Introduction
The present work proposes a Design of payment system by result that pursues:
- Maximize the personal income of workers, increase the result of business management, link personal income to the collective and individual contribution.
The Design responds to a service company with a management structure and several base business units and complies with the new regulations issued in Cuba regarding payment methods and systems.
1. Objective
Define the guidelines to be followed for the formation and distribution of the salary by the application of the Payment by Results System linked to the overcompliance of the plan of total accumulated profits for the period.
2. Reach
It is applied to all the workers of the entity, including those who are associated with the Part-time Payment System.
3. References
3.1. Resolution No. 30/2005. "Unique Salary Scale"
3.2. Resolution No. 27/2006. "General Regulations on the Organization of Wages"
3.3. Decree 281/2007. "Regulations for the implementation and consolidation of the SDGE".
3.4. Decree 323/2014. Of the Modification of Decree No. 281 “Regulations for the implementation and consolidation of the SDGE”.
3.5. NC 3000: 2007. “Integrated Human Capital-Vocabulary Management System”
3.6. Resolution No.101 / 2009 "MITRANS Salary System"
3.7. Payment Systems Methodology. Business Improvement Group.
3.8. MFP Resolution No. 114/2013.
3.9. Resolution No. 17/2014. " General Regulation on Forms and Payment Systems "
3.10. VMRH-070 / of May 2, 2014 (Ministry of Transport)
3.11. VMRH-082/14 of May 22, 2014. (Ministry of Transport)
4. Terms and Definitions
In this procedure, the terms and definitions declared in the current legislation used in section 3 are applicable.
4.1 UEB: Base Business Units.
4.2 URC: Regulation and Control Units
4.3 Forms of Payments: They are the ways to remunerate work according to its nature. In our company, the performance payment method is applied.
4.4 Payment systems (SP): They are the modalities of the forms of payment that are adopted in correspondence with the technical-organizational characteristics and the nature of the work. In our Company, piecework SP and Results SP are established.
4.5 Salary training: Defines the calculation procedure, based on the behavior of the training and conditioning indicators. In correspondence with the results achieved in said indicators, a salary can be obtained that can be equal to, higher or lower than the scale salary plus the increases duly approved and that proceed, according to the actual time worked.
4.6 Salary: Salary is considered the part of the national product that is distributed to workers individually, based on the quantity and quality of the work provided, according to the economic conditions of each historical moment. It includes what is received by the worker, by performance, unit of time, additional payments, extraordinary works, working a day of national commemoration and holidays and paid annual vacations.
4.7 Basic salary: It is the remuneration that includes the salary scale rate, plus the additional payments legally established, and is used in the cases provided for in the legislation.
4.8 Scale Salary: It is the sum of the salary received by the company's employees (Plan and Real) for the concept of scale, in correspondence with the wages defined by the Single Scale (Resolution No. 30/2005). It is reported in correspondence with the officially approved labor regime for the company.
4.9 Salary of the Additional Payment for Business Improvement. It is the sum of the salary received by workers for the concept of Additional Payment for Business Improvement, in accordance with the provisions of Resolution No. 30/2005 of the Ministry of Labor and Social Security. It is reported in correspondence with the officially approved labor regime for the company.
4.10 Salary of other legally approved Additional Payments: It is the sum of the salary received by workers for Additional Payments (except that of the Additional Payment for Business Improvement), which are legally approved by the Ministry of Labor and Social Security. Payments for working in certain conditions or jobs and other extra-qualifying factors. (Night, Master's, Doctorate and Coefficient of Social Economic Interest).
4.11 Results Salary Fund (FSR): It is the sum of the salary paid as a consequence of applying Payment by Results Systems.
4.12 Base salary for calculating the amounts to be applied in payment systems: It is the sum of what the worker earns, according to the real time worked and taking into account the officially approved workday, for the concepts of payment for the complexity of the work, plus the additional payments legally approved that characterize the working conditions, the responsibility of the job, the importance of the branch or company activity in question, as well as the additional payment for implementing business improvement. This magnitude is used to determine the salary for the results, in the payment systems, as appropriate. It is made up of the salary scale, and the additional payments that are legally authorized for each entity.
