The Lallaguda Experience

1S. Vasudevaiah 1Research Scholar, Sr. Divisional Mechanical Engineer SC Railway 1 Rayalaseema University Kurnool, India

Abstract : This paper proposes to study the wage incentive scheme being implemented in the Carriage Repair Shop, Lallaguda of South Central Railway. It aims to suggest methods to improve the existing Payment By Results (PBR) scheme. Indian Railways is one of the largest rail networks in the world. A review of the functioning of Railway Repair Workshops revealed very poor standards of performance which could be improved by introducing incentive schemes that would control the activity in a better manner, more systematised flow of work and encourage increased effort by the individual worker. Hence, in 1958 the decision to introduce incentive schemes in the Railway Workshops was taken. Under PBR workers are classified as Direct, Essential Indirect and Indirect Workers. Basic wages are guaranteed to all workers; Time is the yardstick of measurement of work; various operations in the workshops are subjected to time study as per standard work measurement; the study revealed that employees on average received around 8 % of their pay as incentive bonus in a month and there was no underperformance or over performance. Hence, PBR is a very successful incentive scheme. In PBR there is no quality linkage factor, penalty for bad quality and for rework. Overall it can be said PBR is a liberal scheme and it is a boon to the employee. However this will be more successful and rewarding to the employee and to the organisation if certain changes like quality control factors, attendance and removal of ceiling limit on bonus are introduced in the scheme.

Index Terms - Compensation, Carriage Repair Workshop Lallaguda, Incentive Bonus, Payment by Results.

I. INTRODUCTION B.N. Armstrong1 felt the Just Price theory of reasonable wages and returns was as old as three hundred years B.C. when Plato and Aristotle opined a person is designed to occupy some position or other in his life like his parents. Therefore, the society owes him or her enough compensation to maintain the same position at the time of his birth. For thousands of years compensation to workers was relatively simple. The working hours of artisans and farm hands were determined by duration of day light and changes in climate and weather. Even the rest days were set apart through holidays and weekly day offs. Under pressure from the rich and noblemen this theory again became prominent in the middle ages as the Catholic church propounded a just wage structure to skilled artisans who were in short supply. The church thus recognised right of the artisan for more pay and placed them in a higher social group. In the sixteenth century there was decline in the cost of food and shelter which led to a decline in the standard of hiring of workers in England. In the seventeenth century because of the predominance of cottage industries, the labour activities moved to workers’ homes. The industrialists who were buying the output from the workers were paying less in the absence of bargaining mechanism on behalf of the workers. The last half of the eighteenth century ushered in Industrial revolution. Masses of people got their livelihood through industrial advancement. But within a hundred years, the condition of workers had “sweated”, employing low wages, excess hours of work and living in unsanitary conditions, mentioned B.N Armstrong2. By nineteenth century efforts were underway in the industrialized countries and the U.S. to regulate hours of work and improve working conditions. However, after the growth of trade unionism the bargaining power of the workers gained momentum and a discernible change in the outlook of the industrialists led to an understanding of the need to compensate the worker adequately. Industries started compensating the workers for contributing to increased productivity. There is now increasing realization that every organization must offer adequate remuneration to its employees to motivate and induce them to give their best for greater productivity. If the workers are not adequately compensated it would result in migration of the competent and the talented. Therefore, compensation of the workers has acquired strategic proportions in the contemporary knowledge based world. Employees or workers are creators and drivers of value and are no more factors of production. As such compensation management has acquired importance these days in management studies.

II. REVIEW OF LITERATURE Properly formulated and implemented incentive programmes can lead to an entirely different way of employee behaviour than wages and salaries. To have motivational value, incentives should have components that recognize employee contributions beyond the call of normal duty assignments. Such contributions demand additional inputs of intellectual, emotional and physical efforts from the employees. Incentives are individual, team, and situation driven apart from organization and market driven. Incentives are variable costs, they are not fixed. They stimulate increased intellectual, emotional and physical efforts. They lead to improved individual and team performance which in turn increases work and the organization productivity. Productivity improvement will offer increased and improved output, reduced costs and higher profits3. Incentive plans can be broadly classified into three categories: i. Individual incentive plans, ii. Group incentive plans, and iii. Company – work incentive plans. These are mostly short term incentive plans.

