17

Lecture

Wage &
Incentive Plans

Straight Day-Work
Under this Scheme, the employer buys the time of the
worker.
Earnings E = T R
T = Time in hours available for work in a day
R = Rate of pay, per hour in Taka

Ridwan Al Aziz (Rivan), Lecturer,

Dept. of IPE, BUET

1-2

Piece Work
A uniform rate is paid to the workers for the amount
of work performed and not for the time he spends.
Earning E = n R
n = output in number
R = Piece rate in Taka

Ridwan Al Aziz (Rivan), Lecturer,

Dept. of IPE, BUET

1-3

Incentive Plans
Based on Productivity

Taylor Plan
Merrick Plan

Gantt plan

Based on Time
Halsey Plan
Rowan Plan
Emerson Plan

Bedeaux Plan
Ridwan Al Aziz (Rivan), Lecturer,
Dept. of IPE, BUET

1-4

Taylors Differential Piece Work

A standard task n1 (units) is carefully established.
This standard task is called as High Task.
First of all, Taylor proposed that the workers
producing more than the standard unit will be paid at
high rate R2. The worker, who would fail to achieve
the standard task, will be paid at low piece rate R1.

Ridwan Al Aziz (Rivan), Lecturer,

Dept. of IPE, BUET

1-5

Taylors Differential Piece Work

Ridwan Al Aziz (Rivan), Lecturer,

Dept. of IPE, BUET

1-6

Merricks Multiple Differential

Piece Work
That there should not be any penalty on the workers
and they should be assured of minimum wages (fair
days work = R3)
He proposed number of differentials in piece rate e.g.
upto 70% of the standard task ..Tk R3 (piece rate)
upto 100% of the standard task .Tk R4 (increased
piece rate)
upto 120% and above the standard task..Tk R5 (increased
rate)
Ridwan Al Aziz (Rivan), Lecturer,
Dept. of IPE, BUET

1-7

Merricks Multiple Differential

Piece Work

Ridwan Al Aziz (Rivan), Lecturer,

Dept. of IPE, BUET

1-8

Gantt Plan
That there should not be any penalty on the workers
and they should be assured of minimum wages.
If the worker fails to complete the task within the
standard time he receives only the wages for actual
time spent at the specified rate. But if he completes
the task within time he gets extra wages.

Ridwan Al Aziz (Rivan), Lecturer,

Dept. of IPE, BUET

1-9

Gantt Plan
Standard time = 10 hours
Rate = Tk 8 per hour
Bonus = 25% of the standard time

If the worker finishes his job within 8 hours he will get

Tk 80 plus 25% of the days wages i.e. 80 25% = 20
that means total Tk 80 + 20 = Tk 100.
So he will get bonus for 8 hours work.
Ridwan Al Aziz (Rivan), Lecturer,
Dept. of IPE, BUET

1-10

Halsey Plan

Ridwan Al Aziz (Rivan), Lecturer,

Dept. of IPE, BUET

1-11

Halsey Plan
R = Base rate guaranteed on hourly basis
N = Total pieces are to be produced
N2 = Low task in pieces per hour
T = Time required for making N pieces
P = Percentage of the workers share in gain of above task.
It is generally varying from 25% to 50%
S = Standard time for the job on the basis of data =
(S-T) = Time saved by the worker

E = Wages for the job = RT + p (S-T) R

Ridwan Al Aziz (Rivan), Lecturer,
Dept. of IPE, BUET

1-12

Halsey Plan

Guaranteed base rate = Tk 25 per hour.

Total piece to be produced = 300 pieces.
Standard Task= 100 pieces/hour.
Low task would be 75% of the standard task.
The worker took 2 hours to complete the
job.
Percentage of the workers share in the gain
of above task is 40%.
Hence calculate the rate of incentive per
hour for the worker.
Ridwan Al Aziz (Rivan), Lecturer,
Dept. of IPE, BUET

1-13

Halsey Plan
Guaranteed base rate = Tk 25 per hour. Total piece to be produced = 300 pieces.
Standard Task= 100 pieces/hour, Low task would be 75% of the standard task.
The worker took 2 hours to complete the job. Percentage of the workers share
in the gain of above task is 40%. Hence calculate the rate of incentive per hour
for the worker.
Solution:

R = 25 Tk/hour, N = 300, N2 = 100 75% = 75, T = 2 hours, p = 40% =

0.4
S=
hours
Therefore, E = = RT + p (S-T) R= 225+ 0.4 (4-2) 25 = 70 Taka
Per hour basis wage = 70/2 = 35 Taka per hour.
So, an incentive of (35-25) = 10 Taka per hour should be paid.
Ridwan Al Aziz (Rivan), Lecturer,
Dept. of IPE, BUET

1-14

Rowan Plan
Mr. James Rowan proposed that the bonus should be
paid on the percentage of time worked rather than
time saved. The minimum wage was guaranteed.

Ridwan Al Aziz (Rivan), Lecturer,

Dept. of IPE, BUET

1-15

Emerson Plan
The minimum wage was guaranteed.
Efficiency is measured on the basis of the comparison
of actual performance with the standard fixed.
If the efficiency is 100% the bonus would be paid at
20% and above 100% bonus at 30% would be paid.

Ridwan Al Aziz (Rivan), Lecturer,

Dept. of IPE, BUET

1-16

Bedeaux Plan
Standard time for each job is fixed after undertaking
time and motion study expressed in terms of B.
Generally the bonus paid to the worker is 75% of the
wages for time saved. The rest 25% goes to the
foreman.

Ridwan Al Aziz (Rivan), Lecturer,

Dept. of IPE, BUET

1-17

Bedeaux Plan
Standard time(S) = 360 Bs (6 hours 60 minutes)
Actual time (T)
= 300 Bs (5 hours 60 minutes)
Wage rate (R)
= Tk 10 per hour
Value of time saved = (360 300) / 60 10
= Tk 10
Total wages (W) = S R + 75% of value saved
= 6 10 + 75 / 100 10
= Tk 67.5

Ridwan Al Aziz (Rivan), Lecturer,

Dept. of IPE, BUET

1-18