Individual and Group Incentive Wages 

There are two different methods of calculating an employee’s Labor Utilization Rate in Incentive Wages.

In Individual Incentive Wages, an employee’s payment depends only on the data which has been recorded for that individual employee; the data recorded for other employees is of no relevance.

In Group Incentive Wages, the data of other colleagues in the group is also included in the calculation. A group is a number of employees who work in the same pool. Remuneration for the group’s performance depends on the overall result of the group. The target times of the individual group members are credited anonymously to the group. Their actual times are cumulated for the group result, but are still differentiated in order to be able to determine the working times of individual group members.

Employees M1, M2 and M3 belong to group G1. The group has been commissioned to charge a blast furnace. An average of 2 hours is required for each ton of steel produced; the 2 hours include a range of various different activities.

Employee M1 works for group G1 for 8 hours, employee M2 works for 6 hours on day one and 4 hours on day two for group G1, and employee M3 works for group G1 for 2 hours.

Group G1 produces a total of 12 tons of steel. The group’s target time amounts to 24 hours, and the cumulated actual time is 20 hours. Group G1’s Labor Utilization rate is 120%.

The working time of each individual employee is valuated using this figure of 120%.