Rowan Plan
This plan was introduced by D. Rowan in the year 1901. As before, the bonus is paid on the basis of time saved. But rather than a fixed percentage in the case of Halsey plan, it takes into account a proportion following as:
Therefore, under this plan bonus is that proportion of the wages of time taken which the time saved bears to the time allowed or standard time.
Bonus = Time taken × Hourly rate
Overall earnings = Time Taken × Hourly Rate + Bonus
Merits
- It makes sure minimum time wages. It is more liberal than the Halsey plan in that it provides encouragement to work and earn additional remuneration.
- As enhance in effort is much less rewarded after a definite stage, an automatic check for restricted production of inferior quality of goods is ensured.
- This automatic examine enables the worker to earn a fair wage, because there is less opportunity of rate-cutting by the employer, as he is not paying extraordinary wages.
Demerits
- The normal worker may search the bonus calculation a bit complex.
- Like Halsey plan, this plan does not promote extraordinary efficiency. For instance, if the time saved is more than half the overall, earnings begin decreasing.