This article throws light upon the six main types of incentive wage plans for workers. The types are: 1. Halsay’s Plan 2. Rowan Plan 3. Taylor’s Differential Piece Rate System 4. Gant’s Plan 5. Merrick’s Multiple Piece Rate System 6. Beadux Plan.
Type # 1. Halsay’s Plan:
It was formulated in 1891 by Mr. F.A, Halsay of America. The plan was adopted in England. In this standard time and hourly rate is predetermined. In case worker completes job in less than the standard time, he gets bonus of time saved in addition to normal wages. Bonus is half of the wages of time saved. This is why it is also called Fifty-Fifty Plan.
Total Wages = Normal Wages + Bonus
where t = Time taken
h = Hourly rate s = standard time
For instance, the standard time for a job is 10 hrs. with hourly rate of Rs. 6. The work is done in 4 hrs. Calculate the wages through Halsay Plan.
Ans. Here t = 4
h = Rs, 6
=> 24 + 18 = Rs. 42 Ans.
Type # 2. Rowan Plan:
This was developed by Lames Rowan 1901, in Scotland. This also assures minimum wages & many times regarded as improved form of Halsay Plan. If the worker completes his work before prescribed standard time, he is paid additional wages.
Formula = (t x h) + t x (s – t) x h
where t = time taken
h = hourly rate
s = standard time
For instance, if standard time for a job is 10 hrs. with hourly, rate of Rs. 6. The work is done in 4 Calculate wages under Rowan Plan.
Ans. Here t = 4
h – Rs. 6
5 = 10
= 24 + 14.4
= Rs. 38.4 Ans.
Type # 3. Taylor’s Differential Piece Rate System:
This system was developed by father of scientific management F. W. Taylor himself. In this the number of output is specified with amount per piece. If the standard number is surpassed the worker gets high price for its produce.
The wage rates for producing standard number of units or more is higher than the wage rates fixed for producing lesser than the standard output. In this way it rewards efficient workers and punishes the lazy ones at the same time.
Let standard number of units be 25. Wage rate upto 24 units is Rs. 5 each and for 25 or above that is Rs. 7 each.
Worker producing 20 units get: 20 x 5 = Rs. 100
Worker producing 25 units get: 20 x 7 = Rs. 140
Worker producing 27 units get: 27 x 7 = Rs. 189
Type # 4. Gant’s Plan:
This was put forward by H. L. Gants and is combined and integrated form of time and piece-rate system. It is an improvement of taylor’s plan. Here, there is guarantee of minimum wages.
Formula- s x h + 25% of (s x h)
Where s = standard time
h = hourly rates
Let us suppose that
Prescribed standard output = 10 units
Prescribed standard time = 8 hours
Wages per hour = Rs. 3 /-
Bonus rate = 25 per cent of wages.
If worker completes his job in 8 hours his wages will be:
8 x 3 = Rs. 24/- + Bonus i.e., Rs. 6/- = Rs. 30/-.
If worker does it in 6 hours wages will be:
24 + 6= Rs. 30/-.
If he does its in 10 hours wages will be:
8 x 3 = Rs. 24/- only.
Type # 5. Merrick’s Multiple Piece Rate System:
This is a modified form of Taylor Plan. In this there are different wages for different number of outputs i.e.. for the first n units say Rs. 21- per unit. For next n units say Rs. 4/- and so on
For instance different wage-rates for varying units are as follows:
1-20 units @ Rs. 4 per unit
21-40 units @ Rs. 6 per unit
41-50 units @ Rs. 8 per unit
1. A worker produces 11 units,
he gets 11 x 4 = Rs. 44/-
2. If worker produces 25 units-
(20×4) + (5×6)
80 + 30 = Rs. 110/-
3. If worker produces 48 units- (20×4)+ (20×6)+ (8×8) 80+ 120 + 64
= Rs. 264/-.
Type # 6. Beadux Point Premium Plan:
This was introduced by C.E Beadux. After careful motion, time and fatigue study, the standard output is prescribed. In case the worker produces prescribed quantity within prescribed time, wages will be calculated per hours. If he completes the work before prescribed time is over, the wages of time saved is shared between worker and supervisor in ratio of 3:1.