4.13 Salary Fund: It is the sum of the Salary Funds that the workers receive for the different concepts, that is, the sum of salary that for the concept of scale, additional payment for business improvement, additional payments legally approved by the MTSS, of the that is paid as a consequence of applying Payment by Results Systems and the amount of salary of accumulated vacations 9.09%.
4.14 Gross Value Added (GVA): It is defined as the Production of Goods and Services less the Material Expense and the Services Purchased or as the Net Sales less the sales tax, less the Material Expense and the Services Purchased.
4.15 Salary Expenditure / GVA: It is a coefficient and expresses the Salary Expenditure for each weight of Gross Added Value. It is obtained by dividing the Salary Fund by the Gross Added Value.
4.16 Management Indicators: They are fundamental and characterize the degree of fulfillment of the assigned state and social task, as well as the level of efficiency in the use of resources and the workforce. Among the Management Indicators at the Company level are: State commission. Total net sales, Export sales, Profit for the period, Contribution for the return on state investment, Contribution in CUC and Rotation of Working Capital.
4.17 Limit Salary Fund to Distribute (FSLD): It is the maximum salary amount to be distributed at the Organizational Unit level, understood, salary to be distributed at the Organizational Unit level without deteriorating the planned VAB salary by weight in the period.
4.18 Salary to be Distributed Fund (FSD): It is the amount of salary to be distributed at the Organizational Unit level, taking into account the Over-profit and the saving of the Salary Expense by weight of VAB.
4.19 OverUtility (SU): Income Amount reached above Planned.
4.20 Savings Wage expense by weight of VAB (Saving GS / VAB): GS / VAB not used as planned.
4.21 Organizational Unit: Understand Company, Base Business Unit (UEB), Workshop, Brigade and / or area or work group.
4.22 Hourly wage rate: Obtained from Resolution 30/2005.
4.23 Coefficient of Social Economic Interest (CIES): Coefficient established by provision of the MTSS for the entity due to the economic importance or the service provided.
4.24 PE: Business Improvement.
4.25 Workers covered: Total number of workers of the entity that are included in the payment system.
4.26 Salary Distribution Coefficient = (CDS).
4.27 Labor participation coefficient = (CPL)
4.28 Salary distribution: It is the calculation procedure for the salary distribution formed to the participating workers, depending on the specific contribution of each one in the global result, being able to use the labor participation coefficient (CPL), the individual evaluation of the work results and the wage distribution coefficient (CDS), among others.
5. List of annexes
5.1. Annex No.1 Model No.1:
5.2. Annex No.2 Model No.2:
5.3. Annex No.3 Model No.3:
5.4. Annex No.4 Model No.4:
6. Responsibilities
6.1. Managing Director
6.1.1. Maximum responsible for the application, evaluation and control of the payment system, as well as the results obtained.
6.1.2. Periodically account for payment systems before the superior organisms and the workers' collective.
6.1.3. Certify monthly compliance with economic indicators for your
Assessment.
6.1.4. Individually assess your direct reports through the use of the CPL.
6.2. Deputy Director
6.2.1. He will assume the responsibilities designated to the Director of the entity, when he is in office.
6.3. Accounting and Finance Director
6.3.1. Guarantee that the planning of the Indicators of this Payment by Results System is carried out in correspondence with the productive capacities of the entity.
6.3.2. Certify monthly the economic indicators that support the application of this payment system, both at company and UEB level.
6.3.3. Analyze the behavior of the Salary Expense for Gross Added Value planned for the period, as well as the rest of the indicators established in the payment system and take the appropriate measures to avoid deterioration.
6.3.4. Individually assess your direct reports through the use of the CPL.
6.4. Human Capital Director
6.4.1. Review the final version of the Regulations and Payment System in force, as well as the modifications that they receive, before the approval of the General Director.
