Establishing fleet policy is a good thing. Outlining and publishing a document that spells out the rules and regulations attendant to the assignment, acquisition, use, and replacement of company vehicles is the foundation of a successful fleet program.
The mere existence, of course, of such a policy is certainly no guarantee of success, any more than a law against robbing banks ensures no banks will be robbed. Compliance with the policy brings success to the fleet program, and this is where some fleet managers become frustrated.
Tracking compliance among hundreds, if not thousands, of drivers spread out over a large geographic area is no small task, particularly when little or no staff are available to assist and when some stakeholders actively work against it.
Fleet managers can take action, however, that will help maximize compliance, beginning before the policy is implemented and continuing in the normal course of fleet operations.
1. Include All Stakeholders When Developing Policy
Different companies may have different stakeholders pertaining to fleet policy, but every company has several of them. The fleet manager is the subject expert in developing the policy. However, there are usually a number of disciplines and/or departments that have a stake in its implementation. For example:
- Sales/Service: Most fleets fit into either of these categories, some into both. No one knows better than drivers what they require in a vehicle and its mission.
- Human Resources (HR): When the entire vehicle or a portion thereof is compensatory in nature, policy issues are raised that interest HR departments. Charging for personal use, MVR checks, and penalties for policy violations are just a few such issues.
- Risk Management: Inevitably fleet vehicles will be involved in accidents. Some will be the driver’s fault, and a fleet policy must address all of them, i.e., how they are reported and how physical damage is repaired.
- Legal: All policy issues carry the potential for legal action or review.
- Senior Management: At the very least, senior management should review a policy document prior to implementation.
The overall point is that avoiding compliance problems in the future is far easier if policy development is a team effort, involving all stakeholders.
2. Obtain Policy Endorsement at the Highest Possible Management Level
The logic behind this recommendation is very simple. When senior management (the so-called “C-level,” CEO, CFO, COO, etc.) has reviewed and endorsed a fleet policy document, the consequences of noncompliance become far more serious.
It becomes more difficult for a mid-level manager to excuse a driver’s policy violation if the fleet manager can simply point to a memo or e-mail from the company president approving the fleet policy and charging the fleet manager with full authority to carry it out. Better still, make certain a copy of the endorsement is the first page in any electronic or hard copy of the policy.
3. Make Certain the Policy is Easily Accessible
In fairness to drivers, not all policy violations are willful, i.e., the driver knows the policy and chooses to ignore it. Some infractions result from innocent ignorance — drivers who, when faced with a decision, make the wrong one simply because he or she isn’t aware of the right one. Fortunately, today’s fleet managers have far more sophisticated tools at their disposal than their predecessors of just 10 or 15 years ago.
It wasn’t too long ago that a fleet policy was only published in hard copy as a booklet or other document kept in the vehicle’s glove compartment. Today, though still a good idea, fleet policy can be made accessible to drivers, 24 hours a day, seven days a week.
- Intranet. Many, if not most, companies have a Web site accessible to employees, on which various departments’ policies can be viewed. Posting fleet policy documents online not only provides ready access, but it also facilitates changes to the policy (as opposed to updating a printed policy manual kept in the vehicle).
- Fleet Hot Line. One creative way policy can be made more accessible to drivers is via a fleet “hot line,” an automated, toll-free number drivers can call for policy guidance. A prompted recording can ask if the question concerns maintenance/repair, what to do when involved in an accident, how to place an order for vehicle replacement, how to get pricing for out-of-service vehicles, etc. Nearly all drivers carry cell phones, so calling the line for policy clarification is a simple matter.
- E-mail. E-mail has made mass communication fast and easy. Fleet managers can use e-mail to highlight various fleet policy matters. An e-mail blast entitled “What to do in case of an accident,” for example, can remind drivers of policy mandates in handling crashes. These e-mails can be sent at the fleet manager’s convenience. Further, a fleet manager can add to his or her e-mail signature a phrase such as “Questions about policy?” with a hot link to the online policy site.
