How Senior Management Can Motivate Fleet Managers
Motivating employees to excel is one of the core responsibilities of management, from the departmental to most senior levels. Motivated employees work hard, stay late, get in early, and learn their craft — and, ultimately, the company benefits.
And, fleet managers are no exception. Some have risen to the job from within the vehicle business, working at dealerships, manufacturers, or even fleet service companies. Others have non-vehicle backgrounds, including purchasing, finance, treasury, accounting, and sales. Some have sought the job, while others inherited it, and still others “volunteered” by standing still while everyone else moved back.
Motivation for a job with incumbents from such widely diverse backgrounds can take a number of different forms. Knowing what they are will help senior managers get the most out of a critical company function.
People are motivated in a number of ways, not just on the job, but also in life. The list of possible motivators is a long one, including internal and external, from peers or superiors, by self-satisfaction and by helping satisfy others, etc.
Fleet management is about as diverse a profession as there is, with successful professionals coming from a variety of backgrounds, with widely different experiences and even skill sets. There are, however, some common, positive methods of motivation that fleet managers will respond to, much in the same way any employee might:
- Internal motivation includes self-satisfaction for a job well done; requires an innate desire to do well.
- External motivation can come from many sources, including within the profession or company, from managers/superiors, or even from family or friends; those seeking external motivation want recognition.
- Rewards can mean money, which is a universal motivator, but can also include public recognition (e.g., company newsletter, industry publication) or written commendation.
- But, not everyone has that same fire or desire for positive reinforcement as a primary goal. Some people are motivated by fear, or concern that bad things might happen:
- Fears could include job loss, not receiving a raise, or getting a bad review.
- Disappointment is, to some extent, the opposite of positive internal motivation. This could include not wanting to disappoint oneself or not wanting to fail, as opposed to wanting to succeed.
- Introverted people typically dislike the kind of positive recognition that motivates others and are careful to do just enough to remain out of the spotlight.
While negative motivation may seem like a terrible way to push employees to excel, it is a simple fact that some people respond to such fears more quickly and thoroughly than they do to the kinds of good things that seem obvious to most.
In general terms, motivating people in any business environment doesn’t differ based on what their jobs may be. On the positive side, general business motivation can take a number of common forms.
Most companies have in-house communication venues, which include intranet sites, newsletters, “town hall” meetings, or any outlet where all or a group of employees receives a message. Employees who excel, or those who have achieved anniversaries with the company, are often recognized to the employee base as a whole.
Within a sales organization, a number of the aforementioned communication methods are used. Sales managers conduct regular calls with staff, where sales personnel discuss the market, what they’re doing, and their “pipelines.” It is common during such calls for sales “wins,” and the salesperson(s) who won them, to be recognized.
Also, within sales groups, annual sales meetings are excellent venues for awards and recognition, as sales teams are feted for their success during the year. Finally, if you are in a manufacturing environment, safety is a major issue. Plants often publicly recognize employees who have either reached milestones or suggested processes which have enhanced the safety of the plant.
These are just examples of the many ways companies, and management, recognize and reward excellence, which is a strong motivator.
Motivating Fleet Managers
As with any other job function, motivation depends on the mission, and the first step in learning what motivates fleet managers is to determine how their performance is assessed.
The basic function of a fleet manager is the same today as it has been since the formal establishment of the profession more than 70 years ago: to manage the provision of company vehicles in the most cost-efficient, safest manner possible. What has changed, and changed dramatically, are the tools fleet managers use to accomplish this mission and the vehicles they provide.
As with any employee, fleet managers are judged by their job performance and either rewarded or not rewarded based on how they are able to manage cost and increase or ensure safety. Begin by looking at how fleet managers can be motivated using the one thing that motivates every employee: money. Because much of what fleet managers do is measurable, establishing key performance indicators (KPIs) pertaining to fleet costs is relatively easy.
Cost indicators fleet managers routinely track, and report to management, include:
- Fixed costs: primarily include depreciation (the difference between the original value of the vehicles and what they return when sold), insurance (a bit more tricky, since most larger fleets are self-insured for physical damage, and the fixed cost is usually an accrual account based on past experience; when well-managed, the accrual declines). Depreciation is by far the largest portion of fixed costs, accounting for as much as 70 percent or more.
- Variable costs: costs associated with the operation of the vehicle are fuel, maintenance and repair, tires, oil, and miscellaneous (warranty recovery, tolls, and other relatively minor costs). Here, fuel is the largest (and most volatile) cost, incurred at 70-plus percent of variable costs.
