ON INCENTIVE PAY IN HIGHER EDUCATION

A. I. KOLMATSUI

(Presented by the scientific seminar of the Department of Political Economy)

The principal task in the development of our economy is to ensure a rise in the material and cultural standard of living of the people on the basis of high rates of development of socialist production, an increase in its efficiency, scientific and technical progress, and an acceleration of the growth of labor productivity. Among the system of measures contributing to the fulfillment of this task, the most important role belongs to the material and moral stimulation of the labor of scientific workers.

Scientific research under modern conditions is part of the aggregate social expenditures on the production of goods. The result of scientific labor makes it possible to increase the productivity of social labor, and this appears as a decisive factor in the growth of national income.

That is why the CPSU and the Soviet government devote great attention to the development of science. Suffice it to say that the total state expenditures on scientific research work will reach 13 billion rubles in 1971 and will increase by 8.3%, while national income will grow by 6.1%. Taking into account the importance of the growth of labor productivity as a decisive factor in raising the country’s economic power, it is necessary first of all to show concern for the fulfillment of tasks in science and technology, which to a considerable degree depends on the material stimulation of the labor of scientific workers. In the arsenal of economic incentives for the development of socialist production, an important place is occupied by incentive pay for labor in higher education.

Taking into account the role of higher educational institutions in the matter of training personnel, it is necessary to note their significance as scientific centers. This is determined by the following circumstances: a) in carrying out the training of personnel for the national economy, it is necessary to pay attention to

scientific knowledge of future specialists, on whom the implementation of scientific and technological progress at enterprises depends;

b) higher educational institutions employ about 30% of all scientific workers in the Soviet Union and more than half of the doctors and candidates of sciences, which determines the quality and prospects of the successful development of higher-education science;

c) higher educational institutions have a constant influx of fresh forces for conducting scientific research. For this reason, in our economic literature of recent years the question has been raised of the economic effectiveness of higher-education science.

Incentive pay for labor in higher education is of great importance for increasing the effectiveness of scientific research and technical development. “Bonuses will be inadmissible under the system of full communism,” wrote V. I. Lenin, “but in the transitional epoch from capitalism to communism one cannot do without bonuses...”¹). Paying special attention to the material encouragement of scientific workers, V. I. Lenin proposed establishing bonuses “for especially successful and rapid fulfillment of the most important organizational and technical tasks”²).

A bonus, as an economic form of interaction of the system of interests with respect to a definite object (scientific research, technical developments), makes it possible to express most fully the dependence of concrete results on the quantity and quality of the labor of scientific workers. Its purpose consists in ensuring the maximization of the worker’s efforts in certain periods of time for the performance of the assigned task by compensating for increased labor expenditures that are not reflected in wages. Thus, a bonus makes it possible to take fullest account of the individual labor contribution of workers of a given category, which is characterized by a sharp differentiation in the results of the work of individual performers.

This circumstance is very important to take into account in analyzing research labor. In scientific inquiry, despite its growing technical equipment, the role of the labor of the scientific worker is increasing. The additional labor expenditures of the worker are expressed not only in an increase in the intensity of creative labor, but also in a simple increase in working time at the expense of one’s free time. This should be reflected above all in the incentive-pay system. In order to create a stable material interest in raising labor effectiveness, it is necessary that the bonus compensate for the worker’s additional labor expenditures.

The importance of incentive pay also lies in ensuring a combination of the interests of society, scientific collectives, and individual workers. This combination of interests must create more favorable conditions for shortening the time required to conduct scientific research at a high scientific and technical level and for the more rapid use of scientific recommendations in production. The incentive-pay system must, therefore, link together the entire process of creating, mastering, and using new technology. In addition, the economic stimulation of scientific work in higher educational institutions must promote the development of the most important complex scientific and technical problems and the use of the scientific and technical potential of higher educational institutions.

In order for incentive pay for workers of a higher educational institution to achieve po—

¹) V. I. Lenin. Collected Works, vol. 38, p. 98.

