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The Trucking Company’s Unfair Bonus Structure




Bonuses are a great way to reward your employees for a well-done job. They are entirely optional, and you don't have to give them one if you don't want to. But if you are going to implement a bonus structure for your company, you should do it right.

The problem is that many trucking companies have bonus systems that are unfair and unjust, and this can cause problems for employees and employers alike. This article will discuss the most common bonus structure (MPG) used in trucking companies and explain why it is unfair and how you can make it better.


The MPG Performance Evaluation Is Unfair To Drivers


Most trucking companies evaluate driver performance using the MPG (miles per gallon).

Trucking companies have been evaluating their drivers this way since the late 1970s, and the system has worked so well that it's practically become a universal standard. But times change, and so should our methods for evaluating driver performance.


Why it doesn't work:


The MPG is a terrible measure for judging driver performance for several reasons. First, there are plenty of situations where a driver has no control over how much mileage they get from their vehicle; for example, if the weather is terrible (either hot or cold), the truck will use more fuel than average. If the roads are bumpy, that will wear down the tires and use more fuel to keep the vehicle balanced. These factors can make it much harder for a trucker to hit their MPG target, even when driving perfectly!


Second, even if you adjust for these factors, there are plenty of other factors outside of a driver's control. For example, there might be a lot of traffic on the road or an accident that causes delays, which could quickly leave a trucker unable to reach their MPG target.


This past week our CEO Kameel E. Gaines attended the Tenstreet User Conference 2022, where Lloyd Palum of Vnomics stated, "Don't use MPG to evaluate driver performance. It's not fair”. Instead, introduce an efficient fuel rewards system that does work.


Introduce A Reward Points System


Reward points bonus is the easiest way to get the most out of your truck drivers and keep them motivated. Drivers are more likely to do their best work if they feel like a reward is waiting for them at the end of it all.


The bonus doesn't have to be monetary. You can give them points based on performance or how much risk they took when driving their trucks. Points can be redeemed for whatever they want! Rewards points are a part of nontraditional benefits that raise the stakes of retention and decrease driver turnover.


Tim Hindes, the co-founder of Stay Metrics, which Tenstreet acquired, stated during the Tenstreet User Conference 2022, "Bonuses aren't only about money; they should come as reward points from job stores. So put your money in rewards points.” Give your drivers a reason to stay. Think outside the box.


5 Ideas To Improve Your Trucking Company's Bonus Program


It's true! If a bonus program is designed well, it can help improve your employee retention rate and production, not just provide a monthly bonus for your drivers. A great bonus program can even help you attract new talent. But how do you know if your bonus program is working?


1. Listen To Feedback


This is probably one of the most apparent suggestions ever, but it's also one that many trucking companies overlook. When you're looking for ways to improve your bonus program, begin by asking your current drivers what they would like to see changed about your program, this can help you find out whether drivers are aware of the details of their bonus program, whether they think the requirements are too complicated, or whether they just don't think it's worthwhile at all.


2. Make It As Transparent As Possible


Transparency is critical for a company-wide bonus program. If the rules aren't clear and easy to understand, employees will likely be confused about what they need to do to earn their bonuses. The more transparent your program is, the better it will be received by your workers, which could mean higher productivity and happier employees overall!


3. Don't Limit The Bonus To A Specific Dollar Amount


What if you got rid of the "bonus program cap" or the "bonus program maximum"? Think of the marketing advantage: you're telling drivers they can earn unlimited bonuses rather than "might" earn rewards if they reach X miles.


And what if you gave drivers a bonus for every mile they drive? You could even offer different amounts for different types of miles, like special bonus incentives for driving at night or in bad weather. You're rewarding drivers for being out on the road when it's most dangerous but when your company needs them the most.


4. Create Clear, Attainable Milestones For Your Drivers To Reach


What if we rewarded you based on how many customers you served while on the road? How many times did you bring food to hungry people? How did you deliver Christmas presents to families? Then you and your team could set goals together and build milestones.

And then when you reach those milestones—BOOM—bonus time! So if the business is slow, there's a built-in incentive for your drivers to keep doing what they're doing to get where they need to go.


5. Tie It Into Your Company Values


Think about what values your company values and wants to reward. Then find ways to incorporate those values into the bonus program.


For example, if you value safety, you might consider rewarding drivers who have gone an entire quarter without an accident or a ticket with a $1500 bonus. This will show your drivers that safety is essential to the company and encourage them to put safety first in their everyday work.


Consider offering bonuses for both individual and group performances. It's important to reward employees for their hard work, but it's also important to show them how their efforts fit into the bigger picture of its goals. To help with this, think about offering rewards for individual and group performances.


For instance, perhaps you would like to see an increase in productivity in the sales / recruiting department. You could offer an individual bonus of $500 per new client acquired each month and then offer a team award.


The Benefits Of Having A Good Bonus Structure At A Trucking Company


Having a good bonus structure at your trucking company is essential. It is beneficial to you, but it also helps the company and its employees.


Here are some of the benefits;


1. Bonus Reduces Truck Driver Turnover Rate


Trucking company turnover costs are high, and so are training and hiring new individuals, both of which decrease a company's productivity.


One way to keep turnover costs at bay is to offer bonuses to your most valuable employees. This will encourage loyalty and reduce the number of people who leave their positions. An entry-level job is a great place to offer bonuses because you can quickly identify employee loyalty early on in your career.


2. Truck Driver Bonuses Increase Retention Rates


Sometimes it's hard to keep truck drivers around. They get tired of the long hours, the limited contact with their families, and the low pay. Trucking companies that offer driver bonuses help retain their staff by increasing drivers' overall compensation. Improving retention is essential for several reasons:

  • Less time and money spent on training new drivers

  • More robust culture based on employee satisfaction

3. Better Truck Driver Performance


Once you have given your employees clear expectations, they are much more likely to work towards meeting those goals and even exceeding them. In addition, by providing employees a chance to earn money for achieving set benchmarks, you give them extra motivation to excel at their jobs. That means better performance from everyone on the team.


4. A Good Bonus Structure Can Help Attract Potential Employees


Bonuses are a great way to attract potential employees and keep them working hard. You can give out bonuses based on years of service or even if the employee finishes their training program with flying colors. In addition, if an employee stays with your company long-term, they may get access to additional benefits like health insurance or retirement plans.


5. Increase Customer Satisfaction


The thing about trucking is that it requires a lot of patience and hard work, but with a good bonus structure, your employees will be motivated to serve your customers as quickly as possible. This means they'll deliver products on time and provide prompt service when someone needs help.


Final Thoughts


The benefits of a sound bonus system extend beyond the better management of drivers. It helps foster employee loyalty and can even reduce turnover rates. Creating the perfect bonus system for your company will require time, energy, and research – but it'll be worth it in the long run.


Need Help?


Don't you just hate losing your best truck drivers? We do. That's why we're here to help.

We're Rig On Wheels Truck Driver Recruitment Agency, and our job is to help your company find and retain the best truck drivers out there. We're a recruitment agency that takes the time to understand what makes your company succeed, so we can help you find the kind of trucker who fits your budget and suits your needs in terms of skill set, culture, and personality.


We want to make sure that when we help you recruit, these drivers stick around with you for a long time, not just hop from one place to another like some crazy truck driver butterfly.


So give us a call today. We're here to help you keep your trucks rolling!


To learn more about Rig on Wheels | Recruitment Services

Email questions to recruiting@rigonwheels.com


To speak directly to Kameel Gaines, Call 281-968-3100


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