Time rate and piece rate
are two common wage systems used by organizations to pay their employees. Here
are some of the suitability of each wage system:
Time rate wage system:
- Suitable for unskilled tasks: Time rate is
suitable for tasks that are unchanging, where the amount of time taken to
complete a task is consistent from day to day.
- Suitable for jobs that require close
supervision: Time rate is suitable for jobs that require close
supervision, as it is easier to monitor the amount of time an employee
spends working.
- Provides stability and security: Time rate
provides stability and security to employees, as they are paid a
consistent wage regardless of the amount of work they produce.
Piece rate wage system:
- Suitable for jobs that are easily
quantifiable: Piece rate is suitable for jobs that are easily
quantifiable, where the amount of work produced can be accurately
measured.
- Suitable for jobs that require motivation:
Piece rate is suitable for jobs that require motivation, as employees are
paid based on their output, which can increase their motivation to work
harder.
- Offers opportunities for higher earnings:
Piece rate offers opportunities for higher earnings to employees, as they
can increase their income by producing more work.
In conclusion, the
suitability of time rate and piece rate wage systems depends on the nature of
the job and the goals of the organization. Time rate is suitable for jobs that
are unchanging and require close supervision, while piece rate is suitable for
jobs that are easily quantifiable and require motivation. Organizations must
carefully consider their needs and goals when choosing a wage system, in order
to ensure that they are paying their employees fairly and equitably.
