The document proposes a simple performance-based incentive system where 65% of efficiency gains above breakeven are shared with operating and non-operating employees, with 45% going to operators and 20% to non-operators such as line supervisors, quality checkers, industrial engineers, mechanics, and managers. The remaining 35% of gains are retained by the employer. The incentive system is designed to distribute gains from improved performance across employee groups.

1. Design of a Simple Performance Based
Incentive System
The LOOP Initiative

2. Design of a Simple Incentive System
Employer
Retention
35%
Share of
Operators
45%
Share of Non
Operators
20%
Incentives Distribution
• Incentives designed in form
of efficiency gains above
breakeven
• 65% of gains shared with
operating and non-operating
(supervisors, helpers,
engineering, training etc.)
employees
• 35% of gains retained by
employer

3. Non-operators Receiving Performance Based Incentives
Line
supervisors
Quality
Checkers
Industrial
Engineering
Mechanic
Production
Manager
Quality
Manager

4. Thank you
Trainer: Sandeep Raghuwanshi