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Illustrations · Q7

Q.In what situations is the Time Rate Wage system more suitable than a piece-rate-based system?

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Time Rate Wage is generally more suitable than a piece-rate-based system in the following situations:

  1. Where quality is paramount and must not be sacrificed for speed — e.g. precision engineering, inspection, or research and development work, where a rushed job could mean a defective or unsafe product.
  2. Where output cannot be easily measured in countable units — e.g. supervisory work, maintenance, or general administrative support, where there is no natural per-unit output against which a piece rate could even be set. …

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