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Unformatted text preview: ework An incentive plan under which employees receive a certain rate for each unit produced. Differential Piece Rate A compensation rate under which employees whose production exceeds the standard amount of output receive a higher rate for all of their work than the rate paid to those who do not exceed the standard amount. Computing the Piece Rate
Computing the Piece Rate
60 minutes (per hour) = 5 units per hour 12 minutes (standard time per unit) $12.75 (hourly rate)
5 units (per hour) = $2.55 per unit Piecework: The Drawbacks
Piecework: The Drawbacks Problems with piecework systems: Is not always an effective motivator Piecework standards can be difficult to develop. Individual contributions can be difficult measure. Not easily applied to work that is highly mechanized with little employee control over output.
Piecework may conflict with organizational culture (teamwork) and/or group norms (“rate busting”). When quality is more important than quantity. When technology changes are...
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- Fall '07