REDESIGNED INCENTIVE SCHEME ON WORKSHOPS

-TIRUPATHI PATTERN

-V. Rama Manohara Rao IRAS

JAO/CRS/TPTY

INTRODUCTION:

An incentive scheme may be viewed as a ‘win–win solution’ between the administration and the staff of an organization. The advantages for the administration are: no requirement of additional man power, higher and efficient machine utilisation, more productivity, less pilferage of working hours, etc. Whereas for workers: it gives the satisfaction of “earning more by working more” leading to more purchasing power. And as an end result the organization is benefited with better industrial relations and discipline.

In this write up, an attempt has been made to discuss the existing incentive schemes on Indian Railways without going into too much of technicalities but concentrating on the conceptual aspects of the schemes.

PRESENT SCHEMES:

Presently existing incentive schemes on Indian Railway workshops may be broadly grouped into two categories:

One is based on saving of time in each activity by the employee, there by performing the activity in lesser time than the prescribed time- giving scope for increased out turn. (Chittaranjan pattern)

The other one is directly linked to outturn given by a group. This is Group based incentive scheme. (Tirupathi scheme) which has been introduced on workshops during January 2002.

CHITTARANJAN PATTERN SCHEME

To appreciate better the newly introduced incentive scheme in CRS,

(Carriage Repair Shop) Tirupathi, by bringing out the differences with the existing schemes, the chittaranjan pattern is also discussed briefly here under.

SALIENT FEATURES:

–Chittaranjan pattern incentive scheme was started in 1954 on Production shops and in 1958 on Indian Railway workshops.

–It is based on the time saved by the worker against the prescribed time for each activity set by the work-study group.

· It is so designed that a reasonably efficient worker should be able to earn 33%incentive.

· i.e.; if the worker is able to complete a work in 3/4ths of the time prescribed, then he would be eligible to earn 33% incentive.

· However the maximum limit set is that the employee can not save time more than 50% of the allowed time for an activity. i.e. more than 50% saving in time will not be eligible for incentive benefit.

Under this scheme, the workers are divided into three categories: Direct workers, Essential indirect workers, and Indirect workers. Different incentive rates are fixed for each category.

In this scheme the idle time can be booked on the following counts:

•Non availability of tools,

•Non availability of work

•Power cut

•Machine run down.

•The time office has to give every month the statements showing the number and details of workers in each category for calculating the incentive earned.

THE RETHINKING:

There has been a general view that the chittaranjan pattern of incentive scheme is not working up to the expectations because of the following reasons:

· Individual employee may earn the incentive leading to financial out flow for the administration but final out turn of the workshop is not increasing.

· There is no provision to take care of quality aspect of the work.

· As this is an individual based scheme, the expected synergy in gaining final output is not accruing.

· There is a perceived scope for manipulation of time saved by the employee.

The lacunae in the chittaranjan pattern forced the administration to rethink- and hence no incentive scheme has been introduced for workshops set up after 1980.

Hence the new scheme, which is group based and is directly linked to outturn given by the group.

TIRUPATHI PATTERN OF INCENTIVE SCHEME:

RITES Study group was constituted to propose a new incentive scheme for the workshops on Indian railways, Tirupathi workshop as a pilot project. The Railway Board with some modifications accepted the RITES report. The similar scheme suggested by the RITES study group is being implemented in production shops DLW and ICF. However for the first time this scheme is introduced on workshops in Carriage Repair shop Tirupathi, during January 2002, which was inaugurated by the Honorable Railway Minister Shri Nitish Kumar.

ACTIVITIES OF CRS:

Before discussing the new scheme, the activities of CRS Tirupathi, are mentioned briefly:

The main activities of CRS are POH of coaches and turning of wheel sets.

Other works under taken are:

POH of MEMU, DMU, DHMU

RSP works like

•UIC vestibules.

•SS inlays

•Retro-fitment of Coaches.

•PVC flooring

SALIENT FEATURES OF THE SCHEME:

The salient features of the scheme are discussed as under:

A). The workshop categorization under the Scheme:

To facilitate the implementation of incentive scheme the workshop has been categorized into Production shops, Support Shops Support Departments & Non-incentive departments.

