From the course: Balanced Scorecard and Key Performance Indicators
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Cash incentives for motivational performance
From the course: Balanced Scorecard and Key Performance Indicators
Cash incentives for motivational performance
- We are at the daily 8:00 AM meeting, looking at our four key performance indicators, our KPIs. The first measure, driver turnover. The second measure, billable miles per tractor per day. The third measure is days pickup to cash, and the fourth and last measure is the percent of fuel purchased from company docs. Recall that XYZ's second largest operating cost is the cost of fuel. The fuel cost is the most volatile of XYZ's operating costs, fluctuating up and down with the worldwide price of oil. XYZ attempts to reduce its fuel costs by operating its own fuel depots. XYZ can save 10% on its fuel cost if its drivers refuel at a company-owned fuel depot rather than at a commercial truck stop. The goal here is 90%. We are currently at 70%. Now, you may ask why our goal isn't 100%, given that we get a cost savings of 10% for all fuel obtained from our own fuel depots. Well, we can't get 100% because we don't have full…
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