Improving safety, productivity and fuel economy are top priorities for fleet owners, but not necessarily for drivers. Some give their best for an honest paycheck; others, it seems, need a little more motivation. That’s why many trucking operations offer bonuses and other cash incentives to encourage specific actions from drivers in these areas.
Money is a great motivator – if drivers have the training and education necessary to do what it takes to get it. You can’t assume that a driver knows how to achieve the goals you set for him. Similarly, the actions required to qualify for a bonus must be predictable and repeatable. Otherwise, there’s no real connection between performance and reward, and the driver may feel that he isn’t in control of his own compensation.
Likewise, it’s important that drivers are clear on why you offer specific incentives.
Although the reward itself is sufficient motivation for many employees, you may foster creativity and teamwork if the driver understands your ultimate goal, whether it’s safety, productivity, fuel economy, customer service or some other concern specific to your operation.
Recognize that money does not have to be the sole currency of an incentive program. Many successful programs incorporate non-cash rewards, such as special events, privileges and even just public acknowledgment of a job well done.
While the principal goal of an incentive program is to achieve superior performance in specific areas, a solid program can pay off more broadly in intangibles, such as morale and self-respect. An incentive program shows drivers that their employer truly cares how they do their jobs. “We designed the incentive plan to give drivers pride in themselves and what they do,” says Amy Meredith, manager of safety and human resources at Simplot Transportation, a 185-truck private fleet in Caldwell, Idaho.
Rewarding the right stuff
The value of the reward is not the sole – or even most important – factor in the success of a rewards program. It’s more important to focus on what you are rewarding. Well-managed incentive programs account for all the related variables that determine a bottom-line result, says Gregory Melcher, a consultant with The Human Advantage Inc., a Plano, Texas-based firm specializing in retention programs.
Suppose you pay drivers 1 cent for each mile they stay above 6 mpg. The benefit of better fuel economy may be lost, Melcher says, if your program doesn’t also factor in out-of-route miles.
USA Motor Express is a case in point. Many fleets look at just fuel economy and/or idle time, but that’s not enough, says Leon Balentine, president of the 165-truck carrier based in Florence, Ala. USA Motor Express includes several fuel standards as part of its “Team USA” incentive reward – a $1,000 savings bond each quarter. Drivers must keep out-of-route miles under 10 percent. Their miles per gallon and fuel cost per-mile must match the average of the top 50 percent, Balentine says.
Balentine sets the standard at the top 50 percent because most drivers are already performing at acceptable levels, he says. “In any company, if they check their records, 50 percent of their trucks are making money and 50 percent are losing money. We want to make it so 80 percent are making and 20 percent are losing. You don’t have to manage the whole fleet, just the bottom 20 percent and take corrective action with those people.”
In determining what to reward, it helps to define your ultimate goal. Consider safety. Although everyone would agree that a safe operation is an admirable goal, the real reasons you need to be safe are to limit losses and to keep insurance costs at a minimum. Therefore, an incentive based strictly on prevention of accidents while driving may not address workplace safety problems that affect workers’ comp premiums or moving violations and out-of-service orders that may affect liability insurance.
Perception of fairness
Incentive programs must be simple to explain and, most importantly, drivers must perceive the measurements and evaluation process as completely fair, says Bob Canann, operations manager at Glass Trucking, a 53-truck carrier in Newkirk, Okla. “Reality and a driver’s perception could be two different things,” Canann says.
Glass Trucking pays a quarterly and annual safety bonus based on accident-free miles. That sounds simple enough, but all accidents aren’t the same, of course. The carrier must determine whether or not a particular accident should be charged against the driver, and therein lies the potential for suspicion and resentment.
To ensure that drivers recognize that the process is fair, Canann randomly selects drivers, one at a time, to participate when he and another manager review accident and claims reports.
“I use a different driver every time,” Canann says. “It makes the drivers realize what the process is. We read the incident report, explain the circumstance, and the three of us involved all have to agree before a driver loses his bonus.” Canann says.
It’s harder to ensure a perception of fairness when the bonus depends to a degree on subjective criteria. Regardless, carriers may find the performance goal behind such criteria to be essential. Clark Cartage Co. Inc., a 25-truck carrier based in Green Bay, Wis., pays its drivers a performance bonus of 1 to 3 cents per mile, depending on their score in three categories: attitude, implementation and documentation. The most important measurement is a driver’s attitude, says Bob Gillespie, marketing and driver coordinator.
