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com

DEFINITION
Payment by results
Variable rewards granted according to

variations in the achievement of specific

results.

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Advantages
Motivation
Mutual benefits
Increased alertness
Reduction of cost..
Reduced time loss.

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Disadvantages
Sacrifice Quality for Quantity
Disregarding safety regulations
Overwork
Jealousy
Difficult to change

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Types of Incentives
Earning vary in the same proportion as output
Earnings vary less proportionately than output
Earnings vary proportionately more than

output
Earnings differ at different levels of output

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Incomes varying in
proportion
Straight piece-workto output
Standard hour system

Time wages guaranteed

Time wages not guaranteed

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Earnings varying proportionately

less than output
Halsey or weir premium plan

Std. Rate- 25 units per hour

Base rate- Rs1
Total WH-8hours
Case(1) @15/hour worker earn Rs8

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@35/hr produce 35*8 = 280 units

Production = 11.2Hours of work
Compensation=Rs8+50% of 3.2

=9.60

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Rowan Plan
Bonus= Time saved/time allowed*time
taken*rate per hour
Std. Time-10 hours
Wage/hour-Re1
Time taken-8hours
Saved-2 hours

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Halsey Plan

8 hours*Re1+50% of 2= Rs9
Rowan Plan

8+(2/10*8*1)=9.60

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Barth Variable Sharing System

Std. Time - 10Hrs

Rate per hour-Re1
Case(1)
Time taken= 12Hours
Earnings=Root of (12*10)
=10.95

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*1

Bedaux Scheme

Std.Time = 30 Hours
1800 Bs
Wage per hour - Re1
Time taken - 35 hours
Earnings
- Re.35

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Time Taken 25 Hours

Earnings =

Wage 25
Incentive- 5*.75= 3.75
Foreman 1.25

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Earnings varying
Proportionately more than
High Piece rate
output
High std Hour system

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Earnings differing at
different
levels
of output
Taylors differential
piece rate system
120 percent of piece rate at or above std.
80 percent of piece rate below std.

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Maverick Differential Piece Rate system

Gantt task system
Emerson plan

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Group Incentive Plans

Gain Sharing Programs

Cost saving plan
Scanlon plan
Labor cost/svop
Rucker Plan
Labor cost/sop
Profit Sharing Plans

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Cash Plans
Deferred Plans
Combination Plans
ESOPs
Incentive for indirect workers

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