6.4.2. Determine, monthly, the amount that can be paid of Salary by Result for the application of the payment system linked to the Overcompliance of the Plan of Total Accumulated Utilities of the Period, figure that will be fixed in the accounting (calculation of the Limit Salary Fund to Distribute (FSLD).
6.4.3. Control and supervise that the UEB and URC comply with the provisions of the approved Payment System.
6.4.4. Verify that the UEB carry out the analysis of the application of the payment system within the period established in the payment system.
6.4.5. Evaluate quarterly, before the Board of Directors of the company in the Quarterly Dispatches, the behavior of this payment system, providing the elements that are necessary to take the corresponding measures, including its modification or replacement, maintaining the principle of linking the wages of all workers to the results.
6.4.6. Outline the policy to follow regarding the review, update and control of payment systems.
6.4.7. Individually assess your direct reports through the use of the CPL.
6.5. UEB Directors
6.5.1. Head of the application, evaluation and control of the payment system at the
UEB, as well as the results obtained.
6.5.2. Guarantee that the planning of the Indicators of the present Payment for Results System, at the UEB level, is carried out in correspondence with its productive capacities.
6.5.3. Certify monthly the management and limit indicators that support the application of this payment system, at the level of workshops and / or brigades.
6.5.4. Fully implement the provisions of this Procedure.
6.5.5. Guarantee, supervise and safeguard the primary documents that serve as the basis for the application of the payment system. (Commercial offers, work orders, entry and exit cards, biweekly P-reports of the real time worked by worker in each work order and / or position, invoices, etc.)
6.5.6. Evaluate quarterly, before the UEB Board of Directors and in the quarterly dispatches before the company's Board of Directors, the behavior of this payment system, providing the necessary elements to take the corresponding measures, including the modification or replacing it, maintaining the principle of linking the wages of all workers to the results.
6.5.7. Guarantee, to the Directorate of Human Capital, the delivery of the certifications within the terms established in the Regulations.
6.5.8. Individually assess your direct reports through the use of the CPL.
6.6. Designated specialist in the area of organization of the human capital management
6.6.1. Prepare, quarterly, a report on the result of the application of this Payment by Results System.
6.6.2. Analyze quarterly the reports presented by the UEB and prepare the summary report of the impact of the application of the Payment System on the employment and salary indicators of the business system.
6.6.3. Review and control monthly the certifications issued by the UEB of the direct and limit Indicators, established in the Payment System.
6.6.4. Carry out audits of the UEBs, according to schedule, to check and eradicate possible deviations in the implementation of the Payment System.
6.6.5. Prepare, review and modify payment systems before the review of the Director of Human Capital.
6.7. Economic management specialists or technicians appointed in each UEB
6.7.1. Certify monthly the limit and management indicators that support the application of this payment system, at the level of Workshops and Brigades.
6.7.2. Check the behavior of the Gross Value Added Salary Expenditure planned for the period at Workshops and Brigades level and its repercussion at UEB level.
6.7.3. Individually assess your direct reports through the use of the CPL.
7. Development
7.1. Training and salary distribution
The payment system by results establishes as a directive indicator (Indicator of training), the overcompliance of the plan of Total earnings accumulated in the period (SU) and as a limiting indicator, General conditioning indicator, the non-deterioration of the Salary Expense by Added Value relation Gross (GS / VAB).
7.1.1. The Director of Accounting and Finance calculates and issues a certificate of compliance, accumulated, of the economic indicators (Plan and Real), established in the payment system, both at the Company and UEB level.
7.1.2. Subsequently, the Director of Human Capital proceeds to calculate the Limit to Distribute Salary Fund (FSLD), which is determined by the following mathematical expression:
Procedure for applying the payment by results system
7.1.3. When analyzing the results of the calculation carried out, we will proceed to determine the Salary Fund to Distribute (FSD) as follows:
7.1.3.1. If the Limit Salary Fund to Distribute (FSLD) is ≤ 0, no payment for results can be made in the entity, so the Director of Human Capital will issue a certificate disclosing this result.
