What is Allowance? | Different Types of Allowances

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Allowances
The normal time for an operation does not contain any allowances for the worker. It is impossible to work throughout the day even though the most practicable, effective method has been developed. Even under the best working method situation, the job will still demand the expenditure of human effort and some allowance must therefore be made for recovery from fatigue and for relaxation.

Allowances must also be made to enable the worker to attend to his personal needs. The allowances are categorised as:

  1. Relaxation allowance,
  2. Variable allowance
  3. Interference allowance, and
  4.  Contingency allowance.
  5. Policy allowance

1. RELAXATION ALLOWANCE
Relaxation allowances are calculated so as to allow the worker to recover from fatigue. Relaxation allowance is a addition to the basic time intended to provide the worker with the opportunity to recover from the physiological and psychological effects of carrying out specified work under specified conditions and to allow attention to personal needs. The amount of allowance will depend on nature of the job.

Relaxation allowances are of two types: fixed allowances and variable allowances.

Fixed allowances constitute:

(a) Personal needs allowance: It is intended to compensate the operator for the time necessary to leave, the workplace to attend to personal needs like drinking water, smoking, washing hands. Women require longer personal allowance than men. A fair personal allowance is 5% for men, and 7% for women.

(b) Allowances for basic fatigue: This allowance is given to compensate for energy expended during working. A common figure considered as allowance is 4% of the basic time.

2. VARIABLE ALLOWANCE
Variable allowance is allowed to an operator who is working under poor environmental conditions that cannot be improved, added stress and strain in performing the job. The variable fatigue allowance is added to the fixed allowance to an operator who is engaged on medium and heavy work and working under abnormal conditions. The amount of variable fatigue allowance varies from organization to organization.

3. INTERFERENCE ALLOWANCE
It is an allowance of time included into the work content of the job to compensate the operator for the unavoidable loss of production due to simultaneous stoppage of two or more machines being operated by him. This allowance is applicable for machine or process controlled jobs. Interference allowance varies in proportion to number of machines assigned to the operator. The interference of the machine increases the work content.

4. CONTINGENCY ALLOWANCE
A contingency allowance is a small allowance of time which may be included in a standard time to meet legitimate and expected items of work or delays. The precise measurement of which is uneconomical because of their infrequent or irregular occurrence.

This allowance provides for small unavoidable delays as well as for occasional minor extra work:

Some of the examples calling for contingency allowance are:

  • Tool breakage involving removal of tool from the holder and all other activities to insert new tool into the tool holder.
  • Power failures of small duration.
  • Obtaining the necessary tools and gauges from central tool store. Contingency allowance should not exceed 5%.

5. POLICY ALLOWANCE
Policy allowances are not the genuine part of the time study and should be used with utmost care and only in clearly defined circumstances. The usual reason for making the policy allowance is to line up standard times with requirements of wage agreement between employers and trade unions. The policy allowance is an increment, other than bonus increment, applied to a standard time (or to some constituent part of it, e.g., work content) to provide a satisfactory level of earnings for a specified level of performance under exceptional circumstances. Policy allowances are sometimes made as imperfect functioning of a division or part of a plant.

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