²) V. I. Lenin. Collected Works, vol. 36, p. 180.

of the assigned tasks, it is necessary to have a sufficient amount of money in the bonus fund. At present this problem has not yet been fully solved, and the bonus does not always constitute any tangible reward for the successes achieved in work.

Funds for paying bonuses to employees of research organizations of higher educational institutions are provided for in the maintenance estimate (in the cost estimate) of these organizations in the amount of 4–8% of the annual wage fund. A certain part of the rector’s fund is also used for these purposes.

At present, the establishment of research institutes, problem laboratories, and other institutions engaged in extensive work on the creation and introduction of new technology, the development and study of important problems of a research and applied nature, has become widespread in higher educational institutions. However, in higher educational institutions and their structural subdivisions there are no regulations on bonuses drawn up with due regard to their specific conditions. Such regulations must be developed and widely discussed by the university community.

The regulations on bonuses for the professorial and teaching staff and for the engineering and technical staff, workers, and employees of a higher educational institution should reflect the purposes of bonuses, the sources of bonus payments, the sizes of bonuses, and the procedure for awarding them. They should be developed in accordance with the “Regulations on Bonuses for Employees of Enterprises and Organizations for the Creation and Introduction of New Technology,” approved by Resolution No. 597/P-27 of the State Committee of the USSR Council of Ministers on Labor and Wages and the Presidium of the All-Union Central Council of Trade Unions of December 26, 1964, taking into account subsequent amendments and additions. In addition, the “Regulations on Bonuses for Scientific Workers,” approved by the State Committee of the USSR Council of Ministers on Labor and Wages on December 19, 1957, No. 441, should also be reflected here.

The development of regulations on bonuses is a complex task now on the agenda of higher educational institutions. Its complexity lies in the fact that the planned amounts of bonuses to be paid to performers must correspond to their planned labor expenditures. For this, it is necessary to develop and improve standards for the labor intensity of individual types of work. Only in this case will it be possible objectively to take into account the contribution of a given subdivision of a higher educational institution and of each employee, and to calculate the share of the bonus due to them. At the same time it is important that each laboratory, research institute, research sector, department, etc., know in advance the planned amount of the expected bonus, established by means of a preliminary calculation of the economic efficiency of the work being performed. On the basis of this amount of the bonus and the volume of work, it would be advisable to calculate a basic standard—the amount of the bonus per hour of work of the lowest complexity (qualification), taken as the unit. In addition, for each structural subdivision a system of scales of coefficients of scientific and technical complexity, novelty of work, etc., should be developed. Such work in higher educational institutions has so far not become at all widespread.

According to existing practice, funds for bonuses are included in the estimate of the research sector of institutes and are approved annually by the Ministries of Higher and Secondary Specialized Education of the republics at 4 to 8%

of the annual wage fund of employees in the research sector and problem laboratories. Such a practice of forming the bonus fund is in clear contradiction with the very meaning of bonuses, since any saving of the wage fund entails a reduction in the amount of bonuses, and this does not stimulate a reduction in labor costs through better organization of labor in the research collective. Such an organization of scientific research may lead to an increase in the number of employees engaged in research, and hence also in the wage fund; as a result, other things being equal, such a collective has a higher bonus fund.

The main task in improving the bonus system is to determine the principal incentive indicator. Such an indicator should be the final result of the activity of a given collective. This will make it possible to combine most fully the personal and collective interests of employees and to achieve higher results of work as a whole.

