THE DIRECTOR'S FUND, AN INCENTIVE FOR WORKERS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700100076-5
• Release Decision: RIPPUB
• Original Classification: R
• Document Page Count: 4
• Document Creation Date: December 22, 2016
• Document Release Date: October 25, 2011
• Sequence Number: 76
• Publication Date: December 26, 1952
• Content Type: REPORT

Declassified in Part - Sanitized Copy Approved for Release 2011/10/25: CIA-RDP80-00809A000700100076-5
LANGUAGE
WHERE
PUBLISHED Moscow
DATE
PUBLISHED Sep 1952
HOW
CLASSIFICATION ~RRRESSTRRICTED
CENTRAL g IiELLIGEN DApN
~CY
INFORMATION FROM
FOREIGN DOCUMENTS OR RADIO BROADCASTS
COUNTRY USSR
SUBJECT Economic - Trade union, labor
DATE DIST. A6 Dec 1952
NO. OF PAGES 4
SUPPLEMENT TO
REPORT NO.
THIS IS UNEVALUATED INFORMATION
The Director's Fund was created to encourage the initiative and increase the
responsibility of directors, managers, engineering and technical workers, as well
as the entire coll)ctive of workers employed at industrial enterprises, in fulfill-
ing production programs, reducing costs, and fulfilling plans for profits. This
fund is one of the forme of material incentives for the workers of tbo3e enterprises
which have achieved outstanding production successes.
A Director's Fund is set up in all state industrial enterprises operating on
acost-accounting basis with an independent balance sheet. These include factories,
plants, mines, pits, electric power stations, mills, printing houses, peat fields,
timber enterprises, and others, under union, republic and Local subordination (in-
cluding rayon and city industry), and subsidiary industrte?. enterprises under the
transport, construction, trade, and other economic min'scr:es.
There is no Director's Fund at subsidiary industrial enterprises of budgetary
and scientific research establishments.
Formation of the Director's Fund
An industrial enterprise which fulfills or exceeds the state p.en for the out-
put of commodity production in the estaolishea variety or articles, the plan ror
profits, and the plan for the reduction of costs, has the right to form a Director's
Fund. Fulfillment of the plan for commodity production is determined by a compar-
ison of the planned commercial costs of the comparable and noncomparable commodity
output actually produced, with the planned commercial costs of all commodity out-
put.
The Director's Fund of an enterprise consists of deductions from profits or
from savings realized by a reduction in production costs. These deductions are
differentiated and made at a higher rate for enterprises of heavy industry.
STATE
ARMY
CLASSIFICATION RESTRICTED
NAVY NSRB DISTRIBUTION -~ L
AIR ` Fal -I -I __ I I
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For coal, ferrous and nonferrous metallurgy, petroleum, inorganic chemicals,
nitrogenous fertilizer and superphosphate enterprises and for the cement, asbestos,
mica and peat industries, deductions for the Director's Fund are made at the rate
of 5 percent of planned profit3 or planned savings from reduced costs and 45 per-
cent of above-plan profits or above-plan savings.
For enterprises of the machine-building ministries, enterprises of the Ministry
of Electric Power Stations, the Ministry of Paper and Wood-Processing Industry,
the Ministry of Timber Industry, the Ministry of Chemical Industry (except inor-
ganic chemical, nitrogenous fertilizer, and superphosphate enterprises), the Kin-
istry of Construction Materials Industry (except cement, asbestos, and mica), the
t= tile industry and locomotive repair, railroad-car repair, and machine-building
plants of the Ministry of Railways, deductions for the Director's Fund are speci-
fied at the rate of 2 percent of the planned profits or planned savings and 30
percent of above-plan profits or above-plan savings.
For enterprises of the Ministry of Light Industry, the Ministry of Food Indus-
try, the Ministry of Meat and Dairy Industry, the Ministry of Fish Industry,.tha
Ministry'of Local Industry, the Ministry of Local Fuel Industry and also for in-
dustrial enterprises of other ministries (including enterprises under republic and
local subordination) and enterprises of industry under rayon and city subordina-
tion, deductions for the Director's Fund are made at the rate of one percent of
planned profits or planned savings and 15 percent of above-plan profits or above-
plan savings. At the same time regulations state that the total yearly sum of
deductions for the Director's Fund, from planned and above-plan profits or savings
due to a reduction in production costs, must not exceed 5 percent of the yearly
wage fund of industrial personnel in terms of the actual volume of output of com-
modity production.
