Q 2: What is a piecework and differential piece rate plan? What are the advantages and disadvantages of these programs? How has union pressure affected use of piece rate systems?
Under the Fair Labor Standards Act (FLSA), industrial homework (also called "piecework") means the production by any covered person in a home, apartment, or room in a residential establishment, of goods for an employer who permits or authorizes such production, regardless of the source (whether obtained from an employer or elsewhere) of the materials used by the homeworker in producing these items. DIFFERENTIAL PIECE RATE SYSTEM this scheme, up-to a certain production level, which may be standard output, a piece rate (say R 1) is given. For anybody, who achieves more than this output, will get the payment for over achievement at a higher rate. However, it does not guarantee minimum base wage. Standard output may be decided by careful time and unction study procedure.
Advantages of Differential Piece Rate System
* Provides incentives to efficient worker
* Penalizes inefficient worker
* Focuses on high production rate
* Simple and easy to implement
Disadvantages of Differential Piece Rate System
* Minimum wage is not assured.
* No consideration for the machine failure, power failure, etc. * Over emphasis on high production rate
* There are chances that quality of work may suffer.
Q3: What are Gainsharing, Improshare, the Rucker Plan, and the Scanlon Plan? What are the advantages and disadvantages of these programs?
Gainsharing: A technique that compensates workers based on improvements in the company's productivity. Gainsharing is best described as a system of management in which an organization seeks higher levels of performance through the involvement and participation of its people. As performance improves, employees share financially in the gain. It is a team approach; generally all the employees at a site or operation are included.
How does Gainsharing work?
The typical Gainsharing organization measures performance and through a pre-determined formula shares the savings with all employees. The organization's actual performance is compared to baseline performance (often a historical standard) to determine the amount of the gain. Employees have an opportunity to earn a Gainsharing bonus (if there is a gain) generally on a monthly or quarterly basis. Gainsharing measures are typically based on operational measures (productivity, spending, quality, customer service), which are more controllable, by employees rather than...