Production bonus scheme
The method of production was highly labour intensive and this company relied upon a bonus scheme to motivate and remunerate their staff. Initially, the bonus scheme was successful, however, as time passed, things deteriorated - along with morale.
Moreover, production staff had developed ways of "manipulating" earnings, resulting in very high wages being paid for a low level of productivity.
To make matters worse, a number of restrictive rules and regulations meant that any remedial action would prove difficult. Our solution was based upon slowly changing the whole bonus scheme culture. This entailed devising more effective ways to produce job times, drawing up a new pay structure that removed the restrictions and creating a climate of openness and fairness.
Management and staff, from the Chairman downwards, were involved in the company's objectives, culminating in a high profile launch of the way forwards - including the new pay scheme. The assignment changed the face of industrial relations at the company and resulted in productivity improvements of around 20% plus a major reduction in administration costs. Monetary savings were approximately £450,000 per annum.