Dinesh Divekar
Business Mentor, Consultant And Trainer
Management Consultancy

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Our company is a modular furniture manufacturing company. We want to pay incentives quarterly. We want to know how can we calculate incentive plan for worker as well as office staff. Is there any defined or authenticate based plan that how we can calculate incentive.
Can any body help us how to proceed in calculating the incentive.
Satish Pandey

Dear Satish,
You have not given sufficient information about the your query. We the members of this forum do not know what is the production capacity, how many labours are employed and how do you calculate the production, in how many shifts workers work in etc. Secondly, while designing the incentive schemes, quality of the finished product also matters. Therefore, give sufficient information first. You may give your present incentive structure as well.
In the meanwhile, you may go through the following link:
Types of Incentive Schemes: Individual and Group Incentive Scheme
Dinesh Divekar

There are no universal incentive schemes spread across many industries. The incentive plan has to be unit specific and it depends on multiple factors like production capacity, level of utilisation achieved, cash generated, rejection or rework quantum, no. of direct workmen involved, no. of indirect workmen involved (like maintenance, store, materials management, sales etc) and office staff etc. As regards incentive plan while the direct workmen will have payment linked to direct to their efficiency, the output of indirect as well as office staff may not be directly measurable and certain other index has to be used. So all these factors have to be studied in depth before any incentive is planned and you may need expert service of Industrial Engineering. From the HR point of view, the general idea is to share with employees the extra gains of additional production achieved as a result of implementation of incentive plan.
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