Reward for Good Work
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Employees Should be Encouraged to Make Extra Efforts for the Benefit of their Companies by Sharing in the Additional Revenue Obtained, but it is Essential for Bonuses to be Generous, Otherwise the Scheme will not be Attractive
AFRIEND of mine in the West Country has asked me to make some suggestions upon which he proposes to base a bonus scheme which will meet his requirements. In my article last week I described a method devised by Mr. Wood of Huddersfield. That scheme has the essential merit of simplicity, and little time is required for its execution.
I also described a method which takes into account everything that can be brought within any bonus scheme. It covers work done, cleanliness of the vehicle, punctuality, difficult traffics, a supplementary bonus and a Christmas box, It also provides for safeguards against speeding and overloading, factors which, as I have so often urged, are likely to arise when drivers are paid a bonus on results. The bonus on cleanliness is paid annually. The maximum number of marks which can be gained is 20. The employer, however, is so keen on cleanliness that there is a minimum bonus which must be earned, and if that minimum, 15 out of 20, is not reached, not only is the bonus entirely lost for that week but a fine is inflicted and deducted from the total bonus otherwise gained throughout the year. Actually it is rarely that the percentage of marks awarded for cleanliness is less than 90. Usually, in any one week so far experienced, the lowest percentage has been 93, and quite often it is 100.
One result of the application of this part of the scheme is to raise to a high standard the degree of cleanliness of the vehicles of the fleet. On one occasion I made an examination of them as they came into the garage one evening, and rarely, indeed, have I seen chassis parts so clean and void of the usual incrustation which so often covers most of the engine, gearbox, rear axle and other exposed parts. A note of warning here: employers who put this scheme into operation must not expect immediate results; what I might describe as the process of education to this high standard which prevailed at the time of my examination was a slow one. Once, however, the appropriate standard is reached it becomes permanent and requires only a minimum of effort for its maintenance.
Strict Cleanliness
I have mentioned the keenness with which this employer regards this aspect of the working of his fleet. I am in sympathy with him in that respect. He is emphatic that strict cleanliness pays dividends in efficiency of operation. I have often urged that the first step towards efficient maintenance of the mechanism of a chassis is that it should be regularly and thoroughly cleansed. The mere operation of cleaning often enough discloses incipient faults—the slackening of a nut or the chafing of a wire—which otherwise might develop into a serious defect.
There is one point to which I must refer before completing my reference to this part of my subject. In order to prevent victimization or, perhaps, unfair retaliation by a disgruntled driver, against the drivers responsible for examining his vehicle on a week when the allocation of marks was abnormally low, the results of the examination for cleanliness and the award of bonus marks arc not disclosed for a period, eight weeks or more by which time the identity of the checkers responsible has been lost.
In my previous article I referred to a system of marking based on the examination of the driver's log sheets. They A36
are, as I described, checked over by a director and marked " good," " fair " or "poor." For each " good " or "fair," the driver receives 3s. 4d. per clay. For " poor" he gets nothing. The third part of the bonus is the long-term assessment and the averaging of the marks awarded in connection with the first part of the scheme. The object of this part of the plan is to penalize those drivers who are apt to take a day or so off when they think they will. This reassessment of the earlier marks takes place over a period of eight weeks-48 working days.
The log sheets are put together and re-read with their markings. This time, however, "good" reports are awarded one mark; " fair " receive only one half; and " poor " none. The total number of marks assessed on this basis relates to 48 working days, so that if a man has had " good " for every day of the 48 and was not absent on any of those days he would receive the maximum of 100 per cent., which is 48 marks. His total, however, may be diminished because on some days he obtains only one mark and on others nil.
Fair Chance
Suppose a man was absent for sickness, or with permission from his employer. He might have worked, say, only 40 days. If he had obtained 40 marks he would still be 100 per cent, because the 40 marks would be put on a basis of 40 days, thus giving him a fair chance against the employee who had no reason to be away from his work.
If, however, he had been absent eight days without permission, his 40 marks, assuming that he obtained one mark per day for each of the days he did work, are calculated on a basis of 48 days so that his percentage, instead of being 100 as in the other case, is calculated as 40 over 48, which is 831 per cent. That is the way in which this part of the bonus scheme takes care of regularity of attendance at work. For this the award is 10s. per week for each of the eight weeks per 100 marks gained.
There is, however, an addition to the amount, made up as follows—half the fines levied on drivers who have not properly cleaned their vehicles is put into a fund. This is made up to £10 by the employers and to that amount is added half the fines levied on the drivers for being late. This additional sum is distributed to the first six men in order of bonus earned on the eight weeks' average scheme. Half the total sum is divided between the first two of the six; a third of this total sum is divided among the third and fourth, and the balance, one sixth of the total, is paid to the fifth and sixth men.
Most of the traffic is carried in tippers. Some of it, however, such as sugar-beet and ashes, has to be manually loaded and a smaller proportion, manually unloaded. Drivers who handle this traffic are paid a bonus of Is. per load.
At the end of the year the company pay a further contribution of 5s. per man per week into the bonus fund-£13 per annum—and this is divided among the participants according to their total figures for allocation of the bonus. Thus, if a man's total was 90 per cent, of the maximum, he is given an extra 90 per cent, of the £79 in addition to that he had already earned. Finally, at the end of the first year's working, each driver is given a Christmas box amounting to £10.
