Rewarding staffers pays off for Hendrick BMW
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In January, receptionist Sherry Doherty became the first CEO at Hendrick BMW.
But at the Charlotte, N.C., dealership CEO stands for chief energy officer, a snazzy term for outstanding employee of the month.
"I earned it because I am a fairly happy, optimistic person," Doherty says. "I really enjoy the customers and I help people get in a better mood when they're at work. I like my job and it shows and it was noticed."
Hendrick BMW has been the top performer among Hendrick Automotive Group's 85 dealerships for five straight years. It sells about 3,700 new and used BMW and Mini vehicles annually and is the luxury sales and market share leader in Charlotte, Hendrick leaders say. But the store's success stems from its leaders putting workplace culture before business.
In 2005, dealership General Manager John Desmond started holding monthly employee luncheons, monthly one-on-one coaching sessions between managers and employees, and daily employee debriefings. This year, he launched the CEO award. The store's employee turnover rate dropped by 50 percent from 2004 to 2005 when the programs started and has remained at about 15 percent annually, Desmond says. Nationwide the average turnover rate at BMW dealerships is around 19 percent, he says.
"Bricks and mortar don't make a store," Desmond says. "People do."
Desmond launched the CEO program to coincide with the monthly employee luncheons.
At the January luncheon, he named Doherty the first CEO. Doherty then chose the next CEO among employees nominated by other employees. That winner picked the next one and so on.
"They espouse what we're trying to achieve and their peers select them," Desmond says.
The winner gets $500 on the spot and is eligible to win a year-end cash prize of $5,000. But it's not the money that makes the award popular among the store's 165 employees.
"When I was standing in front of our whole group at that luncheon and John was talking about my accomplishments, everyone was smiling at me and nodding," Doherty says. "As a person it made me feel part of a team, such a great team, and such a reciprocal feeling and a big family."
Doherty was so proud she did not cash her $500 check for several months.
"When I'd see it, it reminded me of what a nice day that was," Doherty says.
Kelli Frederick, a service assistant, was chosen as April's CEO because she consistently helps others, even those in different departments. Still, winning the CEO award surprised her.
"I actually cried. It feels good to be recognized," Frederick says. "You work hard daily, so it meant a lot that my co-workers noticed it."
But the 90-minute luncheons are for more than recognizing CEOs, Desmond says.
"It's about talking about positive things, and sometimes we have to talk about things we need to improve upon," Desmond says. "It's hard to do that within the organization so the luncheon has really worked wonders in our store."
Desmond declined to disclose the cost of the luncheons, but says they're an investment, not an expense.
He also holds daily 10 a.m. meetings that last no more than 30 minutes. In those, department managers analyze the previous day's business and discuss the present day's work.
"It's critical," says Desmond. "You have all department managers there so you can communicate, 'Hey I have five cars to deliver today and I'll need this or that from your department.'"
Likewise, every Monday Desmond holds a 2.5-hour manager meeting to take an in-depth look at the previous week's business and the upcoming week's outlook.
Many companies do annual manager-employee performance reviews. At Hendrick BMW, the reviews take place monthly.
Department heads spend 30 to 45 minutes with each employee in their departments reviewing the employee's performance during the previous month and coaching ways to improve.
"How do you eat an elephant other than one bite at a time? So you do it every month. It keeps everyone focused and on task to achieve our goals -- and we have big goals," Desmond says.
Desmond also holds monthly one-on-one reviews with department heads to analyze the departments' strengths and weaknesses.
"It's nothing new, but we're very disciplined about it," Desmond says.
Desmond's store is striving to repeat its 2011 ranking as the nation's No. 1 BMW store based on BMW's Balanced Scorecard. The scorecard grades BMW stores in 16 metrics, including retail volume, used-vehicle volume, local luxury market share, parts purchases and lead conversions, Desmond said.
He also wants to hit his profit target and to be the Charlotte luxury market leader for the fourth straight year.
Reaching those goals will only happen with a positive culture where regular communication keeps everyone on track, Desmond says.
Frederick knows that is how she won CEO: "I overcommunicate everything and so I love how everyone communicates here and the level of respect we all have."
• The store sponsors monthly employee luncheons.
• Employees select the outstanding employee of the month.
• Managers and employees have monthly one-on-one coaching sessions.
• Managers have daily briefings and longer weekly meetings.
You can reach Jamie LaReau at jlareau@crain.com. -- Follow Jamie on 
