Piece-and-salary payment increases employee motivation

Our civilization is called a "consumer society", and if there is a buyer on one side of the scale, then the seller is on the other. In a situation where the market for goods and services is full, as we can see today, for the business owner, the main issue is not "how to produce" but "how to sell." Of course, advertising and various marketing tricks help in this, but much depends on the correct motivation of the seller.

Soviet past

Once the sellers received a fixed salary, and everyone was happy with it. But this kind of calculation is effective only in the situation when there is a certain deficit on the market, and buyers simply do not have a choice. Now at every step we see shops whose shelves are bursting with goods, and numerous firms providing any, even the most exotic services, so the seller must be competent and active, so that the buyer does not go to the neighbors. Of course, it is also necessary to train staff and create a positive reputation for the employer, but motivation is the first place. Therefore, to replace the Soviet fixed rates came piecework wages, in which the staff receives as much as they really earned.

Interest from sales

So, the development of the economy requires new approaches to the calculation of wages. Let's figure out what pay is a piece-progressive. Piece - means, the payment depends on the "transaction", that is, on the volume of sale or production. Progressive - the higher the revenue, the higher the payment for each unit. Let's look at an example.

Piece-rate work:

Say, the seller of clothes receives 10% of the proceeds. Then:

- Sales of 300 thousand rubles. = 30 thousand salary.

- Sales of 500 thousand rubles. = 50 thousand salary.

Piece-progressive pay: the percentage of payroll increases with revenue growth. For example, for an additional 100 thousand, 5% is added, 200 thousand over the norm - 6%, etc.:

- Sales of 300 thousand rubles. = 30 thousand salary.

- Sales of 500 thousand rubles. = 62 thousand rubles.

We complicate the problem

There is also a more complex (and interesting) piece-progressive form of payment. At the same time, the increased interest is calculated not only from additional revenue, but also from the main one. That is: let's take the same 10% rate and a 2%, 3%, 4% bonus, etc., for every following additional 100,000, but this extra charge will already work for the entire amount:

- Sales of 300 thousand rubles. = 30 thousand salary (10%).

- Sales of 400 thousand rubles. = 48 thousand salary (12% of the total amount).

- Sales of 500 thousand rubles. = 65 thousand salary (13% of the total amount);

Of course, it will not be easy to calculate the piece-progressive pay at a large enterprise, and this is the main reason why such a scheme is used mainly in the sales of goods and services. A little later we will consider a formula that can be used in a manufacturing enterprise.

Why this is necessary

It would seem that the usual piece-rate payment works well too. So what is the best piece-work payment ? Of course, motivation! If the employer pays a fixed rate, the risk is high that the employee will not try hard: he knows for sure that he will receive the same amount in any case. With a simple piece-rate salary, there is already a motivation, but numerous observations of personnel in different spheres have shown that many workers set a bar for themselves ("Well, for 30 thousand I have worked, you can relax"). But the piecework and progressive pay always motivates to work more and more, because after applying the same efforts, you can get not 50 but 60 thousand. Especially if the option is used, when the growing coefficient is applied to all revenue (or development), and not only to the amount above the norm. In this case, it is felt that, without making an additional output, the employee seems to lose part of the salary that he could get.

Underwater rocks

Despite the fact that the piecework and progressive pay system has proved itself well, it is not used so often. The main reason for this is the reluctance of many leaders to change something. It is really not that simple to introduce a new system, for this we need to perform a number of actions:

1. Monitor the enterprise to make sure that the stop in development is due to the lack of motivation of employees.
2. Calculate the raising coefficients so that they are sufficiently noticeable for workers and at the same time do not exceed the allowable consumption rates for the employer.
3. Explain to employees a new payment system, show its goals and benefits.
4. Make sure that the accounting department knows how to calculate the piece-progressive pay.

