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-   -   Moral Hazard problem in a small business (http://archives1.twoplustwo.com/showthread.php?t=557924)

jively 11-30-2007 01:45 PM

Re: Moral Hazard problem in a small business
 
Can you change the compensation system for the dispatchers so they profit from the company's profit? Make sure that they get paid more to give the more profitable business to you and not to the OOs.

And if there is a large pool of potential qualified dispatchers, create a policy that any dispatcher who accepts a bribe will be fired.

-Tom

spex x 11-30-2007 02:22 PM

Re: Moral Hazard problem in a small business
 
Maybe you could take your most honest dispatcher and make him a load assignment auditor. Set criteria for load assignment fairness, give copies to all drivers and dispatchers, then have your auditor review all assignments. Over time it should become clear where your theft is taking place, no?

DesertCat 11-30-2007 04:24 PM

Re: Moral Hazard problem in a small business
 
Switch to all OO. Sell your existing trucks to their drivers (finance them) or to new drivers. Reduce your debt and capital costs to near zero over time. Then make the drivers bid for jobs so you earn all the premium dispatching revenues from the best jobs. Of course that's a sea change, you will have to revisit how you manage quality control and the value proposition you offer customers. But it seems like the best way to earn your highest returns on capital, minimize your own staff size, as well as your staffing, and financing headaches.

Its also something you can do over time to ensure it works, switching company trucks to OO a few at a time. That helps minimize your risks.


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