Here let me digress for a moment to generalize on the subject of bonuses in general. One of the features of any bonus scheme must be that it is generous: a scheme which benefits the driver to the extent of 10s. per week is not going to make much of a stir. It is not sufficiently attractive. In this matter there is no point in doing half a job. Co-operation between driver and employer is vital to success and niggardliness is not likely to awaken much of the spirit of co-operation.
For any bonus scheme to succeed it Must arouse the interest of the men who are to earn it—it must be substantial. Is it likely that any man is going to be enthusiastic about a possible 10s. per week extra? Of course not.
Here are the figures for the potential earnings under this scheme. They are the amounts earned during the first year of operation of this scheme by the man who received more than any of his mates.
On the cartage of sugar-beet at Is. per load, £9 6s.; for ashes at the same rate, £1 Is.; weekly bonus, paid in cash, £42 6s, 8d,; bonus for cleanliness, £9 13s, 10d.; yearly bonus (the amount of the eight-weeks' averaging), £45 is. 3d.; additional bonus (the percentage of the £13 donated by the employer), £11 5s. 4d.; Christmas box, £10. The total is £128 14s. id., or nearly £2 10s. per week. In the first year of the existence of the scheme the total paid out was £1,700 and that among 15 drivers.
Now, £1,700 per annum extra payment to 15 men seems rather a lot. It is about £113 per annum or some £2 3s. 6c1. per week per man. When I first described the scheme it was pooh-poohed by one of my readers, a man of much experience of road haulage in all its branches. He could not believe that a concern employing 15 men and paying statutory wages could afford to pay out £1,700 in bonuses over a period of only one year
Pedestrian Outlook This attitude is really reflective of his state of mind: his outlook on life and his perception of the relationship between himself and his employees is pedestrian. He is unenterprising, expecting only the normal processes of buying and selling at predetermined rates, whereas the other, the man who has devised this complicated yet comprehensive bonus system, can see into, the minds of his employees and treats them as he has treated himself, that is capable of extensive earnings as the result of enterprise and exertion. He puts his men in a position of increasing their earnings by working a little harder in a way which will bring profit to him in proportion to their efforts and his own.
Fortunately, it is possible to indicate that this £1,700 can be shown to be well within the scope of the business but would not have been earned but for the application of this seemingly expensive scheme.
Before showing that it is possible to pay this large sum by way of a bonus and still make profits for the employer, I should like to point out that even if the gain in revenues brought to the employer is no more than 11,700 it is still justifiable inasmuch as it brings into being a satisfied and enterprising crew of 15 men imbued with the notion that the employer is giving them a true share of the profits they earn, and bringing it to them in a way which makes it more attractive than any idea of profit-sharing which could be devised.
Let me put this another way. One of these operators has sensed the wisdom of paying a little extra to his men in the belief that it might possibly be profitable to him also. Events have justified that belief. The other has not appreciated the basic truth that by giving his drivers a monetary incentive to seeing that the most is got out of, the vehicles, the business is likely to We more profitable than otherwise, Common Practice
Take first the item relating to the bonus of is. per load for the _carriage of sugar-beet, Incidentally, the award of a bonus of this amount has for many years been a common practice among sugar-beet hauliers. It may therefore be presumed that they have found it to be profitable. A good average rate for sugar-beet throughout the season is 9s. 6d. per ton, and that happens to be the rate for a 9-mile lead. Assume that a driver, in the normal way, would have carried 15 loads in a week, which represents a bonus of 15s. He regards £1 per week as much more attractive and, by exercising his own energy and initiative, he manages to squeeze in another journey per day, five extra loads per week. Those who have had experience of the haulage of sugar-beet and have been in factory yards and observed the difference in tonnage as between an energetic driver and one who is not so keen will appreciate that this difference of five journeys per week can often be quite easily accomplished.
The extra cost to the operator per week, based on a 9-mile average lead, is the running costs of 90 miles at lid, per mile, which is £4 23. 6d. Add the bonus, £1, and the total extra cost to the operator is seen to be £5 2s. 6d, per week. The extra revenue is that accruing from the cartage of five loads of beet per week, 30 tons per week at 9s. 6d. per ton—£14 5s.—so that there is an item of £9 2s. 6d. to go to the credit side of that account.
A sugar-beet campaign lasts about 12-14 weeks, but as there is not always sufficient beet to keep the vehicle fully employed, it would perhaps be fair to take the middle 10 weeks during which this extra traffic could be obtained. That does, at least, mean that on the sugar-beet alone there is an extra profit of £91 5s. for those weeks on each of the vehicles taking part in the work. If only five vehicles are engaged, and I am assuming that all the drivers earn that extra bonus, there is an extra profit of £456 Ss.
So far as the haulage of ashes is concerned, this is probably not a large item in the haulier's books, but it is just as likely to be beneficial to the operator to pay this shilling per load as it is for sugar-beet. It would be fair and reasonable therefore to add another £100 to the account, making the total £556 5s. for sugar-beet and ashes alone.
So far as the general traffic is concerned, I must recall.
that the bonus for this is awarded on the basis of a check on every driver's daily work. The completion of the extra journey adds to the driver's credit in respect of the bonus he is going to earn, and as there is a possibility of earning nearly £2 per week, it is obvious that every driver is going to do what he can throughout the year to put in as many journeys as possible. S.T.R.