Workshop on Incentive Scheme, held at IRIMEE/ Jamalpur from 17th to 19th April ’00.
Summary of the papers presented

1.Payment by Results – The Incentive Scheme as per the IR Code for Mechanical Department (Workshop): by  Hemant Kumar, Sr. Professor, IRIMEE, Jamalpur

• Synthetic time:

• Many workshops are following the timings circulated by CLW way back in early 1960s. Since the facilities may vary, blindly adopting the timings of CLW is not correct.
• Code is clear as to where synthetic times could be used (manipulation values, setting-up values, loading/unloading values, tool-changing values and preparational values)
• Synthetic times should be based on average of ‘observed times’ of the past, implying actual time-study.
• Synthetic time should not be confused with ‘computed time’, which depends on the metal removal required and the rate at which it can be performed on the machine used.

• Block Time: The code does not mention about block-time. However, block-time based on observed average of activities like POH, repairs, etc. can possibly be used. Ad-hoc time based on ‘judgement’ may not be appropriate.
• Idle-time: Para 424 provides for fixing ‘a minimum machine break-down resulting in booking of idle-time…’ which, when exceeded, should result in NIL incentive bonus to the maintenance gangs. However, no guidelines are available in the code as to what this percentage should be.

• Allowed time for similar activities across the workshops: The participants felt that there should be a standard allowed time for common activities that are performed by many workshops. This could act as a guideline, but some variation due to local conditions may be permitted within a short band. The ideal conditions for the ideal time may also be laid down for ascertaining if any variation may be allowed or not.

2. Auditing of Incentive Scheme – A study Report:by P. K. Mishra, Dy. CME, ER, Jamalpur

• Plus cards or Excess-Time cards:

• Plus cards issued on flimsy grounds, and not investigated.

• Now only PE approves. No Excess-time cards issued in 2-1/2 years

• Loss cards:

• Loss cards destroyed; out-turn taken in subsequent month, raising profit.

• Now only current cards are accepted.
• All cards punched off during the month are sent to accounts office for accountal and payment.
• Missing hours have been minimised as a result of the above actions.

• Idle-time:

• Idle-time cards were put up to AWM at the end of the month, not as and when arising.
• Idle-time cards were not having signatures of time-booth clerk.
• No record in the section was there on a daily basis

• Now record in the section is being kept for idle-cards daily, indicating time IN and time OUT, reason, description of job, etc.
• AWMs are now signing the Idle-time cards as and when they arise.

• Slack ATs:

• Many workers were observed to be idling frequently, at the same time adequate incentive profit earned, indicating slack in the Allowed Time.

• In 2-1/2 years 68 items have been studied and ATs revised. 115 627 man-hours saved per month, i.e. requirement of 500 DWs reduced for doing the same work.

• Disproportionate booking of EIW:

• Due to change/ reduction of the workload, less DWs were booked than the sanction, but corresponding reduction in EIWs not there.
• Machinists available were more than the machine-shifts available, and the surplus men booked as EIW.

• Now EIWs booking are made as per the original/ laid down ratio of DWs
• Surplus machinists have been trained in fitting job, and utilised in the sections where work was there.
• EIW booking reduced from 1929 two years back to 1363 now. Further reduction of 443 is on the anvil due to the new timings.

• Missing cards:

• Cards punched in a month were not being deposited 100%. Some retained for future.
• Piecework number was being given serial number every month. This was resulting in all losses being booked against the last few cards every month, and destroyed or retained. Casual check would indicate continuity, which will be misleading.

• Now cards are checked for continuity of piecework number, and all previous and current numbers accounted for.
• Numbering system has been changed to Annual system. The loss-cards cannot be hidden from month to month.

• Same out-turn reckoned by different sections:

• Credit of out-turn was taken by different sections for the same product, or by the same section more than once, as there was no cross-checking.

• Now material actually received in stores is taken as the physical out-turn of the shop and the incentive out-turn is synchronised with the physical out-turn.

