1. 2 GROUP INCENTIVE SCHEME AT RCF, KAPURTHALA zPART-I - HISTORY zPART-II - SALIENT FEATURES zPART-III - CONVERSION FACTOR CALCULATION zPART-IV - MANPOWER

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GROUP INCENTIVE SCHEME AT RCF, KAPURTHALA

PART-I - HISTORY PART-II - SALIENT FEATURES PART-III - CONVERSION FACTOR CALCULATION PART-IV - MANPOWER CALCULATION PART-V - INCENTIVE PERFORMANCE DURING 2005-06 & 2006-07 PART-VI - REDUCTION IN MANPOWER

DEPLOYED PER EQ. GS UNIT

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PART-I

HISTORY OF INCENTIVE SCHEME INVOGUE AT RCF

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HISTORY OF INCENTIVE SCHEME INVOGUE AT RCF

1. AWARDING OF CONTRACT TO RITES FOR FORMULATING INCENTIVE SCHEME

APR’92

2. SUBMISSION OF STUDY REPORT BY RITES AUG’93

3. INTERNAL EXAMINATION AND INTERACTION WITH RITES SEPT’93 TO NOV’94

4. SUBMISSION OF PROPOSAL TO RAILWAY BOARD NOV’94

5. SUBMISSION OF CORRECTED PROPOSAL TO RAILWAY BOARD

MAR’95

6. CLEARANCE RECEIVED FROM RAILWAY BOARD JULY’95

7. TRIAL RUN WITH PAYMENT AUG’95 TO NOV’95

8. ACTUAL IMPLEMENTATION OF INCENTIVE SCHEME DEC’95

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FIRST REVIEW OF INCENTIVE SCHEME

1. FIRST REVIEW BECAME DUE ON DEC’96

2. AWARDING OF CONTRACT TO RITES FOR REVIEW OF INCENTIVE SCHEME

MAY’97

3. STUDY FOR REVIEW BY RITES JUL’97 TO MAY’98

4. SUBMISSION OF REVISED STUDY REPORT BY RITES MAR’99

5. INTERNAL ANALYSIS BY RCF MANAGEMENT APR’99 TO MAY’99

6. DISCUSSION WITH STAFF COUNCIL JUN’99 TO AUG’99

7. RCF PROPOSAL SENT TO RAILWAY BOARD 21.08.99

8. BOARD’S APPROVAL OF REVISED SCHEME ALONGWITH REVISED CALCULATION FORMULAE

17.12.99

9. REVISED SCHEME IMPLEMENTED W.E.F. SEPT’99

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PART-II

SALIENT FEATURES

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GROUP INCENTIVE SCHEME AT RCF(SALIENT FEATURES)

PRODUCTION SHOPS HAVE BEEN DIVIDED INTO FIVE PRODUTCTION GROUPS:

GROUP-I - SMS, FSAS & ASSOCIATED PROGRESS GROUOP-II - SAS & ASSOCIATED PROGRESS GROUP-III - PAINT SHOP & ITS PROGRESS GROUP-IV - FURNISHING, CARPENTRY, FRP & FINISHING AND

ITS PROGRESS. GROUP-V - BOGIE SHOP AND ITS PROGRESS

THE INCENTIVE EARNING PRECENTAGE FOR EVERY ONE IN A PARTICULAR GROUP IS SAME.

INCENTIVE OUT TURN IS BASED ON THE FINAL OUTPUT IN COMPLETE COACH SETS FROM THAT GROUP IN THE CONCERNED MONTH.

OUTPUTS OF GROUPS ARE MEASURED IN EQ. GS UNITS COMPUTED BY USING THE CONVERSION FACTORS FOR DIFFERENT COACH TYPES.

