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From Wikipedia, the free encyclopedia
Wage Reform was a process that took place in the Soviet Union from 1956 through 1962. The reforms took place during the Khrushchev era and were intended to move Soviet industrial workers away from the mindset of overfulfillment of quotas that had characterised the Soviet economy during the Stalinist period.
Under Stalin the majority of Soviet workers had been paid for their work based upon their individual performance through a piece-rate system, with the intention of encouraging workers to work hard and therefore increase production as much as possible. However, the enormous level of bureaucracy that this entailed contributed to huge inefficiencies in Soviet industry. Workers' personal production quotas were also heavily manipulated by factory managers who were keen to protect workers' wages.
The wage reforms sought to remove outdated wage practices and incentivise Soviet workers much more efficiently by making their wages more standardised and less dependent upon overtime or bonus payments. However, industrial managers were loathe to go ahead with actions that would effectively reduce workers, and often ignored the directives, continuing to pay workers high overtime rates. Because of the nature of Soviet industry, where materials were often in short supply and production would often be the result of "storming" practices, the ability to offer bonus payments had often been vital to the everyday running of Soviet industry, and therefore the reforms ultimately failed to create a more efficient system.