Another extreme occurs when bonus payments account only for a small part of staff members’ income. This prevents them from being financially encouraged to put effort in getting higher qualifications, mastering several professions, improving manufacturing processes and work organization on their own accord. They are not interested in doing that because promotion to superior posts accompanied by rise in salary is determined for most staff members by natural biological and demographic factors. It cannot keep up with the pace at which new circumstances appear in a man’s life (birth of children, a need to get better housing in a shorter time, etc.). And the employee might have a chance to resolve these new issues if he got bonus payment for certain achievements in work exceeding the «standard requirements» which the administration demands of a man taking up this post and which are remunerated by the salary set for this post.
Let us also make special note here that we are speaking about the salary-bonus system of labor remuneration, not about pay by the hour or pay by the hour and bonus system. The two systems are essentially different though in some circumstances (for example, working on the conveyor belt) this difference is unclear. Yet there the difference between the systems exists. Pay by the hour remuneration system is based on paying for the time an employee spends at his place of work assuming that the employee is fully busy with work during this time. If the employee wishes to reduce the time he spends at his place of work as compared to the established norm to an extent permitted by the administration his pay will be reduced proportionally.
The salary-bonus system permits (but does not compel the administration to do it) that some categories of staff members can stay at their workplaces for a shorter time that is compulsory for the rest of staff if they keep up with the schedule of work assigned by executives and submit work in due time and quality. In such a case a shorter working time per working day after accomplishing the assigned task does not result in reduction in pay. On the contrary it is itself a kind of a bonus that many will prefer to a money increment.
Actually the salary-bonus system can be a better motivation towards the collective’s conscientious labor than the pay by the hour and bonus system or pay by the hour system, and it is far better than piecework payment. Because there are categories of employees whose volume of professional work is limited by the nature of manufacturing process and its rhythm (hourly, weekly, etc.) it will bring nothing but harm to the enterprises systemic integrity if they are forced to stay at their workplaces during the entire working day. The point is that they will have to imitate labor activity while staying at their workplaces. And imitating labor activity corrupts the imitators themselves, corrupts their associates who do work, gives rise to rows when some people accuse others of pretending to work while they actually work. It undermines the administration’s authority because when an employee has to pretend to work having no real work to do the utmost folly of its executives of all ranks and its inability to organize a coordinated and efficient activity of the collective becomes evident.
And team contract can be effective only within the salary-bonus system of labor remuneration. Such a contract assigns work to a team which is a small integral collective where work is distributed and co-ordinated between the members in an informal way, on the basis of personal comradeship, mutual aid and respect.
Normally the salary-bonus system of labor remuneration should include the entire staff of an enterprise. But the way it is applied to staff members engaged in management activity should be different from the way it is applied to production personnel and support personneclass="underline"
within this system production and support personnel is paid for conscientiously following the orders of executives and coming forward with initiatives beneficial for the common cause (of a team, shop, department, the entire collective) primarily within the boundaries of their main and complementary professions and the posts they occupy;
management personnel is paid primarily for ensuring a certain production output[96] calculated per one subordinate and for increasing this index[97], as well as for achieving economy in comparison with basic levels of consumption in subordinate collectives. Such economy can include saving on raw materials, component parts, energy, agents, tooling, working capacity resource of equipment etc. (according to the concrete functional specialization of the collectives he or she heads). Naturally it must be done while quality and safety standards are adhered to and improved.
A collective works in modern production. To control any collective activity means to distribute an individual personal responsibility for quality and timeliness of performing different fragments of the common work among staff members and making these fragments liable to an objective check according to «done — not done» index (in compliance with the standard).
In accordance with these specific features of modern production and its control which are of an objective nature what should be remunerated is a man’s ability to be responsible, to conscientiously perform actual assigned work and to come forward with initiatives while being responsible for the fragments of work assigned and for coordinating work on the whole. Additionally all the staff members of an enterprise should clearly see that the salary is paid for performing the functions of one’s post at a minimum standard and that bonuses are paid for conscientiously deviating from the minimum standard by exceeding it in the course of daily work in a collective with an atmosphere of comradeship and friendliness.
Modern production is of such a nature that controlling it requires to use the salary-bonus system of labor remuneration. But it can stimulate labor efficiently only if it is accompanied by a high standard of mutual trust and comradeship among subordinates and executives which exists in the collective and is proven by experience and if subordinates and executives are equally interested that they succeed in their common cause.
When this fact is understood the answer to the question on what the ratio of minimum and maximum income among an enterprise’s staff should be becomes clear. In every historic era, in every society there is an optimum «maximum income» / «minimum income» ratio within a collective which changes in the course of time. The «optimum» ratio of «maximum income» / «minimum income» involves a wage rates scale which encourages employees to improve their qualification and to acquire several professions. This should make the enterprise more efficient in production and ensure an increase in the «profit per employee» index.
If the ratio «available maximum» / «income actually received by staff» is small this means many employees regard making additional efforts for improving qualification and acquiring several professions as redundant troubles which do not improve their well-being and result in nothing but uselessly spent time and strength.
Besides, historic circumstances can lead to a lack of highly qualified professionals in certain trades (a lack compared to the demand). This allows people who have mastered these professions (which differ for every historic era) to demand exclusively high salaries for taking part in the society’s working unity. In the historic reality when labor resources are distributed among industries by means of free market regulation such opportunity is realized in exclusively high salaries of certain professional corporations. Their salaries sometimes exceed the amount, which provides for consumption in a morally healthy life-style (and paying for services which neutralize the damage to health caused by hazardous industry). In some cases the state’s social order supports the system of exclusively high salaries first of all in the management sphere and other «clean» activities. It is done through granting privileges in access to basic and professional education to certain social minorities and preventing the majority from getting such education.