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Question

Piece-rate system of remuneration is suitable for which of the following situations?

[1 mark]

A
Quantity of products is more important than the quality produced.
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B
Quality of products is more important than the quantity produced.
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C
Productivity of an employee cannot be measured precisely.
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D
Individual employees do not have any control over production.
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Solution

The correct option is A Quantity of products is more important than the quality produced.
Piece-rate system is suitable when:
  • Where production quantity is more important than the quality of the product.
  • When the work is of repetitive nature.
  • When the mass manufacturing system of production is followed and the work is standardised, it is suitable for continuous manufacturing.
  • When it is possible to measure the production/output of workers separately.
  • When strict supervision is not required and/or it is difficult.

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