The Production shops:

•Wheel shop

•Paint shop

•CF shop

•CBR (carriage bogie repair shop)

•Train lighting shop

Support shops:

1.Mill Wright 2. Power maintenance

3.Machine shop and calibration shop

4.Smithy shop 5. Yard operating

6.Coach movement and scrap handling

Support departments:

• IED (Industrial Engg Department)(This department is newly designated by the RITES clubbing PCO and other offices and made it primarily responsible for incentive calculation related work)

• Computer Section

• Quality Systems Division (Dealing with ISO 9000 work)

Non Incentive Departments:

The Non Incentive Departments are:

–Accounts department including the Time Office

–All the Ministerial staff including those working in the shops

–Personnel Branch

–Stores Department

–Basic Training Center

–Out Side Power Maintenance

The Production shops, support shops, and support departments are given different incentive earning factors.

B). It is a group based incentive scheme:

The incentive earned is dependent on the collective performance of the group in terms of

(i) The total clocked in man-hours. This takes care of the absenteeism within the group i.e., the number of employees absent in the group will affect the entire group’s incentive earning capacity.

(ii) Total out turn in eGSCN given by the group.

(iii) Quality of work performed without giving scope for en-route detachments, or sick markings within 100.

C). Equalising factor for various kinds of Coach works-Conversion in to eGSCN:

All the units turned out by the group (say a shop) are converted in to SPUs, (Standard Production Units) which are: equated GSCN with regard to coach related POH works, and ICF wheel set with regard to the turning of wheel sets for calculation of incentive on a equal footing.

RITES had provided with various conversion factors for various types of work( like RSP works, POH of MEMU etc) to convert in to eGSCN and authorized IED for any future requirements in fixing the conversion factors.

D) No Over Time:

•Overtime booking though allowed (under RITES study) acts adversely on group performance and also employee’s incentive earning. However the final scheme as approved by Railway Board does not provide for booking of over time.

E) Idle time:

Idle time can be booked only in the event of power failure for more than one hour (unlike the chittaranjan pattern).

•To assist in getting better attendance at work by group members a Group Attendance Factor is included in the scheme.

F) Indicators of quality performance:

This scheme takes in to consideration indicators of performance like

(i) Rectification man-hours (ii) time spent away from the work place (iii) quality factors (iv) En-route detachments (v) sick markings within 100 days after POH- while calculating the final incentive earned by the individual employee. These indicators will affect the incentive earning capacity of the employee.

Rectification man- hours: If a group is forced to spend more time than required to perform an activity because of the low quality work/ incomplete work of the earlier group, the additional time spent to rectify it, is called the rectification man hours and this factor acts negatively on the incentive earned by the earlier group and the individuals of that group.

G) QUALITY FACTORS:

These Quality factors are used in calculating the incentive earned by the supervisory staff, which makes them more responsible for the quality of work.

For Supervisory staff payment of incentive will be at a flat rate of 15% of their basic pay multiplied by quality factor Q as calculated below subjected to the condition that overall earning of the section supervised by them is 15% or more. In cases of sectional earning becoming less than 15% the actual average value of sectional incentive earning multiplied by quality factor Q shall be used for calculation of incentive earning for supervisory staff.

.

· Quality linkage factor Q=(Q1+Q2+ Q3)/3

· Q1 reflects the local passing in work shops (NTXR passing/rejections)

· Q2 reflects coaches marked within 100 days after the POH

· Q3 reflects en-route detachments.

· Q2, Q3 are 1 if the index is equal to /better than the global average/or previous year’s

095 (.9 for SE/SSE) if the index is equal to previous years’ or global average

it is 0.9(0.85 for supervisors) if it is worse than previous years or than the global average.

(H)No fresh recruitment of staff is proposed under this scheme.

I) Railway Board had provided for review of the scheme within a year and termination after five years followed by review.

VARIOUS PARAMETERS -THEIR EFFECT ON THE INCENTIVE EARNINGS.

Various parameters of this scheme can be grouped into two:

1. That are directly proportional to the incentive earned by the employee.

2. Those are inversely proportional to the incentive earned by the employee.

Parameters which keep a directly proportional relation to the incentive earned by the employee are:

–Total Clocked in man-hours of the group

–Total out turn achieved by the group in eGSCN,

–Number of working days in a month.

Inversely affecting parameters

i.e., if the value of these parameters increase the incentive earned by the employee will decrease.

• The rectification man-hours

• The coach holding factor. (should be > or = 1. If it is less than 1 it affects adversely on the incentive earned by the employee of that group).

•The time spent away from workshop by the employee.

•Number of men absent in the group in the month.

