Piece Rate System

Total wages = Total output x Wage rate per unit of output

= output units x rate per unit
= Actual yield x unit or piece rate
 Time Rate System:
• Total Wages = Actual taken x Time rate
= Total hours worked x wage rate per hour per week
Halsey Premium plan:
• Total Wages = Basic wages + Bonus
• Basic wages = Time taken(TT) x Standard rate
• Bonus = ½ (Time saved x standard rate)
• Finally Total wages = (TT x SR) + ½ (TS x SR)
• Time saved = Standard time – Time taken
• Effective wage rate under Halsey plan = Total wages/TT
Rowan Premium
Plan
• Total wages = Basic wages + Bonus
• Basic wages = Time taken (TT) x Standard rate(SR)
• Bonus = Time saved(TS)/Standard Time(ST) x TT x SR
• Total wages = (TT x SR) + TS/ST(TT x SR)
• Effective wage rate = Total wages/TT
Taylor’s Differential Piece Rate System:
• Wages = Actual yield x Low or High piece rate
• High piece rate = 120% of normal piece rate
• Low piece rate = 80% of normal piece rate
• Use low piece rate for below standard
• Use high piece rate for equal and above standard
• Standard output/standard yield(if not given) = TT x standard output per time
unit
• Standard rate per unit(if not given) =
 Gantt’s Task and Bonus
Scheme:
• Total wages below standard = Actual yield x Normal piece Rate
• Total wages equals to standard = Time taken x Time rate + 20% of time wage
• Total wages above standard = Actual yield x High piece Rate
• Normal piece rate = Time rate or guaranteed time rate
• High piece rate = 120% of Normal Piece rate