Disadvantages of time Rate System
- It requires a lot of supervision to see how the work is being done. This is costly to the management.
- It promotes work inefficiency among the hardworking employees especially when they discover that they are earning the same or less wage as compared to the lazy ones.
- It leads to low output. There is a tendency of workers to dodge or do little work since they are assured of their wages at the end of the period.
- It leads production of low quality products. This is because it does not consider how work is done but rather the period worked.
- It is not suitable to use in a situation where there is need to increase output very fast for example when a firm is supplying a certain product to a given company and there is a sharp increase in demand.
- 6. It is difficult to identify the hard working employees when using the time rate mode of payment.
CATEGORIES Economics
TAGS Dr. Bbosa Science
