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Incentive Scheme for Sewing Operators – Part #1

by Prasanta Sarkar - July 30, 2012

All you know that employees work for money. If there is a chance for earning more money through
better performance employees will jump for it. As a result, an employer gets more production in
the same working hours. It will work only if you design your incentive scheme scienti cally and if it
is fair.

I will share 3 simple ways for designing incentive scheme for sewing operators in the garment
industry in 3 parts. All of these are successfully running in garment manufacturing factories. In
this article, the term ‘incentive’ indicates the bonus amount or extra amount of money operators
earn for their better performance.
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Part#1 Incentive on extra production

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The name itself de nes that bonus will be paid to sewing operators when operators produce more
pieces than target production. Production target is set for the line and bonus is paid to the line. Subscribe
This is one types of group incentive plan where line output will decide whether operators will get
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incentive or not.

This is the most easy and smart way to design incentive plan for operators. Operators would be
happy and motivated as they can count extra pieces produced by them at the end of the day. FOLLOW US

Hence, they can nd out their incentive earnings easily. To keep it simple, incentive rate can be
kept equal or less than the current average labor cost per garment. Reason, whatever extra  17.4K  4.95K  13.8K
garment is produced by the line will cost you nothing but you can save in overheads, electricity,  1.90K  1.27K  661
over time payments.

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Managers, who feel operators and supervisors may cheat them in individual performance based Retail Apocalypse Due to Covid-
incentive scheme, can implement this scheme. Secondly factories, who don’t track details of 19
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individual operator performance for their operators, can easily implement this scheme without
any dif culty.
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Read following 5 steps to design production based incentive scheme. Digital Brands
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Step 1: Set production target (PT):

In this step you will set daily line’s production target to be eligible for earning incentive. Record
daily line output from day one of loading the style. Once learning curve ends calculate average line
output of following consecutive 3 days. For example, rst 7 days line output is 40, 150, 250, 290,
300,310, 305 pieces. You can expect daily average production of 300 pieces from the line without
any bonus system. Now to get more production announced bonus for extra production than 300
pieces daily.

Target production can be de ned more accurately by using line ef ciency% history. Here is the
formula for calculating target quantity using line ef ciency
Target production = Available minutes in a line * Ef ciency% / Garment SAM

Step 2: Calculate daily average salary for the line (W):

It is considered that operators are paid xed salary. There is two ways to calculate daily average
salary for the line.

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Add up monthly salary of all operators working in the line. Now, divide total amount by number of
working days in a month to calculate average salary that is paid to the line daily.
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Or you can rst calculate daily wages of individual operators and sump up daily wages of those Apparel Production Apparel Software

workers who works in the line to calculate line’s daily wages. Business Guides CAD/CAM career

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Example: In a sewing line 30 operators are working. 10 of them get 180, 10 of them get INR
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200.00 and rest 10 operators get INR 220. So, daily average wages for the whole line is 6000/-
(1800+2000+2200). To make the calculation easy multiply operator number by highest operator Event & Fair Fabric Fashion
salary. i.e. 220/- *30 = 6600/-
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Step 3: Calculate Direct Labor cost per piece (C): 
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Divide daily total line wages by target production to calculate direct labor cost per piece. i.e.
C=W/PT or C=6000.00/300 = INR 20.00 Operator Training PLM

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Step 4: Determine incentive rate per extra pieces produced (ET):  QNA Quality Quality system

Salary & Wages Sampling Sewing Machine

If the line performs as per target level then line will produce average 300 piece daily and your per Sourcing Spec Sheet Stitching

cost of manufacturing will be INR 20.00. Now, if line produces more pieces than your target you Technology Textile processing
per piece direct labor cost will go down as because you are still paying INR 6000.00 to the line.
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You can set incentive rate two ways
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1. If line produces more garment than 300 pieces line will be given bonus of INR 20.00 for each
extra garment. That is equal to the average labor cost per garment. In this case labor cost per
garment will remain same but your daily production will be increased and order can be nished
in less time.

2. Secondly if you want to increase production and at the same bring down your labor cost per
piece set bonus less than average labor cost per piece. You can set it as 80% of labor cost per
garment i.e. INR 16.00 for each extra piece production. 

Example: If the line produces 350 pieces per day, line will earn bonus for 50 pieces (350-300).
Multiply extra pieces by incentive rate to calculate total bonus earned by the line.

If you use rst method (i.e 20.00 per garment) total bonus earning of the line in a day is equal to
INR 1000.00. And if you use second method (i.e 16.00 per garment) total bonus earning of the line
in a day is equal to INR 800.00.

Step 5: Distribution of incentive amount among operators: 

You got total incentive earning for the line. You have to distribute to the operator in such a way
that nobody gets demotivated.

Distribution of bonus can be designed in two ways –

 1. Distribute total amount equally to all operators. In this example 30 operators earned bonus
INR 1000.00. So, each operator will get bonus equal to INR 33.33.

2. Second option instead of equal distribution, distribute bonus based on work content (SAM of
the operation) ratio. For example, if SAM of the garment is 15 minutes and SMV of two
operations is 0.75 and 0.45 minutes and operations are done operator X and operator Y
respectively. As per SAM ratio operator X will earn bonus = 1000 * 0.75/15 = INR 50.00 and
operator Y will earn bonus = 1000 * 0.45/15 = INR 30.00 

Design of your incentive scheme is ready.

Include line supervisors, helpers and quality checker under the bonus scheme. Set line production
target for them. On reaching the target give them lump sum amount per day.

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Vicky Anand
please discuss the case when we have 40000 operator working on same style in a factory
Like · Reply · 1y · Edited

Engr Joy
Pls upload part 2&3
Like · Reply · 1y

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