Tools that were traditionally owned by the shop was purchased by the mechanic and put in their own box.

Aha, the owners said, expect the mechanics to have all their own tools; make it a job expectation. So, mechanics bought all their own tools, and made more money on flat rate.

Aha, the owners said, were paying the mechanics too much, Look at all the tools they have. Look at all the toys they have. We're paying them too much money. Let's cut back on the time paid out, and get more return.

So, now mechanics have to have $60,000 in tools to buy into their job. They have to cut corners and take shortcuts. They have to avoid cleaning and scraping. Many "manufacture" other problems. They have to lie about doing two jobs at once. I've heard stories of deliberate sabotage to make more money.

Basically, their job and their situation have turned basically honest people into criminals. When apprentices are on the job, they get paid less, of course, but the tradesman they work under does not have time to properly train them or even give them direction.

Below are some comments that were in other forum comments:

Re:Your Service Manager – Concerned about the bottom line OR your safety?

Service managers get shit on by everybody.You have got to understand where he is coming from.flat rates are a fantasy usually but that is how we get paid.Time is money blah blah blah.If you can communicate with the guy,that is all he is asking for, so he has a good story for the moron who owns the e

old coaster 2010/01/27 19:30

Re:Speed vs. Accuracy!

i've never had to work flat rate but, i think it promotes poor workmanship. from some of the guys i work with the stories they tell are all about shortcuts and how much time you can flag for pay. if there is an isssue that's the next guy's problem under warranty. my motto has always been you can hav

ragnar 2009/08/26 20:34

What is your opinion?
February 1st, 2010 3:32pm
In my opinion, flat-rate is good and bad. Yes, on flat-rate, guys do cut corners to make more money. For me, I worked flat-rate, salary and hourly. The best for me was flat-rate with a gurantee. We didn't have to rush to get the job done, our shop was clean, the job was always done good. We could make more money from the flat-rate when the work was there, but if it was slow, we still made a good wage with our guaranteed hours. I feel that this way is a good system, mainly because it can promote hard work and at the same time quality work while keeping up on the shop and never have to worry about money.
Kari Rayson
February 4th, 2010 2:59am
I currently work with flat rate jobs and I think it's bad. I've also been on the administrative side of flat rating jobs. All of it to make more money (for the company).

With what I am currently doing, each job has a set amount of time allotted to do the work. Technically, if I am on a job that is flat rated at 20 hours and I go over that time limit, the company supposedly "loses" money. I think it's all bogus.

My supervisors are constantly bringing flat rate up every single morning at our safety meeting. It is pushing technicians to rush through jobs to get them done as fast as possible. It's resulted in tooling being broken, corners being cut and safety being put aside for production's sake. We recently had a new 150 ton press damaged because of a lack of tooling in the shop and the technician using the press was feeling rushed to do the job quicker.

The company then loses money on the flat rate job because of a broken press. They lose even more money having to fix the press!

Just my "two cents" on flat rate. I'm all about quality over quantity. The last thing I want to do is rush through a job, do a poor job and then have the component come back after an early failure and it becomes a re-work on ME. And then the company loses more money on re-doing the job.
March 1st, 2010 12:26am
As mentioned above if used with an hourly or salary minimun guarantee it can be fair and encourage productivity.

Most of the time I have avoided flat rate jobs because due to unfair workplace politics and management practices it is applied in an unfair manner. This is however a management problem if corners are allowed to be cut, if work is performed improperly and if time is not taken to properly identify or correct the problem. That is the down side.
March 1st, 2010 2:02am
I tried to point out that flat rate is no longer fair to the mechanics. When it was first started, mechanics could work flat rate, invest in tools to make their jobs easier and faster, and be able to make money, and more importantly justify to their wives why he had to spend so much money on tools.

Nowadays, a mechanic has to have all those tools just to get a job. I, personally, have an estimated $60,000 to $70,000 investment; however mine is an old collection. Others collecting, say Snap-on or Mac, with the same volume of tools would be $100,000. Other mechanics have tool boxes that resemble having a garage on wheels.

The flat rate mechanic is being paid $20 to $40 per hour depending on what part of the country you live. Shop rates range from $70/hr to $150/hr for a field mechanic. And the "paid" hours have been dramatically reduced to the mechanic from what it was, even 20 years ago.

The employers have so dramatically cut in to the mechanics revenue that guys are forced to become the dreaded parts-changer.

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