Be ready with an incentive scheme
Page 61
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by John Darker, AMBIM
WHEN the present pay restraint policy runs out of steam there Is every possibility that productivity and incentive payment schemes will once more come to the forefront.
There are already pressures on the Government to reflate the economy in the hope that the rise in unemployment will be slowed down. When wages and salaries have little "elbow room" to expand, whatever the efficiency or productivity of the work force, the only way an ambitious employee may improve his standard of living is to seek other, better paid, employment. • But past experience shows that if a section of the work force is allowed to earn more money by dint of a productivity scheme, other sections of em ployees, whose job may not be readily susceptible to work measurement, will insist on similar increases in average pay. In road transport, for example, a drivers' productivity scheme prompts calls for incen tive payments for white-collar workers. Supervisory staff, especially in the maintenance function, become disgruntled as pay differentials are eroded.
Another fault of productivity schemes in general is that 'it is hard to distinguish the genuine schemes from the bogus ones. An expensive bureaucracy does not succeed in monitoring all the schemes introduced under the general heading of "produc tivity." The vast number of small firms in road transport provides scope for many em ployers to pay above-market rates—with obvious distortions in the labour market. Labour turnover is surely one of the hardest crosses to be borne by transport managers.
The publication of a national survey of driver payment and productivity schemes by the Whitehead Consulting Group Ltd comes at a particularly appropriate time. Its author, Roland E. Bream, runs the distribution division of Whitehead.
As a consultant he has helped to design driver payment schemes in a number of different situations and he knows about the problems arising with driver payment systems both with and Without direct incentives.
As Mr Bob Beckham, the Freight Transport Association president, points out in an introduction to the book, though it is over 60 years since scientific management was developed in the United States, F. W. Taylor —whose book Scientific Management began the trend—never accepted that collective bargaining on wages was sufficient, of itself, for the discovery of facts leading towards improved productivity.
The stress on facts is, of course, a significant pointer to the evaluation of productivity, schemes. Equally important is the co-operation of the workforce in their devising and in their implementation.
If one course is certain to lead to disaster it is for management to impose a productivity scheme—especially one that is hard to understand—on a workforce. Even when shop stewards have been convinced of the workability of a scheme disaster can still ensue if they have failed to persuade their trade union colleagues of all the implications of a productivity agreement The Whitehead survey dealt with 118 companies employing a total of 33,500. It analysed payment structures and methods of premium payment for weekend work, and holidays, and it examined operating standards and driver performance. Fiftyeight companies, almost half of the sample, have defined operating standards for each element of the driver's task. Seventysix companies (64 per cent of the sample) have a formal mechanism to measure the performance of their drivers.
Productivity
Of the 49 companies introducing a bonus scheme 78 per cent led to better productivity, 62 per cent to less overtime, 62 per cent to improved industrial relations and 56 per cent to easier recruitment of drivers. Other claimed benefits were lower labour turnover, more reliable deliveries, improved customer relationships and reduced absenteeism.
These are powerful arguments, not easily swept aside. It would be interesting to have had some correlation of the effect of productivity schemes on vehicle maintenance costs. In the workshop, especially in the small workshops of typical road hauliers, productivity, in the sense of hurried work, can be prohibitively expensive. An excessive work tempo on the road could lead to more downtime of vehicles, apart from increasing the risk of accidents.
The survey revealed that 45 companies (38 per cent) would like to see marked changes in their payment systems. Seventeen firms wished to move away from a guaranteed hours system; 22 firms wished to develop or revise their bonus system; two firms wished to introduce a variable bonus element to their consolidated scheme and a further two firms wished to introduce a scheme based on job evaluation.
Perhaps Significantly, only one firm wished to move from a work-measured scheme to a salary structure. Despite the talk about the improved status of lorry drivers today there is still considerable distrust by employers as to the integrity of lorry drivers. The schoolleaving sons and daughters of lorry drivers may enjoy salary status in thousands of firms, but the poor old "Dads" on the road must be work-measured.
Although most professional transport managers would claim to have a good idea of acceptable average speeds for different classes of vehicles on the road, it is useful to note the range of difference in the survey.
Motorway average speeds— the type of vehicle is not defined —vary from 26 to 50mph. (Recent press reports have said that car transporter drivers average 22mph on motorways.) For such wide variations to exist is remarkable; the number of abnormally slow lorries on motorways is relatively small.
There are various methods of determining speed standards for particular classes of road— city centres, conurbations, unrestricted roads, country roads, dense traffic roads, A and B roads, restricted roads (30mph) urban ways, etc.
Some companies s pa c if y slightly faster speeds for unladen work, none appear to vary average speeds expected in summer and winter—which is odd, in view of weather hazards.
As an example of a fairly complex scheme, though this is not stressed in the report, one reads: Page 43: "Work content defined by miles driven and average handling time for load. Miles driven are converted into hours by dividing 5/6 of the mileage by 25 and the remaining 1/6 by 12.5. Work content is expressed as per cent of clock hours actually paid to arrive at a performance figure. Payment. of an 'additional' bonus is triggered off, provided this per cent is higher than the previous years. Average bonus 3.6 per cent."
Anomalies
I am sure that most drivers reading such an involved formula would say: "Count me out." In the particular company no doubt this formula evolved over 4a period of time and for all I know all concerned may be well satisfied with it. Clearly, no one formula will suit everyone, though this Whitehead survey does suggest that critical appraisal by a competent trade union research officer would highlight so many anomalies—in a comparison of the schemes reviewed—as to cast grave doubt on the work measurement philosophy.. That, of course, would not prevent trade unionists from exploiting any scheme offering tangible benefits.
The small penetration of tachographs—the survey was made in 1975—is shown by the small percentage of companies. who have installed or intend to install them. Only six coin-, panies of 118 had installed tachos on all vehicles though four companies were fitting tachos to all new vehicles. In one case the instrument was fitted to all vehicles, but no charts were inserted.
Another company made a payment, consolidated into basic rates, to gain acceptance of the instrument. This firm used the Charts for checking drivers' log sheets and for demurrage charging. Elsewhere in the survey sample tachos were used as evidence of accidents or delays, for random checks on routes and timings, for uses as a check on vehicle speeds and driver breaks or to check log books