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Well-Planned Incentives Will Deliver Rewards To Everyone Involved

There is one simple fact that explains why a well-structured incentive program can help to meet so many different goals: Everybody likes to be recognized for a job well done.

There is one simple fact that explains why a well-structured incentive program can help to meet so many different goals: Everybody likes to be recognized for a job well done.

A 2002 study by the Canada Safety Council found that targeted incentives can be used to improve everything from fuel economy to employee retention, and even reduce the number of collisions or violations. After introducing cash rewards for a number of objectives, one 30-vehicle fleet immediately slashed driver turnover in half, saving an estimated $56,000.

Within a year, it had also improved overall fuel economy by one litre per 100 kilometres -paying out $6,100 in fuel bonuses while saving $15,000 in diesel.

Goals like these will ultimately determine the nature of the programs that can deliver the desired results.

Traditional driver incentives tend to come in the form of financial rewards for working a period of time without a violation, or a bonus for the clean report from a roadside inspection, but the rewards do not need to be limited to cash. Recognition in the form of plaques, pins and certificates offer the opportunities to show off accomplishments to coworkers and family members alike.

Some fleets apply decals to the trucks that are steered by drivers who accumulate one million accident- free miles. Then there are jackets, hats and uniform patches, all of which will give successful employees a chance to showcase their achievements.

Still, the planning behind an incentive program is not limited to the types of rewards. The timing of a payment, for example, can have a dramatic impact on the way an incentive is perceived.

When the Canada Safety Council studied cash bonuses, the payouts were most effective when they were issued quarterly, coinciding with family events that involve special expenses, such as Christmas, the first day of school or summer vacation.

Frequent rewards have the added impact of keeping the program and its objectives at the top of mind, and regular evaluations give drivers the opportunity to enhance their habits or skills before a problem becomes too pronounced.

There is another benefit to distributing the rewards throughout the year. Annual payments can actually become a disincentive if a driver is fined for a minor violation early in the year and then effectively blocked from the entire bonus that will be paid out many months later.

Consistent benchmarks can make a difference, too. If the process is perceived by employees to be subjective ( “he only received the bonus because he golfs with the boss”), other employees will question whether they can ever achieve the goals. But objective measurements such as the data from an electronic control module or points on a driver’s abstract can give employees a clear understanding of the objectives and where they stand. An added benefit is that objective measurements are easier to monitor and administer.

When it comes time to set the goals, effective targets will be a matter of balance. If the benchmarks are based on the performance of the top 5% of employees in the fleet, the rest of the drivers might think the goals are out of reach.

In contrast, the drivers who require the most help will be enticed by the promise of goals that are regularly met by a larger number of employees.

The programs can even involve every department. I know of one carrier that circulates an evaluation form throughout the company, asking objective questions that pertain to every area of a driver’s job.

But keep in mind that some goals may also need to be refined to ensure that they reflect a driver’s true performance.

A program that focuses on the importance of on-time deliveries would probably need a review process to determine whether the operations department or dispatchers offered enough time to complete a shipment that arrived behind schedule. It would also need to ensure that the goals do not encourage risky behaviours such as speeding or aggressive driving.

Once a well planned incentive program is in place, fleet managers will have the tools to monitor performance, ensure drivers are rewarded for meeting business goals, and ultimately deliver a measure-able return on the related investments. That will be a rewarding experience for everyone involved.

-This month’s expert is Dave Roth. Dave is the Ontario regional manager of safety and training services for Markel Insurance Company of Canada and has more than 20 years experience in managing safety and operations in the trucking industry. Markel Safety and Training Services, a division of Markel Insurance Company of Canada, offers specialized courses, seminars and consulting to fleet owners, safety managers, trainers and drivers. Send your questions, feedback and comments about this column to read about more industry hot topics, visit Markel’s Web site at www.markel.caand click on the Articles & Essays section.

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