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Exercises · Q8

Q.Explain Taylor's differential piece-wage system with a suitable example.

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Under Taylor's differential piece-wage system, two distinctly different piece rates are set for the same job: a higher rate applies to workers whose output reaches or exceeds the standard set by time study, and a lower rate applies to workers whose output falls short of that standard. The gap between the two rates is deliberately kept wide, so the system acts as a strong financial incentive to reach or beat the standard rather than a mild encouragement.

Example: suppose the standard output for a job is fixed at 20 units a day. The higher rate is set at ₹10 per unit and the lower rate at ₹6 per unit.

  • A worker who produces 22 units in a day (at or above standard) is paid 22 × ₹10 = ₹220.
  • A worker who produces only 16 units (below standard) is paid 16 × ₹6 = ₹96, not 16 × ₹10. …

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