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1. Time Based
Systems
Halsey Plan.
Rowan Plan.
Emerson Plan.
Bedeaux Plan.
A. Halsey plan
• This plan was first designed by F.A. Halsey of
Rand Deill Co., Canada.
• According to this plan, a standard time is fixed
for completing a work in advance.
• If a worker completes his task in less than
standard time is paid for some of the time
saved.
• Generally wages for one half of time saved are
paid.
Example.
Time allowedfor a task :20 hrs
Actual time taken :15hrs
Hourlyrate of pay :Rs.1.50
Calculate the wages of the workers.
Solution.
15 X 1.5 +(20-15/2)X 1.50
= 12.50 + (2.5X1.50)
=22.50+ 3.75 =Rs.26.25
In this equation, a worker gets Rs. 3.75 as incentive for
saving four hours.
T X R + (S-T/2) X R
S=standard time taken.
T=time taken.
R=hourly rate.
Merits and demerits.
Merits.
Simple.
Beneficial to efficient
workers.
Minimum base-wage
is guaranteed.
No need to over
speed.
Demerits.
Fixed percentage of
return.
Fixing of standard
time.
Quality suffers.
B. Rowanplan
This system is very much similar to Halsey’s
plan.
The only difference between Halsey and
Rowan Plans is the method of calculating
bonus.
In this bonus is that proportion of wages of
the time taken which the time saved bears to
the standard time allowed.
T X R + (S-T/2) X T X R
Merits and demerits
Merits.
Guaranteed minimum
wages.
Efficiency is
rewarded.
Demerits.
Calculation of bonus
is complicated.
Discourages workers
to over-achieve.
C. Emerson plan
Emerson has developed this efficiency plan in
1910.
Under this, a standard output is fixed for
determining the efficiency of worker.
A worker reaching 66 2/3% of efficiency is paid
only minimum wages and bonus is paid only
when his efficiency crosses this limit.
Merits and Demerits.
Merits.
Simple & easy to
understand.
Guaranteed minimum
wage.
Encourage workers.
Demerits.
More clerical work.
Discourage the
workers.
D. Bedeaux plan
• This plan was devised by Charles E. Bedeaux in
1911.
• This plan provide comparable standards for all
workers.
• In this benefit of time saved goes to both to the
worker as well as to his superior in the ratio of ¾
and ¼.
• The standard time for each job is determined in
terms of minutes which are called Bedeaux
Points or B’s.
Each B represents one minute through time and motion
Merits and Demerits.
Merits.
Simple.
Guaranteed minimum
wages.
Motivated Supervisor.
Demerits.
Quality suffers.
More clerical work &
complicated work.
Workers do not like
that foreman should
share their bonus.
Individual Incentive System
Individual Incentive System
A. Taylor’s differential piece-rate system
The underlying principle of this system is to
reward an efficient worker and penalise the
insufficient worker.
Under this, a standard time was fixed for
completing a task, if a worker completes the
task in the standard time he is paid at higher
rate and lower rate is paid if more than the
standard time is taken.
Features.
• No minimum wages are guaranteed.
• A standard time is fixed for completing the task.
• Higher rate is given if work is completed in
standard and lower rate is offered if more
standard if more time is taken.
Merits and Demerits.
Merits.
• Simple.
• Good incentives to
efficient worker.
• Preferred by
employees.
Demerits.
• Punish slow workers.
• Disunity among
workers.
• No guaranteed
minimum wages.
• Quality suffers.
B. Gantt’s task and bonus plan
• A standard time is fixed for completing the
work.
• A worker taking standard or more time gets
wages on an hourly rate.
• A bonus ragging from 25% to 50% is paid for
completing the task in less than standard
time.
• Demerits.
Less efficiency of workers.
Disunity among workers.
Group Incentive Systems
Priestman’s Plan.
Scalon Plan.
Co-Partnership Plan.
Profit Sharing.
A. Priestman’s plan
• Under this plan a standard production is fixed
for the whole factory.
• If productivity exceeds the standard then
bonus is paid in accordance with the increase;
and if not workers will get minimum wages
only.
• A team spirit is visible because production will
increase with the collective efforts of everyone
in the organisation.
B. Scalon plan
• This method is named after Joseph Scalon of USA.
• In this, a payment of one percent participating
bonus for every one percent increase in
productivity.
• The bonus is available to all employees except
top management.
• For this bonus, a reserve fund of one- half of first
fifteen % is created for off setting any change in
labour cost; and after every year if the reserve is
unused it will distributed among employees in
last month of the year.
C. Co-partnership
• Under this scheme, the employees are offered
shares of the enterprise at reduced rates.
• The underlying of this method is to make
workers feel themselves as a part of the
organisation and understand the viewpoint of
the management.
• Because as a co-partner they will try to make
the concern more and more profitable.
D. Profit sharing
• In this plan workers should also get a part of profits
for contributing their labour.
• These profits are paid to workers in addition to their
nominal wages.
• The payment is made after ascertaining net profit.
Objective-
• To recognise the right of workers for sharing the
prosperity of the company.
• To make workers feel as members of the enterprise
rather than only employees.
• Cordial relations between employees and
employers.
Merits.