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(CONVERSION FACTOR OF A COACH IN A GROUP = AUTHORIZED DIRECT MAN HRS FOR THAT COACH / AUTHORISED DIRECT MAN HRS FOR A GS COACH IN THAT GROUP)

THE SCHEME IS DESIGNED AT AN ASSUMED INCENTIVE PERFORMANCE OF 120R FOR STATISTICAL PURPOSES. ON THIS SCALE, 100R IS THE ZERO INCENTIVE LEVEL.

THE INCENTIVE EARNING CONSISTS OF TWO PORTIONS:-- BASED ON GROUP'S OWN PERFORMANCE, WHICH IS GIVEN 70% WEIGHTAGE.- BASED ON RCF'S OVERALL PERFORMANCE DEPENDING ON THE PHYSICAL DESPATCH OF COACHES, WHICH IS GIVEN 30% WEIGHTAGE.

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SUPPORT SHOPS COVERED UNDER INCENTIVE ARE :-a) TOOL ROOM b) MILL WRIGHTc) TRANSPORT SHOPd) MATERIAL HANDLING SECTIONe) ELECTRICAL & ELECTRONIC MAINTENANCE SECTIONS f) MACHINE SHOP

SUPPORT SHOPS EARN INCENTIVE EQUAL TO THE WEIGHTED AVERAGE OF THE INCENTIVE EARNINGS OF THE FIVE PROD. GROUPS.

SUPPORT DEPTS GIVEN BELOW ARE COVERED BY PCO ALLOWANCE, (15% OF BASIC PAY),a) PROCESS PLANNING b) MATERIAL PLANNING c) INDUSTRIAL ENGINEERING DEPT.d) INSPECTION & QUALITY CONTROL

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Quality of the product is ensured by individual groups through self-inspection & acceptance by receiving group apart from the inspection carried by QC.

Any item needing rectification is to be rectified by the concerned incentive prod. Group and rectification hours are added to their available man-hours. It lowers the incentive earning. Further, double the overtime is also added to available Man-hours with a similar effect to discourage the same. However there is no overtime booking in RCF.

No idle time booking is permitted except for power shut down exceeding 60 min. at a stretch.

Normal requirements for preventive maintenance and breakdown maintenance of M&P have been catered for in assessment of cycle time and auth. manpower.

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The actual clocked in duty time in the allocated work center of the individual worker only is counted towards calculating the individual's incentive earning. Any time spent away from RCF Shops by staff under incentive, whether on duty or other wise is not counted. The only exception is in case of TA camps, in which case the individual gets an amount based on that individual's rate of earning in the last twelve months, for the duration he was away.

The staff is given incentive based on clocked- in man hrs recorded through the computerized time attendance system. If clocked-in man hrs of an individual are equal to maximum possible attendance during the incentive period, he becomes entitled for payment of full incentive and as such the scheme encourages staff to improve their absenteeism performance.

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Payment of incentive amount is based on bonus factors for each grade. Bonus factors have been defined for each grade by Rly. Board and incentive payment made is a %age of the bonus factor and not the basic pay. The bonus factors incidentally are 30% more than the bottom of the scale of pay for each category.

The inclusion of SSE's & SE's in the incentive though recommended by RITES was not accepted by Railway Board, hence supervisors up-to the level of J.E.-I only are covered by the incentive scheme. The SSEs and SEs on the shop floor get a fixed 15% of the basic pay and those in PCO get a fixed 7.5% of basic pay.

The authorized manpower is calculated as follows. - Rites has given the manpower in each group for

making 1000 GS unit in one year.

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- The annual load for each group in GS units is calculated using the conversion factors. - The authorized manpower is then calculated for this load. - This manpower is at a rating of 120R and 16% absenteeism.

The Group Performance Efficiency (GPE) is calculated as follows.

Actual out-turn from the group in GSUs GPE = 1.2 x ------------------ --------------------------------- Target outturn of the group Where TARGET OUT TURN OF THE GROUP=

STANDARD OUTPUT OF GROUP ACTUAL MP --------------------------------------- X -------------- X W. D. OF MONTH AUTHORISED MP OF GROUP 25

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The RCF performance factor is calculated as follows.