• Ineffective time-booth staff:

• Job cards were not kept in the custody of the time booth clerk but left with the section-chargemen or even with the artisan staff.
• Time booth clerks were not posting tally-sheets on a daily basis with the help of GA cards, Job cards, etc.

• Counselling of time-booth clerks and surprise checks on the booths by the officers concerned have been started.

• Non-Stock Requisition (NSR) and Shop-on-shop (SOS) work-orders:

• NSR and SOS work-orders were placed with inflated requirement. While production was as per actual requirement, out-turn was claimed as per the work-order quantities.
• Several fictitious SOS work-orders were placed by shops for the repairs to be done by itself.

• Now NSR and SOS work-orders cannot be placed without the approval of the AIO or the PE.
• For easy monitoring, assisting shops have been given block-timings.

3. Sensitivity Analysis of Incentive Scheme: by Subrato Nath, Dy. CME, ER, Jamalpur

• A shop has four sections A, B, C and D
• Gate Attendance Hours (GAC) remain constant.
• Out-turn in physical terms remains the same.
• Allowed time is reduced by 12% and Incentive rate is increased by 4 times.

• Check the increase in incentive earnings and drop in incentive percentage
• Use the table to calculate ideal earning
• Check out if cyclic variation of gain/loss in incentive is there
• Check for sudden loss in certain sections
• Reduce the number of sections doing the same job within the same shop
• Fix sectional targets for such sections
• Tighten the Inspection staff

4. Management Response to Incentive Scheme: by Ashutosh Swami, Exec. Dir./ Workshop/ Railway Board

• Gradual erosion in working and effectiveness of PCO which in turn has affected the performance of incentive system.
• Compilation of vital incentive performance data not done completely. Data are not analysed at any level.
• PEs have been given all kinds of sundry jobs such as rolling stock movement inside the workshop.
• Staff inducted in PCO without formal training. No refresher course for updating the knowledge and proficiency.
• Supervisory staff not fully involved in the working of incentive system. Their interest limited to ensuring certain percentage of incentive earning only.

• SUPERVISORS

• Involve Sectional supervisor to monitor parameters such as actual output in man-hours and units against planned, load lifted per DW
• Actual booking of staff (DW, EIW) against sanctioned strength. Less booking of staff should be rare and done only on justified grounds, and that too with the approval of PE & Dy.CME.
• Reasons for high absenteeism of DW and EIW, particularly the ones who are habitual to be investigated and corrective measures taken. Absenteeism will come down if supervisors are asked to book all the DWs, as the section % is dependent on the number of DWs in the section.

• REVITALISED PCO FUNCTIONING

• Keep Master Planning card for all repair and manufacturing activities.
• Only printed job cards and computation-cum inspection sheets for squad working with proper serial no. to be used.
• Serial no. of all job cards accounted for payment in a month should tally with the serial no. given by time keeper office.
• Correlation between % incentive earning and amount of incentive paid.
• Section and shop-wise details of actual output in units and man-hours vis-à-vis planned workload. Analyse the reasons for shortfall.
• Details of section/shop where booking of staff is less than the sanctioned strength. Analyse reasons for such booking.

• PRO-ACTIVE FUNCTIONING OF PE

• PE should exclusively look after PCO jobs only.
• PE should monitor and analyse the following incentive performance parameters and initiate corrective action:

• Load lifted per direct worker (actual Vs. planned).
• Utilisation of machines (actual Vs. planned).
• Trend of AT per unit of equated out-turn for POH out-turn and out-turn of spares such as wheels, springs, brake block etc.
• Trend of shop and section-wise percentage incentive earning. Monthly fluctuation in earning from shop to shop and also sections of the same shop. If so, reasons thereof and corrective action taken.
• Analyse section/shop-wise absenteeism. Specifically where absenteeism is more than LR and unauthorised absenteeism is more than 2%.

