FEATURE OF THE WEEK: Benefit from incentives – Employee incentives can help fleets meet an array of objectives

Truck News

Driver compensation is usually measured in terms of an hourly wage or a rate based on travelled distances, but an array of additional incentives can play an important role in helping your fleet retain workers, lower fuel bills, and reduce accident claims.

In a recent study, for example, the US Federal Motor Carrier Safety Administration (FMCSA) concluded that safety incentives helped studied fleets reduce insurance claims, workers’ compensation claims and crashes by 65%.

“Incentive programs that offer progressively increasing safety bonuses for longer periods of crash-free operation would give drivers a material reason for staying with their employers rather than moving to another place of work, where they would have to start again to accumulate safety credits,” the administration added.

Traditionally, fleets pay safety bonuses equivalent to a cent per mile, but some will pay more than two or three cents, says Ray Barton, co-author of Incentive Programs for Enhancing Truck Safety and Productivity, a Canadian study into the issue.

“The companies that felt the strongest about their safety programs, they had both the financial incentives as well as the recognition incentives,” he adds. “The younger drivers prefer the idea of the money. People in the business a little longer, they liked the idea of the recognition.”

Barton points to his own wall of honours as proof, and a proudly displayed coffee cup that was offered for giving a presentation. “It doesn’t have to be a very expensive prize that goes with it. Just something that people can put up on their wall at home and the family can look at and be proud of,” he says.

In comparison, a financial incentive disappears once it’s spent. Financial rewards that are included in such a program should also be paid quarterly, the consultant says, noting that a driver can quickly become discouraged if a January accident shuts him out of a safety initiative for the rest of the year. “This way, if you do get into an accident, you get right back in the program quickly.”

Bonus cheques should also be kept separate from traditional pay, he adds. “Then drivers [become] more aware of it.”

Consider issuing incentives just before Christmas, or the beginning of the school year, when extra cash will be particularly appreciated.

The same approach can be effective when looking to achieve other measurable targets, such as improved fuel economy.

“If you put a fuel economy incentive in place, and you pay half the savings to the drivers, then you’re money ahead and the driver’s money ahead,” he suggests.

A fixed schedule of incentives can also play a role in reducing driver turnover.

“One of the firms, they paid their new drivers two cents a mile less than drivers who had been around a while. They had a huge turnover in the first six months,” Barton says, referring to research in his study. But it then added a safety incentive that accumulated for six months before it was paid out, and the turnover rate dropped to 20% from a traditional level of 70%.

Another company combined an array of incentives, including driver appreciation days, along with training that showed managers how to treat drivers with respect. That fleet’s annual turnover dropped to 30% from 100%.

“If you improve driver retention, you’ll reduce your accident costs,” Barton adds. “I’m not talking the spectacular, fiery crash.” But a driver more aware of a route will be less likely to dent fenders, snap mirrors or jump curbs.

Fleets, meanwhile, will enjoy another benefit. “In order to pay out the incentives, you have to keep good records, and that’s one of the great bonuses of an incentive program,” Barton says.

Of course, a program’s launch will be smoothest if you’ve already established a “baseline” of statistics from which to measure results, but that isn’t always possible.

“It’s great if you can have the before stuff,” he says, “but if you think you have a problem, you’re not going to sit around three years and measure data.”

A copy of Incentive Programs for Enhancing Truck Safety and Productivity can be downloaded from http://www.safety-council.org/news/sc/1999/incentive.htm.

The Canadian Trucking Human Resources Council (CTHRC) is an incorporated non-profit organization with a volunteer Board of Directors that is representative of stakeholders from the Canadian trucking industry. With the conviction that the best human resources skills and practices are essential to the attainment of excellence by the Canadian trucking industry, the mission of the Council is “to assist the Canadian trucking industry to recruit, train and retain the human resources needed to meet current and long-term requirements.” For more information, go to www.cthrc.com.

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