CUMM. RCF ELIGIBLE INCENTIVE OUTPUT UPTO THE END OF INCENTIVE PERIOD

= 1.2 X--------------------------------------------------------------------------------------------------------- CUMM. RCF MANAGEMENT DECLARED TARGET OUTPUT UPTO END OF

INCENTIVE PERIOD IN EQ. GS UNITS

- The monthly target out turn from RCF =

Annual load Actual W. Days in the month Actual strength off all groups

in GSUs for x ----------------------------------- x ----------------------------------RCF as a whole 300 total auth.

strength of all production groups

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The incentive to be paid is calculated as below.- Incentive %age of the group =

[70 x (GPE-1) + 30 x (RCF.perf.fac.-1)] x A, where A=(GPE/1.2)2x(RCF perf.fac./1.2). `A’ can not have a

value<1. Incentive amount of an individual =

Employee's clocked in attendance hrs. Inc.%age x bonus factor x ---------------------------------------------- Hours in the month

The incentive of the support shops is calculated as below.

- Incentive % =

Weighted Avg. of Act. MP on roll (100-Act. Absenteeism) incentive earnings x ----------------- x ------------------------------ x [{(Annual prod plan load in five prod. groups Auth. MP 84 GSUs/1000–1) x 1/4} +

1]

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EXAMPLE FOR CONVERSION FACTOR

CALCULATIONGroup GS SCN DSLR RA VP VPU RA AC ACCN

I 1326.34 1337.23 1334.74 1529.98 1321.21 1321.21 1578.02 1866.69

C.F. 1.00 1.01 1.01 1.15 1.00 1.00 1.191 1.41

II 620.22 631.03 754.04 712.33 580.64 580.64 714.43 566.52

C.F. 1.00 1.02 1.22 1.15 0.94 0.94 1.15 0.91

III 246.48 250.30 252.48 242.66 230.38 216.13 242.66 254.13

C.F. 1.00 1.02 1.02 0.98 0.93 0.88 0.98 1.03

IV 1921.28 2218.93 1822.81 2997.78 1025.15 1025.15 4349.57 5158.77

C.F. 1.0 1.15 0.95 1.56 0.53 0.53 2.26 2.69

V 356.12 356.12 356.98 356.80 353.28 353.28 404.99 404.99

C.F. 1.00 1.00 1.00- 1.00 0.99 0.99 1.14 1.14

Total 4470.44 4793.61 4521.05 5839.55 3510.66 3496.41 7289.67 8251.10

C.F. 1.00 1.07 1.01 1.31 0.79 0.78 1.63 1.85

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EXAMPLE FOR MANPOWER CALCULATION

ANNUAL LOADCOACH TYPE

NO. CF1 CF2

CF3 CF4

CF5 CF EQ1 EQ2 EQ3 EQ4 EQ5 EQ

GS 307 1.00

1.00

1.00

1.00

1.00

1.00 307.0 307.0 307.0 307.0 307.0

307.0

DSLR 150 1.01

1.22

1.02

0.95

1.00

1.01 151.50 183.00 153.00

142.50

150.00

151.50

SCN 142 1.01

1.02

1.02

1.15

1.0 1.07 143.42 144.84 144.84

163.30

142.00

151.94

VPH 50 1.00

0.94

0.93

0.53

0.99

0.79 50.00 47.00 46.50 26.50 49.50 39.50

ACCN/S 300 1.41

0.91

1.03

2.69

1.14

1.85 423.0 273.0 309.0 807.0 342.0 555.00

MEMU/T

54 1.05

1.05

1.00

1.07

0.98

1.05 56.70 56.70 54.00 57.78 52.92 56.70

LHB FAC

2 2.0 1.26

1.90

3.91

2.38

2.74 12.00 7.56 11.40 23.46 14.28 5.48

TOTAL

1359

1693.57

1422.69 1521.74

2398.49

1640.21

1945.31

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MANPOWER CALCULATION FOR 1000 GS UNITS

