To decide who should be included in a Performance Management Program (PMP), think about the key metrics used to measure company performance. The more influence an employee or employee group has on those metrics, the more critical it is that they are included in a PMP.

In trucking, common key metrics are driver productivity, laden mile performance, revenue per mile, fleet utilization and maintenance costs. That suggests that, at a minimum, every Terminal, Driver and Shop Manager should be in a PMP.

From there, go up the org chart to prioritize who should be in the program. As a general rule, the closer a management position is to field operations and the more real influence that position has on your key metrics, the more critical it is that they be included in the plan.

Ideally of course, all employees should have goals and incentive opportunities. Once your key field and corporate personnel are within a PMP, look to provide all employees pay for performance opportunities.

No. Keep in mind that PMPs are self funding. When properly designed, your KPIs are set high enough that meeting those goals generates increased profits. A portion of those increased profits are used to pay off your high performing employees (those that obtained their goals) while the rest is retained by the company.

Also, look to convert existing wage ‘entitlements’ into incentives. For example, convert annual employee Christmas bonuses and driver retention bonuses into retention-performance bonuses that take both longevity and performance into account. High performing employees would earn more than in previous years, low performing employees would earn less.

I recommend providing payouts every three months for obtaining quarterly goals. Quarterly payouts encourage increased performance better than annual payouts do.

Employees that earn a quarterly bonus are motivated to continue their high level of performance in hopes of receiving next quarter’s payout. Employee’s that didn’t earn a bonus in a given quarter are still eligible for next quarter’s bonus. That way, they don’t lose motivation like they might under an annual plan where early failure makes extra effort for the remaining part of the year seem futile.

Finally, make sure that recognition is part of the reward. The CEO or president should send personal ‘Thank Yous’ each quarter to individuals that performed in the top 5-10% or to those that were most improved. Provide terminal level recognition also. For example, authorize a terminal manager to buy a celebratory lunch for all employees at the terminal with the highest laden mile score.