Taylor’s Differential Piece Rate Plan
- It is Individual wage incentive output based plan.
- Developed by F.W. Taylor.
- F.W. Taylor, known as the Father of Scientific Management.
- Under this system standard task is established through time and motion study. 2 The piece rate is fixed. The lower rate for those workers who fail to complete the standard task within the allotted time and the higher rate for those who complete the task within or less than the allotted time.
- The objective of the plan is to provide sufficient incentives to workers to work hard and achieve the standard.
Advantages-
- The method is just and fair to all.
- Inefficient workers are penalized but encouraged to reach the standard.
- Help to improve and standardize the work methods.
- Increase in productivity and hence reduce cost per unit.
Disadvantages-
- No guarantee of minimum wage to workers.
- Demotivate if the worker is just below the standard.
- Employers may fix a very high standard that workers may find it difficult to achieve.
Applicability
- Individual workers can be measured easily.
- When the quantity of output directly depends upon workers skill and effort.
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