Given that there is no standard measurement of attitude, Clark Cartage doesn’t typically base its decisions regarding bonuses on isolated incidents. “If drivers mess up, the big thing we look at is if they’re willing to correct it,” Gillespie says. “We’re looking for patterns. If a driver loses pallets one month, it’s OK. But not if they keep doing it month after month.”
Your challenge doesn’t end at deciding what to reward and what measurements to use. The next step is determining the best way to collect and report data. Here there may be a tradeoff between efficiency and precision. Increasingly, however, technology gives trucking operations both. The integration of enterprise systems and tools like mobile tracking and communication systems, document imaging and routing software gives carriers access to more data at lightning speed.
“We track operating data and revenue by cost center,” Balentine says. “We’ve fine tuned it down to the individual truck. Each driver has his own report card.” USA Motor Express uses McLeod Software’s LoadMaster enterprise system and exports data to a custom-made Excel spreadsheet to generate different reports that factor into the “Team USA” incentive plan.
Each department manager of the company – operations, accounting, safety and maintenance – is responsible for compiling the individual measurement reports for each driver.
Data is useful, of course, in measuring results, but it’s also a powerful educational tool. Many fleets, for example, download data from their trucks’ electronic control modules to provide concrete details of speeds, braking incidents, idling and use of cruise control.
“It’s a continual educational process,” Balentine says. Unless the driver sees and understands these reports, he eventually will forget or ignore his training.
Most managers probably think first of measuring and rewarding individual achievements, but don’t overlook incentives to encourage teamwork where relevant. Indeed, some experts believe that team incentives are often more cost effective. Team incentives, which thrive on competition, can improve an individual’s productivity better than individual incentives, for about half the cash outlay, says K. Dow Scott, Ph.D., president of Performance Development International Inc.
Companies can organize team incentives a variety of ways, but they always involve an element of competition. Viking Freight, San Jose, Calif., rewards teamwork by staging competitions among service centers of similar size. Service centers compete in hours between injuries, miles between accidents, on-time service, claims and an overall rating called inner performance. Quarterly cash awards range from $6,000 for the largest service centers to $750 for the smallest. Managers of the winning centers typically divide money among employees, but some decide to buy prizes and hold a raffle, thus making sure every employee walks away with nice prizes, says Tom Suchevits, vice president of human resources.
“We drive a lot of team recognition,” Suchevits says. “It’s not a one-person type of program.”
Waco, Texas-based Central Freight Lines also stages team competitions, although the reward isn’t cash. Central Freight compares safety statistics between similar-sized terminals. The managers of the losing terminals prepare barbeques for the winners.
“I’ve been very busy this past summer cooking 16-ounce ribeyes,” says Gary Thomas, Central Freight’s director of safety. “We promote fun, high spirits, involvement, accountability and empowerment. But we also teach that it’s OK to have fun.” Central Freight also prepares barbeques for drivers who qualify for Central Freight’s team that competes at state and regional driving championships.
Central Freight pays all expenses for drivers to compete. To be eligible, drivers must have no citations, moving violations, workplace injuries or driving accidents during the year.
“The cost is a drop in the bucket considering that individual has worked safely for the previous year,” Thomas says. Last year, the American Trucking Associations awarded Central Freight Lines the Presidents’ Trophy for its safety program.
More than money
Whether or not you decide to offer a cash reward, drivers – like any other employee – want to receive recognition for their efforts in your behalf. An awards program creates a corporate culture where employees feel their contribution is more important than money. Cash incentives alone have short-lived effects, Thomas says.
“If you give cash, they will go out and buy a TV that will last for a couple of years. You have to give them things they can keep with them,” Thomas says. Central Freight rewards and recognizes employees in two areas: safety and longevity. Employees receive personal items that are visible to others – items that give drivers the opportunity to explain how they received the gift.
“It’s a win-win situation,” Thomas says. “We give things that keep on giving — drivers keep on getting recognition when someone asks, ‘how did you get that?’ The driver says, ‘I earned that by safe driving.'”
