worker incentive plans

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.