13: Managerial Salaries

The managerial and higher technical personnel of a Soviet industrial enterprise receive monthly salaries. The levels of these are fixed by the state, and vary according to qualifications, the size and position of the enterprise etc.:

"Individual monthly salaries are set for executives, engineering and technical personnel... The state fixes salary differentials depending on the importance of an economic sector, enterprise or shop, on working conditions, the area in which an enterprise is located, and so on. In addition, the amount of salary always depends on the volumeof work at the enterprise etc., degree of responsibility and complexity of the production process.

Specially well-qualified executives or engineers employed in major sections of an enterprise, office or organisation receive personal salaries not, as a rule, exceeding the normal salary by more than half".

(Y.L. Manevich: "Wages Systems", in: "The Soviet Planned Economy"; Moscow; 1974; p. 251-2).

In describing industry in orthodox capitalist countries, Soviet sociologists draw attention to:

"... the' key position' of the foreman in bringing ideological influence to bear on workers".

(N. Bogomolova: "Human Relations Doctrine: Ideological Weapon of the Monopolies"; Moscow; 1973; p. 83).

In the Soviet Union also, however, since the "economic reform", the role of the foreman in an industrial enterprise has been raised from that of (in Marx's words) "non-commissioned officer" to that of full member of management, with appropriate increase in his wage-level:

"Top administrative personnel.. include, first and foremost, the director, production shop chiefs and foremen".

(S. Kamenitser: "The Experience of Industrial Management in the Soviet Union"; Moscow; 1975; p. 65).

"It has long been suggested that the foreman be given more responsibility and higher wages.. Since the foreman now contributes more to production, directors now have the right to raise the wages of highly skilled foremen and technical personnel in order to provide an additional incentive, this increase amounting to up to 30% of their fixed salaries, to be paid out of the planned wages fund".

(A. Volkov; "Profit and Personal Incentive", in: "Pravda" (Truth), November 14th., 1965, in; "The Soviet Economic Reform: Main Features and Aims"; Moscow; 1967; p. 97).

On the shop floor the most highly skilled grade of worker receives a wage twice that of the least skilled grade:

"At present one scale of rates is in operation in every sector. Most enterprises have a scale which consists of six grades with a ratio between the higher and lower of 1:2".

(Y.L. Manevich: ibid.; p. 242-3).

The monthly salaries of managerial and technical personnel are naturally higher than the wages of the average shop-floor worker:

"A foreman's salary in a top-category section is 10-20% higher than the basic wage rate for a highly qualified worker; the salary of a foreman in the lowest 3rd. group is 10-20% higher than the basic wage rate for average-qualified workers in this section.... Shop superintendents in the higher group in all sectors are paid more than twice as much as a foreman in the lowest group. The salary paid to an enterprise manager (director) is never more than treble the salary of a foreman. The chief engineer's salary is 85-100% that of the director".

(Y.L. Manevich: ibid.; p. 252).

On this basis, the salaries of managerial and higher technical personnel bear the following relationship to the basic wage rate of an average shop floor worker:

Average shop floor worker 1.5 units

Foreman 1.6 to 2.4 units

Shop superintendent (more than) 3.2 units

Chief engineer (up to) 4.1 to 7.2 units

Director (up to) 4.8 to 7.2 units

Specially well-qualified director (up to) 7.2 to 10.8 units

That is, the salary of an enterprise director is up to 7.2 times the basic wage of a shop floor worker of average skill.

This wage/salary differential between shop floor workers and management personnel forms, however, only a minor part of the actual income differential between these categories; the greater part of the latter, as will be demonstrated, accrues from differentials in "bonus payments".