For an employee, a company vehicle is not only a tool for work but also an attractive benefit that can be used privately. Unfortunately, employees often do not treat company cars with the same care as their own. This article presents methods that can help companies encourage employees to look after the fleet and analyses which of them is more effective.
The penalty system
The penalty system means the firm enforcement of penalties and restrictions to discipline employees for breaches of the adopted fleet policy. It assumes that charging employees for neglecting vehicles will force drivers to follow the rules and take greater responsibility when using company property.
It should be added, however, that this system can have a negative effect on employee morale, which may subsequently even lead to disputes in the labour court if the policy is unclear, treats the employees subject to it unequally, or is simply unlawful.
Below I present the ways of applying a penalty system that I have come across so far.
Debit note for vehicle damage
To introduce this type of measure effectively, a few important points must be remembered:
- Amount of the charge – the maximum amount an employee can be charged is set out in the Polish Labour Code and may not exceed three months' salary of the employee as at the date of the event (except where the damage was caused intentionally by the employee). In addition, the charge may not exceed the actual amount of the damage.
- Evidence of damage – to make a charge, the employer must show that it was the employee who caused the damage. Here the key is the vehicle handover report, a template of which should be an appendix to the fleet policy. It allows the company to establish whether the damage already existed when the property was handed to the employee or whether it arose during use. The more thoroughly the vehicle handover is carried out, the easier it is to establish the extent of the employee's liability should the need arise. An additional tool may also be a vehicle inspection report during use. It lets us easily monitor changes in the vehicle's condition after it has been handed over.
- Clear rules – the fleet policy must clearly describe the scope of liability for damage and the scope of financial liability (subject to compliance with the legislation above). It must therefore describe what kind of damage is penalised (dents, scuffs, interior damage such as burn holes in seats).
Debit note for missing vehicle equipment
The situation is similar to that for damage. The rules must clearly define the value of individual items of equipment. The handover report must state that at the time of handover the given item was part of the vehicle's equipment (remarks on its condition at the time of handover can also be added). Notes of this type are more often used for heavy goods vehicle fleets, where the value and quantity of equipment significantly exceeds the standard fire extinguisher or warning triangle. Examples of such equipment include various tools and load-securing items.
Loss of the regulated bonus
The employer can precisely specify the conditions for receiving a regulated performance bonus. One of the assessment criteria may be a clean damage record when driving the company vehicle. This means that an employee, despite achieving specific results in their work, may not receive the bonus if they do not take proper care of the property entrusted to them.
The reward system
The second approach is a method that rewards employees for a clean damage record and for savings generated through economical driving. The reward system has a wide range of applications: from purely monetary solutions, through access to skills development, to other material benefits. This approach makes it worth striving to improve, because a reward awaits as a result. Below are a few suggestions for how to apply it.
Employee discount on buying the vehicle once it is fully depreciated
For company-owned vehicles, the company can specify in the fleet rules that if a driver, throughout the entire period of using the vehicle – from its introduction into the company until it is fully depreciated (which in many cases ends with fleet replacement) – has not caused any damage and the vehicle has not been damaged, they will receive a discount. This gives the employee motivation from the outset to look after the property, because as a result they will have the chance to buy the vehicle from the company at a favourable price.
Gamification
A growing number of telematics solution providers are introducing into their systems the ability to create challenges for drivers or competitions in the form of gamification (between employees or individual departments). Such campaigns serve a number of functions:
- Team-building function: shared, healthy competition helps strengthen relationships between employees. As a result, the future performance of individual departments or the whole organisation can visibly increase, which also translates into financial benefits.
- Motivational function: the motivation to win means the employee's driving quality improves during the competition. If gamification is repeated often enough, the motivation turns into good habits, which reduces the accident rate and thus brings the company further benefits.
- Analytical function: thanks to the data collected during the competition, the fleet manager can draw the right conclusions from the analysis and implement appropriate measures to improve the fleet's performance, such as:
- identifying drivers who need refresher courses in driving technique.
- comparative analysis of actual average fuel consumption between given vehicle models.
How to create such a competition? As I mentioned, it cannot be done without the appropriate module or feature in the telematics system. It lets drivers view the results in real time, which rules out any cheating. In addition, to assess the results reliably, everyone must use the same measuring devices. It is also worth mentioning the competition rules, which are best prepared with the HR department. The rules must include information such as:
- The timeframe of the competition
- Conditions of participation
- Definitions and a precise description of how driving is measured, e.g.:
- How the system detects individual events, which events are taken into account in the competition, how the eco-driving score is reduced in specific situations.
- The competition committee
- The aim of the competition
- Prizes – as I mentioned, these can vary:
- An extra day of leave
- Prizes in kind (car accessories, discounts on company products, etc.)
- An increased private mileage allowance
- Cash prizes
- Training (not necessarily driving-related; it can be courses directly related to the given position)
With a reward system there are certainly many more ideas and solutions. The key is a fair system that excludes discrimination against any employee subject to the rules. The point is that everyone concerned should have a chance of earning the bonus.
Comparison of the two approaches
Depending on the system chosen, individual factors will change. Let us look at the effect the methods described can have on specific parameters:
The polarisation method as an additional alternative
The polarisation method is something of a blend of the penalty system and the reward system. It does not involve punishing employees for their mistakes, but rather sets drivers apart from those who have better driving results. Below are two suggestions.
A better vehicle configuration for employees with a low accident rate
The employer can decide that drivers with a clean damage record and a high level of economical driving can choose a better vehicle configuration for themselves. Employees below a certain threshold receive lower equipment packages. I would stress, however, that the specific criteria for receiving a vehicle with a better package must be defined, so that every driver knows what to aim for and has an equal chance compared with other employees.
Dynamic mileage rate
An increasingly popular tool among fleet management service providers. The idea is that the rate charged for the employee's private use of the vehicle depends on their driving style. The better the driving style, the lower the rate per km. The worse the driving style, the higher the rate. If you decide on such a solution, you must be confident that your system correctly interprets your employee's driving style, so as to avoid misunderstandings and related claims.
Summary
From my own experience I have to admit that each of the above methods can bring measurable results for the company when properly implemented. Although it is usually no pleasure, charges for damage make the employee develop greater respect for the property entrusted to them and start to look after it at least a little better. On the other hand, the reward system is a great motivator. It encourages the driver to improve their skills, because improvement guarantees clearly defined benefits (which the company has to pay for). So let us remember that there is no single right way, and as in many cases, you need to find your own golden mean that will benefit the whole environment in the long term.