*The author would like to express his thanks to his research supervisor Prof S.Sreenivasa Murthy, Dean, Institute of Public Enterprise for his preparation of the paper

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Individual incentive plans, also called Payment by Results (PBR), are most appropriate under three conditions. First, employee performance can be measured objectively; second, when employees have enough control over work outcome, they are successful; third, they are appropriate if they do not create unhealthy competition among employees leading to poor quality of output. Even if standards are set those employees who meet or exceed the standards set by the employer may be subject to intimidation by workers whose work falls below the standard and unions may use the intimidation tactics to prevent rising plan standards4. There are four common types of individual incentive plans: Piecework, Management, Behavioural encouragement and Referral. Companies generally use one or two piece work plans5 based on individual hourly production, and plan with individual performance standards with objective and subjective criteria. Economists argue that companies using piece work plans will derive two advantages of incentive effect and sorting effect6. The incentive effect refers to a workers’ willingness to work diligently to produce more quantity of output than just attending the work without putting effort. The sorting effect refers to the employee’s choice to leave their employer for another job presumably for one without incentive. Most basic distinctions among PBR plans are the measure of pay calculations. Mostly it is a straight forward measure of the quantity of output, the number, weight or volume of the produce. These are called in general piece work which carry rewards based on price per unit of production. However Marriott after detailed study concluded “there is no reliable way of measuring the effectiveness of incentive payment systems and published experimental evidence in their favour is meager and rarely conclusive. It is however supported by case and comparative studies, which though not always free from defects reinforce the large body of opinion that human beings, given the right conditions are stimulated to produce more if pecuniary inducement is directly linked to the effort they make”7

III. INDIAN RAILWAYS AND INCENTIVE PLANS While there are several variations in PBR plans, this article attempts to throw light on Piecework incentive plan with particular reference to its implementation in Lallaguda Railway Workshop of South Central Railway (SCR), Secunderabad. The Indian Railways is one of the largest rail networks in the world. In its more than 150 years of history, Indian Railways is a state owned public utility of the Government of India. For millions of Indians railways is a cheap and affordable means of transport. As bulk freight carrier Indian Railways transports minerals, industrial products, food grains etc., at a cost effective manner, unmatched by many other modes of transport. During 2015-16 the Indian Railways carried 2.22 crore passengers and 30.3 lakh tons of freight which speaks volumes of its popularity and efficiency. To handle transport of this magnitude, require a large fleet of locomotives and wagons. As on 31st March 2017 the Railways, locomotive fleet consisted of 39 steam, 6023 diesel and 5399 electric. These locomotives haul 64,223 passenger coaches and 2,77,987 freight wagons8. Maintaining this huge fleet of locos and wagons call for an efficient maintenance system to attend to servicing, break downs and repairs. Each railway zone has on average two workshops to maintain and repair the railway coaches apart from one or two workshops to maintain and repair locomotives. Since much of the railway revenue depends on the maintenance of its around 64,223 coaches, these workshops have to function on almost 24x7 basis. For faster maintenance and repair works according to standards incentive schemes are being implemented to motivate the workers. This article examines the functioning of the Payment by Results (PBR) incentive scheme in the Lallaguda workshop of South Central Railway.

3.1 Carriage workshop, Lallaguda The Carriage Workshop of SCR located at Lallaguda, Secunderabad was established in 1893 as the Locomotive, Carriage and Wagon Workshop of the Nizam State Railway (NSR). The Government of Hyderabad took over direct control of the Railways in 1930 and renamed it as the Nizam Guaranteed State Railways (NGSR). The oldest surviving example of modern Industrial Architecture in the twin cities of Hyderabad and Secunderabad is the Lallaguda Workshop. It signalled the beginning of major industry in the state of Hyderabad. When the South Central Railway was carved out on 2nd October 1966, the Lallaguda Workshop became a major workshop of the zone. It continued to be a composite workshop for Metre Gauge/Broad Gauge (MG/BG) rolling stock till 1973. As a result of phasing out of steam locos, the Workshop took up Periodical overhaul (POH) of all types of BG coaches and hence rechristened as Carriage Workshop in 1997.

