...
One of the biggest management mistakes made is when the management personnel (managers and supervisors) are not on the same “team.” There are many reasons this happens, but the most common are lack of communications and lack of agreement.
Scope
All personnel at each management level must be in agreement on what the common goals, policies, and procedures are. Each supervisor and manager may need to adapt the corporate goals and policies to their area, but the basic goals and policies should not change.
Regulatory citations
- None
Key definitions
- Delegation: Authorizing subordinates to independently complete tasks or make decisions.
Summary of requirements
Meetings. While many people consider meetings a waste of time, they are the only forum where common communications can take place. Even if there is nothing to discuss, meetings should still be conducted to maintain communications.
- If supervisors or managers will not attend management meetings, how can they stay current with what is happening in the rest of the company? It is bad enough when you have an employee that is not communicating, what happens when an entire group or department stops communicating?
- The senior manager should set the agenda and pace of the meeting. The agenda should cover reports from participants, old business, new business, and open discussion. One meeting tactic that has been found to be successful is to set a time limit to as many topics as possible. This will cause the participants to prioritize their materials for their portion of the meeting.
- Meeting length should be dictated by the responsibilities of the group and the agenda to be covered. There will be department meetings that have little or nothing on the agenda and take 15 minutes, while upper management meetings may cover a wide variety of issues and take several hours.
- Meetings should not be adjourned until consensus is reached on all matters before the group. There are times when it is acceptable for the consensus to be “We won’t do anything for now, let’s study this and bring it up next time.” This consensus is critical with upper management. If upper management cannot present solid and consistent goals and visions for the company, the subordinate managers and supervisors may not be able to function.
- To maintain a consistent management team approach, management meetings must be scheduled regularly. This will keep the meetings short and the management personnel current. Basically, you do not want to rely on one-on-one conversations to keep everyone in the management team informed and participating.
- Another management approach that successful carriers use is to involve the employees in policy decisions by creating management teams that include, or are made up entirely of, non-management employees. These teams are created to deal with management issues under the direction of upper- or mid-level management.
If a problem is occurring often enough that management sees that a policy needs to be created, they will ask a group of employees to create a policy. This will make the policies (and related procedures) more easily accepted by the employees, as well as bringing the employees into the functioning of the company. If compliance with a policy becomes a problem, consider forming a “task force” of employees to try to determine why. Many times the employees know the answer, but nobody in upper management thinks to ask them.
Task forces are created to deal with a specific problem. Once their task is completed, they are dissolved. When a task force is formed, give it a clear goal and keep the scope narrow. If the issue is improving work flow in operations, do not let the task force start addressing loading and unloading times.
Delegation of authority. When authority to make decisions is delegated, the rights and responsibilities that go along with the task or decision must also be delegated.
- One concept that must accompany delegation is accountability. If a subordinate is delegated a task or decision, the subordinate must be held accountable for the outcome by the manager.
- One of the dangers with delegation is giving the wrong personnel the wrong authority.
- An example would be delegating truck spec’ing to the drivers. The fleet would end up with big, comfortable, and powerful vehicles, but they would not meet fuel mileage requirements and could be too expensive. Getting input from the drivers through a task force or committee could be an excellent idea, but you would not want to delegate ordering vehicles to them!
- Another danger of delegating is delegating only the accountability. If the decision or task is going to be delegated, the authority to change the factors and gather necessary support and materials must also be delegated. If the task is delegated, but the individual has to constantly come back for permission to proceed with the next step, you have not delegated. You just have someone else doing your legwork.
This leads to the next point in delegation. The opposite of delegation is micromanagement.
Micromanagement. Micromanagement involves the manager personally making all decisions and personally supervising the completion of tasks.
- If the project requires micromanagement, do not tell subordinates that it is their project to “run with.” Tell them right from the beginning that you will be involved from start to finish.
- Where supervisors get frustrated is when they are told they need to “make their own decisions and be supervisors,” but are dealing with a manager who will question all decisions made, and even reverse some. An easy indicator that a task is being micromanaged is if every decision is being either questioned or made by the project supervisor’s manager.
- Most managers and supervisors will become frustrated if they are held accountable for outcomes, but have not been delegated the authority to affect the outcomes. You, as the Fleet Manager must decide when you are delegating and when you are micromanaging. The two should not be combined. You cannot delegate, then micromanage.
