- It is the individual wage incentive output based plan.
- It is developed by Henry L. Gantt.
- Under this plan, the standard time for every task is fixed through time and motion study.
- A minimum time wage is guaranteed to all workers.
- A worker who fails to complete the task within the standard time receives wages for actual time spent at the specified rate. Workers who achieve or exceed the standard get extra bonus varying between 20% to 50% of the hourly rate for the time allowed for the task.
- Minimum wages assured to all workers.
- Wages increase progressively with increase in Efficiency.
- Inefficient workers not penalized severally.
- Simple to understand.
- Fixed cost per unit decreases with an increase in production due to incentives for efficiency given under this scheme of wage payment.
- It divides workers into the competing categories. one who earns the bonus and the other who does not earn the bonus. This brings disunity among workers and becomes unacceptable to the labor union.
- The guaranteed time wages may not encourage efficiency if worker feel satisfied with the time wages.
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