Conditions of bonus scheme Objective should be clearly communicated to employees Objective should be attainable Rules should be easy to understand

and It must win the full acceptance of everyone concerned Bonus should be based on efficiency Allowance should be made for any uncontrollable internal factor Types of bonus schemes 1. Individual bonus scheme Each individual should be paid for the work done by that labour. Work should be of repetitive nature so that an appropriate standard can be set It is usually difficult to monitor 2. Group bonus scheme Easy to monitor Increase cooperation between individuals hence sense of team builds Efficient employee may not get benefit due to inefficient performance by other group members. Profit sharing scheme Employee must wait until the year end There might be any uncontrollable factor affecting profit ultimately bonus of individuals What if an employee leave organization during the year Incentive schemes involving shares The benefits are not certain because of uncertainty in the market value of shares Benefits are not immediate Value added incentive schemes Problem in the identification of value added from labour work

3. 4. 5.

Recording of labour cost Time sheets Clock cards Job cards Reasons for labour turnover Illness or accident Retirement or death Paying labour lower than the industry Poor working conditions Lack of opportunity / career development Cost of labour turnover 1. Replacement cost Cost of selection and placement Inefficiency of new labour

 2.

Learning curve factor Increase in wastage due to lack of experience

Preventative cost Pension schemes providing security to employees Cost of maintaining good relationship with students Medical, transportation and other facilities

How to reduce labour turnover Paying satisfactory wages Better working conditions Good informal relations with employees Providing career growth to employees Investigating cause of labour turnover and try to eliminate the problem