7/27/2019 performance incentive higher productivity.pdf
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TECHNOLOGY UPDATE
PERFORMANCE INCENTIVES
=
HIGH PRODUCTIVITY
Sewing Operator Incentive Schemes andTechnology Solutions
+EVQIRXQERYJEGXYVIVWEVIGSRXMRYSYWP]JEGMRKGSWXTVIWWYVIWHYIXSWPS[HS[RSJFYWMRIWWMRXLIQENSVQEVOIXWPMOIXLI97ERH)9ERHMRGVIEWMRKPEFSYV[EKIW-XMWFIGSQMRKXSYKLIVXSVYRXLIWLS[WQSSXLP]EWIZIV]KEVQIRXI\TSVXIVMWJEGMRKGLEPPIRKIWERHMWPSSOMRKJSVWSPYXMSRW3RISJXLITVMQEV]WSPYXMSRWMW[SVOMRKSRMRGVIEWMRKPEFSYVTVSHYGXMZMX]ERHXLIVIEVIERYQFIVSJ[E]WXSQIIXXLMWKSEP-RXLMWEVXMGPI[ILEZIHMWGYWWIHSRISJXLI[E]WXLEXRSXSRP]MQTVSZI]SYVPEFSYVTVSHYGXMZMX]FYXEPWSMRGVIEWIWEZMRKW
The solution is a fair and direct
incentive scheme for workers.
effective amongst other incentiveschemes as it provides a lot of
motivation andis highly effective in increasingproductivity. It is
a supplement to othermanagement techniques, and we may regardit as
one of the important tools since itattempts to link wages with
performance.
Purpose of incentivesThe main purpose of incentives is to
motivate
workers to give his best. Incentive scheme isset to improve
performance of workers, bymaking them work more effectively with
less
wastage of time, at a greater pace, and withbetter application
to the job. Anincentive scheme for the workers brings downthe
making cost when engineering methodsare implemented simultaneously.
Currently,performance incentive scheme in a factory isoptional, but
in the near future an incentivescheme would be become mandatory to
run a
attendance bonus.Few years ago bonus for attendance did
not exist in garment export industry,however, now most of the
companies areproviding attendance bonus to their workersto reduce
operator absenteeism. Similarlyperformance bonus for workers can
break
reduce garment making cost. I dont need to
both the factory owner and workers. Here is acase to describe
the impact and importance ofperformance incentive.
Case: Performance incentive given tooperators based on line
(group)
Assume that a factory is currently running at
become eligible for incentiveearning is 45%. When line
from 35% direct labor costper garment reduces by 30%.See
following illustration-1.
Cost saving per garment= (38.80 27.16) = Rs.11.64 and Cost
reduction= (11.64*100/38.8)=30%Total saving per month
from one line = (6,240 X11.64) = Rs. 72,643.00If the factory
distributes 50%of the savings earned fromextra production,
eachoperator will earn Rs. 211.00
who are earning say 7000 rupees per monthwith overtime. Operator
incentive earning
reduce OT hour expenses. Incentive amountcan be planned at lower
or higher than 50-50that should attract operator to give efforts
toproduce more.
in OT
Above calculations seem very interesting.Some of you may be
already gone through
what do you need to have such kind ofproductivity
improvement?Requirements to run an IncentiveScheme effectively
content (operations SAM)
production and produced minutes
Every factory owner knows this very well thatif they distribute
one dollar as performance
based incentive to their operators they canearn and save in
return more than that. But
with implementing an incentive scheme forworkers. Many are
interested and think tostart some kind of incentives to motivate
theiremployees but still they fail to start. Why so?
Major reasons for not having IncentiveSchemes
recording production data and calculate
without human intervention.
May 2013
PERFORMANCE INCENTIVES
=
HIGH PRODUCTIVITY
Sewing Operator Incentive Schemes andTechnology Solutions
+EVQIRXQERYJEGXYVIVWEVIGSRXMRYSYWP]JEGMRKGSWXTVIWWYVIWHYIXSWPS[HS[RSJFYWMRIWWMRXLIQENSVQEVOIXWPMOIXLI97ERH)9ERHMRGVIEWMRKPEFSYV[EKIW-XMWFIGSQMRKXSYKLIVXSVYRXLIWLS[WQSSXLP]EWIZIV]KEVQIRXI\TSVXIVMWJEGMRKGLEPPIRKIWERHMWPSSOMRKJSVWSPYXMSRW3RISJXLITVMQEV]WSPYXMSRWMW[SVOMRKSRMRGVIEWMRKPEFSYVTVSHYGXMZMX]ERHXLIVIEVIERYQFIVSJ[E]WXSQIIXXLMWKSEP-RXLMWEVXMGPI[ILEZIHMWGYWWIHSRISJXLI[E]WXLEXRSXSRP]MQTVSZI]SYVPEFSYVTVSHYGXMZMX]FYXEPWSMRGVIEWIWEZMRKW
May 2013
Figures atExistingLine
Figures atImprovedline
Operator Salary
SAM per Garment 30 30
Machine/Line 30 30
(pieces)
The solution is a fair and direct
incentive scheme for workers.
effective amongst other incentiveschemes as it provides a lot of
motivation andis highly effective in increasingproductivity. It is
a supplement to othermanagement techniques, and we may regardit as
one of the important tools since itattempts to link wages with
performance.
Purpose of incentivesThe main purpose of incentives is to
motivate
workers to give his best. Incentive scheme isset to improve
performance of workers, bymaking them work more effectively with
less
wastage of time, at a greater pace, and withbetter application
to the job. Anincentive scheme for the workers brings downthe
making cost when engineering methodsare implemented simultaneously.
Currently,performance incentive scheme in a factory isoptional, but
in the near future an incentivescheme would be become mandatory to
run a
attendance bonus.Few years ago bonus for attendance did
not exist in garment export industry,however, now most of the
companies areproviding attendance bonus to their workersto reduce
operator absenteeism. Similarlyperformance bonus for workers can
break
reduce garment making cost. I dont need to
both the factory owner and workers. Here is acase to describe
the impact and importance ofperformance incentive.
Case: Performance incentive given tooperators based on line
(group)
Assume that a factory is currently running at
become eligible for incentiveearning is 45%. When line
from 35% direct labor costper garment reduces by 30%.See
following illustration-1.
Cost saving per garment= (38.80 27.16) = Rs.11.64 and Cost
reduction= (11.64*100/38.8)=30%Total saving per month
from one line = (6,240 X11.64) = Rs. 72,643.00If the factory
distributes 50%of the savings earned fromextra production,
eachoperator will earn Rs. 211.00
who are earning say 7000 rupees per monthwith overtime. Operator
incentive earning
reduce OT hour expenses. Incentive amountcan be planned at lower
or higher than 50-50that should attract operator to give efforts
toproduce more.
in OT
Above calculations seem very interesting.Some of you may be
already gone through
what do you need to have such kind ofproductivity
improvement?Requirements to run an IncentiveScheme effectively
content (operations SAM)
production and produced minutes
Every factory owner knows this very well thatif they distribute
one dollar as performance
based incentive to their operators they canearn and save in
return more than that. But
with implementing an incentive scheme forworkers. Many are
interested and think tostart some kind of incentives to motivate
theiremployees but still they fail to start. Why so?
Major reasons for not having IncentiveSchemes
recording production data and calculate
without human intervention.
