Bonuses for Work or Safety
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Many Hauliers Offer Financial Inducement to Their Drivers to Increase Revenue or Reduce Operating Costs : Two Incentive Schemes are Described in this Article, One based on Tonnage and the Other Taking Vehicle Condition into Account
BONUS schemes are always topical subjects for consideration among hauliers. There is no agreement about the desirability of adopting a plan to pay drivers bonuses; many operators are, of the opinion that nothing is to be gained, whilst others who think that a bonus is desirable cannot agree about the end in view.
There is what is called the incentive bonus, usually designed to persuade drivers to work a little harder and he paid according to results. Obviously the operator who is considering a scheme of this kind sees to it that if the driver is to be paid more he should so conduct himself as to bring in a bigger revenue. Other operators, in planning a bonus scheme, are thinking in terms of safety. They insure against accidents by paying the drivers bonuses on freedom from accidents. .
The profitable side of such a scheme is usually bound up in the premiums paid. The employer gains not only because his no-claim bonus is bigger, but also because his vehicles are less likely to be off the road.
Many schemes of bonus payment are solely based on traffic carried. The driver is paid a bonus in some proportion to the tonnage he carries. The odd thing about these two forms of payment, one for tonnage and one for freedom from accidents, is that they are likely to be found to be conflicting. The driver, in his anxiety to earn a bonus on tonnage or mileage, is likely to take risks which he would avoid lithe tonnage bonus were not applied.
Improve Efficiency I have been asked to suggest an incentive bonus scheme suitable for a general haulage business, but actually in connection with a C licensee who, besides running his own fleet of vehicles, also employs hauliers. He has noticed that the hauliers' drivers get more work done in a given time than his own men. He wants to improve the efficiency of his organization and one way, he thinks, would be to pay his drivers a bonus. He has written to mc to know if
have any suggestions.
Turning over my notes on the subject I found a reference to a bonus scheme operated by the transport manager of Messrs. William Wood and Sons, Huddersfield. I remember the firm as being one with whom I was in consultation shortly before the war, and I made a note of their scheme.
The system had the merit of simplicity, almost vital in any bonus scheme, and it needed little effort to apply— another important factor. The amounts due can be assessed in a few minutes on each pay-day.
These operators were engaged on coal haulage including open-cast work where, as will be realized, much drivers' time can be gained and lost, The transport manager explained: "1 take the total tonnage for the week, which need only be extracted from the books and may take a minute to do, and the total load-carrying employees' hours (drivers only). This figure comes from the wages book and can be totalled in about five minutes.
"Then I divide the total hours into the total tonnage, which gives me an index. The index (which is the hardest part to arrange), starts from 1.750 and goes up to 5.750 in units of 0.025, each unit being valued at 2d. Examples are as follows:—
2,859 tons 2,859 tons
(a) (a)
850 hours equals 3,365, equals bonus of 10s. 9d. 1,724 tons
(b) 475 hours equals 3.645. equals bonus of I2s. 8d. 3,409 tons • (c) 1.280 hours equals 2.675, equals bonus of 6s. 2d. The highest index of 5.750 is valued at 26s. 8d., so that once the list is made out, 10 minutes' work each pay day is ample to calculate the bonus. The hard part, of course, is to arrange an index which will suit the operator concerned."
The scheme had been in operation some four months before the letter was written. During that time the bonus had risen from 3s, 4d. per week to 12s. 8d.
To understand the Working of this scheme, a little mche detail is necessary. The figure 1.750 is nil, that is to say, the employer accepts that as the figure which is the least amount of tonnage per hour. Any operator who adapts this scheme to his own conditions must begin by doing the hard part first and establishing a figure such as this 1.750, the basis of the whole scheme.
Weekly Tonnages
Take the case of a small operator such as the correspondent who has asked me for suggestions. He has only three vehicles, one a 5-tonner and the others 3-tonners. Some figures I have of the work they are doing show that the tonnage carried in a typical week is 50 on the 5-tonner in a 50-hour week. On the smaller vehicles the tonnage is about 44 for the same period.
These are the tonnages now, but the operator wishes to improve them. The first reaction of the reader might be that these figures would serve as zero. That would be a mistake: I should recommend "letting the dog see the rabbit," and would suggest that the standard be lowered if only a little to give the driver a taste of a bonus.
In the scheme above described the total tonnage and total hours of the fleet were taken. I am going to make my assessment lorry by lorry. The 5-tonner is at present carrying 50 tons per week of 50 hours. If I were to take those figures as they stand I should not have any margin for a preliminary allotment of bonus. I will therefore assume that the basic figures are 45 tons in 44 hours. That means that the zero figure will have to be 1.02.
When the bonus is applied, the tonnage or the hours, or both, increase. The former becomes 50 and the latter 45. The bonus figure, tonnage divided by hours, is 1.11. The operator considers that whilst this is an improvement it is very little; he nevertheless wishes to give the driver some encouragement and awards him 4s. 6d., That means that he has assessed the value of 0.09 (1.02 from 1.11) at the rate of nine units. He has also taken a unit to be worth 6d. Nine units therefore work out at 4s. 6d. per week.
