How Does Driver Turnover Affect Motor Carrier Safety Performance and What Can Managers Do About It?

• Author: Michael Knemeyer,Jason W. Miller,Manus Rungtusanatham,John P. Saldanha
• DOI: http://doi.org/10.1111/jbl.12158
• Date: 01 September 2017
• Published date: 01 September 2017

How Does Driver Turnover Affect Motor Carrier Safety

Performance and What Can Managers Do About It?

Jason W. Miller

1

, John P. Saldanha

2

, Manus Rungtusanatham

3

, and

Michael Knemeyer

3

1

Michigan State University

2

West Virginia University

3

The Ohio State University

The trucking industry is the lifeblood of supply chains. Truck driver turnover and motor carrier safety are two salient issues affecting this

industry. While turnover by itself presents a challenge due to the cost of replacing drivers, it takes on additional urgency because turnover

may affect motor carrier safety. However, driver turnover research has focused predominantly on identifying factors affecting turnover, thus

resulting in limited understanding of how turnover affects motor carrier performance, particularly with regard to safety. This reduces our ability

to provide guidance to managers who have to address driver turnover. In this article, we extend prior research by drawing from several theoreti-

cal lenses to develop and test theory of the turnover–safety relationship. Furthermore, we investigate whether carrier managers can mitigate the

effect of turnover on safety by embedding knowledge in carriers’routines using activity control, a formal management control mechanism. We

employ a longitudinal data set composed of primary and secondary data sources to test our hypotheses. We find the turnover–safety relationship

is best characterized by a monotonic negative attenuated pattern and that high levels of activity control mitigate the negative effect of driver

turnover on motor carrier safety in domains more under drivers’control.

Keywords: motor carrier; driver turnover; safety; model selection

INTRODUCTION

A major challenge facing the motor carrier industry is the

persistently high rate of driver turnover (Stephenson and Fox

1996; Williams et al. 2011) and the potential negative impact on

motor carrier safety performance. Several mechanisms exist

through which driver turnover may negatively affect carrier

safety. These include (1) increasing carriers’costs such that they

hire inexperienced, low-cost replacement drivers who may have

poor safety records, (2) heightening financial strains such that car-

riers delay replacing aging equipment, (3) disrupting operations

such that carriers can only meet customers’delivery requirements

if they assign drivers schedules that can only be met by speeding

or violating hour-of-service (HOS) rules, and (4) reducing aggre-

gate firm-specific knowledge that influences safety (Ouellet 1994;

Shaw et al. 2005). Poor safety performance in turn can (1) reduce

revenue due to customers taking their business to safer carriers

(ATRI 2011), (2) increase insurance premiums (Corsi and Fanara

1988), and (3) increase tort costs (Cantor et al. 2006).

However, our understanding of the relationship between driver

turnover and carrier safety is limited. In part, this is because

there have been few examinations of this relationship in the

motor carrier industry and, more generally, in any supply chain

setting (Corsi and Fanara 1988; Shaw et al. 2005). Consistent

with this observation, in a meta-analysis of studies examining

how turnover affects firm-level performance, Park and Shaw

(2013, 276) find very few testing the turnover–safety

relationship. As a consequence they removed safety as a perfor-

mance outcome. The limited attention paid to the turnover–safety

relationship is problematic given that safety is a key element of

not only firm performance (Brown 1996), but also the perfor-

mance of a firm’s supply chain members (Cantor 2008; Pagell

et al. 2014).

Further complicating our understanding of the turnover–safety

relationship is the ambiguity surrounding the form of this rela-

tionship. In particular, research in the management literature has

modeled the theorized monotonic negative attenuated effect of

turnover on firm performance using a nonmonotonic quadratic

polynomial (Shaw et al. 2005; Batt and Colvin 2011). This

approach presents several problems. For example, in settings

with high turnover, such as in the trucking industry where carri-

ers may have driver turnover exceeding 100% annually, a quad-

ratic polynomial may incorrectly imply that firms with the

highest turnover rate are safer than firms with moderate turnover

rates (Cudeck and Harring 2007). Moreover, in the event that the

quadratic term is insignificant but the linear effect is significant

there is a high risk of wrongly inferring that the turnover has a

negative linear relationship with safety. Additionally, while a

negative attenuated relationship suggests firms with the highest

rate of turnover see little gain from a given percentage point

reduction in turnover, a negative linear relationship suggests the

opposite conclusion. To address these shortcomings, one ques-

tion we seek to address in this research is “what is the functional

form of the relationship between driver turnover and carrier-level

safety performance?”Identifying the functional form most

consistent with the data at hand not only informs supply chain

theory, but also has important practical implications.

Furthermore, the effect of driver turnover on carrier safety

may differ depending on the extent to which motor carriers

embed explicit knowledge of job tasks in firm routines to

Corresponding author:

Jason W. Miller, Department of Supply Chain Management, Eli

Broad College of Business, Michigan State University, East Lansing,

MI 48823, USA; E-mail: mill2831@msu.edu

Journal of Business Logistics, 2017, 38(3): 197–216 doi: 10.1111/jbl.12158

© Council of Supply Chain Management Professionals

facilitate rapid replenishment of human capital, including, for

instance, the transfer of best practices to new hires (Nelson and

Winter 1982; Hannan and Freeman 1984; Kelly and Amburgey

1991). We hypothesize that activity control (Mello and Hunt

2009)—defined by Miller et al. (2013, 303) as “the extent to

which management formalizes rules and procedures and central-

izes decision making”—allows firms to embed knowledge in firm

routines and, therefore, ameliorate the effects of driver turnover

on carrier safety. Testing such moderation hypotheses enriches

our theoretical understanding (Goldsby et al. 2013) and allows

for more nuanced managerial guidance.

