Types of Piece Wage
Types of piece wage
Piece wage payment may be applied under different forms:
1. Payment by individual direct products:
This method is applied with direct production workers in the condition that their work is comparatively independent, countable and is checked and taken over independently and specifically. Applying this method to have suitable product standards and wage lists.
2. Payment by group products:
This method is applied with the work required a group of people to cooperate to finish, for example: equipment assembling, line producing, mechanical repairing and so on. In case of various and unrepeatable work, production norm principally depends on scientific basis, but in fact, people often define the wage payment for the whole group on the basis of experiences.
In case of fixed products, production norm should be used to calculate the wage payment for the whole group.
3. Payment by indirect products:
This payment method is applied with additional employees. Their work has a great impact on the performance of regular ones who are paid by piece wage. For example: repairing workers, weaving machine operators, operators in mechanical factory….
The wage of additional employees is calculated by multiplying the amount of work completed by regular employees with the wage rate of additional ones.
This payment method motivates additional employees to serve regular ones better, make it easier for them to improve the volume of products.
4. Group payment:
Applied in work of which partial details shouldn’t be assigned separately but the whole work should be assigned to a group to finish in a certain period of time. This payment method is widely applied in capital construction, in agriculture or in mechanical repairing….
Like payment by products, after receiving the wage for finishing the work, the wage redistribution among group members is often based on the level of each member’s contribution to the group work.
This method will set incentives to employees to not only try their best at work but also call the others’ attention toward the final result of the work.
5. Payment by standard hour:
This payment method is similar to payment by products.
Employees will have additional bonuses according to the percentage of excessive work they have done. For example: As rule, employee X has to make a product per hour and works 8 hours a day, therefore it will be 8 products per day. If he makes 10 products instead of 8, it is similar to the situation that he has worked 10 standard hours. Employee X has performed a work excess of 25%, therefore his wage will be increased by 25% as rule.
The advantages of this method are that it motivates employees to reduce the working hours. Besides, it is easy to understand and doesn’t rely on price per product.
6. Employee incentives for guaranteeing workday:
To motivate employees to go to work regularly, many companies usually offer regular rewards for employees for maintaining working day or working hour system, give them “day – off” in the end of the year or in the next year or offer compensated money.
7. Payment by products or payment by progressive products:
This method is applied when the company has to quickly finish some work in a certain time. For example: Delivering goods to buyers on time as mentioned in the contract. Actually, this payment method is the combination of payment by products and bonus (or progressive wage) at a fixed rate to the products based on norm.
With this payment method, the increase in wage rate exceeds that of products; therefore it is useful in setting incentives for employees to work harder.