Scorecards and similar tools help fleets identify drivers who need attention – as well as those who should be rewarded
Increasing driver pay during a recession may seem counterintuitive. But as Greg Brown and other fleet executives know, funding pay raises with the extra cost savings or revenues that drivers produce is a no-brainer.
In January, B.R. Williams started paying its drivers a monthly performance bonus. The amount that drivers receive varies according to the scores they obtain in three categories – revenue, operations and safety. The program already has paid big dividends for the Oxford, Ala.-based company.
“We have positively enhanced our operation across the board,” says Brown, chairman and chief executive officer of the 165-truck fleet.
Each month, drivers are eligible to receive a maximum bonus of 1.5 cents per mile, or about $140 to $200. Going forward, Brown says drivers will have to earn any future raises with their scores.
Besides using financial incentives to improve performance, B.R. Williams puts drivers’ pride on the line. Every month, drivers receive a ranked list in their mailboxes for fuel mileage, revenue productivity and other categories. “They don’t want to be anywhere near the bottom,” Brown says.
Initially, drivers might have a negative perception of any new program that monitors their performance, especially when it might result in less pay. To be effective, incentives or differential pay programs must be realistic and attainable for the driver – and easy for the company to manage. Technology can automate the management aspect with new tools to monitor and score driver performance from highly accurate and unbiased sources of information.
Building the base
At any time, drivers must perform at a high level for a company to stay profitable – and that’s never been as true as today, considering the current economic climate.
But for less-than-truckload carriers, tying performance to variable pay is a risky proposition. Owners or executives at LTL carriers would love to introduce variable pay, but “the current system doesn’t provide the incentive for a really productive worker to step out of the box and be extra-productive,” says Dave Ward, a partner with ThoughtDrivers, a firm specializing in business performance for the trucking industry.
Most LTL carriers mimic union pay structures where drivers are paid an hourly wage fixed by experience and tenure. “It’s a riskier time to be experimental,” says Ward, a former LTL executive. That’s because the union “card check” legislation that the Obama administration and many members of Congress have pledged to enact will make it easier for employees to unionize over issues such as management making changes to their pay, he says.
By contrast, mileage-based variable pay always has been the standard for the truckload industry, Ward says. And technologies such as onboard computers, wireless communications and enterprise resource planning (ERP) systems can provide fleet managers with accurate performance details that leave no room for debate from drivers.
Mesilla Valley Transportation, a truckload carrier based in Las Cruces, N.M., currently is integrating information from across its enterprise to gain a more broad-based view of driver performance. The new driver reports, or scorecards, will include categories such as the number of loads a driver turned down, service failures, miles driven and fuel efficiency.