7.1.3.2. If, on the other hand, the Limit Salary Fund to Distribute (FSLD) is> 0, we proceed to analyze the behavior of the Management Indicator (Training Indicator), overcompliance of the total accumulated profits of the period at company level (SU) and make a second comparison.
7.1.3.3. If the FSLD is> that the overutility reached in the period the Salary Fund to Distribute in the company (FSD), it will be the amount of the overutility (SU), being considered the same as salary for results.
7.1.3.4. If, unlike the above, the FSLD is ≤ that the overutility (SU), the Distributed Salary Fund (FSD) will be the FSLD.
7.1.4. Once the FSD has been obtained, the Distribution thereof will be calculated for the General Directorate and the UEBs that have obtained overcompliance of the Utilities.
For the General Direction.
7.1.4.1. The FSD to the General Directorate is obtained by dividing the number of workers covered by the General Directorate by the Total Workers covered in the company and multiplying this coefficient by the Salary to Distribute Fund (FSD). Being the mathematical expression the following:
FSD DG = Number of Workers covered in DG x FSD
Total workers covered in the Company
Where:
FSD (DG) = Salary Fund to be Distributed in the General Directorate
DG = General Directorate
FSD = Salary Fund to Distribute
7.1.4.1. Understand by “Covered Workers”, those who are under the Payment for Results System and who received payment for overcompliance.
7.1.4.2. In this calculation, the workers who remained outside the entity throughout the month will not be taken into account, for whom no salary for results corresponds.
For UEB
7.1.4.3. To calculate the Salary Fund to be Distributed among the company's UEBs (FSD UEBs) we will perform the calculation shown below:
The Salary Fund to Distribute formed (section 7.1.3) is deducted from the Salary Fund to Distribute in the General Directorate formed in section 7.1.4.1. This is:
(FSD-UEBs) = (FSD - FSD DG)
Where:
FSD - UEBs = Salary Fund to be Distributed among the UEB
FSD DG = Salary Fund to be Distributed in the General Directorate
FSD = FSD Salary Fund to Distribute (Formed at Company level)
7.1.5. Once the Total Amount of the Salary Fund to be Distributed among the UEBs (FSD UEBs) is known, the amount of the Salary Fund to Distribute will be calculated for each one of the UEBs that have obtained overcompliance of the profits (CFSD), in correspondence with the their participation in the Formation of the Salary to Distribute (FSD) and measuring the combined effect of their participation in the Increase of the VAB of the company and the decrease of the Salary Fund in percentage terms (Annex No. 3).
7.1.6. To determine the participation of each UEB in the Formation of the Salary Fund to Distribute (FSLD), proceed as follows:
For each UEB.
7.1.6.1. The increase in the VAB of the UEB (↑ VA) is calculated. For this, the Real VAB minus the VAB Plan is subtracted.
7.1.6.2. The decrease in the Salary Fund (FS) is calculated. For this, the FS Plan minus the Real FS is subtracted.
7.1.6.3. The previously calculated values are added algebraically (the increase in the GVA (↑ VA) and the decrease in the Salary fund (↓ FS)).
7.1.6.4. The percentage representing the sum previously calculated for each UEB, within the Total, is calculated for each UEB. For this, the sum of each UEB is divided by the Total sum.
7.1.6.5. The Amount of the Salary Fund to be Distributed in the UEB (CFSD UEB) is calculated. For this, the percentage representing the sum previously calculated for each UEB (% VA + FS) is multiplied by the Salary Fund to be Distributed among the UEBs (FSD UEBs).