3.2 Present Activities of the Workshop Winner of the prestigious Heritage Award of INTACH (Indian National Trust for Art and Cultural Heritage) the Workshop carries out Periodical overhaul (POH) of Broad Gauge (BG) coaches; Schedules of Link Hoffman Bosch (LHB) coaches; POH of Diesel Electric Multiple coaches; POH of LHB coaches and Intermediate overhauling of Bogies. Manufacturing of all types of locomotive filters; Supply of wheel sets to divisions; Calibration of Instruments; Chemical and Metallurgical testing/analysis of components; Training of Artisan staff covering – a) Refresher courses to Artisan Staff, b) Imparting training to Apprentices engaged against Apprentice Act, 1961, and c) Skill development programmes.

IV. SIGNIFICANCE OF THE STUDY So far studies on Payment by Results (PBR) incentive scheme were few and far between. A few studies might have been conducted and those were predominantly in the United Kingdom and that too on health sector. It is not known whether studies on PBR in the productive sector were carried out in India since there were no publications including online. Therefore, it can be reasonably concluded that this study on PBR in the Indian Railways is first of its kind in India particularly in the Indian Railways. Improvement of productivity in Indian Railway Workshops is as old as pre-independence days. It needs no emphasis that increased productivity leads to better manpower, plant, machinery and workshop utilization. Before independence piece work bonus incentive systems were implemented in Workshops like Jamalpur, Kancharapara and Perambur. However, each system

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© 2018 IJRAR August 2018, Volume 5, Issue 3 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138) varied from the other in several ways. After independence, the Railway Board had decided to introduce some incentive system that would reward workers who outperformed the minimum level with direct financial assistance. Thus the first financial incentive system was introduced in December 1954 in Chittaranjan Locomotive Workshop. This successful scheme was based on time and the standards were fixed after systematic work measurement. It was extended to the Integral Coach Factory in 1960. A review of the functioning of Railway Repair Workshops revealed very poor standards of performance which could be improved by introducing incentive scheme that would control the activity in a better manner, more systematized flow of work and encourage increased effort by the individual worker. Hence, in 1958 the decision to introduce incentive schemes in the Railway Workshops was taken. However, only after establishing Production Control Organization in all workshops, the incentive scheme was introduced in 1960 in all the individual Railway Workshops. This incentive scheme called System of “Payment by Results” (PBR) was first introduced in Railway Repair Workshops of the Mechanical Department. It was later extended to Signal and Telecommunication Workshops, Civil Engineering Workshops and Electrical sections attached to Mechanical Workshops. While the PBR is being implemented in several workshops including the age old Lallaguda carriage workshop so far no in- depth study has been carried out on the implementation of the scheme. Though PBR in Lallaguda is nearly seven decades old it is worthwhile to study the benefits to the workers as well as to the South Central Railways. With this idea this study is taken up with an intention to find out to what extent the employees are receiving bonus in return for the extra effort they are putting in and also how far the South Central Railway is benefitted by way of increased productivity.

V. OBJECTIVE AND HYPOTHESES This paper aims to study the wage incentive scheme being implemented in the Carriage Repair shop, Lallaguda of the South Central Railway. It aims to suggest methods to improve the existing PBR scheme. Hypotheses: It is said incentive programmes can be to a better way of moulding employee behaviour than wages and salaries. According to Marriott, “There is a large body of opinion that human beings, given the right conditions are stimulated to produce more if pecuniary inducement is directly linked the effort they make”9. It is worthwhile to examine Marriott’s opinion from the point of PBR in Carriage Workshop, Lallaguda.

VI. RESEARCH METHODOLOGY This study used primary and secondary data for assessing the impact of PBR on the employees of Lallaguda workshop. The primary data comprises of actual verification of the work done by the employees of Lallaguda Carriage workshop and interviews with a cross section of the beneficiaries. The secondary data is obtained by way of available literature on Indian Railways and Lallaguda workshop and also literature on compensation management.

