Piece-Rate System ECONOMIC OF LABOUR & SOCIO-LABOUR RELATIONS Demos of the discipline © Filippova I.H. Time Rate System Remuneration Vladimir Dahl East-Ukrainian National University 1 main

ECONOMIC OF LABOUR & SOCIO-LABOUR RELATIONS © Filippova I.H. 2 Labor Utilization Rate Some products are to be assembled using prefabricated parts. An employee usually completes 10 products per hour. STANDARD TIME = 1 hour / 10 motors ACTUAL TIME = 8 hours TARGET TIME = 90 products * S SS STANDARD TIME = 90 products * 1 hour / 10 motors = 9 hours Labor Utilization Rate = Target Time Target Time Actual Time Actual Time Labor Utilization Rate Labor Utilization Rate 9 hours /8 hours= % The employee only works for 8 hours and completes 90 units. The employee’s hourly wage for the 8 hours worked is 12.5% higher than usual.

ECONOMIC OF LABOUR & SOCIO-LABOUR RELATIONS © Filippova I.H. 3 Remuneration: Task 1 Remuneration Task 1

ECONOMIC OF LABOUR & SOCIO-LABOUR RELATIONS © Filippova I.H. 4 The task The repairmen of semi-automatic equipment are paid for their work on indirect incentive piecework system. Norm of maintenance is 12 units of equipment per repairman. Hourly wage rate for repairman is equal to $ The operator's output norm for each unit of equipment is 44 products per shift. Calculate the monthly repairman remuneration, if there has been produced products at his job place (23 working days per month, 8 hours per shift). If the operator performs the norm, the repairman gets 10% bonus of his wage, and 1% - for each 1% of output over the plan. 1) Calculating the repairman remuneration per month regardless of attaining the plan by operators: working days per month * 8 hours per shift * hourly wage rate =. 2) Let's evaluate the monthly norm (the plan) for all the operators working at the jobs serviced by repairman: the norm for operator (products per shift) * number of job places * working days per month = products. 3) Actual output is products. It means that the operators have overfulfilled the norm (plan) for:

ECONOMIC OF LABOUR & SOCIO-LABOUR RELATIONS © Filippova I.H. 5 The task The repairmen of semi-automatic equipment are paid for their work on indirect incentive piecework system. Norm of maintenance is 12 units of equipment per repairman. Hourly wage rate for repairman is equal to $ The operator's output norm for each unit of equipment is 44 products per shift. Calculate the monthly repairman remuneration, if there has been produced products at his job place (23 working days per month, 8 hours per shift). If the operator performs the norm, the repairman gets 10% bonus of his wage, and 1% - for each 1% of output over the plan. 1) Remuneration per month regardless of attaining the plan: $690 2) Monthly norm for all the operators: products. 3) The norm is overfulfiled for the 2% 4) Since the plan is achieved, the repairman gets the bonus 10% of his month wage rate: $ 690 * 0,1 = $ 69 and 1% for each 1% of output above the plan: $ 690 * 0,01 * 2 % = $ ) Thus, the month remuneration for the repairman will be: $ $ $ 69 + $ 13.8 = $ 772.8

ECONOMIC OF LABOUR & SOCIO-LABOUR RELATIONS © Filippova I.H. 6 Remuneration: Task 2 Remuneration Task 2

ECONOMIC OF LABOUR & SOCIO-LABOUR RELATIONS © Filippova I.H. 7 The task Calculate the total amount of brigade remuneration, if the bonus for the job-in-time is paid in the amount of 10% of wages, and for each day of reduction in job duration - 3% of earnings. A team of 5 workers completed the job for 21 days instead of 24 days. Direct piecework wage rate for the whole job UAH. The retrenchment of material costs has been achieved in the amount of UAH. For the retrenchment of material costs the bonus is paid in the amount of 30% of the actual amount of costs reduction.