7.1.6.6. The OverUtility (SU) is calculated. For this, the Real Profit minus the Plan Profit is subtracted.
7.1.6.7. The Limit Salary Fund to Distribute at the UEB level (FSLD UEB) is calculated. For it:
1. Subtract the value of the GS / VAB Plan indicator minus the Real GS / VAB.
2. The value resulting from the previous subsection is multiplied by VAB Real.
7.1.6.8. The Salary Fund to be Distributed among the UEB workers (FSD UEB) is determined. For this they are compared in the order mentioned; CFSD UEB, SU UEB and FSLD UEB. In all comparisons, the lowest resulting value will be chosen and will turn out to be the FSD, proceeding as follows:
7.1.6.9. When the amount of the Salary Fund to be Distributed for each UEB has been obtained, the following will be analyzed:
7.1.6.9.1. If the CFSD UEB> FSLD UEB, that is, if the amount of the Salary Fund to Distribute for each UEB (CFSD) is greater than the Limit Salary Fund to Distribute in it (FSLD-UEB), this result is analyzed. with the overutility formed by unity.
7.1.6.9.2. If the FSLD UEB> YOUR UEB, that is, if the Salary Fund to Limit to Distribute in the UEB (FSLD UEB) is greater than the amount of overutility formed by the unit, the Salary Fund to Distribute for the FSD UEB unit) which constitutes the amount of the salary for results to be distributed among the workers), will be the value of the Overutility. If, on the other hand, the Salary Fund to Limit to Distribute in the UEB (FSLD-UEB) is <that the amount of the Overutility, then the Salary Fund to Distribute for the unit (FSD UEB) will be the value obtained as Limit Salary to Distribute in the UEB (FSLD-UEB).
7.1.6.9.3. If CFSD UEB <FSLD UEB, that is, if the amount of the Salary Fund to Distribute for each UEB (CFSD) is less than the Limit Salary Fund to Distribute in it (FSLD-UEB), the amount of the amount with the overutility formed by the unit.
7.1.6.9.4. If CFSD> SU UEB, that is, if the amount of the Salary Fund to Distribute for each UEB (CFSD) is greater than the amount of the excess utility formed by the unit (SU UEB), then the Salary Fund to Distribute for the unit (FSD-UEB) that constitutes the amount of the salary for results to be distributed among the workers, will be the value of the Overutility (SU).
Likewise, if CFSD <SU UEB, that is, the amount of the Salary Fund to be Distributed for each UEB (CFSD) is less than the excess profit achieved by the unit (SU UEB), then the Salary Fund to Distribute in the UEB (FSD-UEB) is the value reached as the amount of the Salary Fund to be Distributed for each UEB (CFSD).
7.1.7. Once the Salary Fund to be Distributed for each UEB is known (FSD UEB), it will proceed to execute the distribution of the same among the workers who are under the pay-for-results system, for which it is necessary to carry out the following considerations:
1. Assess the per capita salary for overcompliance achieved among the rest of the workers who are covered in the piece rate payment system. (PTD). In this valuation, only those workers who obtained overcompliance wages will be taken into account and it is obtained by dividing the sum of the wages achieved by overcompliance by the number of benefited workers.
2. The percapita of salary for overcompliance achieved among the workers who are covered in the piece rate payment system (PTD) will be multiplied by the number of workers included in the results-based payment system, that is, the workers outside the Piece Rate (TFD)). This last figure does not include those workers who remained outside the entity throughout the month, for any reason.
7.1.8. When obtaining both values, the following considerations will be taken into account:
1. If the result of the multiplication carried out in the previous section (PTD x TFD) is> that the Salary Fund to be Distributed for the UEB (FSD-UEB), then the distribution of this Salary Fund (FSD-UEB) will be carried out), among Out-of-Piece Workers (TFD). This is:
If (PTD x TFD) <(FSD-UEB), then (FSD-UEB) will be distributed among the (TFD).
2. If, unlike the above, the result of the multiplication performed between (PTD x TFD) is <that the Salary Fund to be Distributed for the UEB (FSD-UEB), then the amount of salary formed by the multiplication of (PTD x TFD) among Out-of-Part Workers (TFD), subsequently the amount formed by the multiplication of (PTD x TFD) will be subtracted from the FSD-UEB and said result will be distributed among all workers, that is a Piecework they contributed to the formation of the Salary Fund and the Workers Outside the Piece Work (TFD).This is:
If (PTD x TFD) <(FSD-UEB), then:
- First: (PTD x TFD) will be distributed among (TFD). Second: A (FSD-UEB) subtract (PTD x TFD) = X Third: Distribute the obtained value (X) among all workers
“All workers” is understood to be those who are under the piece rate payment system and who received payment for overcompliance (workers who contributed to the formation of values), in addition to the Outside Piece Workers (TFD).