6.1 Salient features of PBR in the Indian Railways 10 Following are the important features of the PBR incentive bonus scheme: 1. The incentive workers are classified as: i) Direct Workers: Their work can be assessed through time studies; ii) Essential Indirect Workers: They contribute to the work. While their services are essential it is not possible to assess their work and iii) Indirect workers: They do not contribute to production either directly or indirectly. They do not earn incentive bonus; 2. Basic wages are guaranteed to all workers; 3. Time is the yardstick of measurement of work; Various operations in the workshops are subjected to time study as per standard work measurement; 1 4. The time standards will be so fixed methods that an average worker will earn 33 /3 percent extra wages apart from his normal wages for the time spent on to the job; 5. The basic premise of the scheme is an average worker while working without any incentive will be working at a rating of 1 60 units; the same worker would improve his rating to 80 units, i.e. 33 /3 percent more if he works under an incentive scheme. An average worker would take only ¾th of the allowed time to complete an operation; the time saved or gained by each worker is calculated separately for each of them. 6. The saved or gained time cannot be carried over; and there is a ceiling limit on project which is 50 percent of the time taken for each operation.

6.2 Time Study Under the system time standards are fixed for each operation through time study. It is a technique of fixing time necessary to carry out an activity at a defined standard of performance. The work should be simplified before taking up time study. Time study is a detailed record of all elements of work both effective and idle machine times. The effective time is taken up for rating. Each operation is broken into elements that form basic parts of the motion. It may comprise of one or more motions combined in a sequence. The movements are called elements both constant and variable. Constant elements have a standard time allowance for similar set conditions. Variable elements have different timings which allow for variation of work as required. Time studies are taken separately to allow for definite data for the performance of the elements. Wasteful motions and time consumed for them do not count. Elements should have clearly defined break points. After proper study actual time of each element is normalised depending upon the rating performed by the worker.

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6.3 Rating

It is the skill and speed of the worker. The principle is that an average worker without any incentive bonus working at a particular speed and a particular effort earns his normal basic pay. Working at such level he is said to be working at 60 rating. In other words he has produced 60 units of work per hour. The same average worker when he works under incentive bonus scheme 1 will produce an additional 20 units and improves his rating to 80, which is 33 /3 per cent more than the normal. Other workers also can be rated by comparing the performance of each with the normal average worker. Different operative workers attending the same job are studied and the results are recorded and finally the supervisor fixes the rate of each worker in the department.

6.4 Normalised time The actual time of all elements of the work cycle should be converted to the average workers rating under incentive system that is 80 rating, through the following formula.

퐴푐푡푢푎푙 푡𝑖푚푒 ×푂푏푠푒푟푣푒푑 푅푎푡𝑖푛푔 푁표푟푚푎푙푖푠푒푑 푡푖푚푒 = (5.1) 80(푡ℎ푒 𝑖푛푐푒푛푡푦𝑖푣푒 푟푎푡𝑖푛푔 표푓 푎푣푒푟푎푔푒 푤표푟푘푒푟

6.5 Additional allowances Four more allowances given that have to be added to normalised time on a cumulative basis are (a) general handling and 1 contingencies at 12%, (b) ganging on machinery at 5%, (c) Fatigue at 20%, and (d) production bonus at 33 /3%.

6.6 Allowed Time This is the total of normalised time plus the above additional allowances is the allowed time. The worker has to complete an operation within the allowed time to earn bonus. It is estimated that the average worker will complete an operation within 75 per 1 cent of the allowed time and earn 33 /3 per cent bonus. Supposing the normalised time of all elements of a particular job is one hour, adding additional allowances like fatigue at 20%, contingency at 12%, Bonus at 331/3 % and gauging at 5% (only on machining jobs). Hence, time allowed for this job is, without gauging = 1.87 hrs, and with gauging =1.96 hrs. Now 75% of the allowed time of 1.96 hrs. = 1.46 hrs. Time saved = 1.96 – 1.46 = 1 0.50 hrs. Time saved is equivalent to 33 /3 per cent of time taken. This proves that the average worker will complete the job in 75 1 per cent of allowed time and will earn 33 /3 per cent incentive bonus.