- Total cost of operation (TCO): the net cost of a fleet vehicle, determined after it is sold; encompasses all of the above costs ultimately expressed in cents-per- mile driven.
These measurable costs are the benchmark upon which a fleet manager’s performance can be judged, and, ultimately, upon which rewards for excellence can be based.
What rewards, though, and do they really motivate? A cynic might say that the reward could be allowing the fleet manager to keep the job, but one could make the case that this is a corollary to the “negative” motivation of “do your job well, or lose it.” Most HR professionals agree that such negative “motivation” is perverse, and recommend building compensation and career trajectories that provide rewards for excellence.
Receiving More Compensation
Money is the time honored, and most often successful, motivator. Financial rewards can take any number of forms:
- Salary increase: most commonly, the promise of an increase in base income is used as a motivator for any typical employee.
- Individual bonus: some companies allow for individual bonuses (often a percentage of base salaries) for employees based on established goals or other KPIs.
- Profit sharing bonus: still other companies provide all employees with a share of company profits if certain overall corporate goals are achieved.
These are some of the more commonly used motivators for all employees. For fleet managers, the first two — a raise in base or an individual bonus — are usually based on KPIs covering some of the cost factors listed previously, and the fleet manager’s success in reducing, or, when circumstances don’t permit reductions (e.g., when fuel pump prices spike as in 2008), minimizing or managing increases.
A profit-sharing bonus encourages shared motivation among all employees, as in, “I’m going to do my part to help the company succeed.” However, it can end up as an exercise in frustration when a fleet manager excels, but overall corporate goals limit the reward.
There are other ways to reward, and thus encourage, excellence. The aforementioned recognition is often used with drivers of fleet vehicles, particularly where safety is concerned.
Drivers who complete various anniversaries — one year, five years, etc. — without a chargeable accident or violation can be covered in a company newsletter or intranet site, perhaps even receive a letter of commendation or plaque from the CEO. A gift certificate, trip, or choice of prizes from a website or catalogue can be considered as additional reward options. The same can be provided to fleet managers (or other department heads) who keep overall vehicle costs below budget, or institute a cost-reduction regimen, which results in documented savings.
The key is that any savings, or limits to increases, can be formally quantified and documented, as in hard vs. soft savings (even though the latter are real, for purposes of motivating via recognition or money, hard dollar savings should be the measuring stick).
For example, if fuel prices spike very dramatically (again, as they did in 2008), by more than 50 percent in a relatively short period of time, fast action taken by the fleet manager can limit increases in fuel costs to only 20 percent. If documented (as in, the action is clearly defined), it can certainly be an example of fleet management excellence, and worthy of some reward.
A little creativity, however, can also go a long way. For example, perhaps a newly hired fleet manager can be compensated in part in the same way a consultant might be.
Beyond a base salary, and any other standard corporate compensation methods, allow the fleet manager to keep a percentage of documented, hard savings. For example, renegotiating lease rates, cap costs, or fleet services fees produce easily documented savings. Changing a replacement policy, or instituting a vigorous employee purchase marketing program, are some other ways new fleet managers can drop dollars on the bottom line, and perhaps share in the savings.
Utilizing Industry Motivators
There are other motivators that don’t come from within the company, but from the fleet industry itself. There are a number of professional associations that recognize excellence in a number of areas, both general (including AF’s Fleet Manager of the Year and Fleet Hall of Fame awards) and specific (recognition for sustainability, public sector fleet management, and affiliate excellence), which provide motivation to fleet managers across the spectrum.
What a company can do here is encourage fleet managers to participate in such organizations, both at the local (chapter) and national level. The biggest motivator within the industry is recognition for excellence from one’s peers, which not only provides a unique form of pride and satisfaction, but also can show the company that the performance from which it rises is proof of a job well done, and can be used to then provide those motivating factors from within the company — what better reason to recognize an employee than an award from his or her industry peers?
In many ways, fleet managers are motivated to perform excellently in the same ways that other managers are, while they are at the same time motivators unique to the profession. It is important, then, in both cases for management and human resources to recognize the importance of the job, and the uniqueness of the fleet manager’s personal and professional makeup.
Once these points have been established, motivating fleet managers to excel — and for that excellence to be reflected in the company’s bottom line — isn’t difficult.
Blog: To Maximize Fleet Efficiency, Incentivize Your Fleet Manager