PROCEEDINGS
OF THE TOMSK ORDER OF THE OCTOBER REVOLUTION
AND ORDER OF THE RED BANNER OF LABOR
POLYTECHNIC INSTITUTE
named after S. M. KIROV

Volume 292　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　1974

COLLECTIVE MATERIAL INTEREST

IN THE IMPLEMENTATION OF SCIENTIFIC AND TECHNICAL ACHIEVEMENTS

AT A SOCIALIST ENTERPRISE

A. I. KOLMATSUI

Scientific and technical progress is the decisive material prerequisite for the socialist transformation of society and the building of communism. Thanks to the accelerated development of science and technology, growth in labor productivity is ensured, output increases and its quality improves, labor intensity is reduced, the most advanced forms of organization of production and labor are used, etc. Ultimately, the development of science and technology is the decisive factor in the growth of the efficiency of social production and, on this basis, in raising the living standards of working people. Therefore the Communist Party of the Soviet Union and the Soviet government regard the acceleration of scientific and technical progress as one of the main national-economic tasks.

Guided by V. I. Lenin’s ideas on the role and significance of science and technology under socialism, the Twenty-Fourth Congress of the CPSU, in the Directives for the five-year plan for the development of the national economy for 1971–1975, outlined a comprehensive program of scientific and technical progress, constituting an organic part of the five-year plan. “The basis of this program,” as A. N. Kosygin noted in his report at the third session of the USSR Supreme Soviet of the eighth convocation, “is the creation and introduction into production of fundamentally new tools of labor, new materials, progressive technological processes, and the improvement of product quality.”¹ The implementation of the program of scientific and technical progress makes it possible to ensure the intensification of social production and to raise its efficiency, as well as to make fuller use of modern achievements of science and technology in production.

In the system of measures contributing to increased efficiency of social production, the most important role belongs to strengthening the material interest of workers in creating new technology and accelerating the pace of implementation of scientific and technical achievements in production. Under socialism, society must choose such a form of allocation of the product of production to the direct producer that would interest him to the maximum degree in raising the efficiency of labor. Such a form is the distribution of the basic part of the consumption fund in accordance with the quantity and quality of labor expended by each worker in the social economy.

The quantity and quality of workers’ labor, as is known, are determined by a combination of various factors, with each factor playing a definite role in this combination.

To characterize and assess the quality of labor, it is first of all necessary to take into account such factors as qualifications, working conditions, and the scale of the work. These factors are stable and common to large groups of workers. They are customarily called permanent.

Meanwhile, quite often in the production process, with the same qualifications and complexity of labor and equal conditions of production and organization of labor, the results of labor may differ. Consequently, some factors determining the quality of labor have remained unaccounted for. Such factors should be regarded as initiative and creativity in work, promptness, conscientiousness in labor, and so forth. These factors of labor quality are variable. Some workers may have them, while others may not. Today they are present, and tomorrow they may no longer be.

Variable factors are more mobile and do not have their own direct measure. Their direct accounting in the labor process is impossible. They manifest themselves in the final results of labor and exert a direct influence on them. If the wage rates of time workers, the piece rates of piece workers, and the official salaries of engineering-technical workers and employees reflect the permanent factors of labor quality, then in order to reflect the variable factors of labor quality—which can be measured only by comparing concrete results—a special form of distribution according to labor proves objectively necessary: the bonus.

The bonus is an economic category of socialism, expressing the relations of the worker with the production collective and with society as a whole concerning the distribution of part of the fund of remuneration according to labor. Its purpose consists in ensuring the maximization of the worker’s efforts during certain periods of time for the fulfillment of assigned tasks by compensating increased labor expenditures that are not reflected in the permanent part of wages. This has determined the important role of bonus payment in stimulating scientific and technical progress.

For the effective organization of a system of material incentives for workers to increase the pace of the creation and introduction of new technology, it is necessary to take into account the distinctive features of economic relations in the sphere of scientific and technical progress, which are conditioned by the specificity of the very processes of creating and introducing new technology. This system must ensure its noncontradictory interaction with the general system of stimulating production as a whole, of which it is an organic part. In other words, the system of material incentives for workers for the creation and introduction of new technology must be based on a combination of the material interests of society, the collective, and the individual in increasing the efficiency of social production.

Taking into account the distinctive features of economic relations in this area presupposes an analysis of the character of workers’ labor and of its results. The specificity of the labor of workers engaged in the creation and introduction of new technology lies in the great differentiation of the creative capacities of its bearers and, consequently, of the results of the search. This is due to the relative unrepeatability of labor (the personal abilities of workers, their talent, and character are often of decisive importance for success in work), the absence of limits on labor expenditures within the bounds of working time proper, and so forth. Since the indicated features of workers’ labor cannot be fully reflected in the wage rate or salary, then

important significance is acquired by bonuses that reflect the quality of labor through its results.