6.7 Proportionate time Proportionate time is added per batch of worker. It is the time taken for a worker to start the job for which he collects tools, raw material and necessary instructions.

6.8 Guaranteed basic wages Without relevance to the incentive bonus, the normal wages are guaranteed. Losses within a month are adjustable against profits earned within the month which means that either the losses or the profits cannot be carried over to the subsequent months. The ceiling limit on profits is 50 percent of time taken. When majority of workers consistently make profits above 50 per cent the reasons will be enquired into and the causes will be analysed. If improved tools or other timing devices are installed the allowed times will be revised.

6.9 Incentive bonus scheme to direct workers essential indirect workers and Supervisors Direct workers who contribute to the production directly will get bonus of 100%. Indirect workers are entitled for 80 % of the bonus of direct workers. Similarly supervisors up to the level of Chargeman (Junior Engineer) are also entitled for the incentive bonus scheme at 80% of the average profits of Direct workers.

6.10 PBR Incentive calculation of CRW Lallaguda for May 2018 Lallaguda CRW is implementing the PBR incentive plan as per the guidelines and broad principles laid down by the Railway Board. As an example one sub shop, the namely corrosion shop is taken up here for the study. During May 2018 an amount of Rs 854574 was paid as incentive bonus to corrosion shop employees. The calculation of incentive bonus designation wise during the month is given in table hereunder.

Table – 5.1: Employee category wise total and average incentive bonus earned during May 2018 Total Incentive AVG. Incentive of Sl. No. Designation of employee No. of Employees earned Employee 1 SSE 13 39591 3045.46 2 JE 7 22271 3181.57 3 Sr. Technician 71 289516 4077.69 4 Technician - I 58 203080 3501.38 5 Technician - II 25 115762 4630.48 6 Technician - III 49 135129 2757.73

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7 Helper 26 49225 1893.27 6.11 Real example of beneficiaries of Corrosion Shop. Here are the real examples of the following beneficiaries of PBR who received incentive bonus ranging from Rs 2700 to Rs 4000. 1. Mr. Chandra Kumar, Sr Technician, 2. Mr Ramulu, Technician Gr I, 3. Mr K.Kaleswar, Technician Gr II, 4. Mr HariRam Meena, Technician Gr III.

6.11.1 Real Example 1: Mr. Chandra Kumar, Sr. Technician was included in four job cards i. e. job card nos. 68, 71, 139 and 143 during the period of 16th April to 15th May 2018. a) In job card no. 68 for the period 16th April to 19th April he attended to the job of fitting in coach no. 00277 (CN). There are a total of 18 employees in this job card. The total allowed time for the completion of this work was 815 hrs and 37 minutes. The total time taken by all 18 employees for completion of the work was 548 hrs. In this job card Mr. Chandra Kumar has taken 35 hrs. Therefore, the incentive received by Mr. Chandra Kumar in this job card is calculated as follows.

Total time Saved = Total Time allowed – Total Time Taken = 815 Hrs 37 min – 548 Hrs = 267 Hrs 37 min i.e. 267.617 Hrs

Total time saved ×Individual time taken Incentive Received = × Rate incentive received (5.2) Total time taken

267.617 ×35 = × 49.65 = Rs 848.63/- 545

b) In job card no. 71 for the period 20th April to 22nd April he attended to the work of fitting and welding in coach no. 00001 (FAC). This job card was having total of 25 employees. The total allowed time for the completion of this work was 635 hrs and 49 minutes. The total time taken by all 25 employees for completion of the work was 427 hrs. In this job card Mr. Chandra Kumar has worked for 13 hrs. Therefore, the incentive received by Mr. Chandra Kumar in this job card is calculated as follows. Total time Saved = Total Time allowed – Total Time Taken = 635 Hrs 49 min – 427 Hrs = 208 Hrs 49 min i.e. 208.817 Hrs

Total time saved ×Individual time taken Incentive Received = × Rate incentive received Total time taken

