Many trucking companies use incentive plans for their sales reps and recruiters and the trend is toward increased use of pay for performance programs for drivers, driver managers and other roles throughout the company.  This article will provide the four rules for ensuring your plans provide the right balance between motivation and business results.

Creating a great incentive plan is not as easy as many people initially think. With the guidance of compensation expert, Beth Carroll, this 4 part guide will walk you through best practices for creating a great incentive plan while avoiding many of the common pitfalls.

This is a good and welcome change as straight commissions provide ZERO flexibility to deal with fluctuations in the economy, types of accounts, or capacity crunches that create higher freight rates.  On a straight commission, the payout is the same percentage, regardless of the CAUSE of the volume increase.  Using a tiered approach…

On November 6th, Beth Carroll presented at the TIA Technovations Showcase. Check out the video here. During her presentation she discussed the benefits of using the MeasureUp compensation survey, recent updates and best practices. Beth also walked attendees through the search process and how to refine their searches for the best results.

Should I pay support roles incentive? The answer is a very qualified “yes.”  Incentive pay CAN be good for these roles but it is different in relative amount and in the nature of how it is calculated and delivered. 

At the recent TIA conference, I was asked many times how my business is going.  Many of you have known me from nearly the start and I’m always touched by the genuine interest and support so many of you give.  I explained to some of you that I’ve been doing more work with driver pay, and more than once I was met with a bit of a puzzled look and the question…”aren’t they just paid by the mile?  How hard could it be to raise that a penny (or five)?” 

There is ONE universal compensation plan that does not depend on or affect your organization structure and allows you to change your structure, roles, responsibilities, and workflow pretty much at will, and that is a “salary only” plan where there is no incentive tied to individual performance.  You could also have pretty much complete org design freedom if you did salary plus company year-end bonus.  Neither of these approaches is affected at all by the structure or flow of work.  An individual would earn the same amount if they were working cradle to grave or only as carrier sales (the salary levels might need to be adjusted but that is all).  Consider the opposite extreme – the version that I consider to be THE WORST change to make…

I recently returned from my 10th TIA conference in beautiful Palm Desert, CA, and it was one of the best shows I’ve been to.  There was a theme that I heard over and over again at the show…what a fantastic year 2018 had been so far, following on a pretty strong Q4 for 2017.  Freight rates have been rising and business has been booming, but this has not come without its challenges – chief among them, from my perspective, is what I’m calling the “January Overpayment Syndrome.”

There are many different ways to compensate and reward employees: commissions, goal-based incentives, bounties, MBOs, time-off, pizza parties, etc.  In some organizations a pure commission model works the best, whereas in others, a goal-based incentive model works best.  What makes the difference?  How can one be “right” for one organization and another right for a different organization?

It may come as a surprise that managers do not have complete freedom when it comes to how they pay their employees.  Mostly everyone knows you must pay minimum wage for most positions, and now we are all more familiar with the overtime rules of FLSA than we ever wanted to be.  But did you know there are other rules, and these rules vary by state, or even by city, so if you have employees in multiple states you need to really understand the local laws, or you could find yourself in a heap of trouble.

However, there is one thing that I’ve bumped into repeatedly that is puzzling. For most brokers, compensation expense takes up 30% - 50% of the total gross margin generated by the company. More money is spent on compensation than is spent on the TMS system, the website, insurance, displays for trade shows, or pretty much ANY other single area of expense. However, it is not uncommon for me to be asked something along the lines of, “Can’t you just tell me how so and so does it?” or “Just tell me the answer. I just want the quick fix.” or “How does everyone else do it?” or “This is how we did it at my old company, why can’t we just do that here?”

The employment rate reports from the summer indicates the US is approaching “full-employment” with almost as many willing and able workers as there are jobs. Compensation professionals like me pay careful attention to these statistics – whichever way they are moving – as they indicate the need for companies to re-examine their total rewards packages to adjust to the changing market conditions.

The most crucial task for successfully driving growth in any organization is to provide crystal clear role clarity to the staff. This goes far beyond what is typically found in an HR “Job Description” and must really address the nature of the role. Time must be spent interviewing the sales force, perhaps even riding along with them on sales calls or otherwise spending “a day in the life.” In our experience the reps’ perception of their company’s sales strategy and business objectives are never 100% aligned with that of the management team.