SUGGESTION SCHEMES

Suggestion systems is one of the easiest ways to involve employees on an individual basis. An employees suggestion system is a management tool for the submission ,evaluation and implementation of an employees idea to save cost, increase quality or improve other elements of work such as safety. The ideas may be few like mentioned here .How can e reduce paperwork? How we reduce consumption of water,electricity,petrol,etc,items of regular use? How can we change material or process in better way.

Incentive plan
In any organization there are effort to increase production with or without increase in productivity. One of the ways is incentive system. Incentive programs are used in business to motivate employees .The main purpose is to increase production and compensate or recognize those employees who perform outstanding level of work. There are different plan of incentive system.

Type of Incentive Plans

There are several type of wage incentive schemes. Some of the well known schemes are: 1. Straight Piece rate plan- under this plan worker are paid according to the number of units produced. The wage paid vary in direct proportion to the output. Employee is paid at a given rate for each unit produced. 2. Straight piece rate with guaranteed base -this plan is essentially the same a the straight piece rate plan except that an hourly base rate is guaranteed to every worker irrespective of his performance.

If the worker does not produce the standard output the guaranteed wage is paid. 3.Standard Hours Plan- under this plan , a standard time is allowed to complete the task and the hourly rate is paid for the standard time if the worker completes the job in standard time or less. 4.The Halsey Plan- In this plan standard time is laid down for the completion of job. Base rate is guaranteed to very worker. A worker completing the job in more than the standard time is given the guaranteed minimum wage. If the job is completed in less than the standard time ,

The worker is paid time rate for the actual time taken .Standards are set on the basis of past production records. 5.The Rowan Plan In this plan also a standard time is allowed for the completion of a job and bonus is paid for any time saved. In this plan the bonus percentage is equal to the proportion of time saved to time allowed. 6.Taylors differential Piece rate plan This plan is developed by F.W. Taylor, the father of scientific management. Under it standard output is fixed through time study.

Two piece rates are laid down , a lower rate for performance up to standard and a higher rate for above standard performance. This shows that workers surpassing the standards can receive substantial bonus payments. The plan provides greater incentive for producing in excess of the standard. 7.Gantts task and bonus plan this plan is developed by Gantt and Taylor. Under it minimum time wage is guaranteed to every worker. Standard time is set through time study. Workers who finish the task in more than the standard time or in standard time are paid the time wages.

Those completing the task in less than the standard time are paid a piece rate which is higher than the hourly rate. A bonus of 20% of time wages is paid to those performing equal to the standard. 8.Rucker plan: this is basically a group incentive plan designed to encourage employee involvement in cost reduction. A productivity ratio is determined in terms of value added by manufacturer per unit of payroll cost. Value added by manufacture or production value is defined as sales revenue minus the costs of materials ,supplies and outside services used in the production and delivery of the output.

Payroll costs refers to all wages and compensations paid to the workers. when the productivity ratio goes down as a result of savings in the cost of labour, materials, supplies, etc. a bonus is paid to every worker in proportion to his earnings. 9. The Scanlon plan This is a companywide plan designed to foster labour-management cooperation. This measure is the ratio of labour cots to production value. The standard is laid down on the basis of past accounting records relating to overall company performance. A formula is evolved for paying bonus on the basis of savings in costs.

Total productivity maintenance is defined as a system of maintenance covering the entire life of the equipment in every division including planning, manufacturing and maintenance.TPM aims at increasing the productivity. Productivity f a plant depends upon effective and regular utilization of production facilities. Proper maintenance of plant an equipment helps to raise productivity by minimizing breakdowns and idle resources. Regular maintenance increases working life of machine an leads to greater utilization of plant.

Total Productivity Maintenance

Types of Maintenance
The various types of maintenance may be classified into the following categories: Breakdown maintenance - It refers to the repair work taken after the failure of a machine or equipment .Breakdown maintenance is corrective maintenance as it is undertaken to restore an equipment to an accepted standard.

Preventive Maintenance This is the maintenance work taken to prevent the failure of a machine or plant. It is done before the failure arises or prior to the equipment actually breaking down. Routine Maintenance This includes all undertaken to keep the production equipment in efficient condition .It may cover periodic inspection ,cleaning, repairing etc. Planned maintenance- Planned maintenance implies that maintenance work is planned in advance as against unplanned maintenance. It is organized and carried out in a systematic ,manner

Job Evaluation
Job evaluation is the process of determining systematically the comparative or relative worth of various jobs in an organisation. It is a formal plan for appraising the value or worth of a job in relation to other jobs in the organisation .Job evaluation assesses the worth of a job and not of the job holder.

