Taylor’s Differential Piece Rate :This plan was devised by F.W. Taylor, who is known as the father of scientific management. Under this system, two piece rates are fixed :
i) Lower rate applicable to workers whose production is below standard.
ii) Higher rate is applicable to worker whose production is above the standard. So the workers is paid according to his degree of efficiency.
The efficiency of a worker may be determined as a percentage of either :
i) the time allowed for a job to the actual time taken, or
ii) acatual output to the standard output within a specified time.
Under this system, no guaranteed time rate is given. The slow worker is penalised while the efficient worker is duly rewarded.
Gantt's Bonus plan: This system was devised by Henry L. Gantt and it is a combination of time and piece rate. A standard time is fixed for performing a particular work. The worker’s efficiency is determined by comparing the actual time taken with the standard time.
If a worker takes more than the standard time to complete the work (i.e. his efficiency is below 100%), he is given wages on time basis. But if a worker takes the standrd time or less to perform the work (i.e. his efficiency is 100% or more), he is given wages on piece rate basis plus a bonus of 20% on the wages earned.
This plan provides incentives for efficient workers. It is not so harsh as the Taylor’s differential piece rate system. Day wages are guaranteed in this system. Bonus rate may vary depending on the nature of work.
Merrick's piece rate system:
This system is a modification of Taylor’s differential piece rate system. This system does not penalise the slow workers and the trainees but however there is provision of rewarding the efficient workers. The wage payment under this scheme is calculated in the following three rates :-
Level of output Rate of payment
a) Upto 83 % Ordinary piece rate
b) 83% to 100% 110% of ordinary piece rate.
c) Over 100% 120% of ordinary piece rate.
Saturday, October 25, 2008
how to give incentives to workers working as teams
It is a bonus scheme under which bonus or premium is payable to a group of workers in place of individual workers.
Applicability :-
i) This plan is applicable where it is necessary to show collective interest in the work.
ii) Where output of an individual worker cannot be measured with ease.
iii) Where output is more dependent on the group efforts of workers.
iv) Where it is necessary that both direct and indirect workers would be rewarded.
Advantages :
i) It creates team spirit and leads to increase in output. This, in turn, lowers the cost of production.
ii) It eliminates excessive waste of time, materials etc.
Disadvantages :-
i) More efficient workers are not rewarded under this scheme.
ii) Difficulty arises as to the amount of incentive to be fixed and distributed.
Q.20. Give the meaning, advantages and disadvantages of profit sharing scheme.
Ans.: It is a scheme under which the employees are entitled to share the profits at an agreed percentage in addition to their wages. Workers can be given the share of profits in the form of cash or shares in the company.
Advantages :-
i) Efficiency of workers is recognised under this scheme which results in the increase in production.
ii) Labour turnover is minimised.
iii) More efficient workers are attracted to the organisation.
iv) Better co-operation of workers is obtained.
v) Permanent interest of workers in the future of the business is created if the share of profit is given in the form of shares in the company.
Disadvantages :-
i) It is difficult to fix the percentage of profit to be given to workers because workers may claim more share in the profit which the employer may not agree with.
ii) Profit is calculated at the end of the year and only at that time workers’ share of profit is given to them as incentive. Thus under this system, there is no provision of payment of incentive to the workers immediately after they complete a job. So it is very likely that workers may loose interest.
iii) Workers’ share profit in good years but do not bear the loss in bad years. It shows that their relationship with the company is like a fair weather friend.
iv) Workers have a suspicious look at the accounts shown by management as they do not understand the accounting and financial complicacies. So they think that they get less than reasonable share of profit.
Applicability :-
i) This plan is applicable where it is necessary to show collective interest in the work.
ii) Where output of an individual worker cannot be measured with ease.
iii) Where output is more dependent on the group efforts of workers.
iv) Where it is necessary that both direct and indirect workers would be rewarded.
Advantages :
i) It creates team spirit and leads to increase in output. This, in turn, lowers the cost of production.
ii) It eliminates excessive waste of time, materials etc.
Disadvantages :-
i) More efficient workers are not rewarded under this scheme.
ii) Difficulty arises as to the amount of incentive to be fixed and distributed.
Q.20. Give the meaning, advantages and disadvantages of profit sharing scheme.
Ans.: It is a scheme under which the employees are entitled to share the profits at an agreed percentage in addition to their wages. Workers can be given the share of profits in the form of cash or shares in the company.
