Driver Bonus

The aim is to renew the bonus system of drivers of Leisibach AG. At the moment the drivers receive a bonus, but this bonus can be cancelled if, for example, there is damage to the truck. This system is not considered optimal for the following reasons:

Current system

it is perceived as arbitrary. Drivers sometimes do not understand why they do not receive a bonus.
it is seen as a punishment system rather than a reward system. The bonus comes automatically, unless you don't behave well, in which case there is a deduction.
Drivers who work hard and do a lot of assignments are not rewarded. On the contrary, they have a greater risk of suffering damage to the vehicle. On the other hand, notorious blue-collar drivers are not.

Requirements for the new system

The requirements for the new system are:

good, reliable employees should be rewarded.
it should be taken into account that different activities (placing, changing, emptying, picking up) take different amounts of time.
attendance shall be taken into account. On the one hand, a driver should not be "penalized" for vacation days. On the other hand, it should be taken into account that someone who is absent for many days has not contributed much to the company.
different circumstances to different job types (trailer trucks, cranes) should be taken into account.

Bonus system Description

Trucks

Order points

Order points are attributed to each driver.

The following activities give points:

place
change
empty
pick up

It is taken into account that the activities have different durations, and can often be performed in conjunction with each other.

Therefore, there are the following points per activity:

activity	order points
set	1
change	2
empty	2
pick up	1

A value of 12 points per day is considered good. Calculated by rule of thumb:

6 change orders per day
2 points per change

This is only an order of magnitude for the time being. As described below, experience must first be gained and the bonus levels must be determined.

Since the bonus is paid monthly, we calculate the number of points in the month divided by the number of working days, where working days are those days in which the driver was on duty. Sickness, vacation, unpaid leave, training, etc. do not count as working days. Likewise, for the sake of simplicity, short assignments and half-days are not considered as working days.

The monthly bonus is therefore derived from the average order points in the month.

Working days

The average order points take into account that someone who had a few days of vacation cannot collect the same number of points.

Formula

Bonus points for driver X in month Y = total order points in month / (number of working days) * (1/maximum (number of working days, 10)).

The "maximum" in the formula can be explained as follows: It should not be possible for a driver to work only one day a month, put in a little effort and then get the full bonus. Those who work a lot (and well) should have a better chance to get the bonus. If a good employee has 12 days of vacation, the probability of getting a bonus should decrease, but it should not be completely impossible either. So the formula works in such a way that if there are few days of work, it reduces the bonus points and thus reduces the prospect of a bonus.

Scale

For example, a scale could look like this:

Bonus points	Bonus
<= 5	0.-
6 - 9	100.-
10 - 13	200.-
>= 14	300.-

In any case, this still needs to be specified in detail.
Be sure to refer to the note below in the section "Recommendation Introduction".

Trailer trains

Orders for trailer trains have other characteristics. Typically, two dumpsters are driven per trip, but there are only 6 trips per day with more kilometers.

The mechanics of trailer trains are the same, but the order points per activity are larger. (to be defined)

Crane

The 3 crane drivers are excluded from the bonus system. They are the best drivers and it does not make sense to incentivize them according to a mechanical system. Rather, the Kranen drivers should be paid an individual annual bonus for exceptional performance.

Data sources

All data are available from a3. These would still need to be clarified in detail.

Recommendation Introduction

We suggest that the scale not be set in stone, and that the system be introduced cautiously. On the contrary, we recommend that the system first be observed from the background for a few months before it is communicated to drivers and introduced. With experience, the scale can be adjusted. And only then should the new system be communicated.

Bonus systems have the disadvantage that, if wrongly balanced, they can destroy a lot of trust. In addition, crafty employees often find unexpected ways to "trick" an immature system. Furthermore, it is not advisable to adjust the bonus system every few months, because there are losers in every adjustment. And experience shows that it is precisely these losers who interpret the adjustment as arbitrariness "from those up there".

Therefore, we propose the following procedure:

Phase 1: observation: data are collected, pro forma results are analyzed. But the system runs in the background and is only visible to management and scheduling. This phase should last at least 2 months. Any adjustments can be made to the system. At the end of this phase the scale is defined. The phase concludes with the announcement to the drivers.
Phase 2: Parallel phase: The old bonus system continues to run, but in parallel the drivers see how they would finish under the new system. It is important that the drivers understand the system and have access to the evaluations. This phase should last at least 2 months. The phase should end with drivers being able to share their experiences with the new system. If necessary, management may decide to make final minor adjustments based on driver feedback.
Phase 3: Introduction: The old bonus system is replaced by the new one. Here it is important that consistency is signaled and also lived. For example, one can say that the bonus system or the scale will be evaluated again at the end of the year. But an arbitrary change shortly after the introduction is not advisable.