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Accounting

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ISSUES ON HIGH ABSEENTEISM AND DRIVER SHORTAGE
Problem Statement
The next problem that PHSB was faced is the high abseenteism and driver shortage. This is greatest challenge facing PHSB and not merely limited to smaller transport companies. With greater attention to operate closer to just-in time, the transport companies were pressured to deliver CPO to the refineries on time.
Just-in-time operate under the concept of receiving raw materials, products and parts as they are needed, rather than days or even weeks before. This allows businesses to significantly cut inventory costs by having fewer unnecessary supplies on hand and far less material to store. As effective as just-in-time delivery is, it can be difficult to coordinate large amounts of shipments efficiently, especially when dealing with shipments that vary in size and destination.
In using just-in-time delivery, the fact that most companies require drivers to be on the road for days at a time. And of course they will be tired after their stint. The irregular routes and the days away from home are difficult for many drivers. This leads to the high abseenteism and driver shortage because they need to be ready at all time regardless what they are doing.
Other than that, the problem is the matter of remuneration package that these drivers are getting from PHSB. Since PHSB was a small family-owned company, it was unable to provide an attractive remuneration package to the drivers. The hardwork of PHSB’s drivers were not paid accordingly. The way they work, all the hours they spend on the road not matched the remuneration package of PHSB. In addition, many big players in the market were able to draw drivers into their employ with benefits and bonuses, which smaller companies like PHSB unable to match.

Solutions

PHSB urgently need to settle this issues because this is the main driver of company’s operation. In order to handle the issues, the company had taken several initiatives to overcome this problem.
First, purchase a Vehicle Tracking System. This is to minimize high pilferage during the months of November to January. By using Vehicle Tracking System, productivity of workers can be increased by being able to keep track of drivers’ routes, exposing unauthorised stops and breaks and by evaluating the overtime requests of workers. By having detailed information on the whereabouts of vehicles at all times, it is far easier to keep an eye on employee activities. By having all the relevant information on one screen, those running the software have easy access to answer enquiries rapidly and accurately. PHSB also can find their most productive employees and use this information to implement further training or even a system of bonuses to enhance staff members' work ethic. This systems will reduce the amount of paperwork that drivers must fill out. By doing this PHSB not only soften the blow of introducing such a system, but also increase the accuracy of their records. By having detailed information on the whereabouts of all employees, business owners are far more in touch with their business operations. Meaning they have greater levels of control over their company. In addition, in a fleet based business, it is about time to consider bringing your operations up to date, making use of advanced technology to not only improve your operations, but also efficiency and profitability.
Next, to prevent the temptation to pilfer from PHSB’s stock, Rosmee suggesting to declare year-end bonuses to the drivers. PHSB spot-on the reason for the pattern of pilferage, then they should be able to understand that the drivers are compelled to pilfer because they need the money. By giving them bonuses, they will be able to aid the drivers in meeting their year-end expenses, thus reducing pilferage. The bonuses to the drivers that PHSB going to spend will be much lower than the compensation they need to pay if they successful in minimising the pilferage. Bonus payments to employees give them the incentive to work hard and be motivated. If PHSB give out bonuses at a specific time of the year which is in year-end, then employees will have something to work towards. Bonuses not a permanent commitment. They dole out the money once, and they only have to repeat it if certain performance benchmarks (benchmarks which can and do change regularly) are met. Since bonuses and similar performance incentives are often viewed by workers as a sort of add-on perk, they can also be used as a “carrot” to motivate workers, and they can give workers a perception that they’re more in control of how much they earn.
Besides the two solutions, PHSB want to restructure their compensation package for their drivers. They want to match the industry players so that all the big players feel difficult and unable to poach PHSB’s driver indisciminately with better offer and benefits. A good compensation package is the extremely important piece of the overall company to keep the company competitive and successful. On the other hand, the compensation strategy is important to keep the personnel budget under the control and to manage the jobs in the right salary (pay) brackets. A good compensation package differentiates the organization on the job market and builds the attractiveness of the company for the drivers. They love to be hired by the attractive organization, they do not like to be hired by the average company offering the same conditions as any other average organization in the industry. The remuneration package must not necessarily high, but it must including all the things a person must have to fulfill their Maslow’s Hierarchy of needs.
Employees who receive a good compensation package and regular bonus payments feel far more appreciated than those that do not. When supplying bonuses, you should focus on what the individual has achieved within the past quarter, as this will encourage them further as each month passes.

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