At Central Freight, safety prizes come at one, two and five years of accident-free driving. Prizes include certificates, pen and pencil sets, and a gold and silver belt buckle and black leather jacket for the 5-year achievement. Prizes are even more elaborate for 10- and 15-year achievements. Longevity awards begin at 10 years, where employees receive a gold ring. For every five years after that, they receive a diamond to put in the ring.
Most incentive programs are geared toward tracking employee performance over time. That approach is mostly to produce specific actions to achieve your operation’s goals. But don’t overlook the benefits of rewards for isolated events.
Central Freight’s “I gotcha program,” for example, recognizes employees who managers spot using proper lifting techniques and taking other preventive measures for injury. Viking Freight has an Easy-To-Do-Business-With award for drivers. Fellow employees and managers recognize drivers who show professionalism and courtesy. The company also has an All Star Award, worth $100 and an accompanying certificate. The award can be given at any time, for any reason, with approval of a director-level or higher manager. The company also has an “Extra Mile” award – a certificate and $500 for employees who “do something really special,” Viking Freight’s Suchevits says.
“One driver dedicated six weekends of his time to run classes for drivers competing at truck driving championships,” Suchevits says. “He set up the course, went through it and showed them how to drive through courses. We ended up with 30 drivers competing at the state level.”
Even though your company may lack the financial and human resources of Viking Freight or Central Freight, your incentive programs can be just as effective. Incentives are not cut-and-paste programs anyhow. Spend a few days to determine what you want from drivers that you aren’t getting and redesign your compensation accordingly.
Figuring in fuel
Clark Cartage Co. Inc. sponsors incentive programs for safety, performance and fuel savings. Most drivers receive their safety and performance check each quarter, calculated on a cents-per-mile basis. The fuel incentive is more complicated, and it actually discourages some drivers, says Bob Gillespie, the marketing and driver coordinator of the 25-truck fleet in Green Bay, Wis.
Gillespie points out that fuel incentives are tough to manage fairly because so many factors are involved: the seasons, different equipment, different routes and payloads all affect individual fuel mileage. Downloading fuel reports from electronic engines is simple enough, but deciding exactly what you want to control and how to reward it fairly is the difficult part. The difficulty in managing these variables may be one reason that more carriers apparently offer safety and productivity bonuses than fuel economy rewards.
Rather than manage these complex variables, many trucking operations find it more effective to focus on one or two fuel-related activities. Reducing idling is a simple solution for McKelvey Trucking, a 300-truck carrier in Phoenix. The trucking company rewards drivers an extra 5 mph top speed – from 65 to 70 mph – if they keep idle time below 25 percent.
“We went away from paying people,” says Dave Gomez, McKelvey’s director of maintenance. “The biggest complaint we always had was speed. Since we went away from the cash bonus, I’ve never heard one complaint.” McKelvey Trucking programs its Cat engines with Caterpillar’s Incentive program – a program that comes pre-installed in Cat’s dash computer. According to McKelvey Trucking’s fleet reports, 88 percent of their drivers are getting the incentive, Gomez says.
Another option is merging fuel incentives into a comprehensive bonus program. Drivers are then encouraged by successes in other areas as you train them to increase fuel economy, says Gregory Mechler, a consultant with the Human Advantage Inc. Still another approach is to make minimum fuel standards an eligibility requirement to participate in the comprehensive bonus program.
USA Express in Florence, Ala., created the “Team USA” performance incentive plan in which eligible drivers receive a 10-year, $1,000 savings bond each quarter (the bonds actually cost the company $500). If drivers stay on Team USA four quarters straight, they earn an extra $1,000 savings bond. To qualify for Team USA, drivers must meet minimal productivity, safety and fuel economy standards, says Leon Balentine, president of the 165-truck carrier.
To calculate Team USA’s fuel standards, Balentine averages the top 50 percent of his drivers’ mpg and fuel cost per dispatch mile. The current requirements are, respectively, 6.3 mpg and 20 cents. Because fuel prices are so volatile, Balentine recalculates the average on a quarterly basis. Drivers must also keep engines under 45 percent idle time, Balentine says.
As with other incentive programs, your fuel incentives may undergo some changes before drivers perceive it as fair. The important thing to remember, though, is that fuel economy is something drivers can control, and through monitoring it, you can improve it – if your incentive makes it worth their effort.