Chapter – 6 Staffing (10 marks)

The workers of a factory are demanding the introduction of time wage system in place of the existing piece-rate system of wage payment. The management is not prepared to accept this demand of the workers. Why, in your opinion, is the management opposing this demand? Explain in brief any four reasons.

The management is opposing the introduction of time wage system due to the following reasons: (write the disadvantages of time wage system) – any 4

• In time wage system, both efficient and inefficient workers get equal remuneration for same job. There is no incentive for efficient workers to work better in terms of quality and quantity of output. Efficiency will neither result in extra remuneration nor promotion for them. As a result there is quality of work is low.
• It is difficult to assess a worker’s efficiency, as there is no record of his performance.
• Time wage system treats workers at par. As such trade unions pressurise management to accept their demands. If they do not accept the demands it leads to industrial unrest, strikes, riots and lockouts, etc.
• Constant supervision of workers is required which increases cost of production
• There is the tendency for workers to go slow and hence production suffers.
• Skilled workers are not required.

What are the advantages of piece rate system?

• It provides an incentive to produce more.
• It ensures fairness by correlating wages and productivity.
• Cost of supervision is less as workers do not need to be supervised.

When is TIME wage payment method suitable? – {Hint all work that requires time to do the work is time wage system} Go through all they are important

• When high degree of skill is required
• Where production process is complicated and intricate
• Where quality is more important than quantity.
• Where mental work is involved such as administration, management and policy making.
• When workers are recruited on group basis
• When machines used are delicate and expensive
• When workers have no control over their output (control is by machine)
• When there is no clear relationship between effort and output
• Where units of output CANNOT be measured
• When output of learners CANNOT be expected to reach the minimum standard