Advantages :-
i) Efficiency of workers is recognised under this scheme which results in the increase in production.
ii) Labour turnover is minimised.
iii) More efficient workers are attracted to the organisation.
iv) Better co-operation of workers is obtained.
v) Permanent interest of workers in the future of the business is created if the share of profit is given in the form of shares in the company.
Disadvantages :-
i) It is difficult to fix the percentage of profit to be given to workers because workers may claim more share in the profit which the employer may not agree with.
ii) Profit is calculated at the end of the year and only at that time workers’ share of profit is given to them as incentive. Thus under this system, there is no provision of payment of incentive to the workers immediately after they complete a job. So it is very likely that workers may loose interest.
iii) Workers’ share profit in good years but do not bear the loss in bad years. It shows that their relationship with the company is like a fair weather friend.
iv) Workers have a suspicious look at the accounts shown by management as they do not understand the accounting and financial complicacies. So they think that they get less than reasonable share of profit.
EMPLOYEE PAYROLLS
: Payroll is prepared by the payroll department with the following objectives :
i) To determine gross and net earnings of each worker.
ii) To provide information about cost of wages for departments or jobs etc.
iii) To summarise wages according to cost centres
iv) To determine deductions like EPF, ESI, LIC premiums.
v) To help in ascertaining hourly rate of labour cost of each department.
vi) To calculate and summarise employer’s contribution to ESI and PF.
vii)To summarise the cost of overtime premium incurred and cost of bonus payment.
viii)To facilitate management in controlling labour cost by means of comparing actual wages with budgeted wages.
i) To determine gross and net earnings of each worker.
ii) To provide information about cost of wages for departments or jobs etc.
iii) To summarise wages according to cost centres
iv) To determine deductions like EPF, ESI, LIC premiums.
v) To help in ascertaining hourly rate of labour cost of each department.
vi) To calculate and summarise employer’s contribution to ESI and PF.
vii)To summarise the cost of overtime premium incurred and cost of bonus payment.
viii)To facilitate management in controlling labour cost by means of comparing actual wages with budgeted wages.
SENDING WORKERS TO PERFORM OUTSIDE THE ORGANISATION
Some times workers are required to work outside the factory. They are given wages at a higher rate than the regular workers. The outworkers are of the following two groups :-
i) Workers who work at their own premises with their own tools after receiving materials from the factory.
ii) Workers who are sent to the customers’ premises to perform their work.
Control of outworkers :-
For Control of outworkers, the following steps should be taken :
a) Attendance of outworkers working at the customer’s premises should be maintained.
b) Supervisor in charge of such workers would provide them all information regarding descrption of work, allotted time for the job etc.
c) Engaged time and booked time should be clearly recorded.
d) It should be ensured that wages paid should be charged to the job.
Control of outworkers has the following advantages :
i) The work is completed and delivered with in stipulated time and flow of work in the factory is not affected.
ii) Because of careful inspection, good quality of work is done by the workers.
iii) Proper accounts for the materials issued to these workers is maintained which help in ensuring the effective use of such materials
i) Workers who work at their own premises with their own tools after receiving materials from the factory.
ii) Workers who are sent to the customers’ premises to perform their work.
Control of outworkers :-
For Control of outworkers, the following steps should be taken :
a) Attendance of outworkers working at the customer’s premises should be maintained.
b) Supervisor in charge of such workers would provide them all information regarding descrption of work, allotted time for the job etc.
c) Engaged time and booked time should be clearly recorded.
d) It should be ensured that wages paid should be charged to the job.
Control of outworkers has the following advantages :
i) The work is completed and delivered with in stipulated time and flow of work in the factory is not affected.
ii) Because of careful inspection, good quality of work is done by the workers.
iii) Proper accounts for the materials issued to these workers is maintained which help in ensuring the effective use of such materials
Time keeping, HRM & workers records
The various methods of time-keeping for recording the attendance of workers at the gate of the factory may be grouped as below :
(i) Manual methods,
(ii) Mechanical methods.
Manual Methods:
The following are included under manual methods of time keeping :
a) Attendance Register method,
b) Disc or Token method
A) Attendance Regtister Method:-
This is a method of time recording under which a register is kept at the entrance of the factory. This register is maintained with necessary columns like name, identify number of the employee, arrival and departure time of a worker etc. The noting down of arrival and departure time of the workers may be done by the workers themselves or by an employee specifically appointed for this purpose. Then the entries are made to individual attendance records from such register.
