Advantages of piece rate system of wages
- Output of the firm can easily be increased. This is because workers aim at maximizing their income and therefore they devote much of their time working hence increase in output.
- It minimizes the cost of supervision as compared to the time rate mode of payment. This is because it ties payment directly to performance.
- There is less time wastage as workers use most of their time working to earn more. This helps to obtain high levels of effort from the workers which increase their productivity .
- It is suitable where the quantity of work can easily be estimated (measured). For example in cotton harvesting where the number of baskets harvested is considered.
- It helps to identify the most able workers. The employer can easily identify the abilities of different workers by considering the quantity of work done.
- It increases the innovativeness and creativity workers. This increases their productivity in the production process.
- It helps to minimize discrimination and nepotism involved during payment. This is because workers are paid according to their abilities.
- Easier to calculate the wage because output is measurable
- one works at his/her own pace
CATEGORIES Economics
TAGS Dr. Bbosa Science