Borrowing from theories including human capital theory

(Schultz 1961; Price 1977), behavioral theory of the firm (Cyert

and March 1992), and structural inertia theory (Hannan and

Freeman 1984), we incorporate contextual information from the

trucking industry to delineate the underlying logic for our

hypothesized relationships to develop a more fully articulated

mid-range theory (Merton 1968; Pawson 2000; Holmstr€

om

et al. 2009) for the driver turnover–motor carrier safety perfor-

mance relationship. We test these hypotheses with a unique

longitudinal data set compiled from primary and secondary data

sources. Our work builds on prior studies examining the

turnover–safety relationship by utilizing information-theoretic

approaches (Burnham and Anderson 2004) to identify the best

functional form for the driver turnover–motor carrier safety per-

formance relationship. We also provide the first test of how

managerial usage of activity control moderates the effect of dri-

ver turnover on motor carrier safety. The results of this

research provide guidance to managers of the settings where

they will receive the greatest benefit for a given percentage

point reduction in driver turnover.

LITERATURE REVIEW

The topics of driver turnover and motor carrier safety cut across

multiple disciplines and, as such, motivate the organization of

our literature review into two sections. The first section describes

extant research in the logistics and supply chain management

(SCM) domain pertaining to driver turnover and extant research

from the broader management discipline that examines the conse-

quences of collective frontline operator turnover (CFOT), defined

by Hausknecht and Trevor (2011, p. 353) as “the aggregate

levels of employee departures that occur within groups, work

units, or organizations.”The second section details the multidis-

ciplinary research on motor carrier safety.

Driver turnover and consequences of collective frontline

operator turnover

Given the costs motor carriers incur to replace drivers (Suzuki

2007), the majority of research has examined factors that predict

driver turnover. These include driver pay, equitable distribution

of pay, and other financial benefits (LeMay et al. 1993; Stephen-

son and Fox 1996; Keller 2002; Min and Lambert 2002; Garver

et al. 2008; Suzuki et al. 2009); the extent drivers return home

(Min and Lambert 2002; Taylor et al. 2006); driver relationships

with dispatchers (Keller and Ozment 1999; Suzuki et al. 2009);

use of realistic job previews (LeMay and Taylor 1988); availabil-

ity of desirable equipment (Garver et al. 2008); scheduling of

drivers’work (Min and Lambert 2002; de Croon et al. 2004);

driver autonomy (Stephenson and Fox 1996); driver demograph-

ics (Beilock and Capelle 1990); top management support (Wil-

liams et al. 2011); and perceived justice with mandates to adopt

onboard technologies (Cantor et al. 2011).

In contrast, there has been limited research regarding the conse-

quences of driver turnover in the logistics and SCM discipline.

This paucity of research attention likely stems from the commonly

held assumption that motivates driver turnover research: driver

turnover is detrimental to carrier performance (Suzuki 2007). Kel-

ler (2002) finds that driver turnover rate had a negative linear rela-

tionship with drivers’external relations with customers and their

external performance (e.g. on-time deliveries and pickups, consis-

tent transit time). Saldanha et al. (2014) find driver turnover rate

had a negative attenuated relationship with motor carriers’opera-

tional performance. With regard to safety, Corsi and Fanara (1988)

find a positive linear relationship between driver turnover rates and

motor carriers’accident rates. Shaw et al. (2005) report a negative

attenuated relationship between driver turnover rates and motor

carriers’revenue per driver, and operating ratio. However, they

reported positive attenuated relationships between driver turnover

rates and out-of-service percentage and between driver turnover

rates and accident frequency ratio. Thus, while the extant literature

suggests that driver turnover rates negatively affect motor carrier

performance in a variety of domains, the functional form of this

relationship is unclear.

This is problematic for theoretical and practical reasons. Theo-

retically, these different relationships imply different underlying

processes regarding motor carrier operations. In particular, a neg-

ative linear relationship suggests carriers are unable to develop

processes that mitigate the consequences of high turnover,

whereas a negative attenuated relationship suggests this is the

case (Staw 1980). Managerially, these different functional forms

carry different recommendations regarding which motor carriers

benefit most from reducing driver turnover. More specifically, a

negative linear relationship suggests motor carriers with the high-

est rate of driver turnover benefit the greatest from a given

percentage point turnover reduction. In contrast, a negative

attenuated relationship suggests the opposite.

Beyond just the motor carrier literature, the broader manage-

ment literature on the safety consequences of CFOT offers little

guidance. In large part, this is because there have been few

inquiries into the CFOT–safety relationship—so few that Park

and Shaw (2013) remove safety-related correlations from their

meta-analysis. The two studies that have investigated this rela-

tionship have found evidence supporting the negative attenuated

pattern in cement manufacturing (Shaw et al. 2005) and retail

operations (Shaw et al. 2013).

Motor carrier safety performance

Scholars from many disciplines have undertaken examinations of

factors that affect motor carrier safety performance due to the

far-reaching public policy implications (Savage 2013). The pre-

dominant focus of these studies has been to identify driver- and

motor carrier-related factors that relate to accident rates. At the

198 J. W. Miller et al.