Objectives : To decide the weightage/worth of the job To decide the relative pay scale or rate of pay for each job To provide a framework for periodic review.

Methods of Job Evaluation There are four methods of Job evaluation1) Ranking Method This is the simplest and oldest method of job evaluation. Under this method various jobs ranked in their order of relative difficulty in performance or importance. The result is list of jobs from most important to the least important. A relative rank is assigned to each job. This decides which job is more important or difficult and on this basis wages for the key jobs are determined.

2.Job classification Or Grading Method Under this method all the jobs are sorted out into classes or grades predetermined and arranged in order of importance. These classes or grades are established in advance by a committee of experts. Grades are defined keeping in mind various factors like skill, effort, responsibility ,working conditions ,etc. Procedure: 1.Grades are identified ,defined and put down in a structured manner . 2.All the jobs are described and specified first . 3.Jobs with similar content are grouped together. 4.The jobs are then fitted into the defined grades.

3.Factor Comparison Method Under this method, the worth of the job is determined in terms of various factors. This process establishes a rate of pay for each factor .Factors on which ranking is done are: Skill, physical effort ,mental requirements ,responsibility, working conditions. Hence the ranking itself directly determines the wage level. For eg.Cooks job wage rate is 25 money units it may be assigned as 5 for skill,2 for mental ability,8 for physical ability,3 for responsibility and 7 for working condition.

4.Point Method: under this method jobs are broken into component factors .Points or weights are assigned to each factor according to the degree of its importance .The total point value for a job indicates its relative worth.

Job Rotation
It involves rotation of workers into different jobs for a short period of time. It relieves boredom by providing flexibility in job assignments. This trains employees in a range of tasks and rotating them through different positions. Benefits : Employees learn new skills and face less boredom Greater variety and wide range of tasks. Innovative technique by enabling workers to apply knowledge of one task to others. Exposure to employees to other types of jobs.

LEARNING CURVE
In any organisation in the beginning ,the speed of work is slow but it picks up with the passage of time. But after a point ,the speed again slows down due to fatigue ,therefore productivity gains are harder with the passage of time .This relationship between experience and productivity is the effect of learning. If this relationship is plotted on a graph ,the resultant graph is popularly known as the Learning curve, or Experience Curve. Learning may be defined as the curve which shows fall in the average labour cost or rise in

the productivity by some percentage with increase in the experience of the operator. Learning may be defined as the technological changes that lower cost as a result of experience.

Learning Curve
Learning Curve
Hours Required to Produce the Most Recent Unit

Cumulative Production

21

Questions - 1
curve
Unit 1ST 2ND 4TH 8TH 16TH 32ND 1000 X .80 800 X .80 640 X .80 512 X .80 410 X .80 Man hours 1000 800 640 512 410 328

An 80% learning

Learning Curves

An 80% learning curve (cont.)

1000 1st unit

Man-hours per unit

800
600 400 200

2nd 4th 8th 16th 32nd

10

20

30

40

50

Cumulative units produced

Learning Curves

Q2.
Consider a product with the following data about the hours of labor required to produce a unit:

Hours required to produce

1-st unit:

100
48

Hours required to produce 10-th unit:

Hours required to produce 25-th unit:

Hours required to produce 75-th unit:

35
25

Hours required to produce 200-th unit:

As more and more units are produced, the hours of labor required to produce the most recent unit is lower and lower.

18

Graph for Example

Cumulative Production
1 10 25 75 200

Hours Required to Produce Most Recent Unit

100 48 35 25 18

Learning Curve
110 100 90 80 70 60 50 40 30 20 10 0
Hours Required to Produce Most Recent Unit

25

50

75

100

125

150

175

200

225

Cumulative Production

Example
Hours Required Cumulative to Produce Production Most Recent Unit
1 7 25 65 180 4000 2550 1850 1500 1170
Learning Curve Data
4500 4000 3500 3000 2500 2000 1500 1000 500 0
Hours Required to Produce the Most Recent Unit

50

100

150

200

Cumulative Production
27

Managerial use of Learning Curve The learning curve is an important technique of cost
reduction and it is widely used in modern industry for the following purposes; 1.Cost estimation /Pricing-it is a technique of cost projection .It forecasts direct labour hours for a predetermined number of units. It helps in negotiating prices. 2.Production-It forecasts the output. It forecast the time. It helps in making production decisions. 3.Financial planning- It offers a basis for comparing costs and prices and helps the finance function in estimating the necessary cash to finance the

4. Work Scheduling- learning curve influences the labour required, quantity produced and timing of deliveries. 5.Modernise or Replace decisions- Learning curve enables us to compare the productivity improvement throughout the process of production.

