1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156 
INCENTIV1 SCHEMES: WASTI OF TIME?
Page 72
Page 73
If you've noticed an error in this article please click here to report it so we can fix it.
by A SPEC", CORRESPONDENT
ARE incentive payments a waste of time? It is not a question to which an easy answer can be put. Conditions vary, reasons for wanting to encourage staff vary. In fact, it is far from untrue to remark that each undertaking that considers this question must do so solely on the basis of its own case, using to what effect it can the experience of undertakings that have instituted such schemes.
The bus industry is one to which incentives seem, prima facie, to be applicable but experience has proved this largely not to be the case. Those bonus paymeiits that are made. range from a very modest few shillings a quarter for merit or safe-driving up to full-scale weekly payments, generally geared to increased productivity. But many people ask: " How effective are these schemes in practice? "
Again, to answer this question, one must come back to individual cases, and individual cases are not easy to spotlight because, not unnaturally, many employers feel that anything they say might be used against them or other employers, by the unions.
It was against this background that I decided to try to obtain a cross-section of one sector of the bus world—the municipal operators. The National Joint Industrial Council for the Road Passenger Transport Industry is, of course, currently considering the whole matter of incentive payments. They met in mid-March and, although no statement was issued, it seems fairly obvious that they expressed at least general approval towards the wider adoption of bonus and other incentive schemes.
I asked the general managers if they operated any incentive or bonus schemes, and whether they would tell me something of the value to them of such schemes when compared to the cost. I received some illuminating replies!
Of the 95 undertakings contacted, 21 did not reply. To some extent I am sure this was because the N,J.I.C, discussions on bonus payments were then pending, and the general managers did not want to commit themselves. However, the other 74 did reply, making a response of approximately three-quarters of the total. Fifty-seven operators said they did not offer any form of bonus payment, but 17 said they did. In other words, some 25 per cent. Many of these 17, of course, offer payments which 1 am sure even they would agree are extremely small.
What interested me much more was what the 17 general managers said about their schemes. I think it is fair to say that only one overall theme ,emerged—that unless a bonus payment really represented something worth an employee's while to strive for, it was barely worth offering.
Several people mentioned that schemes introduced before 1950, and which were geared to small payments, seemed hardly worth while keeping going. This might point to a suggestion that any incentive scheme should be reviewed at intervals in the light of changing money values. It must surely by a very bad advertisement for a management to take away an incentive scheme once it has been started, other, perhaps, than when national wage agreements cover this point.
Another point worth. recording is that eight of the 57 general managers who said they did not offer incentive payments spontaneously remarked on their interest in the subject. One or two others said they were considering them. Some of those who did not reply have since disclosed the fact that they, too, are considering schemes.
The Sunderland undertaking had, of course, received D6
75 per Cent. Replied
N.J.I.C. approval some time ago, for payment of bonttses based on the total number of man-hours worked, compared with passenger carryings. The index for any threemonthly period is compared with the index for the basic year 1958-59.
There seemed, incidentally, no pattern as to how frequently payments should be made, so I can offer no constructive advice on this prickly problem. A fairly popular period seemed to be quarterly payments.
Typical of those general managers who said they did offer some sort of incentive payments was Mr. G. Armstrong, of Southampton. That undertaking pays traffic employees is. a week after 2 years' service, 2s. a week after 3 years, and 3s. a week after 5 years. Stripes, to be worn on uniform tunics, are additionally awarded in respect of each stage. They may be suspended or removed for disciplinary offences.
"We have recently considered a bonus scheme related to revenue and costs," he told me. " But because of the difficulty of finding a datum line we have found this to be impractical and the matter has been shelved for the time being."
A similar incentive scheme to the Southampton one is in being at Newport, Mon. Here, a quarterly bonus ranging from 15s, to £2 10s. is in operation. It is aggregated and paid annually on the following scale: Up to 3 years' service, 15s. a quarter; over 3 and up to 6 years, il; over 6 and up to 9 years, £.1 10s.; over 9 and up to 12 years, £2; over 12 years, £2 10s.
Each employee is allocated 10 points a quarter, forfeiture of all 10 entailing forfeiture of the bonus, too. Each quarter is adjudged separately. Points are deducted for eight offences such as absenteeism, failure to maintain schedules, missed fares, and constant shortages.
The Newport scheme began on October 1, 1950, and costs about £1,400 a year. Mr. R. A. Hawkins, the general manager, stated: "Personally I do not feel that this scheme is of any great value as an incentive."
What is wanted, he thinks, is a more substantial reward to those members of the staff who seldom lose any points, and whose standard of efficiency is always high.
It is, of course, to retain this nucleus of top-notch employees in the face of higher wages and shorter hours offered elsewhere, that brings many managements to the consideration of incentive payments. He commented: "To retain the better type, therefore, I consider that further incentive by way of a greater financial reward must come about in this undertaking, which in itself would prove less costly in the long run." The transport committee are, I believe, now considering. raising the level of payments.
