Incentive Scheme - Manufacturing Company - CiteHR
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i am working in manufacturing company as an hr. Kindly suggest me how to design a production based incentive scheme.
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Dear Mr.Varsha

For production based incentive scheme,first of all your company should have some standard production norms. It depend on the type of items you are manufacturing. Then the plant installed capacity and the utlised capacity is required. The incentive plan can be implemented. The present production vs installed capacity is one of the important criteria. The production can be increase only if the company is not yet been able to utilize its installed capacity. Otherwise when you go for increase in production the cost involved will be high compared to the actual return you can get.

The most common remunerations types are

2. PIECE RATE --- it can be straight piece rate, or with daily minimum and incentive for above the
daily minimum. In industries where the production is on total weight the minimum level will be fixed on that basis.
3. A combination of both the above is also used.
4. Bonus system

The implementation of the Schemes depends on the type of production carried out by the company and its profit margin, sales budget etc.

You need to do a lot of study with the help of your accounts team and then a proper negotiation with workers for the successful implemention of the scheme

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