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Fleet maintenance incentives in the bus industry
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Page 85
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payment of 6d per hour was negotiated and agreed by the Prices and Incomes Board. (Skilled staff at the time earned about 8s per hour).
Co-operation
In response to an internal advertisement a number of Bristol's engineering staff joined the work study department. They were given a period of training and were soon actively involved under the supervision of experienced Work Study Engineers. At all stages the need to involve the staff being studied was stressed. Only a tiny proportion of employees refused to co-operate with the work study engineers. After attempts at persuasion by both company and trade union officials had failed it was necessary to threaten the withdrawal of their 6d per hour interim bonus. The malcontents left the company's employment.
A negotiating committee was set up to deal specifically with the productivity scheme and this resulted in a formal agreement between the company and the trade unions involved. Two full-time union officials, two conveners on the company's staff and three shop stewards comprised the union side of the negotiating committee. The two conveners were taken off shop floor work and devoted the whole of their time to what Mr Hawkins described as "communication, co-ordination and trouble shooting." All of this was done in close collaboration with the work study department and management generally. The personalities of the two conveners (conveners are chairmen of shop stewards' committees) played an important part in the success of the operation.
It had been the original intention of the consultants to carry out the bulk of the study work using a synthetic time allowance system known as MTM2. They explained that this system removed all doubts about rating of individuals and also would not involve the apparently emotive stop-watch. So the whole of the work study team received either full training or a refresher in MTM as appropriate, and were provided with pocket tape recorders for use in their studies. Work then began in earnest, commencing with the known regular jobs such as brake relines, chassis greasing, engine changes, etc. It was decided to concentrate in the first place on two particular shops in the Central Works, namely the fuel pump shop and the electricians' shop. From the depot aspect, although the times obtained would be common throughout the garages, the initial implementation was confined to one garage, which was within easy reach of head office, could be monitored closely. (A typical NBC subsidiary company could, like Eastern National, operate 540 buses from 16 depots with an engineering staff of some 400. The range of skilled tradesmen employed includes fitters, body makers, painters, electricians, trimmers, welders and panel beaters, plus semi-skilled men in some of these trades (plus unskilled staff carrying out cleaning and labouring duties).
The consultants suggested, and Bristol Omnibus agreed that a staff Attitude Survey would be useful in determining what the staff thought of the company and the proposed incentive scheme. Staff of all grades were interviewed in strict confidence by a specialist for the consultancy firm, and the results analysed.
Good image
The company learnt that many people worked for Bristol Omnibus simply because they felt "it was a good firm to work for". Most value was obviously attached to a happy working atmosphere within the shop or depot. The bonus groupings worked out were able to take this into account. Said Mr Hawkins: "A host of other facts also emerged and the survey was well worth while. It also emphasized to the staff the trouble to which we were going to include them and consider their views."
As the date for the pilot introduction became fairly predictable a series of management training courses lasting a week were arranged. These were designed to equip people for the greater responsibilities needed under incentive working and covered Work Planning, Study appreciation, and Industrial Relations, among other subjects. Another series of courses was put on for shop stewards "and to avoid any thought that we were trying to indoctrinate them we arranged that, whilst the company would pay for the courses, the programme and content was arranged entirely by the consultants and the trade unions."
During this time the work study department was producing sufficient "values" to institute the scheme in the selected departments. Each value was checked with the trade union representatives and any queries investigated until agreement was reached. The work values were calculated in standard hours. It was necessary to take account of work outside the normal scope, and for which there was no measured work value; waiting time on occasions when for various reasons there was no work available for the man and allowances for such things as tidying the work area, answering the phone, dealing with vehicle allocation matters, which often occur to early and late shift fitters at depots.
A further problem was that of the very short jobs such as changing a light• bulb, which were classified as minor jobs, and given an average value. Under the terms of the agreement the unmeasured work was credited to the output as clock hours taken, multiplied by 0.8. Waiting time was entered as clock hours times 0.65 and minor jobs were defined as all jobs taking under half-an-hour.
Mr Hawkins stressed that agreements varied between individual companies. Shift work duties varied a good deal. In some cases a fixed value of standard hours was credited to the group in respect of each full shift worked by a member, whilst in other cases, the value was incorporated in the total group credits as a fixed amount.
Throughout the period of information gathering and negotiations, regular meetings were held with the management and supervisory staff involved so that all concerned participated and were fully aware of progress.
Back to the stop-watch
Theory and practice are not always easily reconciled and I was not at all surprised to hear Mr Hawkins stress that the MTM system employed required a considerable amount of study time and calculation to produce each job value. Moreover, there were instances, such as fuel pump overhaul, where the accuracy of MTM was doubtful when considered against the practical knowledge of the length of time taken. Eventually — mark this — "both the work study department and the trade union conveners suggested a reversion to stop-watch technique and this was readily accepted by all concerned." When the scheme was finally ready for implementation, meetings were held between the company, trade union and all the staff at the pilot area concerned so that everyone was fully aware of the changes about to take place. Close supervision was kept on the operation of the scheme in these pilot runs and this contributed to the solution of many teething troubles quickly. An example of somewhat more difficult problems was credits for teaching apprentices, for here due regard must be paid both to the time spent teaching and also any work produced or "botched" — by the apprentice.