Limitations
The learning curve theory cannot deal with situation where1.The enterprise is rapidly growing in size. 2.Learning curve is a theoretical phenomenon and depends on many assumptions. 3.Changes are made in the normal size of the production run. 4.Assumptions on which learning curve is based do not hold good in all situations.

Work Measurement
Work measurement is the application of techniques designed to establish the time for a qualified worker to carry out specified jobs at a defined level of performance. Work measurement refers to the study of work content of a job . It seeks to provide a quantitative assessment of the human work in a specified job and to establish the proper time for the effective performance of that job.

Work measurement serves two purposes: 1.It helps reveal the excess work content in any operation . 2.It helps set standard times for carrying out the work. Techniques of work measurement are Time study Work sampling Structured estimation Predetermined time standards

Time Study
Time study is the most widely used work measurement technique. It is the process of observing and recording the time required to perform each detailed element of a work operation so as determine the reasonable time in which the work should be completed.

Time study Equipment1.The stop watch 2.The study Board 3.Time study forms Steps in making a Time Study o Select the job to be studied o Obtain and record all the information available about the job which is likely to affect the carrying out of the work. o Break the operation into elements. This makes the Time study more accurate because it helps identify and distinguish different types of elements .

Examine the detailed breakdown to ensure that the most effective method and motions are being used Measure with a timing device and record the time taken by the operative to perform each element of the operation. Extend the observed times to basic Times i.e. rating.

Method Study
Method study is the systematic recording and critical examination of ways of doing things in order to make improvements. It is the scientific technique of observing ,recording critically analyzing the operations performed and the movements involved in doing a job with the aim of making improvements therein. It is an organized and factual study of work processes and working conditions. The main concern of method analysis s to find out better waysof doing work.

Motion Study
Motion study is a systematic and critical analysis of the motions made by a man or machine in performing a job so as to eliminate in effective, wasteful and unwanted motions .Motions study is the science of eliminating wastefulness resulting from unnecessary and inefficient motions. Motion study helps to reduce time cost and industrial fatigue by 1.Eliminating unnecessary motions 2.Combining related motions 3.Simplifying complex motions

4.Improving the sequence of necessary motions etc. Motion study is a useful device for improving productivity of labour and equipment.

Lateral Thinking
Lateral thinking is defined as a thinking process in which we make deliberate attempts to generate new ideas by introducing a discontinuity in our thought process. Lateral thinking implies considering a problem from a fresh perspective , a point of view which is different from the norm. Principles of Lateral ThinkingThe principles can be clubbed under three headings.

1.Background the need for lateral thinking arises from the fact that dominance of any idea or concept generally suppresses other useful and efficient ideas . Thus dominance blocks the way to explore continuously more and more useful and efficient ideas stopping the progress. 2.Escape- This principle suggests recognition of the dominant idea and deliberate search for alternate ways of doing the things. 3.Provocation- This assumes that it may be necessary to be wrong at some stage in order to reach the final right solution. Therefore we use one idea to provoke or generate another set of ideas , rather than checking its individual correctness.

Split Brain Theory

This theory proposed by neurosurgeon Rober Sperry won him the Nobel prize in 1981.It says that our abilities ,skills and personality traits are strongly influenced by our habit of using one side of the brain more than the other. The two hemispheres of our brain have distinct thinking processes. Visualization , emotions ,intuitions and motor skills are housed in the right brain whereas logic and communication are functions of the left brain. Our genes and the way we have been brought up or trained often determines which hemisphere of our brain we prefer to use and that in turn determines the way we function.

And if we use the terms of the split brain theory ,we would say that in order to speak well ,we must use both sides of the brain ,the left brain skill to form thoughts into words and the right brain ability to give the speech an emotional touch ,thus making it more absorbing.