:roll:
Dear friends,
i need to motivate the peoples and their production. to introduce the performance./production based incentive schemes.
can any one suggest how to calculate or work out the incentive.
i need different model for implementing the incentive scheme.
kindly help me
regards
sai
From India, Madras
Dear friends,
i need to motivate the peoples and their production. to introduce the performance./production based incentive schemes.
can any one suggest how to calculate or work out the incentive.
i need different model for implementing the incentive scheme.
kindly help me
regards
sai
From India, Madras
Sai,
The first thing you have to do is identify the steps of the production process, from receipt of material to shipment of finished product. (Each step should be described by the employee performing the tasks and verified by the supervisor).
Next, assess the capability of the workforce, their skills, knowledge and experience. Training and upgrading where necessary. (Ask employees and verify with supervisor.)
Do the same with the tools and equipment used in the production process. Are they adequate for the job? Do they need maintenance? Should they be replaced with newer, more efficient models? Again, upgrade where necessary.
When you have completed the above "workplace survey", your next step is to establish a "baseline" for each step in the production process, from cost of materials, internal transportation, machine time, rework, waste, utilities, etc. .
In a Gainsharing system, the "savings" (the amount of the baseline versus actual costs for the month) realized by the employee's efforts, both as to suggestions, modifications, bending work (but not safety) rules, suggestions, etc. will be shared between the Company and employees, on a 50-50 basis (actually 40-40, since 20% will go into a "contingency account to maintain payouts in those months when there is no gain). In the case of suggestions the employee making the suggestion will receive 20% of the employee's 40% with the remainder equally divided among the rest of the employees.
Assuming it costs $10 to make a widget, and the employees reduce costs by 5% ($.05). Monthly production is 50,000 widgets by the 10 employees in the plant. The Company has $25,000 in "gainsharing money" $10000 to be distributed to the employees. The employees share will be distributed, based on a variety of factors - absentee, tardy, leaving early, accidents, and the like. An employee who has worked, or been off for legitimate reason - vacation, paid leave, etc. , the full month will be entitled to a full share. Employees who are not eligible for a full share will have their distribution pro-rate based on the number of "incidents" in the month.
For example: Employee A makes a suggestion that saves the company $25,000 a month. "Employee" portion is $10,000 (40% of savings). The employee who submitted the suggestion gets 20% of the 40% ($2,000) and the remainder ($8,000) is available for distribution to the other 9 employees.
2 of the 9 were sick or absent for 2 (employee B) and 5 (employee C) days respectively, therefore employee B, will receive a pro-rata distribution of 28/30 (approximately $828.62), and employee C will receive (approximately $740.73) or a 5/6 share.
The balance ($6,430) divided among the 7 remaining employees provides approximately $918.57 as a "gainsharing bonus".
Be aware that initially the payouts may be high, but as the baseline is adjusted (recommend annually), there are "diminishing returns" to the employees, thus the reason for the "hold back". When the need to distribute the "hold back" (3-5 years after the initiation of the program), it is a signal that a new incentive plan must be devised.
Hope this helps,
PALADIN
From United States,
9The first thing you have to do is identify the steps of the production process, from receipt of material to shipment of finished product. (Each step should be described by the employee performing the tasks and verified by the supervisor).
Next, assess the capability of the workforce, their skills, knowledge and experience. Training and upgrading where necessary. (Ask employees and verify with supervisor.)
Do the same with the tools and equipment used in the production process. Are they adequate for the job? Do they need maintenance? Should they be replaced with newer, more efficient models? Again, upgrade where necessary.
When you have completed the above "workplace survey", your next step is to establish a "baseline" for each step in the production process, from cost of materials, internal transportation, machine time, rework, waste, utilities, etc. .
In a Gainsharing system, the "savings" (the amount of the baseline versus actual costs for the month) realized by the employee's efforts, both as to suggestions, modifications, bending work (but not safety) rules, suggestions, etc. will be shared between the Company and employees, on a 50-50 basis (actually 40-40, since 20% will go into a "contingency account to maintain payouts in those months when there is no gain). In the case of suggestions the employee making the suggestion will receive 20% of the employee's 40% with the remainder equally divided among the rest of the employees.
Assuming it costs $10 to make a widget, and the employees reduce costs by 5% ($.05). Monthly production is 50,000 widgets by the 10 employees in the plant. The Company has $25,000 in "gainsharing money" $10000 to be distributed to the employees. The employees share will be distributed, based on a variety of factors - absentee, tardy, leaving early, accidents, and the like. An employee who has worked, or been off for legitimate reason - vacation, paid leave, etc. , the full month will be entitled to a full share. Employees who are not eligible for a full share will have their distribution pro-rate based on the number of "incidents" in the month.
For example: Employee A makes a suggestion that saves the company $25,000 a month. "Employee" portion is $10,000 (40% of savings). The employee who submitted the suggestion gets 20% of the 40% ($2,000) and the remainder ($8,000) is available for distribution to the other 9 employees.
2 of the 9 were sick or absent for 2 (employee B) and 5 (employee C) days respectively, therefore employee B, will receive a pro-rata distribution of 28/30 (approximately $828.62), and employee C will receive (approximately $740.73) or a 5/6 share.
The balance ($6,430) divided among the 7 remaining employees provides approximately $918.57 as a "gainsharing bonus".
Be aware that initially the payouts may be high, but as the baseline is adjusted (recommend annually), there are "diminishing returns" to the employees, thus the reason for the "hold back". When the need to distribute the "hold back" (3-5 years after the initiation of the program), it is a signal that a new incentive plan must be devised.
Hope this helps,
PALADIN
From United States,
perfirmance linked incentive implies the establishment metrics for the concerned processes.
eg if production fail to make a shipment on time n it needs to be sent by air, this means "delivery time" parameter and cost has been jeopardised..
so no incentive for manager production.
don't hv improvement myopia, map the processes first and improve upon the same...
first n foremost trap "voice of customer".. what does the end user want and focus organisation resources on achieving exactly the same..
ask your HODs to sit together and have "quarterly business review" with each client...
feel free to call if you need further helkp...
surya
9999645755
From India, Delhi
eg if production fail to make a shipment on time n it needs to be sent by air, this means "delivery time" parameter and cost has been jeopardised..
so no incentive for manager production.
don't hv improvement myopia, map the processes first and improve upon the same...
first n foremost trap "voice of customer".. what does the end user want and focus organisation resources on achieving exactly the same..
ask your HODs to sit together and have "quarterly business review" with each client...
feel free to call if you need further helkp...
surya
9999645755
From India, Delhi
what is the method to allow incentive on the basis of sales? should it be on volume of sales or value of sales
i think incentive on basis of value is not correct, as due to inflation the sale price increases year by year. then what is the best way?
I need suggestions for incentive to employees in a supermarket
jrcs1990
From India, Madras
i think incentive on basis of value is not correct, as due to inflation the sale price increases year by year. then what is the best way?
I need suggestions for incentive to employees in a supermarket
jrcs1990
From India, Madras
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