PROD. GROUP

MANHRS FOR GS COACH

CATEGORY

MANPOWER FOR 1000 GS COACH

AS ON 01.04.05

AS ON 01.04.06

AS ON 01.04.05

REVISED ON 01.04.06

FIX VAR FIX VAR TOTAL

I

SUP 55 45 55 45 100

1326.34

1326.34

TECH. 57 514 57 514 571

UNSKD 49 72 49 72 121

TOTAL 161 631 161 631 792

II

SUP 21 17 21 17 38

621.22 620.22 TECH. 48 246 48 246 294

UNSKD 32 33 32 33 65

TOTAL 101 296 101 296 397

…..and so on for other groups

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MANPOWER CALCULATION FOR ANNUAL LOAD

PROD. GROUP

LOAD1359C/S

CATEGORY

MP 1000 GS

Notional variable (FIX*4/4.5 + VAR

New Manpower/ LOAD

MP for load >1500 GS

TOTAL MANPOWER

FIX VAR - C*L/1000 [A*(L/1500 - 1)*0.3]

-

L A B C M1 M2 M=M1+M2

I

SUP 55 45 94 159 1591693.57

TECH. 57 514 565 957 957

UNSKD 49 72 116 196 196

TOTAL 161 631 775 1312 1312

II

SUP 21 17 36 51 511422.69

TECH. 48 246 289 411 411

UNSKD 32 33 61 87 87

TOTAL 101 296 386 549 549

…..and so on for other groups

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MONTHWISE INCENTIVE PERFORMANCE (2005-2006)

