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Three employees are given the same type of job to perform; the standard time is 7hours. Under the company’s payment scheme employees are paid an hourly rate of£35 and a bonus on 40% time saved.Mariam performs the job in 4 hours, while Saimon takes 6 while Khaled takes 7.
Calculate the wages earned by each worker showing clearly the bonus and the basicpay.
Mariam is unhappy: she has worked the quickest and yet the scheme is penalising her.Explain with valid reasons wether she is justified in being angry? (5)
What safeguards must a company build into its bonus scheme to ensure that they arenot abused? (4)4.
A team of 8 workers produces a total of 400 items in an 8 hour day, for which eachmember is paid £5 per hour. The business is attempting to improve its labour productivity over the 8 hour day and has received the following proposals:i.
Reduce the team to 6 members, changing working practises, resulting in a totaloutput of 320 items per day.ii.
Increase the team to 10 members resulting in a total output of 450 items per day.iii.
Maintain the team at 8 members, but pay a bonus of £0.20 per item to be sharedequally by the team, resulting in an output of 420 items per day.a.
Calculate the original unit if labour cost per item.ii.
For each of the three proposals above, calculate the unit labour costper item and state what effect each proposal would have onproductivity.iii.
The business produces and sells 2000 items in each of the 48 weeksthat it operates. Calculate the annual cost saving that the business willachieve by implementing the most productive proposal.b.
Labour productivity can be improved if the total output is increasing.i.
Define labour productivity.ii.
Describe two ways in which labour productivity might be improvedwithout an increase in total output.iii.
Evaluate the importance of bonus schemes in improving productivityin a business where quality of the product is essential.