Later the driver does better and carries 50 tons per 44 hours. Dividing 50 tons by 44 hours we get 1.14. The number of units is 12 and the bonus 6s.
Another scheme which I have found to be useful is one which is based on the number of journeys per week. In assessing the amount to be paid I take first of all the figures for a driver who is doing fairly well. The bonus should be so arranged, like that above, that the good driver gets a taste of the bonus money as soon as it comes into operation. I also suggest that thtre be a rising scale of bonus so that the more the driver does, the more he gets.
Take the case of a driver who is running 25 journeys per week. To him I would say: "I will pay you Is. per load for every journey in excess of 20. 2s. 6d. for every load in excess of 25, and 5s. for every load over 30." That is for a 23-tonner.
For a 5-tonner I would award Is. 6d. for every load in excess of 15 in a week: 4s, for every load in excess of 20 and 5s, for every load in excess of 25. 1 recommended this inquirer to award the amounts I suggested and to pay more rather than less for those performances.
A comprehensive scheme, the principal drawback of which is its complication, is as follows. Bonus is paid first of all on the actual work done during the week: this is iubject to an immediate deduction for unpunctuality. The lirect bonus can be £ 1 per week on this account alone.
. The second part of the bonus is awarded according to the Aeanliness of the vehicle the driver is operating. There is penalty in connection with this part of the bonus, that if he driver does not obtain a certain percentage of full marks Se is actually penalized. There is a pointer there to the caction of the owner in this matter of cleanliness: he is illergic to dirt, regarding its presence as a bearer of mainenance troubles—in which I think he is perfectly correct. The third part of the bonus is a long-term assessment and verage of the work in order to qualify for the first bonus. he marks gained in qualifying for the first bonus are veraged over a period and a further bonus is paid on the !stilt of that calculation. This is so manipulated that regularity of attendance reacts against the employee in ie form of a deduction from his bonus.
Then there is a bonus payable in respect of certain allies. There is a Christmas box and, finally, a suppleentary overall bonus which is paid to the drivers in prontion to their earnings throughout the year.
I should explain that the work is, in the main, shortstance haulage, mainly of slag, agricultural products, restock, sugar-beet, ashes and furniture. A feature of e clerical system adopted by the company is that each iver enters on his daily log sheet details of the journeys completed each day. Each log sheet is checked by one or other of the directors of the company and is marked "good," " fair " or "poor." FOr each " good " or "fair" the driver receives a bonus of3s. 4d. For " poor" he gets nothing. The Maximum that a driver can make, in a six-day week, is To ensure punctuality in starting work in the morning, a line of 2s. 6d. is imposed on drivers who clock on after 6.30 a.m. The deduction is made a rigid rule and. being in the form of a fine it is quite possible for a man to find that he has nothing in ('he bonus fund.
Personal Check
Speeding and overloading, which are commonly experienced as the result of awarding a bonus on performance, are prevented in this way. One of the directors is responsible for operations. He makes a personal check of each run so that not only does he know the time it should take for the round journey, but also where the vehicle should be at any given moment during a particular journey. The times are based on fair average speeds and it is the habit of this particular director occasionally to check drivers and their times by paying a visit to some spot on the road at or about the time when the vehicle should be passing that way. Any substantial variation noted is made the subject of an immediate inquiry and any action found to be necessary is taken at.once.
Each driver is made responsible for • keeping his vehicle clean, and there are no half tneasures_about the requirements in, that respect. Not only the bodywork and exterior are expected to be clean but also the underneath parts and, indeed, every part of the chassis. That this is no sinecure will be appreciated when I state that for the major part of its time the vehicle may be carrying tarred road-making materials and each week during the campaign, a large tonnage of beet is carried.
To put the scheme into effect the services of the drivers are requisitioned; they serve as checkers. There is a rota, and each week two drivers take their turn to examine all the vehicles. They are provided with an analysis sheet capable of accommodating all the marks for the whole of the fleet. Marks are awarded as follows; front wheels, 1; cab (outside), 2; (inside), 2; engine, 4; battery, front axle and body, 1 mark each; the chassis. 3: gearbox, 2: rear axle, 1; rear wheels, 2. A total of 20 marks for a perfectly clean vehicle.
Fair Allocation
Study of the marking system confirms the fairness of the allocation. Obviously the most difficult part to clean thoroughly is the engine, and for this the greatest number of marks is awarded. The chassis frame is the next most difficult and for that three marks are awarded. The gearbox is less accessible than the rear axle, so that it gets two marks and the rear axle only one.
The two drivers whose responsibility is to check this feature go around the fleet with their analysis sheets and award marks according to their view of the efficiency with which the work has been carried out. A certain amount of latitude is allowed as to the day on which the vehicle must be cleaned. If for some reason the driver cannot dc it at the 'week-end, he is allowed until Wednesday of the following week to carry out the work. The payment for a thoroughly clean chassis, that is one which has earned the full 20 marks, is 10s, per week, so that, already, we have arrived at the position when a driver can earn Et 10s. per week bonus. This is a real incentive to him to keep his vehicle in presentable condition,Which'is of appreciable publicity value besides guaranteeing, to an extent, mechanical efficiency. S.T.R.