CUMULATIVE REWARD WAGE SYSTEM IN DAIREN FAR EAST ELECTRIC COMPANY PAINT AND VARNISH FACTORY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700190216-0
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 4
• Document Creation Date: December 22, 2016
• Document Release Date: August 24, 2011
• Sequence Number: 216
• Publication Date: July 14, 1954
• Content Type: REPORT

Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190216-0
STAT
Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190216-0
 Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A0007001902
CUMULATIVE REWARD WAGE SYSTEM IN DALREN FAR EAST
ELECTRIC COMPANY PAINT AND VP.RNISH FA RY
An-lao Ch'u-ch'ou ti Fen- 'ei Yuan-tse
Principles of Compensation for Work Rendered)
Canton, Jwa.'}~5(~-:~,r
[This report contains information on the application of the
cumulative reward wage system in the Dairen Paint and Varnish
Factory and the advantages of this wage syste-.i over the piece-
work wage system.]
The cumulative reward xbge system is a system of rewarding production in
excess of a fixed quota by cumulatlve raises. The production volume for a
fixed period (a day or a month) is set at. s ~ertaip standard. When the xork-
era produce in excess of the quota during the fixed period of time, they are
paid extra according to a definite scale. The Dairen Paint and Varnish Fac-
tory's calculation method for above-quota production is made according to the
folloxing table:
Grade
Degree oP Above-
Quota Production ($)
Basic Workers'
Salar
I
Accessory Workers'
y
ncreases (~,)
Salary Increases (~)
1
107
110
,~5
2
il0
115
110
3
115
120
~~5
4
120
125
117
5
125
130
120
6
135
140
130
7
150
150
135
8
160
160
140
9
175
200
too
To determine what the production quota should be, the following factors
xere taken into consideration: (1) average output under the Japanese,
(2) equipment and its capabilities, (3) number of xorkers, (4) the degree of
difficulty of production.
For example, the folloxing specific factors xere used in the Dairen
Paint and Varnish factory to determine the norms:
Thera xere seve^ pulverizing machines with either one or two pulver-
izers attached. The output of the various machines differed. Number one
pulverizing machine's highest output was 1,800 kilograms, its average output
was 1,295 kilograms, and its standard eight hour production quota xas fixed
at 1,200 to 1,300 kilograms.
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STAT
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Number two pulverizing machine with only one pulverizer lead a 20 per-
cent lower output than that of number one, and its standard production was set
at 1,080 to 1,200 kilograms,
Multlpigmc~t paint is more expensiv,: and more difficult to make than Faint
with only one pigment. The standard for multipigment is 900 to 1,000 kilo-
grams. Minium output was set at 30 kilograms aonth since it cannot be manu-
factured in a single day.
Wages are calculated as follows. Every production unit must make a daily
written work report to the production office. The report must state the ratio
of '-.he day's actual production to the fixed standards of production, the amount
of raw materiels used, if that quantity iF in agz?rement with the fisted standard,
and the number of basic workers and auxiliary workers. The report must be
filled in by clerks, signed by t.ie shop foreman, and delivered to the produc-
tion office for checking before being sent to the statistician who makes a
monthly report to the accounting office. The accounting office then calculates
the wages according to rate of "above-quota production."
'Phe results of the system were that production increased and exceeded the
plan, raw materials were saved, production costs were *educed, worker's in-
comes were increased, and the attitude of the workers improved.
The following problems are yet to be solved. In setting the standard,
the whole manufacturing process must be studied. When fired, the standard
,ust be explained to the workers. If the standard is too high or too low,
it must be adjusted promptly to avoid arousing dissatisfaction among the
workers. There must be s system of inspection witY, full time inspectors
checking the quantity and quality of output, because to exceed quotas and
get more pay, workers will often lower quality and produce inferior goods.
In striving to produce more, workers often abuse their machines; so workers
must be trained and assigned to a fixed machine for which they a:?e held res-
ponsible.
Workers must be pz?evented from becoming id 1e. In this factory, the pro-
duction of buckets is divided into several steps; yet the standard had been
based upon the final step only and fixed at 200 buckets in 8 hours. Eut in
other steps of the process the machines are capable ~f producing 300 units.
Therefore, workez?s in the final step of the process were rushed while those
in intermed'ste steps were idle.
Also, warehouse and transport workers were not enthusiastic about the
system, because their work was not defined and It was not possible to set up
standards for them. This problem is bei~v tmm~n+?n.?+1?? - _
warehousemen under paint shop classification and shipping workerseunder~theC
bu^ket shop classification.
Although the cumulative reward wade system has ce,?tain faults, it is
still a positive method of increasing production. A sti,dy of its operations
in the Dairen Paint and Varnish Factory showed the following advantages in
the use of this system:
The cumulative reward wage system tends to produce a consistently good
grade of product, because the workers have to meet stands:ds of quality as
well as quantity. An inspection system was set up whereby cez?tain workers
are responsible for examining the quality of production, This system also
insures proper caz?e of machinery. -
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Wages are omparatively high under the cumulative wage system and the
workers are asnured a minimum wage. The disadvantage is that workers cannot
increase their monthly earnings by more than 100 percent. There is a de-
finite limit of compensation for above-quota production. The workers will
therefore raise their work rate as high as the maximum 75 percent and `,hen
will slacken their work rate, because production in excess of 75 percent has
no effect on the worker's income.
STAT
Sanitized Copy Approved for Release 2011/09/14 :CIA-RDP80-00809A000700190216-0