Case Exercise 4 Closing Case:
Driving Employee Motivation
Drivers for private truck fleets log about 20,000 miles a year. They drive 82 percent of all medium-duty and heavy-duty vehicles in the United States and account for 52 percent of the total miles traveled by commercial motor vehicles (CMVs). “The way these employees drive,” says veteran industry journalist Mike Antich, “can either increase or decrease fuel economy and greenhouse gas emissions. If you change driving behavior, you have a direct impact on the amount of fuel consumed and the amount of emissions produced. Even small increases in mpg can make a big difference.” And, Antich points out that fuel-conscious fleet managers have reported up to 30 percent reductions in fuel consumption by changing driver behavior.
How? By motivating drivers to comply with company sustainability policies. Unfortunately, of course, it’s not that simple. Most drivers, according to Antich, “want to do the right thing but don’t see sustainability as part of their job responsibilities. In fact, the No. 1 reason corporate sustainability programs are not ‘sustainable’ is driver noncompliance.” According to Antich, a successful sustainability initiative, “requires developing programs that motivate employees to comply.” He goes on to argue that effective motivational programs often involve gainsharing—programs designed to share company cost savings with employees.
Again, however, implementing the solution isn’t quite as easy as identifying it. Traditionally, observes Antich, gainsharing involves financial incentives, but he admits that “in today’s cost-constrained business environment, offering financial incentives [may not be] a realistic option.” Consequently, many firms have found that individual recognition can be an effective alternative to financial incentives: “Repeatedly,” says Antich, “respondents to employee surveys rate ‘individual recognition’ as a key factor that motivates them to want to excel or achieve corporate objectives.”
Both scientific studies and the experiences of various companies show that the importance of employee recognition—including financial rewards—should not be underestimated in sustainability efforts, primarily because the importance of individual behavior should not be underestimated. According to a report by Jones Lang LaSalle (JLL), a professional-services and investment-management company, many companies with active efficiency programs are finding that further improvements in sustainability can be achieved only by turning to the people who are responsible for implementing those programs. “The low-hanging fruit has been plucked,” JLL’s Michael Jordan advises clients. “You now need the participation of humans.”
Nussbaum Transportation, for example, has developed a software program called Driver Excelerator, which collects and analyzes fuel-related data from various sources, including electronic control devices for capturing mpg numbers. Using the resulting data, managers award points to drivers of the 230-truck fleet for beating the company’s mpg goal. If, for instance, a driver achieves an average quarterly mpg of 8.5 against a goal of 6.5, he or she receives 200 points, which are allotted according to a three-tier system: Bronze pays $0.50 per point, Silver $5.00 per point, and Gold $8.00 per point. Some drivers in the Gold tier earn an extra $1,600 every three months.
Illinois-based Nussbaum was careful to reject an “all-or-nothing” system in which drivers received a bonus for meeting a target and nothing for falling short. “Our experience,” says HR director Jeremy Stickling, “shows that that’s a big demotivator” because drivers who miss out tend to blame external circumstances such as weather or load weights. In fact, Nussbaum plans to make mileage-based performance rewards a bigger portion of drivers’ base-pay rate. The idea is for drivers to get higher monthly checks instead of big quarterly bonus checks. “Guys want their money now,” notes Stickling.*
1. How would you assess Nussbaum’s incentive program?
2. Which basic motivation concepts and theories are illustrated in this case?
3. If the motivation approach outlined in this case is indeed valid, how might it be used in other settings?