The results of labor also have their own specificity. In connection with the great effect on economic relations in the sphere of scientific and technical progress of the time lag, in a number of cases it is impossible to determine reliably the final outcome of scientific and technical activity. Therefore, in organizing material incentives for scientific and technical progress, it is necessary to resolve the question of the interaction of the interests of the present and future development of the socialist economy. Moreover, the results of labor are used not only at the given enterprise and do not always yield an economic effect in the immediate future. All this accounts for the complexity of bonuses in stimulating technical progress.

Under the new conditions of planning and economic incentives, the amounts of incentive funds of enterprises and organizations have been made dependent on the cost-accounting results of their activity. With the growth of the cost-accounting initiative of enterprises, and the increase in their funds going to capital investments directly from the enterprises, the modernization and technical renewal of fixed assets, the transition to new technology, the application of new materials, and the output of new products depend to an ever greater extent directly on the enterprises. The solution of these questions leads to changes in the current cost-accounting indicators that determine the size of incentive funds. If, as measures in the sphere of scientific and technical progress are implemented at an enterprise, the mass of profit, the level of profitability, and sales of output grow, then it becomes advantageous for it to carry out these measures. It is therefore important that the activity of enterprises in the sphere of scientific and technical progress should ultimately be reflected in the growth of incentive funds, ensuring the material interest of the entire enterprise collective.

Under present-day conditions, when the acceleration of the pace of technical progress is of decisive importance for the further development of social production, an important role is played by ensuring an advantage in material interest for those workers who are directly engaged in questions of carrying out scientific and technical progress. These workers, as a rule, perform creative labor that is qualitatively more complex. Such labor contributes to the greatest extent to raising the efficiency of social production. Consequently, increased remuneration for this labor is economically fully justified.

It is also necessary to take into account the circumstance that bonuses in this case may constitute an economic form for realizing the independent interests of groups of workers engaged in performing a single scientific and technical task, the economic result of which can be realized only by society as a whole and partly only in the future. Moreover, the implementation of measures in the field of scientific and technical progress may entail a temporary decline in current production indicators.

The circumstances we have noted may lead to contradictions between the interests of an individual worker or group, the collective, and society. Therefore bonuses must be paid from centralized incentive funds that act as economic levers for carrying out a unified policy in the field of scientific and technical progress. Such a fund is the special sectoral bonus fund for the creation and introduction of new technology.

In connection with the implementation of the economic reform, some economists propose abolishing the special system of bonuses for

the creation and introduction of new technology and to use for these purposes only the material-incentive fund, increasing its size accordingly². This point of view was subjected to just criticism in a number of works by Soviet economists³. For in this case the sphere of operation of workers’ material interest would be limited to the interests of only the given enterprise, whereas the principal significance of the system of material stimulation of technical progress lies in ensuring the unity of technical policy at all stages of technical progress—research, design and engineering organizations, manufacturing enterprises, and consumers.

And indeed, the organization of wages, and the indicators and amounts of bonuses for the results of enterprises’ economic activity, do not yet take full account of workers’ contribution to accelerating technical progress. In addition, the results of introducing new technology are not immediately reflected in the indicators of enterprises’ economic activity. The stimulating significance of bonuses for new technology consists in the fact that they are paid not depending on the general results of the economic activity of collectives, but above all depending on the national-economic efficiency of the new technology.

Thus, the problem is not to deprive enterprises and organizations of bonuses from a centralized fund, but to combine a unified state technical policy with the material, cost-accounting interest of industrial enterprises in their rapid and effective development. In other words, it is to implement, as applied to technical progress, the principle: “that which is in the interests of the national economy should be made economically advantageous for enterprises and cost-accounting organizations.”

The existing system of bonuses for the creation and introduction of new technology, in terms of its purpose and the nature of the measures whose fulfillment gives the right to receive additional material remuneration, basically meets the requirements of the present stage of development of the socialist economy. However, an analysis of existing practice shows that it needs improvement.

Thus, for example, the procedure for forming special bonus funds for new technology cannot be regarded as optimal. For enterprises that devote great attention to technical progress, the bonus fund for work on new technology does not fully satisfy the need for it. The point is that, as scientific and technical progress is carried out, the initial investments in research and development, as a rule, increase. Work on mastering new types of products and technological processes becomes increasingly labor-intensive, requiring the expenditure of labor of higher qualification. Such labor also needs higher remuneration, which gives rise to the need to increase the funds allocated for these purposes. Under conditions in which the size of the material-incentive fund for workers for the creation and introduction of new technology cannot exceed 1% of the wage fund of industrial-production personnel, the amount of these funds may prove insufficient to fully satisfy enterprises’ need to stimulate technical progress.

