INCENTIVES TO REDUCE THE COST OF PRODUCTION IN METALLURGICAL ENTERPRISES

Abstract

The problem investigated by authors is connected with the necessity to ensure the competitiveness of domestic metallurgical enterprises production under conditions of the growing prices for raw materials, materials and energy carriers The problem to decrease product cost becomes very acute. The article presents results of approaches aimed at the personnel’s stimulation for economy of resources. The authors proposes the system to manage personnel’s motivation in reducing product costs. The authors believe that the personnel is not sufficiently interested in rational use of resources. Accordingly it decreases the effectiveness of introduced measures directed on economy of resources. In this regard the traditional approach presuming that the labor productivity rates have to exceed the salary growth rates is criticized. As a criterion of restriction of the money allocated for labor payment, the authors suggest to use a ratio of labor productivity growth rates calculated as the ratio between added value and personnel number. Different stages are listed how to calculate the money allocated for labor payment and financing of other expenses for the personnel. Introduction of the offered approaches will allow to increase motivation of the personnel to rationally use the resources.