• Analyse shop-wise and section-wise details of following exception statements:

• Extra Time or Plus Time Card (No. & quantum in man-hours).
• AT accounted for ‘Material Scrap’.

• OTHER IMPROVEMENTS

• Entire working of incentive scheme including generation of managerial information statement should be computerised.
• This will also facilitate quick detection of irregularities and timely corrective action.
• Computerise the Gate Attendance Recording System.
• Staff inducted in PCO organisation should be given mandatory training on incentive working.
• Refresher course should also be organised at regular intervals for staff, supervisors and officers looking after the incentive functions.
• PEs’ Conference should be organised at least once a year to share ideas, exchange data and other inputs useful for standardisation of norms.

5. Revision of Incentive Scheme in Liluah Workshop:by P. K. Saha, Dy.CME/ ER/ Liluah

The single most important effect of the new orders in Liluah Workshop has been complete elimination of incentive overtime. The various shortcomings noticed were as follows:

• Inoperative time recorder clocks.
• Non submission of completed job cards to the accounts department within 48 hours of completion of job cards.
• Submission of job cards in lots rather than in piecemeal manner.
• Rate fixers not carrying out intensive checks on shop floor to detect irregularities. Rate fixers not investigating the cases of abnormal profit or losses.
• Inspector not insisting on all production documents prior to certifying the completion of job.
• Tendency not to utilise the full strength of workers on incentive.

6. Malpractices Noticed in South Central Railway Workshops: by S. Vasudevaiah, PE/ SCR/ Lalaguda

• Process improvements not reflected in the job/ route-cards: The route being followed on the shop floor was different from the indicated one. The improvement in the process was not reflected in the master route-card.

• A check on the processes being followed resulted in downward revision of AT, and change incorporated in the master card. Raw material was also changed. The process-checks are continuing at LGDS.

• Additional and unnecessary operations included in the job: It was found that the die made for a forging item had excess machining allowance, and the shape provided for additional machining operation.

• Cross-checking with the machine shop resulted in the die getting modified, reducing the AT for machining operation.

• Skipping some operations on store-work-orders as well as repair work-orders: Operations indicated in the route-card were not being carried out fully, and inspection wing was colluding in passing the same and sending to the Stores. On repair orders, the actual repairs done were not as per the card. Full work required for ‘heavy’ work was not done and some operations were being skipped. Credit was being taken for the full scheduled work.

• Tightening the Inspection and taking up with the people involved has improved the matters.

• Discrepancies in issuing job-cards:

• It was noticed that the job-cards issued for some work were being used for some other work by making corrections in the descriptions/ AT, etc. by ink, without even the rate-fixer’s sign let alone being authorised by the PE.
• In some job-cards, multiple operations had been printed and the rate-fixers strike out those not applicable.

• Hand-written corrections are now not being allowed, and the job-cards with ‘multiple choice’ have been corrected.

• Abnormal profits: The code stipulates that abnormal profits should be investigated. While the statement of excess-earnings was being sent by accounts no action was being taken by planning department.

• Investigations have been started in cases of Excess-earnings.

7.  Revision of AT and Incentive Bonus Rate in Railway Workshops – Pitfalls and Suggestions: by R.         Nagarajan, PE/ SR/ Golden Rock

• Neutral CWSs may be asked to advise coach-wise rejections in writing. Presently they point out but the shops themselves note down the defects.
• 15% payment to SSEs should be linked to

1. Incentive earning of the shop
2. Industrial safety record
3. Cost-reduction measures taken
4. No. of days of attendance

• Impart training to Union-leaders in their role/ responsibilities.
• Multi-skilling at least from the next recruitment.
• Workshop modernisation/ expansion to synchronise with manpower planning.

8.  Functioning of Incentive Scheme in Kharagpur Workshop After September 1999: by Manish Kumar Gupta, PE/ SER/ Kharagpur

The main thrust of this presentation was the fact that in Kharagpur workshop, the documents pertaining to the incentive scheme have been computerised, and instead of Bradma printing, computer printing has been started. This has made possible the posting of out-turn in the Inspection sheets also through computer. Plans are afoot to extend the LAN to the shops so that challan, progress of work-order, gate-pass, etc. can be done through computers only.

