Are the days of tenure-based pay systems for drivers close to being history? That’s what Tom Kretsinger Jr., president of American Central Transport, chair of the Truckload Carriers Association (TCA) and the most recent guest of the...
Are the days of tenure-based pay systems for drivers close to being history? That’s what Tom Kretsinger Jr., president of American Central Transport, chair of the Truckload Carriers Association (TCA) and the most recent guest of the popular How They Did It segment of Driving for Profit had to say. Speaking at Driving for Profit, Tom said his company restructured its pay formula to better reward its top-performing drivers and to ensure accountability.
“Our costs are going up faster than our rates and we call that margin squeeze,” Tom said. “It’s not sustainable. What is the answer to that? The only logical answer is, you have to get more productivity out of what you have. We noticed some of our worst drivers were our highest-paid because of tenure and some of our best guys were the lowest paid because they hadn’t been with us for long. We went to pay-for-performance, where our company drivers’ pay resets every six months based on how they perform. As an industry, we’ve always treated all drivers the same and they’re not the same. Some work harder than others, some get better fuel (mileage) than others, some are safer and some are more professional and show up on time.”
Drivers at ACT now earn between 36 and 45 cents a mile, depending on their performance. Every six months, their pay “resets” depending on how they performed over the previous six months. While it hasn’t been a perfect system, and Tom acknowledges drivers who see their pay rate scaled back due to poor performance sometimes leave the company, he also added “If a guy goes from 40 cents to 36 cents and leaves us, that’s probably a good thing for us.”
Tom says he thinks performance-based pay will become more common for drivers, managers and even workers outside the trucking industry. He said the TCA itself uses scorecards to measure employee performance, making it one of the few groups in Washington to employ a performance-based pay structure for its staff.
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