MONTH I II III IV V

APR’05GPE 1.4317 1.1392 1.2100 1.0858 1.3764

RPF 1.5241 1.5241 1.5241 1.5241 1.5241

% INC 83.05 29.14 39.28 22.59 70.29

MAY’05GPE 1.2692 1.1988 1.0653 1.2694 1.3388

RPF 1.3569 1.3569 1.3569 1.3569 1.3569

% INC 37.38 27.79 15.28 37.41 48.46

JUNE’05GPE 1.1061 0.9631 1.0711 1.2875 1.0455

RPF 1.2199 1.2199 1.2199 1.2199 1.2199

% INC 14.03 6.60 11.58 31.28 9.79

JULY’05GPE 1.3218 1.2662 1.5246 1.5530 1.0439

RPF 1.3195 1.3195 1.3195 1.3195 1.3195

% INC 42.85 34.55 82.20 88.95 12.66

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MONTH I II III IV V

AUG’05GPE 1.3853 1.1833 1.5131 1.3327 1.2593

RPF 1.3211 1.3211 1.3211 1.3211 1.3211

% INC 53.70 24.04 79.73 44.70 33.68

SEPT’05

GPE 1.3696 1.2786 1.1979 1.5123 1.1945

RPF 1.3114 1.3114 1.3114 1.3114 1.3114

% INC 50.12 35.78 25.25 78.45 24.86

OCT’05GPE 1.4506 1.3002 1.2080 1.5098 1.2658

RPF 1.3024 1.3024 1.3024 1.3024 1.3024

% INC 64.41 38.33 25.99 76.90 33.42

NOV’05

GPE 1.4743 1.3253 1.4278 1.2498 1.3377

RPF 1.3467 1.3467 1.3467 1.3467 1.3467

% INC 73.85 45.40 64.11 33.95 47.47

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MONTH I II III IV V

DEC’05GPE 1.4715 1.3446 1.3925 1.2201 1.3722

RPF 1.3480 1.3480 1.3480 1.3480 1.3480

% INC 73.39 48.74 57.36 30.02 53.60

JAN’06GPE 1.4432 1.3472 1.4924 1.3091 1.3376

RPF 1.3155 1.3155 1.3155 1.3155 1.3155

% INC 64.20 46.66 74.50 40.59 45.09

FEB’06GPE 1.468 1.3521 1.3520 1.2437 1.3191

RPF 1.2978 1.2978 1.2978 1.2978 1.2978

% INC 67.54 46.11 46.08 30.19 40.86

MAR’06

GPE 1.4341 1.2422 1.2226 1.2895 1.3483

RPF 1.3782 1.3782 1.3782 1.3782 1.3782

% INC 68.47 34.83 32.11 41.93 51.86

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MONTH I II III IV V

APR’06GPE 1.2172 1.0538 0.9726 0.9411 0.9948

RPF 0.6280 0.6280 0.6280 0.6280 0.6280

% INC 15.20 3.77 0.00 0.00 0.00

MAY’06

GPE 1.2498 1.1712 1.4798 1.3015 1.2644

RPF 0.9708 0.9708 0.9708 0.9708 0.9708

% INC 17.49 11.98 41.32 21.11 18.51

JUNE’06

GPE 1.2916 1.2847 1.4380 1.3100 1.3026

RPF 1.2209 1.2209 1.2209 1.2209 1.2209

% INC 31.87 30.97 54.48 34.35 33.34

JULY’06

GPE 1.4392 1.3494 1.3969 1.2873 1.2139

RPF 1.2539 1.2539 1.2539 1.2539 1.2539

% INC 42.35 42.29 50.13 33.35 24.16

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REDUCTION IN MANPOWER DEPLOYED PER GS UNIT

YEAR COACH OUTTURN EQ. GS UNITS

NO.OF MEN ON ROLL (APR) PROD.+PLANT

NO. OF MEN ON ROLL PER GS UNIT

NON-AC

AC TOTAL

1995-96

540 150 690 876.80 4745 5.41

1996-97

746 174 920 1142.20 4606 4.03

1997-98

831 200 1031 1270.80 4557 3.59

1998-99

857 230 1087 1382.19 4525 3.27

1999-00

950 232 1182 1459.79 4490 3.08

2000-01

970 220 1190 1436.07 4453 3.10

2001-02

913 291 1204 1526.04 4419 2.90

2002-03

722 222 944 1171.74 4391 3.75

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REDUCTION IN MANPOWER DEPLOYED PER GS UNIT

YEAR COACH OUTTURN EQ. GS UNITS

NO.OF MEN ON ROLL (APR) PROD.+PLANT

NO. OF MEN ON ROLL PER GS UNIT

NON-AC

AC TOTAL

2003-04 953 248 1201 1516.68 4324 2.85

2004-05 879 322 1201 1602.04 4287 2.68

2005-06 923 340 1263 1657.53 4375 2.64

2006-07(APR-JULY)

319 93 412 510.85 4240 2.77

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Advantages of group incentive scheme over Chitranjan Scheme No concept of indirect worker in this incentive

scheme i.e. All workers are treated as direct & get 100% incentive.

Less paper work due to absence of individual job cards & Item wise rate fixing, resulting less administrative over heads

The sectional output is always geared towards increasing the overall, final output of the workshop. No imbalances in production of different sections/Shops.

More adaptable for Multi skilling. Greater flexibility for efficient utilization of

work force at different locations as per requirement.

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Advantages of group incentive scheme over Chitranjan Scheme

No upper limit of incentive earning.

Absenteeism % affects incentive earnings of each group, hence scheme discourages absenteeism.

Relaxation allowances are given based on ILO guidelines, which are more scientific.

All allowances like inspection, fatigue etc. are already included into the direct man-hours, based on the actual observations during the time of study.

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Documents

1. 2 GROUP INCENTIVE SCHEME AT RCF, KAPURTHALA zPART-I - HISTORY zPART-II - SALIENT FEATURES zPART-III - CONVERSION FACTOR CALCULATION zPART-IV - MANPOWER