The first two points are very important, since a situation is possible where the problems lie not in the absence of motivation, but in the unprofessionalism of sellers or the shortcomings of products / services. In addition, sometimes it is easier and more useful to hire an additional employee, instead of raising wages to everyone. New staff often becomes a good motivation in itself, as competition increases (and there are also suspicions that dismissals are coming).

Applications

Above, we considered examples of using a piece-progressive salary only in sales. This is not accidental, since in other spheres of the economy this kind of calculation is more difficult to apply for several reasons:

1. Significant increase in the volume of settlements: if in sales today, managers most often fill in preliminary calculations themselves, and departments, as a rule, have a relatively small number, then in the accounting department is compelled to calculate wages for a large number of employees.
2. The volume of production depends on the capabilities of the equipment, the supply of raw materials and the time required to produce a unit of production.
3. Risk of increased marriage.
4. The risk that the employee will be idle due to breakdowns or other circumstances beyond his control and will not be able to work out an increased rate.
5. With the growth of production, variable costs also increase.

Nevertheless, pay for piecework and progressive is used both in manufacturing enterprises and in agriculture, although often not quite in the same form as in sales, and not so often.

Types of calculation

Pay for piecework and progressive can have several forms that are used to simplify calculations or reduce risks:

1. Premium: for additional generation or revenue, the employee receives a premium, the size of which is higher the higher the excess of the norm. This method is simpler, since the amount of the premium is clearly prescribed in the documents in advance and does not require additional calculations.
2. Piece-time: used in those industries where the risk of downtime is high. Here, the salary is conditionally divided into three parts: basic piecework + progressive (subject to exceeding the norm) + time-based payment for those periods when the employee was unable to perform his duties for reasons beyond his control.
3. Indirect: an excellent option for calculating the wages of workers in support departments (for example, a repair team) or management. Their payments will depend directly on the amounts that will be accrued to the main production. Thus, repairmen will be interested in that the breakdowns were as small as possible.
4. Lumpy: applies to teams that perform one-time work: the construction or harvesting. If the work is completed before the deadline or in excess, the employer issues a premium for the whole team, and then this bonus is distributed among the employees, depending on the contribution of each of them.

Exact calculation

Since in each case different principles can be applied for calculating the piece-progressive pay, the calculation formula will also be different each time. In large industries, where such an indicator as the norm-clock is introduced, the following formula is often used:

Zn (total) = 3n (cd) + (3p (cd) x (Pf-Pn) x K) / фφ, where:

- ZP (total) - the final salary;

- ЗП (сд) - payment on the basic quotation for all output;

- Pf - actual production;

- Пб - normative production;

- K is the progressive coefficient.

Approval in documents

In general, the piece-progressive payment assumes payment, the growth of which directly depends on exceeding the established rate of efficiency, but the norm, like the form of calculation, can be different. Therefore, each enterprise makes its own decision on the principles of charging payments, raising coefficients, premiums and so on. If you decide to introduce a piece-progressive salary, then you need:

1. Develop a whole system of norms.
2. Detailed description of the accrual system in the Regulations on labor remuneration and in labor agreements with employees.
3. Provide a working environment in which the staff will not be idle for their own fault.
4. Establish a quality control system to ensure that in the pursuit of the number did not increase the percentage of marriage or sellers did not start to use incorrect methods of sales.

To enter or not to enter

Piece-progressive payment is recognized by modern economists as one of the best systems, because, on the one hand, it allows more equitable distribution of the salary fund, on the other hand it serves as a simple but very effective motivation.

Of course, this form of calculation has its drawbacks: complexity in accounting, the risk of aggressive behavior of employees or loss of quality, as well as an increase in salary costs, but with a competent approach, all this pays off. A good option is to use two systems at the same time: a piece-progressive payment along with premiums for high product quality or courteous customer service. For large enterprises, indirect calculation may be particularly interesting, when the salary of auxiliary units depends on the development of the main departments, this helps to get rid of problems with supply or long repairs.

The main thing is to remember that the profit of an enterprise depends on many parameters. And before entering the piece-progressive payment, make sure that all other problems at the enterprise are solved.