He mentioned that in the Electrical shops the PCO was earlier not being allowed to function and no inspections, no time-studies were done. After Sept. 1999, it has been brought under PE; redundant activities have been deleted and time-study undertaken.

He mentioned that Kharagpur Workshop has started action on the concept of inter-shop tenders for the works that do not require special training/ skill. This would reduce the mismatch in the availability of workers.

He also feared that there might not be sufficient load for the entire workshop for people to be able to earn reasonable incentive.

9.  Implementation of Revised ATs in Matunga Workshop: by J. P. Vyas, PE/ CR/ Matunga

• Incentive sanction may be based on 3 months basis instead of three years at present
• Some external agency may carry out fresh work-study.
• With the 15% allowance to SSEs, there may be no SSEs willing to join group B services. Also with the discrepancy in the allowance between the shop SSEs and the PCO SSEs people would not come forward to join PCOs. This order, therefore, needs to be reviewed.

10.  Incentive – Western Railway Experience: by Ashutosh Gangal, DyCME/ WR/ Lower Parel

• Ad-hoc block timings have become common, inflating allowed time.
• Absence of any reliable benchmarks for comparison across workshops - inflated timings have become quite common in all workshops
• Time-studies have proved amenable to misuse and resulted in inflated timings
• No direct relationship of incentive with the physical out turn of coaches / wagons
• Gangs earn and lose incentive in a cycle.
• Transfer of work from one gang to another to optimise gain.
• No volunteers for PCOs due to lower wages result in posting of junior most staff.
• Lack of load for all the workers

• Permission for block timing should become more restrictive
• Benchmarking of timings for comparison across workshops - implement low times for each activity in all shops.
• Use of work sampling, synthetic timings & PMTS for calculating allowed times
• Treating plus times at par with idle time.
• Even if booked, the idle time should not be accounted for in incentive calculations
• Changes of machinery to compulsorily reflect in reduction in allowed timings
• Direct relationship of incentive with the physical out turn needs to be created
• Time lost should be carried forward for incentive calculations. This will prevent cyclical loss/ profit situations.
• Gang incentive or individual incentive earning should be multiplied with capacity utilisation factor to link incentive with physical output.
• Salary differential between PCO & shop floor should be narrowed down
• System of compulsory Cadre-review in workshops needs to be introduced.
• Annual review of shop manufactured items for economic-viability.

11. Implementation of new orders in ICF: by R. Ganesan, PE/ ICF

• Proceeding Time cards: The proceeding time cards were being manipulated, and were not linked properly later on.

• Now the life of PT cards has been fixed at a maximum of three months, after which they are converted into missing hours.

12.  Implementation of revised orders in Gorakhpur Workshop: by R K. Arora, PE/ NER/ Gorakhpur

The points brought out by the author were already covered in the other papers. The experience of Gorakhpur workshop was similar to others.

13.  CLW Incentive Scheme vs. Other Incentive Schemes: by S. Chak, CME/ ICF

• Manpower utilisation
• Absenteeism
• Average Load lifted per DW
• No. of employees paid incentive bonus and average incentive paid
• Sections earning > 45% incentive.

• The standard-hours calculations mention a factor of 208. This is based on 48-hour week. Even though some workshops may be working only 45 hours a week, yet they have to take 208 as the figure (as if they were working for 48 hours a week)
• The incentive staff calculations must be on the basis of 48-hour week.
• Leave reserve is only for Direct workers, and not for EIW.
• The sanctioned strength of EIWs and IWs must not be exceeded. If there are more people (surplus staff), they must be booked as DWs only.

 © Indian Railways Institute of Mechanical and Electrical Engineering, Jamalpur, India - 811214.

Concept & Design by Madhukar Dayal, Professor(IT), IRIMEE

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