While the debate between paying a driver by the mile or by the hour has merits on both sides, we’ve found that in either case, incentives are extremely important to keeping a driver productive and safe.
You’re probably familiar with the letters KPI – Key Performance Indicators. These are the stats and data such as fuel cost or the number of speeding incidents that a company uses to measure its successes.
We’ve all heard the old saying “you can’t manage what you can’t measure”. Let’s talk about the KPIs we can use to incentivize good driver behavior. While certain performance metrics are quantitative and based on pure numbers, a driver’s behavior is more of a variable that can change from trip to trip. It is for this reason that incentives are essential when establishing predictable and manageable driver performance metrics and tying them to overall fleet performance KPIs.
Reward the good things that keep the opposite or bad thing from happening
Because most fleets are now running on Elogs, or will be soon, we now have an exact measure of hours rolling and hours idling. At one gallon per hour and no miles logged while idle, it make sense to incentivize rolling time and prevent idling time. No one makes money when we idle, including the driver, and idling time costs the company money.
Pick KPIs that are tailored to a specific driver but fit into overall fleet performance
As we all know, you can put two drivers in the same truck and because of their driving styles there can be as much as a .7 mpg fuel performance difference because of these two different styles of driving. If your route is flat and consistent Interstate driving, you know that using the transmission and clutch to reduce speed vs the brakes is more efficient. Choose brake usage as an indicator of poor performance. Measure it, and incentivize not using the brakes.
We have agreed that every driver has a different style. You can definitely choose to reward individual drivers based on the improvement to their driving style that will most benefit both that driver and the company as a whole.
Build flexibility into compensation if you regularly have changes or add-ons
Pay your drivers a particular base survival wage with the option to pay for additional stops. If you need to add another stop, he knows he’s not gonna be hung out to dry because he’s going to pick up his stop pay and you are going to get the extra stop covered.
Pay performance bonuses over a set period of time
Track and share progress toward specific performance incentives with regular check in’s on the KPIs that matter most to your company. Let drivers know how close they are, or how FAR they are from getting the monthly or quarterly performance bonus. Use the stick if they are behind their goal, but always dangle that carrot!
And remember, your value to upper management can combine safety performance KPIs with other measurable indicators that have been identified by your company. Pay an average driver an average wage for average work. But create a clearly defined path that will be an exception because a driver has to decide to be exceptional. Give them a bonus incentive to make better decisions and they will likely make the decision that benefits their take home pay.
Incentives can also be effective in helping to create your safety culture
An ideal safety performance program would pay the driver an additional few cents per mile when he is compliant with safety metrics. If he gets ticketed, then he loses the bonus for the period. With most drivers clocking in an average of 3,200 miles per week, $.02 per mile is enough incentive for the driver to keep your safety policies in mind.
That $.02 per mile can easily add up to a monthly car payment or a few trips to the grocery story for the family. Tell your drivers this is what you were thinking when you designed the incentive.
Are there other types of incentives to use besides what we have covered here? Of course there are. The best way to find out what motivates your drivers is to ask them what types of rewards would make them happy. Then take those rewards and tie them back to your safety KPIs.
Build your incentive program based on areas for individual driver improvement and the overall goals of your company. No matter how creative you are, or what you choose to reward, your incentive program should accomplish this:
- Motivate drivers to stay in compliance with your safety and performance metrics
- Improve the KPIs that your company deems important
- Improve driver retention
Email me and let me know what incentives you are using that work really well or that you have tried and did not work so well. We want to hear from you!