Foremen?s Incentive Plan

Ever since the industrial Revolution both major and small companies have put much emphasis on the use of incentives to compensate top management for extra effort and extra skill. For many years industries have also provided hourly rate employees with incentive plans. More recently incentive plans have been extended to include the "front line" supervisors. Many companies have what are called Christmas bonus or profit-sharing plans. The incentives for foremen in mining, which we shall discuss, differ from such bonus plans in that the incentives are paid on a definite measured performance for each individual, and thus directly reflect his effort and skill. What is the objective for paying incentives? The objective for any part of an industrial Engineering Program is to increase productivity and reduce unit cost. The unit cost must include the entire cost of the program. From what base do we start an incentive plan? One should think of art incentive program as the top rung of the Industrial Engineering ladder. Therefore, a company must take several steps before reaching this top rung. The following steps are necessary: