s 1,2

economy

Incentives in Key Industries

January 7, 1995

Q: If in a key industry workers do not have share equity in the enterprise, and the enterprise does not operate on a profit basis, what is the basis for production incentives?

You know, in this type of key industry, there is neither profit nor loss. There are no shareholders. There are no elite who will gain personal profit by the basic needs of the people. They exist because they serve a primary function which must be maintained for the basic development of the society. There should be no exploitation in the society in this delivery of services. But there must be incentive for the individual worker to do well in the job place.

Now there need not be shareholders and shares given, nor need there be company profit or loss. The company simply takes in what is needed to operate. But within the company, there may be many incentives for the workers to enhance their production. There should be rich reward systems for workers who do quality work. There must be recognition given to those who do outstanding work and reward bonuses given, special vacation privilege given, many types of bonuses that can be offered. Vacation packages, time off, extra money -- these all come within operating costs. And not only bonus system, but also promotional system based on quality work. If a worker does quality work then goes to the university and gains educational background, there must be support for that worker to better himself educationally, to make a more substantial contribution. Therefore, that workers who are industrious, get the educational background, do good production, they can advance themselves in this key industry to a more advanced placement with a higher salary. They may also get special bonus. There may be so many incentives given within the company without the development of a profit-loss basis. These are all operating expenses of the company, because the company must provide incentives to the workers to do quality work. This can be done without share holding, or without company profits above and beyond operational expenses. This is all included in operational expenses.