In the modern world product is in most cases the result of the work of an integral microeconomic system — means of production, the infrastructure of the enterprise and its workers. If one considers only the factors of profit[93] and number of employees the ratio of «profit per employee» is what determines the employees’ wages on the whole. Yet because the collective is heterogeneous in terms of professions, responsibilities and authority the enterprise’s head must face the following triad of questions:
1. Whom to pay?
2. What to pay for?
3. How much should one pay?
In order to answer those three questions and ensure management efficiency one must have a clear understanding of what every worker’s professional skills and responsibilities are (within the framework of organizational structure), as well as how his or her professional skills contribute to the collective’s productive activity on the whole (the latter may or may not be covered in job descriptions).
If one grades professions without going into much detail one would get the following three categories:
Workers directly engaged in the manufacturing process are factory personnel;
Workers engaged in support and maintenance are support personnel (janitors, general-duties men, repair and servicing personnel) that also includes what is generally referred to in Russia as «technical personnel» of various divisions of the enterprise (purchase, accounting, security and others);
Workers engaged in managing work of other members of the collective and the work of structural divisions each performing a dedicated function are management personnel.
Representatives of these three categories do not have equal opportunities of participating in the manufacturing process and of developing it thereby ensuring the «profit per employee» ratio growth that to a certain extent characterizes the enterprise’s efficiency and its facility to pay wages and salaries to employees and dividends to shareholders.
Besides, in the framework of most modern manufacturing processes there are workers in all the three categories who are busy with performing their professional duties throughout the whole working day. But there are workers whose professional skill the enterprise cannot do without but the manufacturing process is of such kind that work can be assigned them only for a part of workday or only on certain days.
Because the nature of production and technology dictates the way production and collective work are organized, piecework principle in remuneration of production and auxiliary personnel labor is an irrelevant remnant of independent amateurism, of individual cottage craft. When the collective provides the systemic integrity of an enterprise, piecework means the following:
squabbles within the collective (open and covert) around who gets access to paying and non-paying work;
constant threat of piecework men violating manufacturing procedures in order to get a higher output which leads to increasing expenditure on technical control service;
encouraging repairmen and maintenance personnel to commit acts of sabotage to the end of artificially raising their importance and, correspondingly, their payments;
concealing new and better methods of work and hampering their application within the collective by piecework men of highest qualification to the end of maintaining their monopoly, which is one of the largest obstacles on the way of technological progress and of production quality growth;
facing the insoluble problem of justifying output norms while workers conceal their true abilities to the end of getting high wages from exceeding established norms.
Just these few mentioned ways of piecework’s destructive influence on the enterprise’s functioning are more than enough for a smart manager (or businessman) to start purposefully eliminating it at the enterprise he controls and in its functionally specialized structural units. But piecework is an enduring phenomenon, and in most cases if it is present at an enterprise it is evidence of a badly managed collective.
When the collective provides for the systemic integrity of an enterprise, taking into account the division of staff into productive, auxiliary (including technical and servicing personnel), managerial personnel according to the nature of their work, the salary-bonus system of remuneration of labor turns out to satisfy the requirement of efficient control better.
This system includes:
Basic salary — it is absolutely guaranteed. This money is paid for:
having one or several professions that are needed by the enterprise;
the level of qualification in each of the professions;
being ready to conscientiously carry out the orders of superior executives and support their activities on the basis of professional skills and knowledge.
However everything a salary is paid for is not actual work, not the products of labor but only a potential. That this potential is used is the responsibility not of the people who have this potential but on executives, on the entire hierarch of the enterprise’s management and the management of surrounding macroeconomic systems. This is the objective effect of the collective nature of labor in the systemic integrity of most enterprises.
Bonus is guaranteed by way of statistics, i.e. its amount can range from zero to the equivalent of several salaries and depends on many factors and indices of the enterprise’s work, the work of its units and each staff member. These factors are:
total volume of free profit and the way its comes in throughout the financial year;
assessment by superior executives the staff member’s personal contribution to the collective’s work during the time period which is remunerated (a month, a quarter, a year);
how important this staff member is for the enterprise, judging from his past work and future perspective (this part of the bonus is usually formalized as personal increment in salary granted for long-service, qualification, possessing several professions, speaking foreign languages, ability to solve problems in extraordinary circumstances, etc.);
lump sum payments for special purposes in connection with personal and family life of staff members (depending on what payments of this kind are allowed by the country’s legislature);
loans granted by the enterprise to its employees or remittance of previously granted loans in full or partially.[94]
The salary-bonus system of remuneration of labor operating at an enterprise for several years is characterized by the ratio «income received by way of salary» / «income received by way of various bonuses and personal increments», as well as by the ratio connected with the previous one «income received by way of salary» / «total income including various bonuses».
If the salary takes up a low share in the total income volume (esp e cially if the guaranteed salary e x ceeds the «living wage» acknowledged by the society only by a small amount or is smaller than the «li v ing wage»), this is a sign of covert slavery flourishing at the enterprise and therefore flourishing in the s o ciety which endures such enterprises and such businessmen.
If the share of bonus payments in staff members’ income is large and their salaries are small an employee’s welfare is secured by his ultimate loyalty to executives. It is only their opinion which determines whether he will get non-guaranteed bonus payments or not and what their size will be. When large share of bonus payments in total income becomes a system-forming factor it leads to creating and maintaining a system where staff members are personally dependent on executives and administration on the whole. Personnel are deprived of rights[95] resembling serfs who live in the modern society of science and industry.