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Piece Wage/Rate System (It is not suitable where, ((i) Amount of work can…
Piece Wage/Rate System
wage payment
based on
performance workers.
output &
not time
spent determines
amount of wages.
Piece wages= Number of unit produced * Rate Per Unit
It is not suitable where,
(i) Amount of work can be accurately measured.
(v) Work is repetitive in nature.
(ii) Cost control is essential.
(iv) Quantity is more important than quality.
(vi) Speed is very important.
(iii) Specialised skill is not required.
Types
(i) Straight Piece Rate:
method when
one piece
rate fixed
& whole production
paid on basis
e.g.
piece rate Rs. 6
per unit & worker
produce 200
units then gets
(ii) Increasing Piece Rate:
different rates
fixed for
difference level
of production.
(200 * 6) =Rs. 1200/-
Higher wage rate
given worker
produce more units
1 more item...
e.g.
Piece Rate
Rs.2 fixed
50 units & above
upto 100 units
Rs. 3 &
if worker
produce 80 units
gets wages
according given
increasing rate.
(iii) Decreasing Piece Rate
wage rate
per unit
decreases with
increases in
output this
method used to
improve quality
1 more item...
But some
time it
discourage
efficient workers.
W = N * R