1. Increase in productivity.
2. Cordial relations.
3. Reduction in labour turnover.
4. Additional earning for workers.
5. Less need for supervision.
Demerits.

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Individual Incentive System

  • 2. Halsey Plan. Rowan Plan. Emerson Plan. Bedeaux Plan.
  • 3. A. Halsey plan • This plan was first designed by F.A. Halsey of Rand Deill Co., Canada. • According to this plan, a standard time is fixed for completing a work in advance. • If a worker completes his task in less than standard time is paid for some of the time saved. • Generally wages for one half of time saved are paid.
  • 4. Example. Time allowedfor a task :20 hrs Actual time taken :15hrs Hourlyrate of pay :Rs.1.50 Calculate the wages of the workers. Solution. 15 X 1.5 +(20-15/2)X 1.50 = 12.50 + (2.5X1.50) =22.50+ 3.75 =Rs.26.25 In this equation, a worker gets Rs. 3.75 as incentive for saving four hours. T X R + (S-T/2) X R S=standard time taken. T=time taken. R=hourly rate.
  • 5. Merits and demerits. Merits. Simple. Beneficial to efficient workers. Minimum base-wage is guaranteed. No need to over speed. Demerits. Fixed percentage of return. Fixing of standard time. Quality suffers.
  • 6. B. Rowanplan This system is very much similar to Halsey’s plan. The only difference between Halsey and Rowan Plans is the method of calculating bonus. In this bonus is that proportion of wages of the time taken which the time saved bears to the standard time allowed. T X R + (S-T/2) X T X R
  • 7. Merits and demerits Merits. Guaranteed minimum wages. Efficiency is rewarded. Demerits. Calculation of bonus is complicated. Discourages workers to over-achieve.
  • 8. C. Emerson plan Emerson has developed this efficiency plan in 1910. Under this, a standard output is fixed for determining the efficiency of worker. A worker reaching 66 2/3% of efficiency is paid only minimum wages and bonus is paid only when his efficiency crosses this limit.
  • 9. Merits and Demerits. Merits. Simple & easy to understand. Guaranteed minimum wage. Encourage workers. Demerits. More clerical work. Discourage the workers.
  • 10. D. Bedeaux plan • This plan was devised by Charles E. Bedeaux in 1911. • This plan provide comparable standards for all workers. • In this benefit of time saved goes to both to the worker as well as to his superior in the ratio of ¾ and ¼. • The standard time for each job is determined in terms of minutes which are called Bedeaux Points or B’s. Each B represents one minute through time and motion
  • 11. Merits and Demerits. Merits. Simple. Guaranteed minimum wages. Motivated Supervisor. Demerits. Quality suffers. More clerical work & complicated work. Workers do not like that foreman should share their bonus.
  • 14. A. Taylor’s differential piece-rate system The underlying principle of this system is to reward an efficient worker and penalise the insufficient worker. Under this, a standard time was fixed for completing a task, if a worker completes the task in the standard time he is paid at higher rate and lower rate is paid if more than the standard time is taken.
  • 15. Features. • No minimum wages are guaranteed. • A standard time is fixed for completing the task. • Higher rate is given if work is completed in standard and lower rate is offered if more standard if more time is taken.
  • 16. Merits and Demerits. Merits. • Simple. • Good incentives to efficient worker. • Preferred by employees. Demerits. • Punish slow workers. • Disunity among workers. • No guaranteed minimum wages. • Quality suffers.
  • 17. B. Gantt’s task and bonus plan • A standard time is fixed for completing the work. • A worker taking standard or more time gets wages on an hourly rate. • A bonus ragging from 25% to 50% is paid for completing the task in less than standard time. • Demerits. Less efficiency of workers. Disunity among workers.
  • 18. Group Incentive Systems Priestman’s Plan. Scalon Plan. Co-Partnership Plan. Profit Sharing.
  • 19. A. Priestman’s plan • Under this plan a standard production is fixed for the whole factory. • If productivity exceeds the standard then bonus is paid in accordance with the increase; and if not workers will get minimum wages only. • A team spirit is visible because production will increase with the collective efforts of everyone in the organisation.
  • 20. B. Scalon plan • This method is named after Joseph Scalon of USA. • In this, a payment of one percent participating bonus for every one percent increase in productivity. • The bonus is available to all employees except top management. • For this bonus, a reserve fund of one- half of first fifteen % is created for off setting any change in labour cost; and after every year if the reserve is unused it will distributed among employees in last month of the year.
  • 21. C. Co-partnership • Under this scheme, the employees are offered shares of the enterprise at reduced rates. • The underlying of this method is to make workers feel themselves as a part of the organisation and understand the viewpoint of the management. • Because as a co-partner they will try to make the concern more and more profitable.
  • 22. D. Profit sharing • In this plan workers should also get a part of profits for contributing their labour. • These profits are paid to workers in addition to their nominal wages. • The payment is made after ascertaining net profit. Objective- • To recognise the right of workers for sharing the prosperity of the company. • To make workers feel as members of the enterprise rather than only employees. • Cordial relations between employees and employers.
  • 23. Merits. 1. Increase in productivity. 2. Cordial relations. 3. Reduction in labour turnover. 4. Additional earning for workers. 5. Less need for supervision.