•Sick markings within 100 days of POH,

•En-route detachments

COMPARISON OF THE TWO SCHEMES:

THE CHITTARANJAN PATTERN

THE TIRUPATHI SCHEME

1.Introduced on workshops in 1958 2.It is individual based incentive scheme 3.The time saved by the worker in performing a work against the allowed time forms the basis for the incentive earned. The maximum time that can be saved to be eligible for incentive is 50% to the prescribed time for an activity. 4. Idle time can be booked on more than one reason like non availability of tools, machine break down, power cut etc 5.Over time is allowed 6.Quality factors are not taken into consideration 7.There is no penalising factors for the worker in earning the incentive for the poor quality of work, absence from the workplace, 8.There are no equalizing factors for different types of work.

1.Introduced on workshops in January 2002 2.It is group based incentive scheme. 3. It is directly linked to out turn of the group in eGSCN units, and the attendance factors. The maximum % of additional eGSCN coaches that can be turned out to be eligible for incentive earning is 50% 4.Idle time can booked only on account of power failure more than an hour.( In CRS it seldom happens as power cut is managed by generators. 5. There is no provision for over time in Tirupathi scheme as approved by the Railway board. (Even if Over Time is allowed as per RITES Study, it works against the incentive earning capacity of the worker) 6.Quality factors are taken into consideration and these if factors are adverse they act negative on the incentive earned by the worker. 7.The important feature of this scheme is that it takes into consideration of quality of work, the time spent away from the work place; the rectification man-hours etc and these can act against the amount of incentive earned by the worker. 8.All types of coachwork are converted into eGSCN in case of coach works and in case of the turning of wheels the common factor is ICF wheel sets.

THE WORKING OF THE SCHEME:

The theoretical aspects have been discussed regarding the scheme in the earlier paragraphs. The actual working details of the scheme will be discussed in the following paragraphs:

Prior to the introduction of the incentive scheme CRS had been turning out 40coaches(80 Four wheeler Units) per month on an average i.e., 480 coaches per year. This situation is termed as 100R condition in RITES Study.

The Rly Board approved incentive scheme is designed with an incentive earning of 20% i.e., 120R. With the existing staff strength of 1030 the number of eGSCN that are to be turned out to get 120R incentive is fixed at 50 equated GSCN coaches per month. If less than this target is achieved, it will not be eligible for incentive earning. However the upper ceiling limit of incentive as given in Para 4.02 of Mechanical Code is applicable. i.e., more than 150R incentive is not allowed. As per this, the maximum additional out turn in eGSCN eligible for incentive would be restricted to 50%.

As per RITES study, the Industrial Engineering Department (IED) is made responsible for the calculation of incentive and preparing the bill. While preparing the bill the IED is supplied with inputs from Time office like the total clocked in man –hours of the various groups, and the absentee statements. And IED collects details of various other data directly from the workshop like the rectification man – hours, the out turn. The bill prepared is sent to Accounts Department along with the relevant documents for vetting. The vetted bill is clubbed with the regular salary bill and payment is arranged after due internal check by the Accounts department.

CRS has performed to its optimum and the out turn has increased by 20 coaches per month on an average. Individual shops have achieved maximum out turn to the tune of around150R in terms of eGSCN. As a result the incentive payment was also at 150R.

The average incentive earned by workers of various scales:(In Rs, for Carriage Fitting shop for 3 months from Jan to March 2002 would give an idea of the amount of incentive payment to various grades of staff.

FINANCIAL OUTGO OF INCENTIVES FOR THE WORKSHOP-MONTHWISE (in Rs)

Month	Production Shops	Support Shops	Support Department	Supervisory Staff	Total	Outturn In Four wheeler Units (Not in SPUs)
Jan-02	13,18,831	4,75,352	16,307	27,331	18,37,821	114
Feb-02	15,65,030	2,81,359	13,808	29,541	18,89,738	116
Mar-02	13,35,216	2,58,822	9,831	30,346	16,34,215	116
Apr-02	13,09,826	2,53,727	9,825	31,962	16,05,340	130
May-02	10,67,766	2,00,861	8,032	28327	13,04,986	124
Jun-02	12,97,817	2,59,789	9,161	30150	15,96,917	120
July-02	1412762	269077	11940	31088	16,93,779	134
Aug-02	1441087	283519	11819	29850	17,66,275	136
Total	10748335	2282506	90723	208745	1,32,99,221

Note:

The incentive calculated is based on the eGSCN units (SPUs) turned out be individual groups. However the out turn shown in the last column is the total number of Four-wheeler Units dispatched by the workshop to the Traffic after the POH.