There is a time when each is necessary. The trick is to know the difference and clearly communicate the situation to your subordinates.
Supervisor and management training. Supervisor and management training can be done in two ways, and both are recommended:
- Inside training. This is training that can be done in-house. Many companies have supervisors and managers train their counterparts from other areas of the company. An example is having a safety supervisor train dispatch personnel on the hours-of-service regulations.
- Many times the company has the expertise on staff to handle some of the training needs. In-house training is many times technical in nature. It may not present new ideas and provoke necessary changes.
- Outside training. Bringing experts to the company to conduct training, or providing supervisors and managers with time and assistance to attend outside classes or seminars, is where new ideas come from. Many companies have created a budget and schedule for involvement in outside training. The intention is to improve the supervisors and managers, and ultimately the company.
Management relationships toward drivers. Everyone has heard of the famous “open door policy,” but how open are your doors?
- Do drivers need to call ahead and get a reservation to speak to management?
- Are the drivers ever told that management is “too busy” and to “handle it with a supervisor?”
- Do managers (including the Fleet Manager) “pre-screen” who they are going to talk to?
- Do you have a “chain of command” that must be satisfied before the driver can talk to a manager?
These are all questions that need to be answered when establishing an open door policy. Open door means a driver (or other employee) can approach a management-level employee and discuss concerns. If there are hurdles the employee must jump first, there is not an open door policy.
Asking (but not requiring) employees to try to address issues with their direct supervisor first is a good standard practice, and may eliminate the need to “open the door,” but chain of command procedures should be avoided that make it difficult for employees to get access to management.
Interpersonal skills for managers. Any time a supervisor or manager is hired there is the chance that the individual may chase customers or drivers away. One of the main reasons for this is lack of interpersonal skills.
- Training program. It is a good company investment to allow any employee who is becoming, or wishes to become, a supervisor to enroll in a supervisor or management training program. These programs are normally available at junior or technical colleges. The proper course should teach interpersonal skills as well as basic management practices.
- Communications. One interpersonal skill discussed in many management classes is communications. One critical component of communicating is listening. Too many times supervisors believe it is everyone else’s job to listen to them.
- Here is a simple exercise that can emphasize this. After a supervisor has had a lengthy conversation with a subordinate, ask the employee and the supervisor to write down the most important points of the conversation. Do not be surprised if you get two different answers.
- Codes. People many times say things in codes, and hear what they want to hear. The supervisor and employee both thought they were making their point clearly, but the other may not have even heard the message.
- Here is an example. A driver says “I want to be home this weekend.” The driver manager may have heard “As long as I can get him home somewhere between Friday and Monday he should be happy.”
- The driver manager being the supervisor should have realized the communications were not complete. Not enough information had been communicated. “When you say this weekend, do you mean home any time, or do you want to be home for the whole weekend?” would have been the correct response if the driver manager had been using good interpersonal skills.
Management style is an interpersonal skill that supervisors and managers should be constantly developing. Think of various supervisors you have worked under and think of the qualities that you liked and disliked. There are several styles that a supervisor or manager may need to use in certain circumstances. Here are some common styles encountered in supervisors and managers:
- “I’m the boss.” This management style is very autocratic. I am right and do not even try to bring up an opposing view. There are times when this style is necessary, but it can create problems with employees if it is used all the time.
- “I want to be your best friend.” This type of management style is very democratic and calls on the manager to ask for, and get cooperation and buy in from the employees. As with any other management style, it has its good and bad aspects. In matters that cannot be democratically settled it can lead to the manager becoming involved in endless conversations that cannot change the situation.
- Drill sergeant. This style involves kicking butt and taking names. Not only are you the boss, but you will make sure everyone within hearing distance knows it. This management style works well in the military, where the employees cannot leave and the goals are significantly different. If used too often in the transportation industry it leads to problems.
- The judge. This is a management style that is very technocratic. It requires the collection of all data before a decision can be made. Managers who use this style too much can be viewed as unable to make a decision. Managers who do not use this style at all can be seen as impulsive and not willing to establish facts before making decisions.
Much like dealing with individuals rather than treating all employees the same, managers and supervisors need to be able to change styles when necessary. All managers will tend to use one style more than another. Managers need to know which style they tend to use more than the others.
