Researches find trucking rate-per-mile system outdated; big contributor to R&R issues
FAYETTEVILLE, Ark. -- Management researchers at the University of Arkansas have reinforced what many of North America's truckers already believe -- that a combination of poor working conditions and sub standard pay issues is why many truckers put the brakes on their driving careers.
With turnover rates near 30 percent on average in the U.S, trucking firms have instituted various measures to address recruitment and retention of good drivers, but R&R problems persist, says John Delery, professor of management in the Sam M. Walton College of Business.
Delery and co-professor at Walton Nina Gupta collected personnel information from top managers of 326 large U.S. trucking companies and found that in addition to time away from home and family, many truckers are not satisfied with pay or, more specifically, the way they are paid.
The category "not enough driving hours/runs scheduled" was listed as a problem by drivers at more than three-fourths of the companies, which, the researchers said, indicates that drivers are not scheduled for enough miles to make an acceptable rate of pay.
"It's not that drivers are not paid enough per mile," Gupta said. "It's the total number of miles that's a problem. Many drivers are frustrated because they don't have control over the number of miles they drive. Because they're paid by the mile, they want to keep rolling. They don't like it when they're hundreds of miles from home and waiting for new assignment."
Gupta said the rate-per-mile system used primarily by truckload carriers is an example of the piece-rate pay system, which is one of the oldest kinds of pay system.
The system isn't necessarily obsolete, Gupta said, but with the trucking industry it is problematic because employees do not have control over their performance. Delery said companies have the option of moving from the rate-per-mile system to simply paying an hourly or yearly salary, for example.
"There are measures and tools highly selective hiring practices; sound, objective performance appraisals; and on-board computers that enhance communication between drivers and dispatchers that can accurately evaluate potential or current employees. These tools, rather than a system based purely on incentive, can ensure that employees are motivated, loyal and conscientious," the report states
Gupta said that if companies do not want to abandon the rate-per-mile system, they could carefully design and execute the system to provide consistency for the employee and reduce or eliminate abuse.
The researchers also obtained information from the LTL sector, where average hauls were more than 100 miles shorter than the average haul for truckload carriers. Driver quit rates, which were 15 percent overall, were generally higher among truckload and special-commodity carriers, as compared to LTL where it is more common for drivers to be paid by salary.
However, drivers and companies in all three categories faced most of the same reasons for turnover, which averaged 28 percent among all companies, the researchers found. In addition to pay and benefits and working conditions, factors that contributed significantly to turnover were problems with supervisors; whether or not the company offered a pension plan; and whether or not the company had annual performance appraisals, especially if the appraisals were purely subjective evaluations by supervisors and dispatchers.
Interestingly, factors related to specific equipment (inferior cabs, low engine power) and physical working conditions (boredom and company policies about tractor assignment and driving speed) were less likely to influence drivers' decisions to quit.
Copies of the researchers' study, which was sponsored by the Mack Blackwell National Rural Transportation Center at the University of Arkansas, are available upon request.