Bonus for Indirect workers: It has been observed that in the
bonus plans (individual or group bonus), a standard performance is set & the bonus
is given to the worker, if the actual performance is better than the standard performance.
Thus it’s possible to measure the performance. But only in case of direct worker
or in case of department producing goods, this is possible. However there should be
also a system of bonus in case of an indirect worker or in case of department rendering
services to production department, although it is difficult to measure their performance.
The reason behind this are:
(a) Indirect worker may also be efficient & reward should be given to such efficiency.
(b) The discrimination which may arise, if bonus is not given to indirect workers,
may reduce the morale of the indirect workers, & hence their efficiency.
(c) Direct workers cannot efficiently produce the output without the assistance of
the indirect workers. So, the work of direct workers will suffer, if bonus is not provided
to the indirect workers.
(d) If a section of workers cannot enjoy the benefit which is enjoyed by the other
section, the trade union may start agitation.
The staff in the indirect category should be classified into two groups, for the purpose
of introduction of a bonus scheme for the indirect workers, which is as below:
(1) Indirect workers whose work is connected with the direct workers. Inspectors, checkers,
internal transport-men, shop clerks, etc. comes under this head. On the basis of output
or the performance of the direct workers, bonus may be paid to them.
(2) Indirect workers, who render general services. Maintenance staff, canteen staff,
general sweepers, dispensing staff, watch & ward staff etc. comes under this group.
On the basis of the output of a department or the entire factory, bonus may be paid
to them, on the percentage of bonus payable to direct workers, on job evaluation, merit
rating etc. High time rates in lieu of bonus may be allowed to them, if bonus is not
paid. Bonus to indirect workers should be:
(a) paid at a regular interval, say, weekly or monthly;
(b) assured for a financial year;
(c) efficiency related;
(d) so organized that benefit is produced for both workers & employers;
(e) so as not to show any gross discrimination between different classes of workers.
A few examples of the possible mode of payment of bonus to indirect workers are given
below, keeping in view the above considerations:
(a) Bonus to Stores Staff: Stores staffs are connected
with the receipts & issue of materials. On the value of materials handled or on
the number of requisitions served, they may receive bonus. Standard may be set & efficiency
percentage related to bonus may be worked out.
Efficiency percentage = (Actual performance/Standard performance)*100
(b)Bonus to Supervisors & Foreman: On the
basis of one or more of the following, the supervisors & foremen may be paid bonus
on monthly basis:
(i) output of the department in which they work;
(ii) time saved by direct workers under each supervisor or foremen;
(iii) as compared to budgeted expenditure, savings in expenditure;
(iv) as compared to estimated figures, reduction in scraps & wastes;
(v) as compared to estimated figures, reduction in labour turnover;
(vi) as compared to estimated idle time on account of lack of supervision, reduction
in idle time, etc.
(c)Bonus to Repairs & Maintenance staff: A group bonus scheme is suitable in this case, because, services of a group are required for repair & maintenance. Estimation or standardization should be made of the number of complaints during a period. On the basis of reduction in the number of complaints in comparison to the number estimated, or on the basis of percentage efficiency (in case of standards), payment of bonus may be made.
(d) Bonus to Clerical Staff: In case of clerical staff, bonus may be paid on the basis of output in excess of a predetermined output, where the output is measurable (for example, number of invoices made, number of standard letter typed, number of cheques issued). As a rule, incentive is also provided when there is a promotion from lower category to upper category. Bonus may be paid, where output cannot be measured, on the basis of group bonus scheme upon a planned schedule.
(e) Bonus to Top Executives: In case of top executives, from funds created out of profit or out of savings in cost, bonus may be paid monthly. For deciding the amount of bonus, the efficiency of the department with which the executive is connected should be taken into consideration.
Problem: One foreman, one operator, one labourer, & one
boy undertake to manufacture 150 articles on piece work basis for $1320. 200 ordinary
labour hour is spend by each of the above & their wage rates are as follows:
Foreman & operator – $ 4 per hour each, labourer- $ 2 per hour, & the
boy $ 1 per hour. Calculate the amount of piece work premium & show the amount
which each worker will receive by way of premium when it is divided in proportion to
the wages paid & in each case show the percentage the premium bears to the wage
payments at the ordinary rates.
Solution:
Time wages of the
group: $
1 foreman @ $ 4 per hour for 200 hours 800
1 Operator @ $ 4 per hour for 200 hours 800
1 labourer @ $2 per hour for 200 hours 400
1 boy @ $1 per hour for 200 hours 200
Total Time Wages 2200
Piece work wages 1320
Piece work premium 880
This premium will be divided in the ratio of time wages of the group member’s
i.e.
800:800:400:200 or 4:4:2:1
The Foreman will receive = (4/11)* $ 880 = $ 320 or 40% of his wages
The Operator will receive = (4/11)* $ 880 = $ 320 or 40% of his wages
The Labourer will receive = (2/11)* $ 880 = $160 or 40% of his wages
The Boy will receive = (1/11)* $ 880 = $80 or 40% of his wages
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- Accounting for Wages
- Comparison of Halsey & Rowan Scheme
- Causes, Cost of Labour Turnover
- Emersion efficiency system
- Halsey scheme, Rowan Scheme
- Job Evaluation, Merit Rating
- Labour- Group Bonus Plan
- Labour - Introduction
- Labour Remuneration-Introduction
- Labors Remuneration on Result basis
- Labor's Remuneration on Time Basis
- Labour- Time Keeping
- Labour Turnover
- Merit Rating, Work Study
- Other incentive Schemes
- Pay-Roll or Wages Sheet
- Types of Idle Time
- Working Time & Idle time
