Piece Rate: Taylor's Differential Piece Rate System
F W Taylor, the father of Scientific Management, originated this system. The major features of this plan are:
- There will be two piece of work rates, one is higher & the other is lower.
- The standard of effectiveness is determined either in terms of time or output depends on time & motion study.
- If a worker complete work within standard time (or generate more than standard output within time) he will be given high piece rate.
This system penalises the slow employee by paying low rate because of low manufacture, rewards an able worker by giving him high rate because of higher manufacture. Indirectly, this system gives no place to unproductive work. In other terms, if the output of an employee is less than the standard output, he is paid a low rate & vice versa.