For a production-based incentive scheme, first of all, your company should have some standard production norms. It depends on the type of items you are manufacturing. Then the plant's installed capacity and the utilized capacity are required. The incentive plan can be implemented. The present production versus installed capacity is one of the important criteria. The production can be increased only if the company has not yet been able to utilize its installed capacity. Otherwise, when you go for an increase in production, the cost involved will be high compared to the actual return you can get.
Most Common Remuneration Types
1. TIME RATE
2. PIECE RATE - It can be a straight piece rate or with a daily minimum and an incentive for above the daily minimum. In industries where production is based 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 proper negotiation with workers for the successful implementation of the scheme.
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VGKNAIRVKM