How to manage an industrial army, part 1.

For the past several months the eyes of the world have been on Ukraine.

In a modern David-versus-Goliath scenario, Russia’s military has met tougher-than-expected resistance from scrappy Ukrainian forces – the entire Ukrainian population, really.

Outmanned and outgunned, Ukrainians have nevertheless shown themselves fierce defenders of their homeland against the invading aggressors. What was supposed to have been a quick rout has turned into a protracted standoff, with no end in sight.

Not surprisingly, reports have emerged of low morale among Russian troops. Desertion, defying orders, deliberate self-sabotage. Apparently even some Russian officers are getting in on the act.

War is an extreme case of what’s known in social science as the principal-agent problem. Anytime someone – say, Vladimir Putin – must depend on someone else – say, front-line Russian fighters – to carry out his wishes, there’s a risk that the agent will put his own interests ahead of the interests of the principal he’s representing.

When you think about it, it’s always an act of faith for a country to send troops off to war. You can’t really afford to fire anyone; you have to do the best you can with who you have. Ongoing recruitment is a perennial challenge. And of course you can never pay near enough to offset the personal costs, be they actual or potential. Any country’s armed forces is truly a ‘coalition of the willing.’

Although the stakes are far lower in civilian employment, every company whose entire workforce isn’t overseen directly by the owner must contend with the principal-agent problem. How can the boss trust her workers to actually do what she’s paying them to do?

All through my first two years of active ‘enlistment’ in the ‘brown army,’ I’ve had a chance to learn about the principal-agent dynamics at United Parcel Service.

In my local UPS facility the ratio of drivers per on-road supervisor is fairly high: about 25 to 1. This is approximately the same as the student-teacher ratio in a large public-school classroom. But unlike those students who are all confined to a single space and kept more or less on-task under the teacher’s watchful eye, UPS drivers are ‘deployed’ out into the field every day, miles away from the office where all the ‘on-roads’ work.

Based on what I’ve experienced directly, observed indirectly, or asked about, UPS relies on three main techniques to oversee its delivery operations:

1. Electronic surveillance. Just yesterday the New York Times published an interactive article about the prevalence of worker surveillance across a wide variety of pay-grades, industries and professions, both white- and blue-collar.

It’s no secret that UPS has been spying on its drivers for years. This system of electronic surveillance is called ‘telematics.’ Not everything is tracked, but many things are. Delivery vehicles and our scanning devices (‘DIADs’) are embedded with global positioning systems (GPS), so our whereabouts are always known.

Occasionally I’ve seen printouts pinpointing precisely – within a few feet – where I was when I scanned a package and where I was when I pressed the ‘Stop Complete’ button. This information comes in handy when a customer calls in complaining that they never received their delivery.

Each day I see printouts tabulating how many times….

• I put my vehicle in reverse and for how far (I’ve also seen data on how fast);
• I reversed after instead of before completing a stop (‘back-first exceptions’) and for how far;
• I drove without my seat belt fastened and for how far;
• I drove without my bulkhead door closed and for how far; and
• I recorded on my DIAD while driving or idling.

I’ve also seen printouts tabulating how much….

• Cumulative miles I drove my vehicle, and how many miles over or under the allotted mileage that was;
• Cumulative time I idled my vehicle;
• Average and cumulative time I took between pressing ‘Stop Complete’ and starting my engine;
• I accurately followed the prescribed delivery sequence (‘trace’ or ‘ORION’); and
• Cumulative time it took me to complete my assigned route, and how much time over or under the allotted time that was.

This last metric, also known as the ‘over/under,’ is the single most important data point, because if a driver finishes under the allotted time for the route, then they receive a production bonus – the amount of time they ‘bonused’ multiplied by their hourly rate. This is the main incentive the company uses to induce its drivers to work faster.

Not surprisingly, our vehicle speed is also constantly monitored. But since there’s no way to assess those data contextual information about posted speed limits, vehicle speed only seems to come under scrutiny when there’s an adverse safety incident (a ‘crash’).

Contrary to popular belief, I’ve never received any kind of instruction about left-hand turns. As with vehicle speed, it’s impossible to know whether a left-hand turn is necessary or appropriate without contextual detail. There’s a lot more emphasis placed on the inherent risks of backing up (‘R equals Risk’). Left-hand turns may be more of a time- and fuel-efficiency consideration than a safety concern.

I’m pretty sure I’m missing some telematics items.

My local facility posts the previous delivery day’s telematics results on easels just outside the office. Drivers can choose to review them or not. Drivers with bid routes have told me about having to meet with their on-road about their telematics results, and I’ve occasionally overheard some of these meetings myself. Not surprisingly, the biggest concern seems to be about not going fast enough. Safety is another big concern of course, because it threatens the bottom line in more ways than just productivity.

I’ve experienced first-hand how wrong the telematics can be. Not long ago the daily summary reported that I’d driven more than six miles, 70-plus separate infractions, without buckling my seat belt. This was patently false. Because of what happened to my dad, I’ve never, not once, driven anywhere without my seat belt, on or off the clock.

Because of the fallibility of telematics, the Teamster contract explicitly states that management cannot impose any form of punishment or discipline on a driver based on telematics alone. For this reason, management must rely on the following two managerial techniques:

2. Observations. On-roads are required to observe drivers regularly. You usually don’t know you’re being observed, although I’ve heard some drivers say they’d get tipped off ahead of time by a sympathetic supervisor.

It stands to reason that new drivers get observed more frequently than their peers with more seniority. Drivers who’ve recently been involved in some kind of safety incident such as a crash are also subject to greater scrutiny.

Typically the observation goes on unobtrusively for an hour or two, and then the supervisor presents himself to the driver for a quick spot-briefing of what the observation revealed. There’s usually a follow-up conference and some paperwork back at the office at the end of the day or the beginning of the next day to formalize the process.

The third technique is the most intensive and thus the most periodic:

3. Ride-alongs. Brand new drivers starting their 30-day trial will have a supervisor ride along with them for at least one full shift. So will drivers coming off an injury. And of course the most common reason for a ride-along is in the aftermath of a crash.

In the past two years I’ve had ride-alongs with three different on-roads. (Yes, I’ve been charged with several crashes; I’ll say more about those in a different post.)

Because we spend the entire shift together, and because I’m much closer in age to them than the typical newer driver is, it’s been difficult to keep things on a strictly superior-subordinate basis for the entire time. Eventually the conversation stops being so much about safety and following the methods, and more about our respective stories.

I don’t see this as counterproductive; I see this as a valuable opportunity to build credibility and trust, which helps to offset the principal-agent dynamics. If I can be seen as a trustworthy driver, with the company’s best interests truly at heart, then I might just end up not being quite so micromanaged, and the situations I get myself into might get interpreted in a more favorable light.

This is why I take my job and my role as a UPS agent seriously. If it’s important to the company then it’s important to me. (More about this elsewhere.)

Still, mutual distrust is widespread. I’ll discuss the overall workplace climate in the next part of this post.