Circumstances under which the piece rate system is preferable to the time rate system of wage payment

 

  • When it is possible to measure output either in terms of area covered or volume of output produced.

  • If it leads to increased output per period of time since it motivates workers to work harder to produce greater units of output within the shortest period of time.

  • When careful workers are not likely to suffer for doing quality work in lesser quantities thereby earning less than fast but careless workers who earn more producing output in large quantities but of poor quality.

  • If it enables workers to become creative and innovative in order to increase output.

  • When it is easy to check and avoid wastage arising from hurrying.

  • When accidents at the work place can be avoided.

  • When active workers who are creative or physically stronger or hardworking are not

  • resented for producing more output thereby earning more than the other workers.

  • When it is possible to forecast output and cost of production.

  • When supervision of workers is not necessary, for example, when all workers know and do what they are required to do.

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