La forma de las locuciones verbales

As regards the rationale behind incentives, controversy prevails over the issue. There are some people who regard incentive schemes as beneficial to both the employees and the employer. There are also some others who consider incentive schemes as irrational. In view of this, it seems pertinent first to analyse both the views separately in some details. It will help us form our opinion about the usefulness or otherwise of incentive schemes for an organisation.

Incentives are beneficial: Incentives, i.e., money motivates employees to work more6_{. Besides,}

these also help attract and retain employees in the organisation. Incentives bear multiple effects. These lead to increase in production, productivity, economy of scale, revenue, profit, etc. For employ- ers, the need for a vigorous supervision is reduced. As a consequence, there is cut in supervision cost. The position of supervisors changes from that of being “watch dogs” to that of managers of “machines and materials.” Employee absentecism and turnover also gets reduced.

With increased production, employees also get more remuneration, bonus, etc. This improves their levels of living and, in turn, productivity2_{. Such a positive cycle goes on and on. Research}

studies also support these points.

The cross-country experiences gained in experiences indicate that the practice of payment by results was related to increased output, higher earnings, and lower costs7_{. Such stories abound in}

India also. In a survey8 _{conducted by the National Productivity Council (NPC) pointed out that 70 per}

cent of reporting companies had wage incentive plan. The scheme, on an average, seemed to have achieved increases in output which ranged between 30 per cent and 50 per cent and increases in earnings from 25 per cent to 45 per cent. In his study, Suri9 _{showed that in majority of the jobs}

investigated, wage incentive schemes succeed in raising productivity, increasing earnings and reduc- ing direct labour costs. The progressively increasing productivity and falling costs as a result of incentives in the Chittaranjan Locomotive Works since 1954 also support the positive impact of incentives on production and productivity of an organisation.

Incentives are irrational: Some people consider incentive scheme just rosy, far from reality. They

utilize incentives by putting forward their argument that money being an external factor to the job fails to motivate people. In their opinion, people derive motivation out of their work, i.e., job satisfaction. Their views are in consonance with Herzberg’s two factor theory10 _{which states that money (pay and}

The experience gained across the world also lends support to the fact that incentive schemes play a dubious role so far as increase in production is concerned. How? The apprehension expressed is that even if incentives help increase output at all, these tend to distort quality in the garb of quantity. This costs much for an organisation. Not only that, increase in output may also generate tensions among its claimants. Such a case will, then, call for the sound and effective administration of incentive schemes, on the one hand, and indepth understanding of human relations, on the other11_.

Both have never been simple tasks.

Then, what is the final view? There is no denying the fact that people work for money. Then, it can safely be said that money, i.e., incentive motivates people to work more. In fact, the arguments put forward by the critics against incentive schemes do not belittle the novelity of the schemes. The criticism relates to the application of these schemes which become good or bad in the hands of users only. Therefore, incentives are welcome. It is this realization only that the Study Group of the National Commission on Labour12 _{has also recommended that under our conditions, a wage incentive is}

concerned with an effective utilization of manpower which is the cheapest, quickest and surest means of increasing productivity. The only practicable and self-sustaining means of improving manpower utilization is to introduce incentive schemes and stimulate human efforts to provide a positive motiva- tion to greater output”.

16.1.3 Types of Incentive Schemes

The various types of incentives are classified into two broad categories: financial and non- financial. Here, we are concerned with financial incentives only. Financial incentives may further be classified as individual incentives and group incentives. Both are discussed here one by one.

Individual Incentive (PBR) Schemes

Under this plan, employees are paid on the basis of results13_{. The chief incentive plans included}

in this category are discussed in seriatim.

Taylor’s Differential Piece Rate Plan: This plan was developed by F. W. Taylor, the father of

scientific management. Under this plan, Taylor prescribed two piece work rates. One, a higher wage rate for those who reach the standard work. Second, a lower wage rate whose performance is below the standard. The standard work is determined on the basis of time and motion studies. This wage plan encourages and rewards the employees who are efficient by giving them wages at a higher rate. At the same time, the plan penalises those who are slow performers by paying them at a low wage rate.

Halsey Premium Plan: This plan, originated by F. A. Halsey, an American engineer, is a combina-

tion of the time and the piece wage in a modified form. Under this plan, a guaranteed wage based on past experience is determined. If a worker saves time, he gets 50% of wages for time saved (called premium) in addition to normal wages. It is optional for the worker to work on the premium or not. Thus, this plan also provides incentive to efficient workers.

Rowan Premium Plan: This plan was developed by D. Rowan in 1901. This plan, to a large extent,

is similar to that of Halsey Premium Plan. The only difference is in regard to the determination of the premium. Unlike a fixed percentage in case of Halsey plan, it considers premium on the basis of the proportion which the time saved bears to the standard time.

Emersson Efficiency Plan: Under this scheme, both standard work and day wage are fixed.

Bonus is paid on the basis of worker’s efficiency. A worker becomes entitled to get bonus only when his/her efficiency reaches to 67%. The rate of bonus goes on increasing till he achieves 100% effi- ciency. Above 100% efficiency, bonus will be 20% of the basic rate plus 1% for each 1% increase in efficiency. In this way, at 120% efficiency, a worker receives a bonus of 40% and at 140% efficiency, worker gets 60% of the day wage as bonus.

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Incentives and Benefits

Gantt Task and Bonus Plan: This plan is devised by H. L. Gantt. This plan combines time, piece

wage and bonus. Standard time, piece wage and high rate per piece are determined. A worker who cannot complete standard work within standard time is paid only the minimum guaranteed wage. A worker performing upto the standard level of work, gets time wage plus a bonus @ 20% of normal time wage. If the worker exceeds the standard, he is paid a higher piece rate but there is no bonus .

The above mentioned various incentive schemes indicate that the incentive may vary alongwith variation in earning with changes in performance or output. Thus, based on linkages between perfor- mance and incentive, the various incentive schemes (PBR) may be classified into the four types as follows:

1. Incentives in the same proportion as performance.