Thursday, August 24, 2010
The variable pay plan for our driver has been in place for a month, during which time we have made some minor modifications to the risk factors to account for a couple of unforeseen situations. It is now time to make our first payment calculations based on the data tracked for the four risk factors we believe will lead to a number of positive outcomes for our driver and our organization.
To restate the four risk factors selected:
• 90% of all stops on time
• No at fault accidents
• No more than 3 unexcused absences
• Customer satisfaction rating of “Satisfactory”, i.e., “3”.
Our plan documentation indicates that if our driver “meets” our expectations for all 4 risk factors he will earn an additional $1 per hour getting him back to the going market rate of $15 per hour. However, our plan says he could earn an additional $2 per hour taking him all the way to $17 per hour. During the design phase of building the variable pay plan, we modeled a number of calculation algorithms and after a significant amount of trail and error work, we settled on one that was acceptable to both our operations and financial partners.
• 90% of all stops on time
• No at fault accidents
• No more than 3 unexcused absences
• Customer satisfaction rating of “Satisfactory”, i.e., “3”.
Our plan documentation indicates that if our driver “meets” our expectations for all 4 risk factors he will earn an additional $1 per hour getting him back to the going market rate of $15 per hour. However, our plan says he could earn an additional $2 per hour taking him all the way to $17 per hour. During the design phase of building the variable pay plan, we modeled a number of calculation algorithms and after a significant amount of trail and error work, we settled on one that was acceptable to both our operations and financial partners.
• 90% of all stops on time
If our driver makes 90% - 94.9% of his stops, he earns 25¢ per hour for the
hours he worked this month.
If our driver makes 95% - 99.9% of his stops, he earns 50¢ per hour for the
hours he worked this month.
If our driver makes 100% of his stops, he earns 75¢ per hour for the
hours he worked this month.
• No at fault accidents
As long as our driver has no at fault accidents during the month he earns
25¢ per hour for the hours he worked this month. This is a pass or fail
risk factor.
• No more than 3 unexcused absences during the month
If our driver has 3 unexcused absences, he earns no additional pay
for the month.
If our driver has 2 unexcused absences, he earns 25¢ per hour for the
hours he worked this month.
If our driver has 1 unexcused absences, he earns 50¢ per hour for the
hours he worked this month.
If our driver has 0 unexcused absences, he earns 75¢ per hour for the
hours he worked this month.
• Customer satisfaction rating of “Satisfactory”, i.e., “3”
If our driver has a custom er satisfaction rating of “3” or higher, he earns
25¢ per hour for the hours he worked this month. We opted not to award
a higher reward for this risk factor since we questioned the validity and
reliability of the customer satisfaction survey and rating processes.
So how did our driver do during his first month under the variable pay plan for route drivers.
• 90% of all stops on time: our driver completed 93.5% of his stops
on time.
• No at fault accidents: our drive had no accidents during the month.
• No more than 3 unexcused absences: our drive no unexcused
absences during the month.
• Customer satisfaction rating of “3” or higher: our driver rated a
2.5 during the month.
Appling our calculations we found that our driver earned the following:
• 90% of all stops on time: 25¢
• No at fault accidents: 25¢
• No more than 3 unexcused absences: 75¢
• Customer satisfaction rating of “3” or higher: Zero
For the month, our driver earned an additional $1.25 per hour for each of the 160 hours he worked or $161.25 total. For the record, our driver worked no overtime for the month. Had he worked any overtime, we would have had to factor in his variable pay into his overtime rate. The additional $1.25 per hour brought our driver up to the market rate and just slightly above the average rate for this type of driver in our area.
As part of our driver-mentoring program, the driver’s route supervisor will reinforce customer service by providing our driver with tips and suggestions on how to improve his customer service skills. As a new driver, it may take a few months before his has developed solid relationships with his customers. A portion of the route supervisor’s role is to ensure that new drivers have every opportunity to succeed. Our goal is not to see our driver fail, we want to be supportive of our drivers since this fits into our core values as an organization.
If our driver makes 90% - 94.9% of his stops, he earns 25¢ per hour for the
hours he worked this month.
If our driver makes 95% - 99.9% of his stops, he earns 50¢ per hour for the
hours he worked this month.
If our driver makes 100% of his stops, he earns 75¢ per hour for the
hours he worked this month.
• No at fault accidents
As long as our driver has no at fault accidents during the month he earns
25¢ per hour for the hours he worked this month. This is a pass or fail
risk factor.
• No more than 3 unexcused absences during the month
If our driver has 3 unexcused absences, he earns no additional pay
for the month.
If our driver has 2 unexcused absences, he earns 25¢ per hour for the
hours he worked this month.
If our driver has 1 unexcused absences, he earns 50¢ per hour for the
hours he worked this month.
If our driver has 0 unexcused absences, he earns 75¢ per hour for the
hours he worked this month.
• Customer satisfaction rating of “Satisfactory”, i.e., “3”
If our driver has a custom er satisfaction rating of “3” or higher, he earns
25¢ per hour for the hours he worked this month. We opted not to award
a higher reward for this risk factor since we questioned the validity and
reliability of the customer satisfaction survey and rating processes.
So how did our driver do during his first month under the variable pay plan for route drivers.
• 90% of all stops on time: our driver completed 93.5% of his stops
on time.
• No at fault accidents: our drive had no accidents during the month.
• No more than 3 unexcused absences: our drive no unexcused
absences during the month.
• Customer satisfaction rating of “3” or higher: our driver rated a
2.5 during the month.
Appling our calculations we found that our driver earned the following:
• 90% of all stops on time: 25¢
• No at fault accidents: 25¢
• No more than 3 unexcused absences: 75¢
• Customer satisfaction rating of “3” or higher: Zero
For the month, our driver earned an additional $1.25 per hour for each of the 160 hours he worked or $161.25 total. For the record, our driver worked no overtime for the month. Had he worked any overtime, we would have had to factor in his variable pay into his overtime rate. The additional $1.25 per hour brought our driver up to the market rate and just slightly above the average rate for this type of driver in our area.
As part of our driver-mentoring program, the driver’s route supervisor will reinforce customer service by providing our driver with tips and suggestions on how to improve his customer service skills. As a new driver, it may take a few months before his has developed solid relationships with his customers. A portion of the route supervisor’s role is to ensure that new drivers have every opportunity to succeed. Our goal is not to see our driver fail, we want to be supportive of our drivers since this fits into our core values as an organization.
No comments:
Post a Comment