With the transition of enterprises to the new system of planning and economic stimulation, given a tendency toward a reduction in the number of workers, the wage fund decreases, which leads to a reduc—

² I. Oblomskaya. “Problems of Stimulating Technical Progress.” Planned Economy, 1969, No. 10.
³ L. M. Gatovskii. Economic Problems of Scientific and Technical Progress. Moscow, 1971.

...the sum of bonuses for the creation and introduction of new technology. The established dependence of the amount of bonuses for new technology on the wage fund cannot be considered economically justified, since the implementation of scientific and technological progress should contribute to reducing the expenditures of living and embodied labor.

One of the reasons giving rise to a discrepancy between the size of bonuses and the fund allocated for these purposes is also the fact that the size of bonuses does not correspond to the effectiveness of the measures carried out. According to the current regulation on bonuses for new technology, the amount of incentive is the greater, the lower the economic effectiveness of the given measure. For example, for measures that yield savings of up to 10 thousand rubles per year, the scale provides for a bonus amounting to from 6 to 25% of the annual economic effect, while for measures yielding 50–100 thousand rubles of savings per year—from 3 to 12%. This does not promote the interest of the collective in the most economical solution of technical problems. When determining the bonus amount at the maximum rate, an enterprise may receive more funds for a less economical solution of the indicated problems.

In 1969, as a scientific experiment, all research institutes, design-engineering and technological organizations, as well as industrial enterprises of the Ministry of the Electrical Engineering Industry of the USSR were the first in the country to switch to a new procedure for planning and economic stimulation of the development of new technology.

The amount of funds allocated to the incentive funds for the development and introduction of new technology depends entirely on the annual economic effect of the measures carried out. The specific amount of allocations to the material-incentive fund for the creation and introduction of new technology for industrial enterprises and to the economic-incentive fund for scientific and design-technological organizations is determined by the scale contained in the Regulation on bonuses for employees of enterprises and organizations for the creation and introduction of new technology.

A substantial shortcoming of the new system of economic stimulation of technical progress, in our view, is the unjustifiably large reduction in allocations as the economic effect of the measures carried out increases. For enterprises, those measures are important that can substantially increase the economic efficiency of production. Meanwhile, the results of the first year of the experiment showed that if, on average, for measures with an effectiveness of up to 7 thousand rubles per year, allocations amounted to more than 22%, then for measures with an annual effect of from 50 to 60 thousand rubles—approximately 12%.⁴

Practice shows that with the growth of the economic effectiveness of scientific and technical measures, the complexity of their development and introduction increases significantly; the participation of a large number of workers and a longer time for their implementation are required. At the same time, a sharp reduction in the funds allocated for incentives reduces the possibilities of material encouragement for the participants in such developments.

In this connection, the proposal of economists deserves attention: to discuss and test the possibilities of awarding bonuses for new technology at a uniform percentage of the amount of the effect obtained. In our opinion, this would substantially improve the stimulation of economic effectivene—

⁴ K. I. Kogan, Experience in Applying the New System of Economic Stimulation for the Assimilation and Introduction of New Technology. “Experience of Economic Work at Enterprises,” NIIINFORMTYAZHMASH, Moscow, 1970, p. 38.

of new technology, and will increase the interest of enterprises in developing and implementing the most effective and major measures.

The question of the sources for forming the bonus fund also requires resolution. At present the bonus fund for new technology is formed from deductions charged to the production cost of industrial enterprises. This practice has already been criticized. And indeed, bonuses for new technology are not related to the costs of producing the main output of a given enterprise. Moreover, charging bonuses for new technology to the cost of production reduces profit, which diminishes the possibilities for material incentives for the overall results of activity. Here the interests of groups of workers receiving bonuses for new technology may conflict with the interests of the entire collective.

The most correct of the proposed methods for resolving this issue, in our opinion, is to form the bonus fund for the creation and implementation of new technology from overall profit. In this case, the costs of manufacturing and implementing new technology will correspond to their economic nature, on the one hand, and will also not lead to a reduction in the fund for material incentives for the overall results of economic activity, on the other. N. Garetovskii is right, in our view, when he notes: “In practice, by including in the cost of production the expenses for mastering new types of products, what is ultimately ensured is the redistribution, for the purposes of scientific and technical progress, of part of the surplus product created during the given specific period.”²

In order to ensure an organic connection of the system for stimulating technical progress with the new conditions of economic reform, it is necessary to change substantially the role, methods of formation, and use of the bonus fund for the creation and implementation of new technology. Careful preparation of a system of measures to strengthen bonuses for technical progress and their testing in practice will undoubtedly yield a positive result.

1. A. N. Kosygin, On the State Five-Year Plan for the Development of the National Economy of the USSR for 1971–1975 and on the State Plan for the Development of the National Economy of the USSR for 1972. Moscow, 1971, p. 7. ↩

2. N. Garetovskii. Financial Problems of Scientific and Technical Progress. Planovoe khoziaistvo, 1971, No. 3, p. 39. ↩