Taylor Differential Piece Rate
F. W. Taylor introduced a scheme for wage payment by which the goal of maximum output may be achieved. The basis suggested by Taylor is that low piece rate should be paid for low production and high piece rate should be high production. According to Taylor, a standard time is fixed and the worker who finishes the allotted work before the standard time should be paid at a higher rate and the worker who cannot complete the task within the standard time should be remunerated at a lower rate. This standard should be set up very accurately with the help of time and motion studies because it is the demarcating line for higher and lower rates of wages. Thus, two piece-rates are fixed, one for those who perform the standard task in standard time (may be termed as efficient workers) and the other for those who perform less than the standard task in the standard time (may be termed as inefficient workers).
Usually rates are 175% and 83% of the piece work rate for efficient and inefficient workers respectively.
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