ALIGNING COMPENSATION AND REWARDS WITH SYSCO’s GOALS
Definition of Activity Based Compensation The idea of compensating drivers based on activities performed instead of hours worked. ABC pay systems are based on paying the driver for certain activities that are performed in the scope of delivering product to our customers.
Definition - cont. The elements that make up almost the entire amount of a driver’s time are cases, stops, miles and pre-trip and post-trip times. Elements that can also be included are pallet deliveries, hook-up and unhooking of double trailers, backhauls and safety.
Implementation of ABC Step number one: Complete education and thorough understanding of the concepts and principles of “ABC” pay by management. Step number two: Time line for education and training of drivers to convert hourly pay to the ABC pay.
Why ABC for My Company ? ? ? Improved customer service Driver payroll and sales follow same trends Less need for supervision Consistent routing
Why ABC for My Company ? ? ? Higher pay for drivers More productive workforce Fewer returns
Why ABC for My Company ? ? ? Increase driver retention Better quality of life issues for Drivers Commitment from management to work with drivers, sales and customers to resolve issues Issues to address - –Train employees that ABC will not come at expense of safety. Poor safety practices and corner-cutting will be disciplined. –Mileage and hours will still need to be recorded for DOT compliance.
WIN – WIN - WIN CUSTOMERS – Improved service DRIVERS – Higher pay and Quality of Life COMPANY – Leverage efficiencies to grow sales and gain new customers
Implementation Challenges New way of paying drivers Having and/or getting Associate support Allows growth for Company and Associates Develop renewed trust in Associate and Company relations
ABC Hourly Rate The ABC hourly rate is the hourly rate used in all the ABC component calculations. This hourly rate is the one that usually replaces the old hourly base rate.
ABC Case Rate The ABC case rate is calculated by taking the ABC hourly rate and dividing it by the average unload rate for the drivers. For example: If the unload rate is 110 cases per hour, you would divide the ABC hourly rate by 110 and that would give you the rate per case.
ABC Stop Rate The ABC stop rate is calculated by taking the ABC hourly rate and dividing it by time given for administrative time for each stop. For example: If the administrative time is 5 minutes, you would divide the ABC hourly rate by 60 then multiply it by 5 and that would give you the stop rate.
ABC Mileage Rate The ABC mileage rate is calculated by taking the ABC hourly rate and dividing it by the average miles per hour for driving. For example: If the average miles per hour is 37 mph, you would divide the ABC hourly rate by 37 and that would give you the rate per mile.
ABC Pay for Delays Warehouse and Dispatch delays. Paid actual delay in addition to the ABC pay for the day. Equipment Breakdown delays. Paid actual delay in addition to the ABC pay for the day. Safety Net Pay. When unusual delays cause you to make less under ABC than hourly, the greater pay will apply if the delays are noted and verified.
ABC Pay for Backhauls Company pays 75 minutes for each backhaul that takes 60 minutes or less. Company pays hourly for all time for backhauls that take 61 minutes or more.
ABC Pay for Two Drivers Two drivers on a route get paid 70% of all the cases and 100% of all the other components. Driver A gets help on his/her route during the day. Driver B goes to help Driver A on his route. Driver A continues to get his ABC pay. Driver B get paid hourly (ABC rate) for the time he assist Driver A in addition to his ABC pay.
ABC and Safety Do drivers on ABC increase their driving speed? NO Do drivers on ABC have increases in accidents? NO Do drivers on ABC have increases in injuries? NO
ABC Pay for ALL Drivers ABC pay can be achieved by all drivers. We have drivers from 21 years to 65 years of age benefiting from ABC pay system. Working smarter not faster helps the driver maximize his/her earnings. The drivers use the efficiencies that they know in delivering our product and also knowing our customers needs.