The assessment and remuneration of the activities of scientific collectives should be carried out depending on the actual economic effect of the work performed. This effect should be the principal indicator for bonuses. That is why the bonus fund left at the disposal of higher educational institutions is distributed in proportion to the volume of work performed, taking into account its importance, the quality of execution, and the results of implementation in industry. At the same time, it is very important to interest every subdivision of the higher educational institution engaged in applied scientific research in the implementation of the results of its activity in production with a significant economic effect. The method adopted for differentiating allocations to bonus funds contributes substantially to the fulfillment of this task. Thus:

a) for topics on which research work has been completed on time and delivered to the customer without implementation, funds for bonuses are provided in the amount of 4% of the wage fund;

b) completion of topics with the submission of implementation certificates without indicating the economic effect leads to an increase in the amount of bonuses to 6% of the wage fund;

c) topics that have been completed with the submission of an implementation certificate and with an indication of a significant economic effect increase the amount of bonuses to 8% of the wage fund.

In addition, if, in implementing the results of research and development on a topic, a significant economic effect is achieved, the performers may be awarded bonuses from the administrative fund of the ministry in accordance with the “Regulation on Awarding Bonuses to Employees of Enterprises and Organizations for the Creation and Introduction of New Technology” of December 26, 1964, No. 597/П-27.

It is quite clear that such a practice of awarding bonuses needs improvement. It should be directed toward taking into account the creative initiative and activity of scientific and pedagogical workers throughout the entire period of research, including the introduction of the results of scientific activity into production with a significant economic effect. In our view, a system for the formation of ...

of incentive funds in higher educational institutions, proposed by Soviet economists. In this case it is proposed that, for contractual research in higher educational institutions, the fund for material incentives and the fund for social, cultural, and housing construction measures be formed from deductions from profit, which in qualitative terms should take the form of a definite part of the additional profit obtained by enterprises as a result of the implementation of scientific recommendations in production (for those works for which the economic effect can be calculated), and in the form of the difference between the cost of completed scientific research and its price established in accordance with the economic contract (for those works for which it is not possible to calculate economic efficiency). The norm of deductions from the actual national-economic efficiency, and the period during which this deduction is to be made, should be established so as to take into account the interests of society, of the enterprise using the scientific recommendations, and of the higher educational institution. A significant part of the material-incentive fund should be used for the collective and individual encouragement of scientific and teaching staff, students, postgraduate students, and scientific auxiliary personnel.

Along with this, profit should be a source for the formation of a centralized bonus and reserve fund, which is at the disposal of ministries and departments and may be used to reward employees and collectives for outstanding scientific achievements.

Such an arrangement for organizing material incentives for contractual scientific research in higher educational institutions will be directly dependent on the effect obtained in the national economy from the use of the results of scientific research and recommendations in production.

The bonus system should cover primarily those employees who participate directly in the creation and introduction into production of scientific-research work and technical developments. Awarding bonuses to persons who actively assist in the fulfillment of the plan of scientific-research work should, apparently, be carried out only in cases of some special merit on their part, bearing in mind that the basis of a bonus is not additional remuneration for labor paid through the wage system, but payment for additional labor costs. According to established practice, a bonus fund of up to 10% of the total fund is allocated for rewarding persons who actively assist in the fulfillment of the plan of scientific-research work and in their introduction. If this assistance is connected with the performance of their ordinary official duties, then the bonus loses its economic meaning and, consequently, should not be awarded. To this end, it is necessary to establish accounting of the labor contribution of this category of employees to the fulfillment of the plan of scientific-research work and to its introduction into production. Such an approach to bonuses makes it possible to exclude from the number of persons rewarded those who have no direct relation to the performance of the indicated work, and also to eliminate the equalizing distribution of bonuses.

We have considered only certain aspects of the organization of bonuses in higher education. Under present-day conditions, in view of the tasks facing higher educational institutions, it is necessary to improve

to improve incentive pay in all areas of work of higher educational institutions. At the same time, along with determining the principal indicator for stimulating the work of research collectives, the most important condition for improving this incentive system is the development of a bonus-award system suited to the specific character of higher education institutions, and the determination of particular indicators and bonus conditions for each subdivision of a higher education institution, depending on the concrete tasks they face in developing particular scientific problems. The determination of such indicators and conditions should be resolved locally; this will make it possible to take fuller account of the distinctive features of the work of each research collective and of each individual employee.