What a manager needs to do is be able to use a style that matches the situation. When trying to talk a driver into volunteering to stay out an extra day, using the drill sergeant approach may not be the best!
Goals and objectives for managers and supervisors. One issue that low- and mid-level managers deal with is a lack of goals. They may understand their day-to-day responsibilities, but many times due to lack of management guidance, they do not have short-term or long-term goals.
- Measures. A Fleet Manager needs to sit down and determine what measures are going to be used to determine if supervisors and managers are meeting their goals. Once the measures have been determined, the next step is to determine a goal for each measure. It does no good to establish a measure and monitor the employee’s performance, unless there is a goal to be achieved.
- Here is an example, sticking with our earlier example of turnover. If the turnover of a driver manager’s drivers is to be used as a measure, turnover for the driver manager needs to be measured and tracked. The driver manager and the manager must know what the turnover goal (objective) is to determine if the goal is being met. If the driver manager is assigned the goal of keeping turnover below 20 percent, that is a more manageable goal than telling the driver manager to “reduce turnover.”
- Achievability. Managers need to be careful when setting goals. The goals must be kept achievable. Most measures are not yes/no type measures. In many cases there is not a zero level to be achieved. The problem with many measures is once a certain level is reached, no more improvement is possible.
- Again, using our example of the driver manager who was told to lower turnover. What happens when the driver manager loses a driver who was terminated due to accidents? What happens when a driver quits due to family pressure beyond the driver manager’s ability to intervene and assist?
- The idea is to establish a goal that forces the supervisor to be active in the process and have an impact. If the supervisor believes a goal is not achievable, there will be little or no effort to meet the goal.
- Changing goals. Finally, do not rapidly change measures or goals. Supervisors have to have clear goals that they can impact. If the goals (or objectives) are constantly changing, the supervisor’s performance will suffer.
- An example is a safety supervisor who is told that his/her main goal is to reduce accidents (bad goal, no objective or measurement to it). The following week the supervisor is told his/her main goal is now reducing violations (now the supervisor has two bad goals). The following week the supervisor is now told it is everyone’s responsibility to increase the fleet’s mileage. The supervisor cannot help but wonder which of the goals he/she will be judged on and what will determine adequate performance!
Here are some of the typical positions, with measures and goals in use at carriers. Some carriers use an elaborate system of score carding, while other carriers choose to use a simple system of goals and measures based on their most critical needs:
- Driver manager. Typical measures for driver managers include:
- Driver turnover
- Average mileage for assigned drivers
- Revenue generated
- Unplanned costs generated
- Driver compliance
- Driver complaints
- Hours worked
- “Unassigned driver” or “ unpreplanned driver” incidence or percentage
- Number of shipments dispatched
- Percentage of time in direct contact with drivers
- Customer service representatives. Customer service representatives must have different measures. These measures would also be used for driver managers if the company’s operational structure does not provide separate driver managers and customer service representatives. This list includes:
- Customer complaints
- Number of shipments booked
- Revenue generated
- Unplanned cost generated
- Shipment entry errors
- Shipment assignment errors
- Pick up and delivery reschedule
- On-time delivery percentage
- Percentage of time in direct contact with customers
- Safety/training managers and supervisors. The measures for these supervisors will depend on their specific functions. If the safety department is simply used as an auditing and enforcement arm, the measures will be different than if the department is directly involved in prevention activities. In this list should be:
- Accident rates
- Injury rates
- Out-of-service rates
- Violation/citation rates and costs
- Hours-of-service compliance
- Driver turnover
- Claims (accident and injury) costs
- Administrative costs
- Auditing volume vs. time
- Meeting budget projections
- Maintenance supervisors and managers. Maintenance personnel, while operating in a specialized environment, must still be provided with measures. One consideration is these supervisors and managers are in a situation where they may not be able to control the workflow through their area. That may be determined by the operations personnel. If they do have the ability to control their own workflow, that of course would be measured as well (efficiency in scheduling). Common measures involve how efficiently the maintenance facility is operating. Typical measures for maintenance supervisors and managers are:
- Rework
- Actual repair time compared to company or industry standards
- Wait time before equipment can be brought into the shop
- Total time to process a vehicle through the shop compared to the company or industry standard repair time
- Meeting budget projections
- Breakdowns and unscheduled repairs
- Man-hours lost to injuries
- Dock supervisors. Much like maintenance personnel, performance for dock supervisors can be difficult to track because they may not control the workflow. Again, the key is to measure how efficient the dock is operating. Some simple measures for a dock supervisor are:
- Volume of freight moved over time (shift, 24 hour day, etc.)