Prior to incentive scheme the average number of four-wheeler units turned out per month were 80. From January to March three months were trial period. During April there has been a slight enhancement of target by the RITES and hence the total incentive paid was reduced even the out turn was more compared to earlier three months.

And again during the months of May and June due to heavy summer the percentage of absenteeism has gone up. It was around 17% where as for other months it was around 12% explaining the lesser amount of incentive earned by the workshop employees though the out turn was matching compared to earlier months. Here we can clearly observe the role of negative factors determining the amount of incentive earned by the employee.

AN ANALYSIS AND CONCLUSION

This scheme will yield good results provided there is a strict monitoring form the administration. Various sub groups in the workshop have to work in tandem to achieve the additional out turn for the workshop. Other wise there is a possibility of the situation where in some groups in the workshop achieve additional outturn and hence additional incentive whereas some lag behind leading to no net additional out turn for entire workshop taken together.

It is required to maintain the additional feed constantly and continuously at an increased level. Form the point of view of the workers; they should not be deprived of incentive for want of additional feed to avoid inviting any labour problem.

There is a possibility of premature POH to keep up the additional feed to the incentive shops.

On completion of one year the scheme has to be analysed for the financial viability duly taking into consideration the following aspects:

The amount of additional out flow in terms of labour payment (incentive) and material, and the financial benefit to the Railways in terms of the additional out turn in return and at what cost.

Annexure follows: Formulae.

Formulae

Equation 1

Group Std. Monthly Target =

Annual Target in SPU

(No. of Working Days in a month)*( No.of working Days in a Year)

Equation 2

Std Man-hours for the group in the month =

0.875 * Strength @ 120 R * Working Hours in the month

Equation 3

Group Attendance Factor =

( Actual Clocked In Hours) 0.875* On Roll Strength * Working Hours in month

Equation 4

Available Man Hours =

Clocked in Man Hours

Less idle time man hours

less rectification man hours actually clocked in the month by own group on items for which other supplyin ggrouop agrees for rectification by own group

plus (3* rectification work man hours by other receiving group on items earlier dispatched by own supplying group to any other receiving group.)

Equation 5

Group Production Norm for the group in SPU for the month

=(Group Std. Monthly Target * Available Man Hours)

Std. Man Hours for the group in the month

Equation 6

Group Base Output of the group in SPU=

0.833 * Group Production Norm

Equation 7

Group Production Index =

(Group incentive eligible Dispatches) *( Group Holding Factor )* (Group Attendance Factor)/Group Base Output

Equation 8

Plant Production Index = P Xa/Xb+qYa/Yb+rZa+Zb+….

Xa Ya Za =

Group incentive eligible despattch in month for different incentive production groups

Xb Yb Zb =

corresponding group base out put for the month for different incentive production groups.

P q r = applicable weightage factors for individual production groups.

Applicable weightage factors =

(Allowed Time at 100 R per SPU) * ( Group standard monthly target in SPU)

Sum of( allowed Time* satandard monthly target)of All Shops

Equation 9

Gross Production Index =

(0.7 * Group production index) + (0.3 * Plant Production Index)

Equation 10

Individual Incentive Earned =

(GPI-1)

*( Incentive Earning Factor )

*( Actual Clocked in Hours of the Employee exluding time spent away from work place)

/ ( Total Working Hours of the Month).

INCENTIVE CALCULATION FOR SUPPORT SHOPS

Equation 11

Standard Man Power Ratio for Support Shops:

Arithmetic Sum of Authorised Strength of all Production Shops

Authorized Strength of Support Shops

Equation 12

Actual Man power ratio=

Actual overall Strength of all Production Shops

Actual On roll Strength of Support Shops

Equation 13

Support Shops Incentive Group Performance Efficiency=

Actual Man Power Ratio

Standard Man Power Ratio

Equation 14

Support Shops Incentive Linkage Factor= 0.8 (Constant)

Equation 15

Individual Support Shops Attendance Factor=

Actual Clocked In Hours

0.875 * Over all Strength * working Days * Working Hours

Equation 16

Weighted Performance Index=

Sum of (G.P.I. * Over all Strength + G.P.I * Over all Strength + .…………)

Sum of (Actual Over all Strength of Production Shops)

Equation 17

Incentive Earning by an employee=

(Weighted Performance Index –1) * 0.8* Support Shops Incentive Group Performance Effy * Individual support shop attendance Factor * Applicable Incentive Earning Factor * Clocked-in Hours by a member / Scheduled Working Hours.

Similar formulae are given for the calculation of incentive for the support departments with incentive linkage factor of 0.5.