Question

Develop a differential piece rate plan for a shirt manufacturing company.

Answer 1

The method can be explained with the help of an example. A standard output of 200 units of a shirt is fixed in an 8 hours time. A; rate of $45ispaidiftheoutputis200ormoreunitsand$35 if production is less than 200 units. Worker A has produced 240 units and B produced 180 units. The wages to be paid to a worker, A will be $10800=(240\ast$45) and that to B will be $6300=(180\ast$35).

F.W. Taylor started this method as a part of the scheme of scientific management. The underlying principle of this system is to reward an efficient worker and penalise the inefficient person. In Taylor’s system, inefficient persons have no place in his organization.

The standard time was fixed for completing a task with the help of time and motion study. If a worker completes the task in the standard time he is paid at a higher rate and a lower rate is paid if more than the standard time is taken