PAY FOR PERFORMANCE
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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Just another system to get drivers to do more work.
We ask our drivers day after day to have a more responsible driving habits, to drive safer, slower, we pay them accoringly and they hardly make the pay they should.
For a company paying on %, they want care about driver pay they just want to move equipment.
Safety, driver rest, everything we have been battling for together with the professional drivers, forget it.
I do not like such a statement from a responsible owner. Are they pushing ideas in Canada that does not work in the state hoping Candians companies are most at risks and open the market for them to get bigger and bigger into Canadian Market?
People will decide, in our cas it is already decide, there many more ways to provide good incentives for the drivers, just respect them first.
bad system as it pits driver against driver and then the fun starts with all the fights that will happen.
When have drivers been paid based on tenure? In my forty odd year experience I was always paid based purely on performance. The problem isn’t whether pay is tenure based or performance based but that newly licensed drivers are at the same pay grade as forty year experienced drivers. There is no career path. Without a career path it’s a hopeless outlook and advancement and skill development is stunted.
That`s just crazy. It`s a free-for-all out there now. You institute this sort of system industry-wide and mayhem will follow. It`s bad enough being endangered every day by poorly trained drivers coming out of the GTA now. You dangle this in front of that class of driver by that sort of company and look out scout. I hope I`m retired by then. This trucking gig is getting more dangerous all the time. Crazy regulations plus corporate greed equals increased death rates. It`s time these suits stopped this sort of nonsense.
“Our costs are going up faster than our rates and we call that margin squeeze,
Kretsinger & the TCA want to turn truckers into commissioned sales whom we all associate with cut throat & dishonest practises. Not to mention a driver needs to know what their income will be long term and the company needs to make an investment in that driver and commit to them as well.
This is the same guy who wants to hire experienced former drivers & veterans? I don’t see many of them putting up with this cowardly practise. As mentioned previously shippers need to shoulder their portion of the burden, not make drivers find the profit margin.
When I first became involved in managing groups of individuals in the early 80’s the organization I was with lived by the maxim:
‘Profit is the result of good management, not the reason for it’
It doesn’t seem to dawn on today’s number crunching leaders that long term employees are less productive not because they have tenure and simply don’t care, but because they are now working for organizations with a management team that no longer cares about them. Take a look around. This is a global epidemic within large organizations.
Presently working in Canada for subsistence pay and would suggest to all trucking companies to raise the rates. It has also come to my attention that the ‘foreign trucking association of Canada’ has been paying their drivers 0.55 cents per mile to deliver between Calgary Ab and Vancouver BC.
Subsistence pay being defined as, presently paying out of pocket to deliver the freight
Kee Transport Canada