208.817 ×13 = × 49.65 = Rs 315.64/- 427

c) In job card no. 139 for the period 8th May to 10th May he was allotted the work of fitting and welding in coach no. 10208 (CN). There are a total of thirteen employees on this job. The total allowed time for the completion of this work was 706 hrs and 06 minutes. The total time taken by all 13 employees for completion of the work was 474 hrs. In this job card Mr. Chandra Kumar has worked for 26 hrs and 15 minutes. Therefore, the incentive received by Mr. Chandra Kumar in this job card is calculated as follows. Total time Saved = Total Time allowed – Total Time Taken = 706 Hrs 06 min – 474 Hrs = 232 Hrs 06 min i.e. 232.1 Hrs

Total time saved ×Individual time taken Incentive Received = × Rate incentive received Total time taken

232.1 ×26.25 = × 49.65 474

= 12.8536 x 49.65 = Rs. 638.18/-

d) In job card no. 143 for the period 11th May to 15th May he discharged the work of fitting and welding in coach no. 10440 (GS). This job card was having total of 17 employees. The total allowed time for the completion of this work was 450 hrs and 24 minutes. The total time taken by all 17 employees for completion of the work was 303 hrs. In this job card Mr. Chandra Kumar has worked for 30 hrs and 30 minutes. Therefore, the incentive received by Mr. Chandra Kumar in this job card is calculated as follows. Total time Saved = Total Time allowed – Total Time Taken

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= 450 Hrs 24 min – 303 Hrs = 147 Hrs 24 min i.e. 147.4 Hrs

Total time saved ×Individual time taken Incentive Received = × Rate incentive received Total time taken

147.4 ×30.50 = × 49.65 303

= 14.8373 x 49.65 = Rs. 736.67/-

For the period of 16th April to 15th May, Mr. Chandra Kumar was booked in four job cards and he worked for a total 104 Hrs and 45 minutes. The total time saved by him for the above mentioned period was 51.1406 Hrs and for this he was paid Rs. 2,539/- as an incentive.

6.11.2 Real Example 2: Mr. Ramulu, Technician Gr- I was included in 5 job cards i. e. job card no. 68, 71, 135,140 and 143 during the period of 16th April to 15th May and earned various bonus amounts, as mentioned in the following table, calculated as in the case of Mr.Chander kumar referred in example above. In a similar way Mr. Ramulu earned various amounts on remaining four job cards various amounts as mentioned in the following table: 5.2

Table – 5.2: Time saved and incentive bonus earned by Mr. Ramulu during May 2018

Sl. No. Job card no Time saved in Hours Bonus earned 1 68 267.617 Rs 740.09 2 71 208.817 Rs 460.55 3 135 682.8 Rs 1759.07 4 140 175 Rs 1112.14 5 143 147.4 Rs 368.62

So for the period of 16th April to 15th May, Mr. Ramulu was booked in five job cards and he worked for total 209 Hrs and 30 minutes. The total time saved by him for the above mentioned period was 102.55 Hrs and for this he had been payed Rs. 4,441/- as incentive.

6.11.3 Real Example 3: Mr. K. Kaleshwar, Technician – II was included in four job cards i. e. job card nos. 70, 137, 141 and 144 during the period of 16th April to 15th May, amounts, as mentioned in the following table, calculated as in the case of Mr.Chander kumar referred in example above. In a similar way Mr. Kaleswar earned various amounts on remaining four job cards various amounts as mentioned in the following table:

Table – 5.3: Time saved and incentive bonus earned by Mr. Kaleswar during May 2018

Sl. No. Job card no Time saved in Hours Bonus earned 1 70 166.267 903.71 2 137 186.35 1982.92 3 141 204.983 737.51 4 144 33.117 325.73

So for the period of 16th April to 15th May, Mr. K. Kaleshwar was booked in four job cards and he worked for total 209 Hrs and 30 minutes. The total time saved by him for the above mentioned period was 102.59 Hrs and for this he had been payed Rs. 3950/- as incentive.

6.11.4 Real Example 4: Mr. Hari Ram Meena, Technician – III was included in five job cards i. e. job card nos. 66, 71, 73,139 and 142 during the period of 16th April to 15th May, he earned various bonus amounts, as mentioned in the following table, calculated as in the case of Mr.Chander kumar referred in example above.