Another general manager who does not think much of the merit type of bonus scheme is Mr. J. C. Wake, of St. Helens. That undertaking spends some £2,000 a year on such a plan. "Whilst the scheme was valuable when it
"No Great Value"
was first introduced, it does not appear to have retained its value to the present time," he said. St. Helens pays from Is, to 7s, a week, based on length of service from 5 to 14 years.
Three other general managers whose undertakings offer this system of merit payment all agreed it was too small to be effective. One remarked: "The greatest incentive for maintaining staff and recruiting new staff would be some improvement in the conditions of service, which would make the work more comparable with that in industry, generally. A problem which faces transport undertakings, however, is how to do this, and at the same time provide adequate services as and when the public require them."
Another said: "The decent employees will continue to try to fulfil their obligations and thus obtain the maximum merit pay, but I think that the majority of them would continue to do their best without the scheme."
These three general managers reported the cost of such schemes to be £1,200, £2,155 and £5,757 a year.
Several other municipal undertakings, as well as some of these I have already mentioned, pay small amounts to recipients of safe driving and conductors' merit awards in the two national competitions. These payments are even smaller in scope mid cost than the merit pay schemes.
OF TIME?
CORRESPONDENT
Some undertakings offer incentives on the engineering side as well as, or instead of, traffic staff schemes. These engineering incentive schemes stand a better chance of hitting the target as a rule, because they can be tied closely to a tangible production figure.
In fact, such incentive schemes do not need to cost anything to an undertaking. As one general manager told me: "A percentage of any increased productivity is paid, in addition to the weekly rate, the remainder accruing to the benefit of the undertaking. It could not, therefore, be truly said that the schemes, in effect, cost us anything."
The usual basis of such incentive schemes is an agreed standard time for a job at normal speeds, They offer, as a rule, a noticeable increase in take-home pay. As one manager said: " So far as the employees are concerned the main benefits we have found are a higher average weekly pay packet and a greater reluctance on the part of the employees participating to leave us."
A few of the municipal undertakings do pay large-scale bonuses. Among these are Glasgow, Edinburgh, Manchester, Coventry, Wolverhampton and West Bromwich— all areas, of course, of great competition for labour, Manchester, for instance, offers bonuses on both the traffic and the engineering sides. Those. on the engineering side are in the main overhauling works. They embrace nearly all craftsmen and a proportion of the labourers involved in the maintenance and repair of corporation vehicles.
Engineering Bonuses Too
There are two types of scheme, which vary a little in detail but are both based on the general principle that the
time saved is shared in agreed proportion between the men and the undertaking. These engineering bonus schemes are collective to trades. Times allowed for the work involved are determined by ratefixers. It is anticipated that during this year the maintenance work at operating garages will .be covered by a similar scheme.
Manchester also offers a scheme for drivers and conductors. Payments under this plan are based on the year 1955-56, and current results in terms of revenue collected over the tax year are offset against crew hours paid, Because passenger carryings have been falling off, the amount earned under this scheme is now very small. In addition, a good conduct bonus is paid solely to platform staff.
All Manchester's bonus payments are made on a weekly basis. This undertaking, incidentally, is running into opposition from other municipalities in its attempt to institute a £200,000 a year bonus scheme for platform staff, that would offer a really solid bonus.
The Glasgow general manager, Mr. E. R. L, Fitzpayne, remarked, some years ago now, that the unions were, of course, aware of incentive scheme developments and (on the engineering side) might well try to establish national ratings for particular jobs. If this were so, it should be strongly resisted because there were so many variable factors between individual undertakings.
Glasgow's Glasgow's present scheme was intro Present Plans duced in 1953, although a bonus scheme
was started some 40 years before that in the tram workshops. This scheme had the disadvantage of being too rigid and applied only to about a third of the workers employed in the shop.
Again, Glasgow's engineering bonus scheme is calculated by reference to the time saved against agreed standard times. The total of the hours saved is distributed according to each man's weekly attendance hours. It is claimed that bonus earnings of 33+ per cent, can comfortably be achieved. Mr. Fitzpayne emphasizes the importance of fully consulting the unions at every possible stage.
Some years ago now, Mr. R. I. Clarke, senior consultant to Production Engineering, Ltd., made a seven-point suggestion to Scottish busmen. This was: (1) to establish a standard revenue per route mile with machinery for periodic adjustment; (2) regular calculation of standard revenue for miles actually run; (3) comparison with actual revenue: (4) as an optional extra, establishment of depot standard hours for normal service, with weekly comparisonwith actual hours, multiplied by a standard labour rate to give "profit "; (5) payment into a pool, with individual shares on merit rating; (6) quarterly assessment of these merit points; and (7) weekly payment of the bonus.
Well, this survey has proved comprehensive, but not exhaustive. It has shown bonus schemes must be worth while to be of any real value as incentives. It has also. I think, shown that, if the cost could be recovered out of fares increases, quite a few undertakings would be interested in examining bonus schemes as a means of retaining staff and improving their productivity.
These points are proved, I feel, by the latest schemes to be announced. Derby, for instance, wants to pay 105, a week to every employee who completes his weekly allocated duties plus any contracted overtime. Blackpool wants to share profits above the first £5,000—a scheme that would pay each employee some £10 a year.
And they. I am sure, will be far from the last undertakings to tread the incentives path.