- Misloads (number or percentage)
- Cargo damage caused by dock operation
- Average time to load/unload trucks
- Turn time on dropped trailers
- Man-hours lost to injury
As part of establishing measures and goals, policies and procedures must be put into place. If the supervisors or managers are allowed to move numbers around or delay reporting to improve numbers, it will create an environment where the most creative will be getting rewarded for meeting their goals, not the ones that are performing the best.
Per diem pay. Per diem pay is an often discussed topic in the transportation industry, which is why we are discussing it here.
- Under the per diem program, drivers are allowed to claim a significant tax deduction for meals and incidental expenses while on the road. To claim this deduction a driver must either save all meal receipts or use the daily standard allowance.
- A driver cannot switch from one method to the other during the year. If the driver is claiming the per diem allowance for part of the year, he/she must use that method for determining meal and incidental expenses for the entire year.
- Expenses other than meals and incidentals encountered by the driver are not considered in the per diem. These expenses are deductible under a different rule. Job specific equipment and safety equipment are examples of expenses that a driver may also be able to deduct. However, any expense the employer reimburses the driver for cannot be claimed as a deduction. If the employer reimburses the driver for meals and incidentals, the driver cannot claim the deduction at the end of the year.
Working per diem into wages. Some employers pay their drivers a “per diem allowance.” This is done by designating a specific amount of the driver’s wage as intended to pay for meals and incidentals. This allowance is treated as a reimbursement, not income. Reimbursements are not considered taxable income, and therefore not taxed.
An example would be an employer that is paying 25 cents per mile with an accompanying 5 cent per mile per diem allowance. The driver’s income, for tax and accounting purposes, would be 25 cents per mile. The 5 cents per mile would be paid as an “expense reimbursement,” not as income. No taxes would be taken out of the 5 cents per mile.
The major advantage to the per diem allowance system is that it lowers the driver’s taxable income. The benefit to the driver is it will lower the driver’s income tax withholding, putting more money directly into the driver’s pocket on pay day. The benefit to the employer is the lower the driver’s taxable wages, the lower the employer’s cost in areas that are directly or indirectly tied to taxable payroll.
The disadvantages to paying a per diem allowance are:
- The employer must make sure it is not reimbursing the driver an amount that is more than the daily standard allowance. If the employer is overpaying the per diem the employer is subject to fines and penalties from the IRS for hiding income.
- The driver’s income appears lower than it actually is. This can be an issue when the driver is applying for a loan or filing any paperwork that is wage based.
- The drivers lose the ability to claim the meal and incidental tax deduction. Many drivers use this deduction as a “savings account,” knowing that the deduction will generate a refund every year.
- Drivers may become upset when they receive their Social Security Wage Statement and realize their Social Security will be based on wages and taxes, not including the per diem allowance.
Per diem legal implications. An employer that wishes to pay a per diem allowance needs to consult a tax attorney or accountant that specializes in transportation laws and taxes. Determining the correct threshold for the allowance will be the biggest hurdle. Remember, if you set the threshold too high and the drivers are getting too much money “tax free,” you will be viewed by the IRS as “hiding wages for the purpose of avoiding paying the correct taxes.
Employers that are presently paying a per diem also need to consult with a tax attorney or accountant that specializes in transportation laws and taxes to make sure they have their level set correctly.
As a general rule the IRS will compare your per diem allowance to what the drivers can claim on their taxes. If the IRS has determined that the standard daily per diem per day the driver is away from home, the company must not be giving a per diem allowance that works out to be higher than that. If an employer is paying a per diem of 10 cents per mile to a driver that drives 600 miles per day, this could easily be viewed as hiding taxable income.
Finally, drivers must understand that part of their wage is being given to them as a reimbursement for meals and incidentals, and they cannot deduct these expenses from their taxes. If a driver is found to be deducting meals and incidentals at the same time as the employer is paying a per diem allowance, all parties involved may need to explain their actions to the IRS. If the driver can claim he/she was not informed of the full implications of the per diem allowance, the employer can again be seen as attempting to hide taxable income.