The policy of incomes and payment for labor

2. Rate networks, their role in the wage

     Tariff networks is the basis for the regulation of vocational qualification division and movement of labor, central part of centralized regulation of wages of different categories and groups of workers, the core of professional qualification differentiation in payment.

     Tariff networks as an important element of the tariff system serves to determine the ratio of wages of workers who perform work of varying complexity. It contains a number of categories and corresponding rate coefficients. Tariff category reflects the level of skills of workers, ie workers of higher qualifications - the highest level of tariff grid. Tariff coefficient indicates how many times each wage level of skilled workers higher than wages of the worker with first level.

     The ratio of tariff coefficients of extreme categories is diapason of tariff grid. A tariff network also shows the rate of absolute and relative growth of rate coefficients, which can be progressive, permanent and regressive, depending on the financial capacity of enterprises and vocational qualification structure of staff.

     Progressive growth of rate coefficients appropriate in terms of shortages of qualified staff that creates a material interest in improving workers' skills and move into more complex and highly paid work.

     In modern conditions, most enterprises use the sixth-and eighth tariff networks. It’s distinguished four groups of unified tariff grids which differentiated by sectors of the economy:

• 8-th category grid with a ratio of tariffs 1 and 8 categories of 1: 2.4 – for paying to workers from general shops of enterprises of ferrous metallurgy;
• 8-th category tariff network with a ratio 1 and 8 bits of 1.0: 2.01 – for paying to workers directly employed in the performance of responsible work of mechanical engineering, including electrical, electronic, radio industry and production of means of communication;
• 7-th category tariff grid a ratio of tariffs 1 and 7-th bits 1,0: 2,01 – for payment to workers directly employed in maintenance, adjustment and repair of main equipment of thermal and electrical systems, nuclear, thermal and hydroelectric power;
• 6-th category grid with a ratio of tariffs 1 and 6-th categories 1,0: 1,8 - for all other industries and activities.

     The average qualification of factory workers in general, plant or station is characterized by the average tariff level. The average tariff coefficient of group of workers (Кс) is calculated only if the labor of workers of the plant, station, factory is paid for the same tariff grid:

                                 K_с=∑ К *Ч_р/∑Ч_р                                        (3.4) 

     Where К – the tariff coefficient of the current tariff category

     Ч_р – the quantity of workers

     ∑Ч – the summary quantity of the workers.

     After calculation of average tariff coefficient, it’s defined the average tariff category by the formula:

     Рс = Рм + (Кс – Км) / (Кб – Км) (3.5)

     or

    Рс = Рб – (Кб – Кс) / (Кб – Км), (3.6.)

     Where Рм, Рб – tariff categories, that correspond to the less and greater from two adjacent tariff coefficients between which there is the known average tariff coefficient.

  Км, Кб – the less and greater from two adjacent tariff coefficients of tariff network, between which there is the known average tariff coefficient. 
 
 
 

                                                            Table 3.1

    Characteristic of the most wide spread tariff networks 

    For the right using of labor force in enterprises during the planning of quantity of workers,  retariffication of works, it’s very important to compression  of average category of works and workers. These values have to correspond to each other. If the average category of works leaves behind the average category of workers, this lead to inopportuneness of familiarization of production output, expenses of working time, launching of defective products. 
 
 
 

     3.3.Directory of professional qualification of workers and its application

     Directory of professional qualification of workers - is classified by economic activity of a collection of job descriptions that are in the list of Classifier of professions (CP).

     Classifier of professions is a component of the state system of classification and coding of techno-economic and social information, designed according to the Cabinet of Ministers of 4.05.1993 in «On the concept of building national statistics and state program of transition to international system of accounting and statistics». The base of development of the CP was international standard professional qualification in 1988. It provides that in organizations, enterprises the list about work to the workers’ service record should be written according to professional names in the Classifier of professions.

     In the list of Classifier of professions there are such professional groups of employees:

• Legislators, senior officials, leaders.
• Professionals.
• Specialists.
• Technical staff.
• Workers of trade and domestic services.
• Skilled workers from agriculture, forestry, and fishing.
• Skilled workers with a tool.
• Operators and rigger of equipment and machines.
• Simplest professions.

     Directory is a normative document that is necessary in questions of management in organizations of all forms of ownership and economic activity.

     Directory consists of editions and sections of issues that are grouped by main economic activities, production and operations.

     According to the general provisions of the Directory each issue, or section of issue has a compulsory part correlative with the classification of occupations by CP list of namely: «Executives», «Professionals», «Specialist», «Technical servants», «Workers». The contents of the section or issue consists of «Introduction», «Qualification characteristic», contained in the alphabetical sequence of serial numbers and also additional lists of professional support from a range of categories.

     Qualification characteristic of profession employee has the following sections: «Challenges and responsibilities», «Should Know», «Qualifications demand», «Specialization», «Examples of work». 

     The method of ascribing the occupations to different categories is established on grade valuation of classification feature. To this features some quantity of grades are appropriated. For example, for hand works by difficulty characteristic is established 5 grades (very simple - 1 grade, simple – 2, average difficulty – 3 grades, difficult – 4 grades, very difficult – 5 grades). By difficulty it’s established 5 grades, by responsibility – 4 grades and by harmfulness – also 4 grades. Together the maximum sum is 18 grades.

     The establishing of the category on the certain work is made by the coefficient, which is calculated as a correlation maximal sum of grades to the quantity of categories of tariff net. In the conditions of 6-th category tariff net this coefficient will equal to 3 (18:6). And then by dividing the sum of grades, which were given to the work by special features, on coefficient define the category of the work.

