Why profit-sharing may be the ultimate incentive program for owners and drivers
July 1, 2012
A few months ago I was asked by the Central Ontario chapter of the Fleet Safety Council if I would like to participate in an upcoming panel discussion about driver incentive programs. I accepted, always eager to offer my two cents from a...
A few months ago I was asked by the Central Ontario chapter of the Fleet Safety Council if I would like to participate in an upcoming panel discussion about driver incentive programs. I accepted, always eager to offer my two cents from a driver’s perspective.
As thoughts about this topic percolated in my mind over the months, I’ve had quite some difficulty coming to any type of concrete opinion on what a driver incentive program should look like. The best place to start is to gain some understanding of what is meant when we talk about driver incentives.
If you look up a dictionary definition of the word ‘incentive’ you will find something to this effect: A reward offered for increased productivity.
Increasing productivity is usually associated with an increase in the volume of work performed (usually accomplished by investing more time in the job), performing the same volume of work at a lower cost (fuel savings, accident-free miles), or meeting a higher standard of performance (improving CSA scores or carrier ratings). The reward to the driver is most often a financial one.
What I find interesting is that an increase in productivity requires an investment of additional time by the driver. Yet in recent years, changes to hours-of-service legislation (HoS) and the use of electronic on-board recorders (EOBRs) have tightened control over a driver’s time.
At the same time, most of us are still paid by the mile and by the drop. This system was put into place to encourage productivity also. Run more miles, do more drops, and you get paid more.
But that system was put into place when HoS rules were loosely enforced or non-existent.
So what we have now is the operations side of our business still paying drivers by the mile, encouraging them to work as quickly as possible in the name of productivity and incentive programs that are designed to slow us down and work more efficiently and safely.
This presents somewhat of a paradox for drivers. It’s no wonder that drivers often express the feeling that they are stuck between a rock and a hard place, because the expectations of the operations side of the business and the safety and compliance side of the business clash.
As a driver are you going to place your efforts on the operations side that pays you 40 cents a mile every week or on the safety and compliance side that presents you with the potential to earn up to another two to six cents per mile each quarter, if you meet the criteria?
It’s no surprise that many drivers feel it’s just not worth the effort. Maybe we’re well past the time of looking for a new means of paying drivers for their efforts as well as developing new incentive programs?
What if I’m more interested in earning the same money but doing it in less time, allowing me more personal time? Is there an incentive program out there that will do that? Perhaps.
Some companies are implementing profit-sharing programs. These programs present the opportunity to involve all employees – not just drivers – in the incentive program. They have the potential to foster greater teamwork and break down communication barriers between departments.
A profit-sharing program fixes the cost of an incentive program as a percentage of net profit for the company, so it aids in financial forecasting and planning. But it requires diligent and consistent messaging from all levels of management to front-line employees. Everyone has to be working towards the same goal. I’ve learned over the years as a driver that communication with front-line employees is not a strength this industry possesses.
That’s not a criticism; it’s simply recognition of the difficulty we all face in developing relationships with one another when we rarely see each other.
That lack of social interaction is difficult to overcome in an industry that keeps managers and workers thousands of kilometres apart most of the time.
A successful profit-sharing program depends on constant interaction between all employees if there is to be a payoff. That payoff has the potential to be no less than a satisfactory set of HoS rules that recognizes the need for flexibility in a driver’s daily routine and an end to downloading inefficiencies such as dock delays to the driver.
As an aging driver I find that I am increasingly frustrated by the lack of time I can spend with my family and invest in my own personal wellbeing. Issues of driver health and wellness are coming to the forefront and facing up to this reality is what incentive programs also have to address.
It does not seem reasonable to me to ask an aging driver pool to invest even more time in the name of productivity while also expecting them to take more time to care for themselves. You just can’t have it both ways.