Advantages :-
a) This method is simple and inexpensive
b) This method can be followed in small concerns where no. of workers is not large.
Disadvantages :
a) This method is unsuitable in large organisations because there will be hold-ups of workers at the time of getting in and out.
c) It involves extra clerical costs for maintaining individual attendance records.
B) Disc or Token Method :-
Under this method, each worker is allottted a metal disc or token bearing his identification number. Such discs are placed on hooks on a board serially and kept at the factory gate or entrance of the department. At the time of entering into the factory or department, the workers remove their respective discs and place them in a box kept nearby. After the schduled time, the original box is removed and a “late box” is substituted. The late box is taken away at the end of the maximum late time allowed.
The time keeper records the attendance in a register for the purpose of preparing payrolls.
Advantages :
a) This method is simple and economical.
b) This method is applicable only to small organisations.
Disadvantages :
a) A fellow worker may proxy for his colleague by putting his disc in the box.
b) This method may also involve much clerical work,
c) There is possibility that the time keeper may make deliberate mistakes.
Mechanical Methods:
The Mechanical methods that are generally used for recording “In” and “Out” times of workers may be as follows !
a) Time recording clocks
b) Dial time recorders.
(I) Time Recording Clocks :-
It is a mechanical device which automatically records the time of workers. Under this method, clock card or time card is allotted to each worker for one week duration. These cards are serially arranged and kept in a tray near the factory gate. When the worker enters into the gate, he picks up his time card from the tray, puts it in the time recording clock. Then the exact arrival time is recorded at the space provided on the card against a particular day. This time recording process is repeated when the worker leaves the factory after his work. Other particulars of time regarding lunch, late arrivals, early leaving and overtime are printed in red so as to distinguish these from normal period spent in the factory.
Advantages :-
a) There are no chances of dispute arising in connection with recording of time of workers because time is recorded by the clock and not by the time-keeper.
b) There is no scope for partiality or carelessness of the time keeper as it is in the case of manual methods.
Disadvantages :
a) There are chances that a worker may try to get his friend’s timecard from the gate and get him marked present even if he is late or absent.
b) When the time recording clock becomes out of order, then recording of time of workers is disturbed.
(II) Dial time recorders :
This is a machine which has a dial around the clock with about 150 holes. Each hole represents a number which corresponds the identification or token no. of the worker concerned. There is one radial arm in the centre of the dial. When a worker enters into the gate of the factory, he has to press the dial arm into a hole corresponding his identification number and the time is automatically recorded on the roll of paper placed inside the dial time recorder against his number. The paper placed inside the machine provides a running account of worker’s time. This helps in preparing payroll.
Advantages :
a) This method allows greater accuracy and avoids much loss of time.
b) This method avoids the necessity of recopying the attendance time in the pay roll.
Disadvantages :
a) Capacity of this machine is limited,
b) Presence of time keeper is necessary to prevent fraud and irregularities which requires additional costs.
c) Installation cost is high.
(i) Manual methods,
(ii) Mechanical methods.
Manual Methods:
The following are included under manual methods of time keeping :
a) Attendance Register method,
b) Disc or Token method
A) Attendance Regtister Method:-
This is a method of time recording under which a register is kept at the entrance of the factory. This register is maintained with necessary columns like name, identify number of the employee, arrival and departure time of a worker etc. The noting down of arrival and departure time of the workers may be done by the workers themselves or by an employee specifically appointed for this purpose. Then the entries are made to individual attendance records from such register.
Advantages :-
a) This method is simple and inexpensive
b) This method can be followed in small concerns where no. of workers is not large.
Disadvantages :
a) This method is unsuitable in large organisations because there will be hold-ups of workers at the time of getting in and out.
c) It involves extra clerical costs for maintaining individual attendance records.
B) Disc or Token Method :-
Under this method, each worker is allottted a metal disc or token bearing his identification number. Such discs are placed on hooks on a board serially and kept at the factory gate or entrance of the department. At the time of entering into the factory or department, the workers remove their respective discs and place them in a box kept nearby. After the schduled time, the original box is removed and a “late box” is substituted. The late box is taken away at the end of the maximum late time allowed.
The time keeper records the attendance in a register for the purpose of preparing payrolls.
Advantages :
a) This method is simple and economical.
b) This method is applicable only to small organisations.