     Mechanized works have categories by stationary system. For each feature it’s established several levels, which provide the type of technique, the role of aggregate, and the position of worker, the conditions of works and others.

     However as result of wide introduction of new machinery equipment, new technologies, organizations of labor and so on, to the agriculture sphere the improvement of tariff system should be realized not only on the line of works but also and executors. [7 318-348 c.]

     In each organization in accordance with the requirements of current law and on base of the Directory it’s developed and approved by the leader job descriptions for managers, professionals and specialists. This takes into account the specific tasks and duties, functions, rights, responsibilities of these groups and especially staff of business.

     Official instructions consist of sections: «General», «Tasks and duties», «Rights», «responsibility», «Should Know», «Qualifications» and «Relations with profession, position».

     For technical and service workers if necessary develop work instructions, in which there are such sections as the «General», «Relations with profession», may be missing.

     Determination of the implement of the work to certain tariff categories and awarding of qualification categories to workers is carried out by the owner or his authorized body in accordance with the qualification directory in agreement with the union or other authorized labor body.

     Qualification levels increase primarily to workers who are successfully doing established norms of work and are diligently towards their employment duties. Right to increase the category of workers who perform work of higher level successfully during the period that is not less than three months and passed the exam. With a gross violation of discipline and other serious violations that caused the deterioration of product quality, worker skills can be reduced to one bit. Renewal of the category is realized in general, but not earlier than three months after its decline.

     The accordance of actually performed work and the skills of employee to the requirements of the job qualification directory are performed by Certification Commission, which is created directly in the enterprise. It gives an evaluation of the employee: is he/she up to requirements, or not. From the results of certification of the owner or his authority body has the right to change the salaries of officials within the established order of minimum and maximum salaries for related positions.

     As the development of market relations, scientific and technical progress, improvement of labor and production the constant changes in the content, types of work, in the spheres of activity take place. In this case, the directory must be promptly make the appropriate adjustments and corrections, to eliminate outdated and display new types of work functions of employees, and change the requirements for them. Expansion of international economic relations requires further improvement of tariff qualification requirements according to current international standards and requirements.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

     3.4. Bonuses and allowances

     The company uses different bonuses and allowances that are variable part of the tariff system and depend on production conditions. According to the Law of Ukraine «On wages» conditions of introduction and size of allowances, extra pay, rewards and other incentive compensation and compensatory payments established in collective bargaining with the rules and guarantees, by law, general and branch (regional) agreements. Application of extra payment and allowances and their sizes are limited to economic and social necessity and financial possibilities of the company.

     The differentiation of wages, depending on working conditions determine by the two factors - compensation and simulative.

     Compensation factor associated with that work that in the most hazardous conditions, with more cost-effective physical energy, requires a certain compensation for deviations from normal conditions. Its numerical value can be obtained based on the differences in the cost of physical energy, the share of food in total consumption and share of workers compensation products in the total value of product consumption.

     Stimulating factor ensures higher wages in adverse conditions. Concrete size of extra payment for the conditions are determined on the basis of certification of working  places and evaluation of actual conditions of employment of workers at these locations.

     The company installed such dimensions of allowances: for work in difficult and hazardous conditions - up to 12%, and for work in particularly difficult or particularly hazardous conditions - up to 24% tariff rate (base salary).

     Working at night is charged at a higher rate of not less than 20% of tariff rate (salary) for each hour at night.

     To calculate the additional remuneration for work at night hourly rates are determined for the workers, whose work is paid for day tariff rates by dividing the daily rate on the appropriate duration of working day (in hours), set for this category of workers by legislation. For workers whose work is charged at monthly rates (salaries), hourly rates are calculated by dividing the monthly rate (salary) on the number of working hours according to the calendar in this month.

     Allowance for the combining of professions (positions) and doing the duties of temporarily absent employee is determined under the conditions stipulated in the collective agreement.

     There are bonuses for work in extra norm time. Extra norm time is time spent in a normal working day over the duration established for this profession, working time spent in holidays. Overtime work is limited and can be performed only with the permission of the trade union committee. For each of the employees they can not be exceeding 120 hours a year and 4 hours within two days. These works can not involve pregnant women, mothers who feed children, teens. Size of allowances applies from 50 to 100% of tariff rates.

     Introduction the allowances for skills create a new incentive for training. The main criteria for skills are: high quality of work, the systematic implementation of standards and valuation problems, exact observance of technological and production discipline, combining the professions and operations. Allowances are established to employees who worked at the plant at least one year and defined step-by-step. Size allowances may increase once a year.

     With regard of particulars of production at some enterprises it is advisable to specify the parameters of high professional skill. These include: high performance for a certain period; systematically achieve of higher figures than the average of the same profession, periodic performance of works of higher level, work on complicated equipment, combining jobs, respecting the labor and production discipline.

     In Ukraine traditionally the payment for labor is realized for done work during the month. So for providing the calculating of monthly salary it’s not enough the only tariff system, but it’s the base of the paying for labor. With the help of tariff system it’s not possible to determine concrete effectiveness for a given period of time. So with the help of current systems and forms of payment for labor it’ll be possible to calculate the absolute size of the wage.

4. Systems and forms of payment of work in agrarian sector

     According to the Law of Ukraine “About collective agriculture enterprise”, the firm can independently choose the forms, systems and sizes of payment for labor. The payment for labor is depend on the quantity and quality of labor contribution of every member of enterprise and caused by the finished results. The enterprise has the right of free hiring of the stuff, their salary is determined by agreement of the both parts, but cannot be less than the established minimum by the state. [8]