Table – 5.4: Time saved and incentive bonus earned by Mr. Hari Ram Meena during May 2018

Sl. No. Job card no Time saved in Hours Bonus earned 1 66 22.317 276.39 2 71 208.817 204.71 3 73 116.083 1028.70

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4 139 232.1 894.78 5 142 175.867 482.45 So for the period of 16th April to 15th May, Mr. Hari Ram Meena was booked in 5 job cards and he worked for total 183 Hrs and 15 minutes. The total time saved by him for the above mentioned period was 89.64Hrs and for this he had been paid Rs. 2,887/- as incentive.

VII. RESULT AND DISCUSSION The following table provides the amount of incentive received by all the employees of Carriage Repair workshop, Lallaguda during the month of May 2018.

Table – 7.1: Incentive bonus received by all shops of Lallaguda during May 2018

Bonus Earned I t e m During May 2018 1. Incentive Earning (%) 48.68 2. Incentive Earning Amount (in Rs.) 5640238.00 3.Staff Booking

3.1.Direct Workers (DW) (i.e., DW – 1234+LR 102) 1336 3.2.Essentially Indirect Workers (EIW) 493 4.TOTAL (3.1+3.2) 1829 5.Absenteeism percentage 41.24 6.Load lifted per DW 499.00 7.Total Available Gate Attendance (GA) Hours 416202.75 8. Time Allowed (hrs) 345821.62 9. Time Taken (hrs) 232601.75 10. Time Saved (hrs) (8-9) 113219.87 11. Load Lifted (Hours) 345821.62 Incentive Shop (Production/Repair)

12.Production Shop Total Available Man hours 174591.00 13.Service Shop Total Available 69952.25 14.Total Available Man Hours Incentive Shops (12+13) 244543.25 15.Average Net Time Saved per Direct Worker 84.75 16.Money value of Total Time Saved at Average Hourly Rate of each category 27586862.90 17.Total amount of Incentive Bonus earned ( As per Bill) 5640238.00 18.Net saving in cost of Labour as a result of Incentive Scheme (16-17) 21946624.90 19.Average amount of Incentive earned by Direct Worker 4570.70 20.Direct Man Hours (Actual) 244543.25

퐴푙푙표푤푒푑 푡𝑖푚푒 표푛 푤표푟푘 표푟푑푒푟 Load lifted per Direct Worker = (퐺퐴 푐푎푟푑 퐻표푢푟푠−퐷푖푟푒푐푡 푀푎푛 퐻표푢푟푠) (7.1) 퐷푊+퐿푅− 267 345821.62 = (416202.75−244543.25) 1234+102− 267 = 499 Hours Average percentage of Incentive earned = Time saved / Time Taken (7.2) = 113219.87/232601.75 = 48.68 % 푇표푡푎푙 푎푚표푢푛푡 표푓 퐼푛푐푒푛푡𝑖푣푒 퐵표푛푢푠 푒푎푟푛푒푑 Average Amount of Incentive earned by Direct worker = (7.3) 퐷𝑖푟푒푐푡 푊표푟푘푒푟푠 5640238.00 = = 푅푠. 4570.70/- 1234

The table above shows that the employees on an average earned 48.68% as incentive bonus during May 2018. On average a Direct Worker earned Rs.4570.70 which is nearly 8% of his take home salary. This is the main motivational factor for the

