I am looking for an appropriate Incentive scheme for workers and Supervisors of our manufacturing facility. The key issues are:
The industry under consideration is an engineering industry manufacturing custom made engineering goods with no specific design or a datum for basing the calculations upon. the quantity, variety, size and design are all unique for any particular project. The varioation in size also will be from a few kg per piece to upto 4 to 5 tons.
becuase of the absence of any common base line we had been trying various incentive schemes.
1. We have already tried Piece Rate Incentive Scheme.
a. This scheme did not provide equitable distribution of Incentive earned as all the supporting workmen were alienated.
b. because of the highly varied take - home there were division between workmen inspite of seniorty differences.
c. Machine Maintenance and proper use of equipment was never given a thought.
d. Fatigue induced absence was very prevalent.
In order to Obviate the above mentioned problems the incentive scheme was modified as below.
Since it is a product made of steel that is manufactured and the main raw material being steel, we had worked out a scheme which considered the base as output tonnage of steel per month. With a specific quantity for acheiving breakeven any quantity output more than this figure was conidered for incentive on a per ton basis. this rate of incentive also varies with the increasing output. For example of the tonnage output is 94 ton the incentive rate per ton will be around Rs. 2000 per ton but if the output is 120 ton then the rate will be around 3500 per ton. Out of this there are deductions with respect to Overtime beyond a certian permissible limit and also for contract labour beyond a certain permissible limit.
out of the cumulative incentive calculated, 70% was exclusively reserved for production oriented personnel or personnel who were engaged in manufacturing activity of the said product. balance 30% is spread to the entire workmen of the factory. This was agreed upon by the workers also since there is an equitable distribution of the incentive.
however the Basic problem that has been plaguing the system is that in a project industry it takes a lead tme of around 4 months for out put to be despatched so there is very negligible incentive for the first three months and a very large incentive on the 4th month. This is creating problem for the labours as they are unable to forecast any incentive for the month as also plan or budget their expenditure.
Ca anyone suggest a better incentive scheme or a hybrid incentive scheme so that is mutually advantageous to the workmen as well as the company.
From India, Pondicherry
The industry under consideration is an engineering industry manufacturing custom made engineering goods with no specific design or a datum for basing the calculations upon. the quantity, variety, size and design are all unique for any particular project. The varioation in size also will be from a few kg per piece to upto 4 to 5 tons.
becuase of the absence of any common base line we had been trying various incentive schemes.
1. We have already tried Piece Rate Incentive Scheme.
a. This scheme did not provide equitable distribution of Incentive earned as all the supporting workmen were alienated.
b. because of the highly varied take - home there were division between workmen inspite of seniorty differences.
c. Machine Maintenance and proper use of equipment was never given a thought.
d. Fatigue induced absence was very prevalent.
In order to Obviate the above mentioned problems the incentive scheme was modified as below.
Since it is a product made of steel that is manufactured and the main raw material being steel, we had worked out a scheme which considered the base as output tonnage of steel per month. With a specific quantity for acheiving breakeven any quantity output more than this figure was conidered for incentive on a per ton basis. this rate of incentive also varies with the increasing output. For example of the tonnage output is 94 ton the incentive rate per ton will be around Rs. 2000 per ton but if the output is 120 ton then the rate will be around 3500 per ton. Out of this there are deductions with respect to Overtime beyond a certian permissible limit and also for contract labour beyond a certain permissible limit.
out of the cumulative incentive calculated, 70% was exclusively reserved for production oriented personnel or personnel who were engaged in manufacturing activity of the said product. balance 30% is spread to the entire workmen of the factory. This was agreed upon by the workers also since there is an equitable distribution of the incentive.
however the Basic problem that has been plaguing the system is that in a project industry it takes a lead tme of around 4 months for out put to be despatched so there is very negligible incentive for the first three months and a very large incentive on the 4th month. This is creating problem for the labours as they are unable to forecast any incentive for the month as also plan or budget their expenditure.
Ca anyone suggest a better incentive scheme or a hybrid incentive scheme so that is mutually advantageous to the workmen as well as the company.
From India, Pondicherry
I am into advisory for many years now. First of all though you have given information it is difficult to make any suggestions off hand without understanding your current appraisal model and your company's strategic model. Secondly the issue of lead time. Instead of giving the entire amount at one go after every four months why dnt you average it. This way everyone will get monthly incentive. Remember give the incentive with interest, i.e at the bank rate. This way all will get their incentives monthly and there will be no question of lead time. For any other clarifications you can contact me on my email id.
Regards
Sonali
From India, Thana
5Regards
Sonali
From India, Thana
Further details would be needed before commenting on the matter or giving any instant solution. We are a Delhi based consultancy having a rich experience of manufacturing industry and can help you in the matter. If you need our help, please contact us at the below mentioned address.
Thanks & Regards,
Avika Kapoor
Kapgrow Corporate Advisory Services Pvt. Ltd.
E-173, Kalkaji, New Delhi - 110019
011-40553774
09310270884
From India, New Delhi
Thanks & Regards,
Avika Kapoor
Kapgrow Corporate Advisory Services Pvt. Ltd.
E-173, Kalkaji, New Delhi - 110019
011-40553774
09310270884
From India, New Delhi
Given the paucity of details, suggestions made by Sonali seems sound. I recall the way the cost of living index was paid in the late 70s in UK, when the inflation rate was accelerating. The company I worked in paid an increase based on the increase in index every quarter. Similarly, instead of paying all in the fourth month, you could agree with the unions that you would pay every month the same percentage based on the previous quarter's performance.
Have a nice day.
Simhan
From United Kingdom
Have a nice day.
Simhan
From United Kingdom
Hai All,
I working for manfacturing company in andhra pradesh in non metro area.
Now i have to design a salary structure for worker level employees.
Please suggest me which concept is better to implement ? Gross salary concept or CTC concept
And also provide for which salary components we should collect the bills.
Thanks
Jagadish
9951341456
From India, Nalgonda
I working for manfacturing company in andhra pradesh in non metro area.
Now i have to design a salary structure for worker level employees.
Please suggest me which concept is better to implement ? Gross salary concept or CTC concept
And also provide for which salary components we should collect the bills.
Thanks
Jagadish
9951341456
From India, Nalgonda
Hai All,
I working for manfacturing company in andhra pradesh in non metro area.
Now i have to design a salary structure for worker level employees.
Please suggest me which concept is better to implement ? Gross salary concept or CTC concept
And also provide for which salary components we should collect the bills.
Thanks
Jagadish
9951341456
From India, Nalgonda
I working for manfacturing company in andhra pradesh in non metro area.
Now i have to design a salary structure for worker level employees.
Please suggest me which concept is better to implement ? Gross salary concept or CTC concept
And also provide for which salary components we should collect the bills.
Thanks
Jagadish
9951341456
From India, Nalgonda
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Conf_RevMeeting _CPFC_20570_MOM 10% refund on admin charges incentive.pdf