Planned profits include only those profits which ere provided for in yearly
and quarterly plans. Enterprises for which no profit is provided in the plan,
must fulfill the plan for savings by a reduction in costs and a percentage of
the reduction of costs of comparable production against the previous year, in
order to receive a Director's Fund.
Above-plan profits are determined by the difference between actual profits,
es shown in the approved balance sheet of the enterprise, and planned profits.
In this case, profit deductions for the consumers' goods fund are taken both-from
the plan and from the balance sheet. Above-plan savings from a reduction in
costs are specified as the difference between actual and planned costs of the
enterprise's entire output of commodity production, both comparable and noncom-
parable.
In practice it often happens that enterprises achieve above-plan profits,
or above-plan savings from reduced costs, indirectly, from sources independent
of the production phase of the enterprise, such as e. change in the price of
raw materials ,;r fuel, a change in the price of articles produced, a change in
transportation rates, etc. These indirect proff.ts and savings must first be
deducted from the total above-plan profits and savings before deductions are
made for the Director's Fund.
The final size of the deductions for the Director's Fund is determined by
the results of the year's work and the approved yearly accounts and balance sheet
of the enterprise. However, to make monetary assets of the Director's Fund avail-
able for the extent of the current calendar year, the directors of enterprises are
allowed to make advance deductions at the end of each quarter on the basis of the
balance of the enterprise and at half the rate of the established norm. These
deductions must be approved by the director of a higher-level economic organization.
No deductions are made for the fourth quarter since this sum is included in the
final account for the entire year. I
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As a result of the extensive development of socialist competition for an in-
crease in profitability and the attainment of above-plan accumulations, the finan-
cial and economic activity of industrial enterprises is continually improving and
plans for reducing production costs are being exceeded. Correspondingly, deductions
for the Director's Fund grow from year to year.
It may happen that in practice the sum of the quarterly deductions for the
Director's Fund in the course of a year turns out to be higher than the sum indi-
cated by the approved yearly accounts and balance. It this does happen, then the
excessive amount deducted is cancelled by the balance remaining in the Director's
Fund at the end of the year. If this amount is not sufficient to cover the discrep-
ancy, the difference must be jade up from deductions for the Director's Fund for
the next year. Until this is made up, no new expenditures are permitted from the
Director's Fund.
Utilization of the Director's Fund
In many instances the Director's Fund constitutes a very large sum. How, then,
should these funds be expended?
In accordance with a government decree, the Director's Fund may be expended
in the following way: for the expansion of production; for construction and repair
of housing for workers of the enterprise, above capital investment plans at the
rate of 50 percent of the deductions; for improving cultural and public services
for the_vorkers of enterprises (including the expansion of auxiliary enterprises,
children's institutions, equipment for rest homes and sanatoriums, dining rooms
and clubs, and supplies for these institutions; and for physical culture activities);
for the payment of individual bonuses to workers, employees, and engineering and
technical workers; for obtaining paid transportation to rest homes and sanatoriums;
end for extraordinary financial aid to the workers.
An estimate of utilization of the Director's Fund must be agreed to by the
directors of the enterprise and the factory-plant committees of the trade union.
The wage commissions have been designated by the VTsSP3 to see to it that the fund
is utilized according to the estimate.
The Director's Fund supplements the exceedingly large amounts allocated by
the Soviet government for improving the material well-being and cultural level of
.the Soviet people.
The better the work of an enterprise and the higher the quantitative and quali-
tative indices of its activities, the more significant are the money savings and,
i erefore, the larger become the deductions for the Director's Fund.
Take as an example the Second Bearing Plant of the Ministry of Automobile and
Tractor Industry. Id 1951, more than a million rubles were expended from the.
Director's Fund of this plant. A considerable part of this money went for he
construction and equipment of a club, a pioneers' camp, kindergartens and nurseries,
for paid transportation of workers to rest homes and sanatoriums, and also for
bonus payments.
The Director's Fund is like a mirror which reflects the economic status of
any plant or factory. Every trade-union organization is vitally interested in the
establishment and proper utilisation of the Director's Fund of its enterprise,
since it is an important source of suppl';aentary funds for improving the cultural
and living conditions of workers and employees.
The duty of trade-union organizations is to further the development of
socialistic competition among workers for the fulfillment and overfulfillment of
production programs, for economy in materials, raw materials and electric power,
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and for the accumulation of planned and above-plan profits. It is necessary to
-explain the significance of the Director's Fund to the workers and employees and
to establish strict control over the manner in which it is expended.
Declassified in Part - Sanitized Copy Approved for Release 2011/10/25: CIA-RDP80-00809A000700100076-5