In practice, the piece rate for a specific task in an industrial environment is usually set by an industrial engineer who uses time and exercise studies to determine how many N. an hour a standard employee can produce at a standard speed. Taking into account the wages paid by the local labor market and company-specific factors, such as the policy of paying for efficient wages, the wage reduction policy, etc., will determine the standard hourly wage rate of employees. The task's piece rate will then be set to WIN so that standard employees who work at standard speed will generate standard wages.
Advocates of piece-rate compensation usually use an analogy. Imagine a company that buys steel rods from two different suppliers, one of which is more efficient than the other. We barely thought that the company would pay a second, less efficient supplier for each steel bar, not the first one. The cost of producing steel rods is the supplier's business, not the customer company, it just wants to buy steel rods as cheaply as possible. With a simple analogy, piece-rate wage compensation is an obvious pay system because it ensures that the buyer, the employee, pays for what she gets – that is, the labor service that is sufficient to complete the assigned task. But the workforce is not a commodity of steel bars, which is where our five-factor analysis will begin.
Most of the problems encountered in piece-rate wages are technical, so this will occupy most of our discussion. When the technology is simple, the piece rate is ideal: there is no ambiguity; there is little or no obvious quality difference in the way of working; the worker is the infantry; the employee must not adversely affect the capital equipment used; the training between the workers and Cooperation is not a serious problem; there is little external uncertainty in linking worker inputs to output levels.
More generally, task blurring is a killing in the piece counting tool setup. Quality problems can be killed unless the quality can be reasonably easily monitored, and the problem can be traced back to the responsible culprit, who then usually corrects the problem and pays the fine [or at least does not compensate for the poor work].
Maintenance of capital equipment can be a problem when using piece-rate wages because workers abuse machines to pursue higher yields.
Therefore, in some cases, workers need to purchase their own tools, while in other cases, individual workers need to pay for consumables such as drill bits. If you need a lot of cooperation, the piece rate is usually very poor. Even if the employee works very independently - think about the clothes manufacturing and the individual workers on his or her sewing machine - training new employees can also be problematic, as this will bring opportunity costs to the trainer's piece-rate gains. The standard practice is to have a "leader" staff member on each shift. He is responsible for helping inexperienced workers, and compensation is based on [or supplemental] training, supervision, etc.
Orignal From: Piece-rate wage compensation in human resources
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