LABOUR

LABOUR

Method of Remuneration:

1) Time Rate system

          a) Flat time Rate

          b) High wage system

          c) Graduated time rate

2) Payment by Results

          a) Piece rate system

                   i) Straight piece rate

                   ii) Differential piece rate

·         Taylor system

·         Merrick system

b) Group Bonus System

          i) Budgeted Expenses

          ii) Towne gain sharing scheme

          iii) Cost efficiency bonus

          iv) Priest man system

c) Combination of Time and Piece rate

          i) Gantt task and Bonus scheme

          ii) Emerson Efficiency system

          iii) Point scheme

·         Bedaux system

·         Haynes manit system

d) Premium bonus plans

          i) Halsey premium plan

          ii) Halsey weir premium plan

iii) Rowan scheme

          iv) Barth scheme

          v) Accelerating premium bonus scheme

e) Other incentive schemes

          i) Indirect monetary incentive

·         Profit sharing

·         Co-partnership

ii) Non-Monetary Incentive

1) Time rate system = Hours worked * Rate per hour (Basic wages)

2) Piece rate system: 

    i) Straight piece rate earnings = Number of units produced * Rate per unit

    ii) Differential Piece rate

a)   F.W.Taylor’s differential rate system

      » 83% of piece rate when below standard

      » 125% of piece rate when above or at standard

b)   Merrick differential or multiple piece rate system

Efficiency level                         Piece rate

» up to 83%                             »Normal piece rate

» 83% to 100%                         » 110% of Normal rate

          » Above 100%                                   » 120% of Normal rate

     iii) Gantt Task and Bonus system

              Output                                     Payment

            » Below standard                    » Time rate (guaranteed)

            » At standard                                     » 20% Bonus of Time rate

            » Above standard                    » 120% of ordinary piece rate

    iv) Emerson’s Efficiency system

            Efficiency            Payment

          » Below 66.7%                » Hourly Rate

          » from 66.7%             » Hourly rate (+) increasing bonus according to degree

                   to 100%                              of efficiency on the basis of step bonus rates

          » Above 100%                 » Hourly rate (+) 20% Bonus (+) additional bonus of               1%

                                                 of hourly rate for every 1% increase in efficiency   

    v) Halsey Premium Plan = Basic wages + 50% of time saved * Hourly Rate

    vi) Halsey Weir Premium Plan = Basic wages + 30% of time saved * Hourly rate

   vii) Rowan Plan = Basic wages + Time saved             * Basic Wages                                                                          

                                                     Time allowed      

    viii) Bedaus Point system = Basic wages + 75% * Bedaus point/60 * Rate/hr

    ix) Barth’s System = Hourly rate * √Std time *Time taken

Labour Turnover:-

1) Separation rate method =   Separation during the period

                                          Average No. of worker’s during the period

2) Net labour T.O rate (or) Replacement method

                                  = Number of replacements

                                         Average No. of worker’s during the period

3) Labour flux rate = No. of separation + No. of replacement

                                  Average No. of worker’s during the period

Accounting Treatment

1) Normal Idle time = Charged to factory overheads

2) Normal but un-controllable = It should be charged to job by inflating wage rate.

3) Abnormal = It should be charged to costing P & L a/c