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

Answer 1

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.