|
Time Rate System |
Piece Rate System |
| Meaning | |
| In the time rate system, the wages are paid as per the time spent by workers. | The piece rate system, the wages are paid
as per the output given by workers. |
| Old/new system | |
| It is the oldest and simplest system of wage
payment. |
It is a modem and incentive system of
wage payment. |
| Guarantee of wage payment | |
| It gives guarantee of certain minimum wage payment to every worker. | It fails to give guarantee of minimum wage
payment to every worker. |
| Support from | |
| Employees and trade unions support time rate system. | Employers and efficient workers prefer piece rate system. |
| Understanding of the system | |
| It is easy to understand and simple to administer. | It is a complicated system as various records and registers are required to be maintained. |
| Distinction between workers | |
| Distinction is not made between efficient and inefficient workers as all are paid at one and the same rate. | Distinction is made between efficient and
inefficient workers. An efficient worker is paid more while an inefficient worker is paid less. |
| Effects on production | |
| It encourages workers to follow go-slow policy and naturally production suffers.
|
Piece rate system encourages workers to
take more interest in the work and naturally production increases. |
| Quality of production | |
| Quality and workmanship of production are not affected. Similarly, machinery, raw materials, etc. are utilized properly. The spoiled work is also negligible. | Quality and workmanship of production
may suffer as workers are in a hurry lo complete more work. This leads to increase in spoiled work and wastage of rawmaterial. |
| Supervision required | |
| Strict supervision is necessary as workers are paid as per the period spent.
|
Strict supervision is not necessary as workers are paid in proportion to the production given. |
| Suitability | |
| Suitable to small units and also convenient when contribution of individual worker is not easily measurable. | Piece rate system is suitable when contribution of individual worker is measurable easily and quickly. |
Time rate v/s Piece rate
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