Incentive Schemes in Railways PDF

Incentive Schemes in Railways M.N.Reddy Sr.Lecturer/STC/SC 1  PAYMENTS BY RESULTS Need : Improve productivity by better utilisation of manpower, M&P and covered area. 2 ...

Incentive Schemes in Railways M.N.Reddy Sr.Lecturer/STC/SC 1  PAYMENTS BY RESULTS Need : Improve productivity by better utilisation of manpower, M&P and covered area. 2  INTRODUCTION - Piece work bonus system was in existence in certain workshops like - Jamalpur - Kancharpara and - Perumbur prior to independence. - However the system adopted was varied from workshops to workshop. 3  INTRODUCTION - Railway Board took decision to introduce incentive scheme in 1949 - The first and formal scheme was introduced in CLW in Dec’1954 - The scheme was successful and further it was extended to ICF in 1960. 4  REVIEW - Review of productivity revealed that low standard of efficiency could be improved with this scheme. - Provide better control of activity. - More systematic flow of work. - More effort by individual worker. 5 SALIENT FEATURES OF THE SCHEME - The basic wages are guaranteed. - Time is the yard stick for measuring work. - The various operations in the workshops are subjected to time study. - The allowed time is so fixed that the workmen of normal ability may earn 33 1/3% bonus. - The allowed time includes all allowances such as fatigue, general handling, gauging and productivity bonus allowance. 6  SALIENT FEATURES  Based on the concept that an average worker while working under non-incentive conditions is assumed to be working at a rating of 60 units.  The same worker under incentive conditions would be working at 80 rating.  It means that the average worker would finish the work in ¾ of the allowed time.  Calculation is done on monthly basis, and the gain or loss cannot be carried out to the next month.  The ceiling limit is fixed at 50% of the time taken. 7  TYPE OF WORKERS The Incentive workers are classified as  Direct workers  Essential Indirect workers.  Indirect workers. 8 DW: Engaged in work which can be assessed through time studies. EIW’ S: Those who contribute to the continuity of the work. Whose work cannot be assessed through time studies. IWS: Who are provided for cleaning etc. do not contribute directly or indirectly. 9  TIMING OF OPERATION - The only check on the efficiency of the Labour is the systematic comparison of time taken with actual time. 10  TIME STUDY - Fixation of time standards for each operation. - It is a technique for determining accurately as possible from a limited number of observations. 11  RATING Rating is the assessment of the skill and effort involved in each element. Different operative workers performing the same job are studied and the results checked by superior rate fixers. 12  NORMALISING On completion of time study the actual times of all the elements in the work cycle should be converted to time @ 80 rating. Normalized time = Actual time x observed rating 80 i.e.Incentive rating 13  Examples of Normalizing Slow worker: Actual time = 60 minutes Observed rating = 60 Normalized time = Actual time x observed rating 80 i.e. Incentive rating = (60 X 60) / 80 = 45 minutes Fast worker: Actual time = 36 min, Obs rating = 100 Normalized time = (36 X 100) / 80 = 45 minutes 14  ALLOWANCES  General handling and contingencies – 12 1/2 %  Gauging on Machining – 5%  Fatigue – 12 ½ to 25%  Production bonus – 33 1/3 % 15  CALCULATION OF ALLOWED TIME Let Normalized time = 1 Hour Add allowances as under a) Fatigue 12.5% = 1x0.125 = 0.125 = 1+0.125 = 1.125 b) Contingency 10%=1.125x10 = 0.1125 Hrs 100 = 1.125+0.1125= 1.2375 Hrs c) Bonus 33 1/3 % = 1.2375x100 = 1.645875 Hrs 3x100 d) Gauging 5% = 5x1.6459= 0.083=1.646+0.083=1.728 (1.65) 16 100  Calculation of Incentive Allowed time will be fixed for each activity as explained earlier. Incentive earned = Allowed Time –Time taken Time taken Allowed time for a turning job = 45 min Time taken by a worker = 30 min Incentive % = (45-30)/30 = 15/30= 50% 17  Calculation of Incentive Example in a month one worker has worked for 200 hours and earned allowed time of 280 hours. Incentive % = Allowed Time –Time taken Time taken = (280-200)/200= 40% Money value of incentive = 80X hourly rate = 80X Rs.110 = Rs.8800/- 18  SYNTHETIC TIMES Synthetic times are time standards built up from element times previously obtained from direct time studies. Time studies are taken to arrive @ synthetic data such as:  Loading and unloading values.  Setting up values  Changing tool values.  Preparational value. 19  EXTRA TIME Extra time over the allowed time can be allowed due to  Excess machining work required on castings, forgings, bars.  