The more accessible the policy document, the less likely a driver will inadvertently violate policy simply out of ignorance.
4. Keep It Simple
As with any process, a simple, straightforward fleet policy encourages compliance. Here, it is important to differentiate between policy and procedure. Policy is the “what,” and procedure is the “how.”
For example, the policy might simply state, “Vehicles will be replaced at 36 months or 65,000 miles, whichever occurs first.” The procedure for replacement might include the fleet department notifying the driver of a pending replacement, forwarding the selector, tracking order placement/status, and picking up the new vehicle and dropping off the old one.
A complex policy increases the possibility of errors even if the driver attempts to comply. Provide a simple statement of policy, then an equally simple procedure for a driver to follow.
5. Universal Application
Fleet managers experience some of the most frustrating compliance issues in policy enforcement. The classic example is the “But he’s/she’s our best salesperson” situation.It goes something like this: A driver has had previous accidents or a history
of moving violations on a motor vehicle report. Fleet policy calls for clear consequences, i.e., revocation of personal use privileges or company car assignment and even up to termination.
At this point, the fleet manager notifies the driver and the driver’s supervisor of the policy violation and begins steps to apply the consequences. It is usually the supervisor or even a more senior manager who steps into the process with the “We can’t allow this. This driver is our best performer” or “This is a very difficult position to fill” argument, pulling rank to create a policy exception.
This is a very destructive issue. The fleet driver world is a small one, and word gets around. Once a driver has been “let off the hook” for what are serious policy violations, it becomes next to impossible for the fleet manager to enforce the policy for anyone else.
Effective fleet policy is applied consistently, without exception, at all levels. A senior VP whose car is compensatory must face the consequences for MVR violations or multiple accidents in exactly the same manner as the lowest-level sales or service driver. This even-handed policy approach requires approval, sign-off, and endorsement of fleet policy at the highest level possible, in writing, as described earlier.
The approval should include wording in which the senior executive provides the fleet manager full authority to enforce the policy with direction to report the executive regularly.
In this manner, when the “But he’s/she’s our best salesperson” excuse is given, the supervisor can simply be reminded, with a copy of the endorsement if necessary, that the CEO (for example) requires the policy be applied without exception.
6. Driver Sign-off
Before a new-hire candidate is employed in a position for which a company vehicle is assigned, the process should include not only an MVR review, but the driver also should indicate in writing he or she has read and agrees to abide by the company fleet policy. This procedure is generally a relatively simple matter. For example, the driver sign-off document can include language giving permission to the company to obtain and review the MVR.
Fleet policy tends to be a fluid document. For this reason, it is a good idea to provide all drivers a sign-off document every year, at the very least, for any policy changes that occurred during the year.
7. Track Exceptions to Find Compliance Problems
Sometimes, noncompliance can be difficult to uncover until it has had a substantial effect on fleet operations or fleet expense. Take fuel for example, a fleet expense that has taken center stage in the past year. Fleet policy might require drivers use only regular unleaded fuel and self-service pumps. If the fleet manager looks only at the resulting fleet miles per gallon and/or cost per mile, policy violations might go undetected.
Fleet fuel card programs, however, permit fleet managers to track transaction exceptions, indicating those in which premium or full-service fuel was purchased. Such transactions can increase fuel costs by as much as 20 cents per gallon. When fuel transaction exception reports are used, drivers in violation of policy can be brought to task.
Policy exceptions can be used to track noncompliance in several variable cost areas, including maintenance and repair, condition reporting, and replacement cycling. When drivers are aware their behavior is tracked and receive follow-up when policy is violated, they are far less likely to repeat such violations.
8. Reward Compliance, Punish Noncompliance
Employees are motivated in various ways — some with the possibility of reward, others by facing discipline. Reward/penalty programs are used in nearly every corporate discipline from clerical to management. Employees undergo annual performance reviews with rewards including increases in compensation, penalties (perhaps no increase), or even a probationary period during which performance must improve.
