DRAFTING AN INCENTIVE SCHEME :

Drafting a scheme of payment by results must proceed on the following lines: 1. Define the objectives of the payment system and, if necessary, challenge the assumptions held about the purpose of the system and how it should cooperate. 2. Collect facts about the existing systemthe pay structure, the types of payment schemes in use. The number of people paid under each arrangement, the levels of earnings in different occupations, and the make-up of learnings, including overtime payment. 3. Analyse the circumstances in which the payment system operates. 4. Compare the existing or proposed arrangement against the criteria for evaluating systems listed above. 5. Analyse the effectiveness of the pay structure and payment systems by: 6. Comparing the results achieved with the objectives of' the system under such headings as ability to attract and retain staff, effect of productivity, effect on management-employee relationships; 7. Identifying particular problem areas where the system is producing anomalies in pay or earnings between occupations or units, where the requirements of ihe equal-pay legislation are not met or where rates of pay are nut competitive with local going rates. 8. Consider conducting an attitude survey to obtain the views of workers, rate fixers and supervisors about the present system and the changes need to be made. 9. Consult as required with unions and employees on the present arrangements and what needs to be done about them. 10. Conduct pay surveys as required to establish local market rates. 11. Conduct job evaluation studies as required in consultation with unions to establish correct relativities and lo provide the basic data for designing a logical pay structure. 12. Develop pilot tests and install any revised or new individual, group or measured day-work payment systems that may be required, in consultation with unions. 13. Revise the pay structure as necessary in the light of the actions taken in Steps 8 and 10 and in consultation with the unions or employee representatives. In a unionized concern, revisions in the pay structure would, of course, have to be negotiated with the unions.

14. Ensure that information is available which will enable the effectiveness of a revised pay system or structure to be monitored.