Hard material  Defects in the machine for which worker is not responsible.  Change in batch quantity against a work order. 20  JOB CARDS Job / Squad cards are the basic documents on the basis of which incentive is calculated. Job/Squad cards should be punched on/ off with aid of time recording clocks. From the time of punching, the job cards should remain in the custody of time booth clerk. All completed Job/squad cards should be sent to incentive bonus section with in 48 hours. 21  MATERIAL SCRAP Normally bonus is payable on quantities of work which confirm to specifications. If inspector certifies, rejections are owing to material scrap, the reject of outturn will also be taken into account upto the % of work done on rejects. 22  IDLE TIME DEDUCTION FROM SUPERVISORS Shop JE’s are responsible for  Lack of work  Lack of tools 23  IDLE TIME DEDUCTION FROM SUPERVISORS Idle time of DW’s Percentage debited 2 – 10% 10% 5% - 15% 20% >15% No Bonus 24  IDLE TIME BOOKING Idle time can be booked on accounting the following reasons.  No Power  Machine Repair  Lack of Material  Lack of tools  Waiting for work  Crane repair  Misc 25  Group Incentive Scheme The new scheme namely Group Incentive Scheme has been introduced in Tirupati, Rayanapadu Workshops of this railway during the year 2000. In this scheme main group is formed from main production shop of the plant. A standard production unit (SPU) will be defined for each incentive production group. Support shops incentive group formed from various shops in the plant which directly support the activities of shops included under incentive production groups.  Group Incentive Scheme The output performance from shops included under support shops can not be quantified in measurable terms. Support departments incentive group formed from different departments under plant management who directly but essentially support the production activities in the shops. The output performance can not be quantified in physical units.  Salient Features of the Group Incentive Scheme Management approved annual production plan for each incentive production group is defined before each financial year. For each despatchable product from the group the applicable SPU of product is defined by the IED. The manpower strength including LR of 12.5% for each production group is required to achieve annual production plan. Idle hours may be counted only when the power failure at a stretch for a period of 60 minutes.  Salient Features of the Group Incentive Scheme This scheme also does not permit plus cards on any account. Group attendance factor affects the group incentive. Excessive detention to the coaches in the plant, affect the incentive. Defects reported by the customer depots will affect the group incentive. While deciding the outage 70% weightage is given to the individual shop and 30% weightage is given to overall outage.  Salient Features of the Group Incentive Scheme Rework reduce the group incentive. Minimum bonus earning should be 20%. Maximum ceiling on bonus earning is 50%.  CLW Vs GIS The CLW Group Incentive Pattern Scheme Introduced in CLW Introduced in Wheel 1958 further and Axle Plant, Tirupati extended to ICF and Workshop, other workshops. Rayanapadu Workshop and Mancheshwar Workshops.  CLW GIS It is individual based It is group based incentive scheme. incentive scheme. Minimum bonus earning Minimum bonus is at 33 1/3 %. earning at 20%. Maximum permissible Maximum permissible bonus limit 50%. bonus limit 50% Idle time can be booked on Idle time can be booked account of lack of tools, only on account of machine breakdown, non power failure that too for availability of raw materials. more than one hour.  CLW GIS Once the outturn is Quality linkage factors are dispatched from the shop taken into consideration there is no provision for and they effect the deduction of incentive for the outturn. bad workmanship. Group attendance will not Group attendance will affect the incentive of affect the individual individual. incentive. Individual shop outturn is 70% of individual shop taken for bonus calculation. and 30% of the overall outturn is taken for bonus calculation.  CLW GIS Additional no. of days stay of Coaches detained in the the coaches will not affect the shops for more than 60 bonus. days effect the bonus. There are no equalising factor All types of coaches are for each type of work. converted into standard sleeper coaches. No. of men work on the Only 4 to 5 men are production control required in the Industrial organisation ranges up to Engineering department. 200. THANK YOU 35