The idea behind incentive pay is admirable: The safest drivers are rewarded for being vigilant on the road. When designed correctly, these programs work because the theory behind them is sound; drivers who want rewards will drive more cautiously. Unfortunately, a poorly designed incentive system, however, can have the exact opposite effect, costing fleets time, money, and lives.
What Your Incentive Program Might Look Like Today
A common incentive program might be structured like this:
- Drivers make a lower base pay compared to other fleets of their carrier-type. This frees up some room to offer larger bonuses.
- Drivers are given generous rewards and bonuses for safe driving, so they are heavily incentivized to perform well.
- Their rewards are conditioned on meeting a fixed, difficult goal, rather than a more general goal centered on overall performance.
A real-world example:
- Driver A makes $45,000 a year, while most competing carriers are paying their drivers $48,000 a year.
- Driver A receives a $5,000 bonus for meeting the incentive program requirements, making their total compensation well above average.
- Since the fleet cannot give these bonuses to every driver, they make the goal somewhat difficult to reach, like: no preventable accidents, no injuries, and no more than 20 telematics incidents for the year.
Sounds reasonable, right?
In this case, no.
When Driver Incentives Go Wrong
A driver might sign up for a fleet with the above pay scheme because—though the base pay is lower than other fleets—they’re a safe driver and think they can easily get the bonus, which would give them above average compensation. This driver is signing on to the fleet because they think they will get these rewards and do well.
They might spend the first few months being extra-diligent behind the wheel, more so than before they had an incentive-reward in mind. But slowly over time they might slip up just once or accrue more telematics incidents than the reward specifies, despite trying their hardest. Now, only halfway through the year they’re ineligible for the bonus.
At this point, the driver might feel like they’ve worked hard and their genuine efforts are going to go unacknowledged. This is incredibly demoralizing. They’re liable to mentally “check out” for the rest of the year or even leave their fleet.
How to Design an Incentive Program that Works
To avoid the pitfalls of the incentive structure above, you need to:
- Define your program’s goals.
- Do you want to focus on reducing accidents? Improving customer service? Perhaps you have an award for each!
- Define what success looks like.
- Don’t pick a goal that can be missed halfway through the year. Pick something like “Rank in the top 30% of drivers” so that drivers are incentivized to work hard year-round.
- Set an appropriate bonus amount and consider other accolades.
- Don’t make your bonus so high that drivers will be demoralized or upset if they miss it. You want your drivers to stick with you for the long-haul, which means avoiding major letdowns and disappointments.
- Many drivers appreciate the recognition that goes along with rewards. Consider publicly recognizing their efforts with an award they can display to their friends. This will cost you less than a bonus but is just as potent.
Once you’ve set up a plan that fits this criteria, you’re on track to increase your fleet’s safety outcomes and overall performance.
Unfortunately, many fleets don’t offer awards programs. Why?
Many awards programs can be timely to administer, requiring fleet managers to track all incidents for each driver throughout the year and go through their driver list 1-by-1 to identify who’s in contention.
Fortunately, if this is your concern, you can use a driver management platform, like the Idelic Safety Suite to calculate these awards for you. Safety Suite has more integrations than any other platform in the industry, pulling in data from every single system your fleet uses. It also lets you add and edit your driver data without ever leaving the Safety Suite interface. Then, when award season arrives, with the click of a button you are given a list of your award winners, with no extra work required.
With Safety Suite, it’s easy to keep safety top-of-mind, and making it a priority doesn’t have to be time-consuming. Watch a short video on how you can simplify your safety here.
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