EUROPE-ASIA STUDIES, Vol. 55, No. 4, 2003, 553–574 Managing the Labour Collective: Wage Systems in the Russian Industrial Enterprise CLAUDIO MORRISON & GREGORY SCHWARTZ THE SOVIET SYSTEM OF PRODUCTION was characterised by giant enterprises with rigid bureaucratic hierarchies, pervasive formal regulations and tightly organised output schedules under the central plan. 1 Similar bureaucratic inflexibility extended to wage distribution, where the ‘scientifically’ determined wage structure, pay scales, skill differentials and premiums were drafted by the planning organs and ministries in Moscow, and were substantially uniform across industries. This rigidity reflected the attempt of the Soviet authorities to construct a predictable wage system aimed at constraining the growth of the wage fund within the limits of productivity growth. In principle, the wage system was intended to provide rewards and incentives for fulfilling the plan, furnish the basis of recruitment and retention of labour, and combat levelling in order to obtain workers’ effort, for which it relied on various forms of incentive pay schemes centred on the use of individual piecework (Filtzer, 1986, 1994; Kirsch, 1972). In practice, the endemic irregularity of production in the Soviet system (see Arnot, 1988; Clarke, 1993; Filtzer, 1986, 1992) and the acute labour shortages resulting from the demand for adequate labour inputs to make the plan (see Hanson, 1986; Lane, 1987; Malle, 1990; Oxenstierna, 1990) put production managers under pressure to make wages commensurate with workers’ expectations. However, the strict control of the plan over wage inflation forced managers to operate within the limits of the wage fund, making the attainment of targets through a standardised and predictable system of wages difficult. With very few formal incentives, disciplinary powers or the power to hire and fire, meeting plan targets hinged on shop managers relying almost entirely on informal mechanisms of control in the allocation of work, payment, social and welfare benefits and access to promotion to motivate and discipline the workforce. Informal mana- gerial power depended on keeping production quotas relatively low, allowing workers to fulfil and overfulfil plan targets easily and using other components of incentive schemes, like bonuses, in-kind and non-tangible remuneration, to obtain their co-op- eration in overcoming production bottlenecks (Granick, 1960, pp. 207–218; Kirsch, 1972, pp. 44–66). Managers ignored, circumvented and systematically manipulated party policies, making extensive concessions to valued individual workers over pay in order to prevent them from leaving, to secure their loyalty and commitment to fulfil ISSN 0966-8136 print; ISSN 1465-3427 online/03/040553-22  2003 University of Glasgow DOI: 10.1080/0966813032000083993