Incentive Bonus: RBE No.46/1987 – Hourly Rates

No.PC-IV/86/Imp/Incentive Bonus/1, dated 06.03.1987

Sub:   Hourly rates of incentive bonus.

In para 11.30 of their Report (Part-I), the IV Pay Commission has observed as under:

“11.30. Suggestions received from different associations/ Federations regarding incentive scheme mainly relate to their extension to other areas, enhancing the ceiling limit and taking actual wages, including allowances, into consideration for calculation of incentive payment.

We find that although substantial changes have taken place due to modernization and introduction of sophisticated technologies in workshops, establishments, etc., these incentive schemes have not been suitably reviewed.

Unless such reviews are carried out periodically, the schemes may not have the desired effect. In fact, in a particular case, the additional output may not really be due to the effort of the workman so as to justify payment by way of incentive but may be the result of introduction of more modern technology.

We are, therefore, unable to recommend any change in the schemes until they have been carefully reviewed. Care should be taken to ensure that the increased output claimed by the employee is capable of verification and is clearly quantifiable.”

In the light of the above recommendation, the Ministry of Railways (Railway Board) have decided that pending review as suggested by the Pay Commission, the existing hourly rates of incentive bonus as communicated in Railway Board’s letters No.PC-III/73/WS/Incentive Bonus, dated 24.06.1978 and PC-III/82/PS-3/10, dated 14.02.1986 (RBE No.34/1986) should continue until further orders.