3. When the Salary to Distribute Fund (FSD-UEB) has been defined, as well as the workers who participate in said results, the distribution of the salary will be carried out among each one, considering the individual and collective contributions.
The individual contributions will be measured through the individual evaluation of the results of the work of each boss to his direct subordinates, as a consequence of the application of the Labor Participation Coefficients (CPL), which can take values with ranges between 0 and 2 points. (See Annex No.3)
The collective contributions will be measured through the Salary Distribution Coefficients. (CDS).
4. The coefficient of overcompliance of the directive indicator or formative indicator (K) will be calculated, for which the following calculation is made:
K = FSD-UEB
∑ STRT
FSD-UEB = Salary Fund to be Distributed among the UEB (Salary by results (SR))
∑STRT = Sum of wages for real time worked, earned by workers participating in the distribution. (Amount of Salary formed by Real Time Worked)
We obtain the Amount of salary for over-compliance of the training indicator, for each of the workers who participate in the distribution (src) for this we will multiply the STRT of each of them by the Coefficient of compliance of the directive indicator or training indicator (K), src = (K x STRT)
Where:
src = Salary by calculation result for one of the workers participating in the distribution.
K = Coefficient of compliance of the leading indicator or formative indicator (K), STRT = Real Time Wage worked for each of the workers participating in the distribution.
The sum of the SR or SSC must coincide with the Salary Fund to be Distributed among the UEB
∑ src must be = FSD-UEB
5. We proceed to calculate the Amount by calculation results (MRC), for each worker, for this we will multiply Labor Participation Coefficient (CPL) by the src, Salary by calculation result for each of the workers who participate in the distribution. Mathematically we will have to:
MRC = (src x CPL), for each of the workers participating in the distribution
6. We proceed to calculate the collective contributions, for this we will take into account the results of the Salary Distribution Coefficient (CDS), which is calculated as follows:
CDS = ∑ Salary by calculation result for one of the workers participating in the distribution.
Onto Amount for calculation results (MRC), for each worker
CDS = ∑ src)
∑MRC
The value of the CDS will be reported four places after the comma, approaching the last number on the right by excess when the number that happens to it is ≥ 5 and by default if said number is <5. For example, if when calculating the value from the CDS we obtain a value of 0.66476 or 0.66475, 0.6648% will be certified, if, on the contrary, this result gives us 0.66474, 0.6647 must be certified.
7. To calculate the Salary for Results to be received for each worker, the Amount for Calculation Results (MRC) will be multiplied by the Salary Distribution Coefficient (CDS). Being the mathematical expression the following:
SR = MRC x CDS, for each worker
Where:
SR = Salary for results
MRC = Amount for calculation results
CDS = Labor participation coefficient.
8. Let's calculate the Accrued Salary for each worker who participated in the distribution. This figure is obtained from the sum between the Salary obtained by Real Time Worked and the Salary by results (SR), obtained in the previous section. Mathematically it is calculated by using the following equation:
SD = STRT + SR
Where:
SD = Earned Salary
STRT = Real Time Worked Salary
SR = Salary for results.
9. All the calculated values that constitute salary, in any of its modalities, will be reported with two places after the comma, following the approximation principle of consideration 6.
8. Records
8.1. Model No.1: Certification of economic indicators for the application of the payment by results system linked to the overcompliance of the Accumulated Total Profits plan for the period.
8.2. Model No.2: Certification of the Limit Salary Fund to Distribute (FSLD).
8.3. Model No.3: Participation of the UEB in the Increase of the VAB of the Company (↑ VAB) and in the decrease of the Fund of Salary of the Company (↓ FS).
