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Explain payment by results system of remuneration. What are its sub-methods?
Under results system of remuneration, workers are paid according to the production achieved by them. Time attended by the workers is immaterial.
Following are the sub-methods:
1) Straight Piece Rate System
2) Piece Rate With Guaranteed Time Rate
3) Differential Piece Rate System
Explain the following:
a.) Taylor Differential Piece Rate System
This system has two piece rates, if the output is below standard low piece rate is given to worker and if output is above standard a high piece rate is paid. It does not provide for any guaranteed time rate payment. The main defect in this system is that even if the efficiency of the worker is slightly below the standard limit, he gets heavily punished and even if the efficiency of the worker is slightly above the standard limit, he is benefited largely.
b.) Merrick Differential Piece Rate System
This system provides three piece rates to remove the defect in case of Taylor’s system. Under this system no guaranteed time rate payment is provided.
c.) Gnatt Task Bonus System
This system is a combination of piece rate and time rate. It provides minimum time rate payment. A high standard is set. The wage structure is fixed as below:
• Output below standard - Minimum time rate payment.
• Output at standard - Time wages plus some increase in wage rates.
• Output above standard - High piece rate for entire output.
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