Disadvantages :
a) A fellow worker may proxy for his colleague by putting his disc in the box.
b) This method may also involve much clerical work,
c) There is possibility that the time keeper may make deliberate mistakes.
Mechanical Methods:
The Mechanical methods that are generally used for recording “In” and “Out” times of workers may be as follows !
a) Time recording clocks
b) Dial time recorders.
(I) Time Recording Clocks :-
It is a mechanical device which automatically records the time of workers. Under this method, clock card or time card is allotted to each worker for one week duration. These cards are serially arranged and kept in a tray near the factory gate. When the worker enters into the gate, he picks up his time card from the tray, puts it in the time recording clock. Then the exact arrival time is recorded at the space provided on the card against a particular day. This time recording process is repeated when the worker leaves the factory after his work. Other particulars of time regarding lunch, late arrivals, early leaving and overtime are printed in red so as to distinguish these from normal period spent in the factory.
Advantages :-
a) There are no chances of dispute arising in connection with recording of time of workers because time is recorded by the clock and not by the time-keeper.
b) There is no scope for partiality or carelessness of the time keeper as it is in the case of manual methods.
Disadvantages :
a) There are chances that a worker may try to get his friend’s timecard from the gate and get him marked present even if he is late or absent.
b) When the time recording clock becomes out of order, then recording of time of workers is disturbed.
(II) Dial time recorders :
This is a machine which has a dial around the clock with about 150 holes. Each hole represents a number which corresponds the identification or token no. of the worker concerned. There is one radial arm in the centre of the dial. When a worker enters into the gate of the factory, he has to press the dial arm into a hole corresponding his identification number and the time is automatically recorded on the roll of paper placed inside the dial time recorder against his number. The paper placed inside the machine provides a running account of worker’s time. This helps in preparing payroll.
Advantages :
a) This method allows greater accuracy and avoids much loss of time.
b) This method avoids the necessity of recopying the attendance time in the pay roll.
Disadvantages :
a) Capacity of this machine is limited,
b) Presence of time keeper is necessary to prevent fraud and irregularities which requires additional costs.
c) Installation cost is high.
Monday, October 20, 2008
material on self performance appraisal
Self-Appraisal
A little boy went into a drug store, reached for a soda carton and pulled it over to the telephone. He climbed onto the carton so that he could reach the buttons on the phone and proceeded to punch in ten-digit phone number.
The store-owner observed and listened to the conversation:
Boy: 'Lady, Can you give me the job of cutting your lawn?
Woman: (at the other end of the phone line): 'I already have someone to cut my lawn.'
Boy: 'Lady, I will cut your lawn for half the price of the person who cuts your lawn now.'
Woman: I'm very satisfied with the person who is presently cutting my lawn.
Boy: (with more perseverance): 'I'll even sweep your curb and your sidewalk, so on Sunday you will have the prettiest lawn in all of Palm beach, Florida.'
Woman: No, thank you.
With a smile on his face, the little boy replaced the receiver.
The store-owner, who was listening to all this, walked over to the boy.
Store Owner: 'Son... I like your attitude; I like that positive spirit and would like to offer you a job.'
Boy: 'No thanks'.
Store Owner: But you were really pleading for one.
Boy: No Sir, I was just checking my performance at the job I already have. I am the one who is working for that lady, I was talking to!'
This is what we call 'Self Appraisa
A little boy went into a drug store, reached for a soda carton and pulled it over to the telephone. He climbed onto the carton so that he could reach the buttons on the phone and proceeded to punch in ten-digit phone number.
The store-owner observed and listened to the conversation:
Boy: 'Lady, Can you give me the job of cutting your lawn?
Woman: (at the other end of the phone line): 'I already have someone to cut my lawn.'
Boy: 'Lady, I will cut your lawn for half the price of the person who cuts your lawn now.'
Woman: I'm very satisfied with the person who is presently cutting my lawn.
Boy: (with more perseverance): 'I'll even sweep your curb and your sidewalk, so on Sunday you will have the prettiest lawn in all of Palm beach, Florida.'
Woman: No, thank you.
With a smile on his face, the little boy replaced the receiver.
The store-owner, who was listening to all this, walked over to the boy.
Store Owner: 'Son... I like your attitude; I like that positive spirit and would like to offer you a job.'
Boy: 'No thanks'.
Store Owner: But you were really pleading for one.
Boy: No Sir, I was just checking my performance at the job I already have. I am the one who is working for that lady, I was talking to!'
This is what we call 'Self Appraisa
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