ECONOMIC OF LABOUR & SOCIO-LABOUR RELATIONS © Filippova I.H. 8 Labour Productivity LABOUR PRODUCTIVITY

ECONOMIC OF LABOUR & SOCIO-LABOUR RELATIONS © Filippova I.H. 9 Labour productivity Working hours per moth Monthly output of the worker, units Output norm Regulatory laboriousness of products Increasing in labor productivity, % minutesReducing, % Before the revision of the output norms ,00XX After the revision of the output norms ,8614,2916,67 Before the revision of the output norms the worker's output was 10,500 units per month (175 working hours per month). After implementing some measures for the organization of labor output norm was set of 70 units per hour. Evaluate the percentage of reducing in regulatory laboriousness of products, and increasing in labor productivity, and what will be the monthly output of the worker? TASK 1 Monthly output of the worker after the revision of the output norms, units: 70 units per hour · 175 hours per moth = 12,250 units per moth

ECONOMIC OF LABOUR & SOCIO-LABOUR RELATIONS © Filippova I.H. 10 Labour productivity Working hours per moth Monthly output of the worker, units Output norm Regulatory laboriousness of products Increasing in labor productivity, % minutesReducing, % Before the revision of the output norms ,00XX After the revision of the output norms ,8614,2916,67 Before the revision of the output norms the worker's output was 10,500 units per month (175 working hours per month). After implementing some measures for the organization of labor output norm was set of 70 units per hour. Evaluate the percentage of reducing in regulatory laboriousness of products, and increasing in labor productivity, and what will be the monthly output of the worker? TASK 1 Output norm before the revision, units: units per month / 175 hours per moth = 60 units per hour

ECONOMIC OF LABOUR & SOCIO-LABOUR RELATIONS © Filippova I.H. 11 Labour productivity Working hours per moth Monthly output of the worker, units Output norm Regulatory laboriousness of products Increasing in labor productivity, % minutesReducing, % Before the revision of the output norms ,00XX After the revision of the output norms ,8614,2916,67 Before the revision of the output norms the worker's output was 10,500 units per month (175 working hours per month). After implementing some measures for the organization of labor output norm was set of 70 units per hour. Evaluate the percentage of reducing in regulatory laboriousness of products, and increasing in labor productivity, and what will be the monthly output of the worker? TASK 1 Before the revision of the output norms : 60 min. / 60 units per hour = 1,0 min. per unit After the revision of the output norms : 60 min. / 70 units per hour = 0.86 min. per unit Regulatory laboriousness of products, minutes:

ECONOMIC OF LABOUR & SOCIO-LABOUR RELATIONS © Filippova I.H. 12 Labour productivity Working hours per moth Monthly output of the worker, units Output norm Regulatory laboriousness of products Increasing in labor productivity, % minutesReducing, % Before the revision of the output norms ,00XX After the revision of the output norms ,8614,2916,67 Before the revision of the output norms the worker's output was 10,500 units per month (175 working hours per month). After implementing some measures for the organization of labor output norm was set of 70 units per hour. Evaluate the percentage of reducing in regulatory laboriousness of products, and increasing in labor productivity, and what will be the monthly output of the worker? TASK 1 Reducing the regulatory laboriousness of products, %: (1.00 min. – 0.86 min.) * 100 / 1.00 min. = %

ECONOMIC OF LABOUR & SOCIO-LABOUR RELATIONS © Filippova I.H. 13 Labour productivity Working hours per moth Monthly output of the worker, units Output norm Regulatory laboriousness of products Increasing in labor productivity, % minutesReducing, % Before the revision of the output norms ,00XX After the revision of the output norms ,8614,2916,67 Before the revision of the output norms the worker's output was 10,500 units per month (175 working hours per month). After implementing some measures for the organization of labor output norm was set of 70 units per hour. Evaluate the percentage of reducing in regulatory laboriousness of products, and increasing in labor productivity, and what will be the monthly output of the worker? TASK 1 Increasing in labour productivity, %: (70 units per hour – 60 units per hour) * 100 / 60 units per hour = %

ECONOMIC OF LABOUR & SOCIO-LABOUR RELATIONS © Filippova I.H. 14 The end