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© 2018 IJRAR August 2018, Volume 5, Issue 3 www.ijrar.org (E-ISSN 2348-1269, P- ISSN 2349-5138) employee to attend to his job with dedication and punctuality. However the beneficiaries mentioned in the examples above were of the opinion that the ceiling limit of 50% is dampening their spirits with regard to the PBR plan. They opine that the output will be more and the commitment will be increased if the ceiling limit is removed. Asked about the absence of quality linkage in PBR they felt overdose of supervision is an assurance to maintain quality in their work. They also felt the excessive paper work is a hampering matter in the PBR as the time needed to fill several papers can be devoted to their work. For the Railways the net saving and cost of labour as a result of PBR incentive scheme is 2.19 Crores which is on an average the salary of 566 additional employees. The time saved is a blessing for the Railways because the coaches will be repaired in time and kept at the disposal of the traffic division. However, the percentage of absenteeism at 41 is a matter of concern because out of the total 1800 it comes to over 700 absentees in the month. This is because there is no penalization provision in the PBR plan. To ensure better attendance and better turn over it will be useful to include a discouraging penalty with the cooperation of the employees. The cycle time indicates the number of days taken for repairing a coach in the workshop. From the year 2006 there has been a downward trend in the days taken for repair of a coach. For example it took 19.21 days in the year 2006 to repair a coach while in the year 2017 it took only 8.72 days which is less than half of 2006. This means the availability of coach is more to the railways that would contribute to increased revenue. Similarly manpower ratio per coach per year which was 1.8773 in 2012 has come down to 1.3200. This indicates that during the last five years the number of employees to repair a coach has come down. So also there is an increase in trend in the percentage of incentive earned. In the year 2010 while it was 38.865 percent it is 48.123 in 2017. This was because the load lifted has increased from 3937107 hours in 2010 to 4265600 in 2017.

VIII. FINDINGS AND RECOMMENDATIONS 1. PBR is a very successful incentive scheme under implementation in the Indian Railways. The employees prefer to avail the benefits of individual incentive scheme because that would fetch them reward in terms of money. Further since the incentive is paid on monthly basis it would encourage their monthly earnings and to keep their income at a steady level. 2. There is no quality linkage factor in this scheme. Since the employee is more interested in finishing his job and save time to earn incentive his emphasis will be more on completing his job without paying much attention to the quality aspect. Therefore, the supervisors have to verify the quality of the work turned out by the employee. This means the PBR plan needs more supervision over the worker. 3. There should be penalisation for bad quality and for rework. This would force the employee to improve the quality of his work and reduce rework. 4. Inordinate delays in carriage repairs exceeding 60 days should be discouraged. Since there is no penalization for inordinate delays there is laxity in attending to some carriages which require much labour and work. Therefore, when a carriage is held up for longer days there should be penalization. 5. Documentation work is aplenty in the implementation of the scheme. Considering its liberal approach, it may be needed but over dose of documentation should be restricted. 6. Training which an important component in skill up-gradation is is not getting encouragement, because an employee deputed for training has to forego bonus. There should be motivation as well as mandatory rules to upgrade the skills of the employees through training. IX. CONCLUSION It is said incentive programmes can be a better way of moulding employee behaviour than wages and salaries. According to Marriott, “There is a large body of opinion that human beings, given the right conditions are stimulated to produce more if pecuniary inducement is directly linked to the effort they make”. This opinion was proved after examining PBR implementation in Carriage Workshop, Lallaguda. Further, it can be said PBR is a liberal scheme and it is a boon to the employee. However, it will be more successful and rewarding to the employee and to the organisation if certain changes like quality control factors, attendance and removal of ceiling limit on bonus are introduced in the scheme.

REFERENCES

[1] Armstrong, Barbara Nachtrieb. Ensuring Essentials. Macmillan, New York, 1932 [2] ibid. [3] Henderson, Richard I. Compensation Management in a Knowledge World. 10 edition. Pearson. Dorling Kindersley (India) Pvt. Ltd., 2013 [4] Dulles, F.R. & Dubofsky, M. Labour in America: A History (4th ed). IL: Harlan Davidson, Arlington Heights, 1984 [5] Peck. Variable Pay. [6] Lazear, E.P. Personnel Economics for Managers. John Wiley & Sons, New York, 1998. [7] Marriott, R. Incentive payment systems: A review of research and opinion. 35th revised edition staple press, London, 1968. [8] Indian Railways Statistical Publications 2016-17 Ministry of Railways, Railway Board, New Delhi. [9] Marriott: 1968 [10] Ministry of Railways. Indian Railway Code for the Mechanical Department (Workshops). Railway Board, New Delhi, 1991.

IJRAR1903245 International Journal of Research and Analytical Reviews (IJRAR) www.ijrar.org 917