Incentive Plans — Halsey Premium Plan and Halsey-Weir Plan

Incentive (premium/bonus) plans are wage schemes that combine the security of a time wage with the incentive of a piece-rate scheme. The organisation fixes a standard time (time allowed) for a job. If the worker finishes in less than the standard time, the time saved benefits both worker and employer: the worker is paid the normal time wage for the time actually taken PLUS a bonus for part of the time saved, and the employer benefits from the rest of the saving (lower overhead per unit). Crucially, a worker who does NOT save time still receives the guaranteed time wage — earnings can never fall below the time rate.

Halsey Premium Plan

Devised by F.A. Halsey, this plan pays the worker a bonus equal to a fixed percentage (commonly 50%) of the value of the time saved.

• Time Saved = Time Allowed (Standard Time) − Time Taken
• Basic (Time) Wages = Time Taken × Rate per Hour
• Bonus = 50% × Time Saved × Rate per Hour
• Total Earnings = (Time Taken × Rate) + (50% × Time Saved × Rate)

The key feature is that the bonus percentage is fixed (50%), so the worker gets half the value of the time saved and the employer keeps the other half.

Advantages: guarantees a time wage (security); gives an incentive to save time; the employer shares in the saving; simple to compute.

Limitations: the worker gets only PART (half) of the benefit of their own time saving, which some workers regard as unfair; quality may suffer if a worker rushes to save time.

Halsey-Weir Plan

The Halsey-Weir Plan is a variant of the Halsey Plan, differing only in the bonus percentage: instead of 50%, the worker is paid a bonus of 30% of the value of the time saved. Everything else is identical to the Halsey Plan.

• Total Earnings = (Time Taken × Rate) + (30% × Time Saved × Rate) …