Encouraging compliance with fleet policy is not much different than encouraging excellence in job performance. A cynic might scoff at the idea of rewarding employees for simply doing the job they’re paid to do. However, when the job includes the daily care and operation of a company vehicle, the consequences for not doing so can be expensive.
Rewards can take any number of forms. Some people are satisfied simply with recognition, i.e., a photo and/or mention in the company newsletter or perhaps correspondence from a senior manager recognizing excellence in compliance. Still others look for some concrete financial reward. Either way, drivers are encouraged at minimum to keep fleet policy in mind as they go about their day-to-day duties.
A compliance record is often used when reviewing MVRs. Drivers, for example, who have completed some period of time without violations or chargeable accidents are recognized or rewarded. It is also possible to apply such rewards to drivers whose overall vehicle operating costs are lower than some benchmark or among the lowest in the fleet. Again, keeping policy compliance in mind is the goal.
Penalties can be more difficult, but not impossible. Essentially, they should be tied to the original policy document. For example, the policy might require use of regular unleaded fuel. If the driver purchases premium fuel, the amount of the purchase is deducted from the driver’s expense reimbursement.
Some policy noncompliance is more serious than others. As vehicles approach replacement mileage, many companies place restrictions on the unauthorized work performed on the vehicle. This policy helps prevent drivers who plan to buy their vehicle from “rebuilding” a vehicle unnecessarily. Unless the fleet manager has the means to catch such unnecessary expense (as with exception reporting or using a mileage/time parameter), and consequences are spelled out and properly approved, such violations can substantially affect total fleet holding costs.
Ultimately, the “carrot and stick” method of boosting driver compliance with corporate fleet policy is a tried-and-true practice.
9. Regular Communications
In fairness to drivers, their main mission is to sell, service, or deliver — not to “manage” a company vehicle. The occasional fleet policy violation can be excused to an extent. The key is communication. Drivers, thinking more about making the sale than where to get an oil change, should be reminded that just like any other company-provided tool (cell phone, laptop, etc.), policy governs the care, operation, and use of the vehicle that gets them to the customer.
Fortunately, technology has given fleet managers the ability to communicate far more quickly and frequently and with more people than ever before. A fleet page on the company Web site is one way the Internet has facilitated such communications. Allowing driver feedback and questions, and providing prompt response, will keep policy out in front. Company newsletters, either electronic, hard copy, or both, can provide not only a focus on policy, but also tips on how to keep vehicles running smoothly, attain maximum fuel efficiency, or even purchase out-of-service vehicles, and ultimately provide the recognition “reward.”
It can also be helpful to have the CEO or another senior executive annually repeat mention of the policy, his/her endorsement thereof, and provision of authority to the fleet manager for its execution. Regular repetition of policy items will ultimately impact compliance, as drivers will recall that communication when policy issues arise.
10. Regular Policy Review
We’ve described fleet policy as “fluid.” This is true of any company policy document, as rules, regulations, and circumstances can change rapidly. What seemed a good idea may have unintended negative consequences or a better idea may be suggested. Policy can become obsolete as the fleet industry changes. If policy is not reviewed and updated, compliance can become more difficult, even impossible.
At least once each year, gather the stakeholders included in the original policy development to discuss changes in their areas that might require an appropriate change in fleet policy. As changes are made and policy is updated, communicate these changes not only to drivers, but also to their supervisors, middle and senior management, and particularly to that senior executive who has provided the original policy endorsement.
Interim communication is a must as well. For example, a change in human resources or risk management policy might also impact fleet. Encourage those disciplines to keep the fleet manager informed, so if fleet policy change is necessary, it can be made promptly.
Taken together, these tips can seem daunting to a fleet manager whose time and resources are limited. But none are especially complex or difficult, and over time, they can be developed into a regular process.
The fleet manager’s performance is judged primarily on the ability to capture, track, manage, and reduce fleet expense while providing drivers a key tool for employees to do their jobs more efficiently and safely. Policy noncompliance is one driver behavior that can measurably affect fleet costs; doing whatever is necessary to ensure driver compliance with policy is one way to maximize performance and save money.