Stable earnings
The decision to introduce a group bonus, rather than one related to individual output, was decided upon for two main reasons. First, that the earnings would be more stable with a group bonus and, secondly, that this basis would encourage people to help one another with heavy jobs, often necessary in the bus industry. An additional benefit was that any lazy member of the team can be spurred on by the other members chasing the maximum bonus, though Mr Hawkins did not sound too confident that this theoretical advantage worked out in practice.
How is a group bonus worked out in the bus industry? Typically work is recorded by means of job cards, issued either on a daily basis to each individual, or for each job. At the end of the week the cards are analysed by a bonus clerk and the total number of standard hours output is calculated. Any appropriate allowances are added on and the total number of clock hours is used as a base to determine the group performance. The performance figure determines the percentage bonus to be paid and this is paid as a percentage of the base rate on each hour worked.
Theory and practice
Mr Hawkins then revealed yet another major discrepancy between theory and practice. Before the scheme was implemented, a draft establishment was presented to the company by the consultants, indicating that Bristol could manage with many less staff. (He did not, alas, reveal whether the trade unions were given this interesting information!) This was duly analysed from the company aspect and it was found that some of the savings could not be made due to the necessity to cover early and late shifts at some garages, and the minimum number of staff required for such a rota. "However, when the revised establishment had been agreed, at a level approximately 50 above the original proposal from the consultants, a detailed analysis was carried out of the wastage rates in each area, and the anticipated staff retirements in the future. Although wastage reduced with the introduction of the Bonus Scheme and the increased rates of pay, we were able to avoidmany redundancies by trying to plan in advance the staff levels, and the redundancies were confined mainly to small country garages where the staff movement rate was low."
When the scheme began Bristol found that some staff had very poor output figures. In many cases this could be solved by training, which took on new importance, and is now an automatic feature. (It hardly needs stressing, but effective training could have been undertaken without any productivity scheme at all!) In some instances staff were moved to jobs with which they could cope. This element of retraining and staff transfer is likely to arise whenever an incentive bonus scheme is introduced.
Benefit evaluation
Perhaps the most revealing element of Mr Hawkins' talk was his evaluation of the benefits. In NBC companies, upon full completion of the scheme, the wage costs were compared with those pertaining prior to its introduction. Actual savings were not easily calculated since in most cases shortage of staff before the introduction of productivity incentives meant that scheduled work load was not being achieved. "However, it is fair to say that in most companies the scheme had the effect of stabilizing costs for a period of between one and two years. Viewing this against the increase in output it is obvious that there were tangible benefits to the companies. The staff were also very happy with the increased wages."
With the benefit of hindsight, it is now clear that bus companies were hampered by the need to introduce schemes swiftly, hence method study took rather a back seat. "Given the opportunity to install a scheme with a less urgent time schedule, full attention to method study before the time values are calculated will more than repay itself, since the end result includes a complete overhaul of working methods. Leading on naturally from this, is the opportunity to agree standards and work specifications for the jobs with the Trade Unions, and the people involved. There is then less argument about whether somebody did or did not skimp a job or miss out a vital operation."
Another important lesson, in Mr Hawkins' view, is to keep the agreement with workers simple in all features. "Whilst it may be possible to achieve 100 per cent accuracy in a complicated scale of allowances, or credits for the particular activities, the accuracy of the basic scheme is unlikely to be greater than 95 per cent and consequently a little bit of give and take with the allowances can result in the ability to keep them simple, which is a vital feature if the operatives themselves are to understand the scheme."
Keeping managers in step
What other snags emerge? One is very obvious. The pay increases achieved by the hourly paid staff under an incentive scheme obviously upset the differentials with their supervisory and management staff. "These differentials should be maintained by appropriate regrading at the time the scheme is implemented and the cost of doing it borne in mind when assessing the overall savings. Whether the supervisory and management salaries are increased automatically or some kind of different incentive is added, is a different story, but the matter should be given serious thought." One by-product of incentive schemes in NBC corn panies is that cost centres for supervisors are now an accepted feature of management.
Despite, or perhaps because of, the present state of the economy, workers will strive to boost real earnings to match inflationary effects. Mr Hawkins concluded that even with close control — a necessary feature of any Work Study based scheme "a percentage creep in earnings will result, which means that eventually earnings will rise for the same given output. Where one goes with a second generation scheme can be a problem: the two main choices appear to be measured day work — in which case the pay is guaranteed but the output is not — or a trend towards part consolidation of the bonus payments into the basic earnings. With the present economic and industrial climate, a forecast is difficult. There seems little doubt. however, that the second generation schemes will involve some consolidation, and that eventually we shall revert to an incentive again for increased productivity."