How is the piece rate determined? Piece rate is

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

One of the key organizational issues at the enterprise is the choice of the form of remuneration. In most cases, employees of enterprises receive remuneration in accordance with their salary and hours worked. However, this scheme can not be applied in all organizations.

For example, it is not suitable for enterprises where it is extremely important for the manager to increase the productivity of the staff, and also where quantitative indicators of the work performed can be taken into account. In such cases, the best option is the introduction of a piece rate. The essence of this option for calculating employee remuneration will be discussed later in the article.

General information

Piece rate is a form of remuneration for employees, in which the amount receivable directly depends on the amount of work performed, produced units of production. You can enter this calculation option with personnel if you can calculate the result of labor and track its quality.

In most cases, time wages are used. According to this scheme, the reward is received,for example, he alth workers, teachers, administrators, security guards, accountants, etc. Piece rate is a suitable calculation option for welders, turners, copywriters, taxi drivers, repairmen, etc.

Employee motivation

Often, the manager, in an effort to increase the interest of employees in work, uses a combined calculation procedure: a piece rate and a fixed amount of wages.

As a rule, in such cases, the employee is guaranteed to receive a small monthly salary. It allows you to meet the primary needs during the "off season". In addition to this salary, the employee is paid for each unit of product sold or manufactured.

Important indicators

To determine the piece rate, you need to know some additional values. Among them:

• Production rate. It represents the minimum number of items that must be manufactured or sold in a given period of time. As a rule, hourly, monthly, daily norms are set.
• Tariff rate. It represents the minimum guaranteed amount of an employee's remuneration per month. The rate is set according to qualification. It is worth saying that the salary is only a part of the salary. In addition to the tariff, it may include social payments, bonuses, etc.
• Tariff scale. It is a scheme for calculating the payment of work in accordance with its complexity and the qualifications of the employee.

Howpiece rate determined?

Let's consider the order of calculation on an example. Let's say the company has set a daily norm for a milling machine - 120 parts. The tariff rate is 1200 rubles per day. For a month of work, the miller was able to process 2400 parts.

The piece rate is determined by dividing the rate by the norm:

Р=1200 /120=10 rubles/pcs

The monthly earnings of a milling machine operator will be:

10 x 2400=RUB 24,000

In some enterprises, the rate of production is determined by the time spent on the performance of operations, and there is a slightly different procedure for calculating the piece rate. In this case, the calculation is somewhat more complicated.

Let's assume that the enterprise has a time limit of 30 minutes for one operation on the machine. The hourly rate is 150 rubles/month. During the month of work, the employee was able to perform 600 operations. Calculate the piece rate. In this case, it is equal to:

P=150 x 30/60 min.=75 rubles/operation.

In a month the employee will receive:

75 x 600=45 thousand rubles.

Direct piecework

Earnings of employees are determined in accordance with the volumes performed using fixed amounts established depending on qualifications.

For example, the piece-rate of a seamstress of the highest category is 50 rubles. for one product. She sews 600 items a month. Accordingly, her earnings will be 30 thousand rubles.

Part-time premium payment

This form of calculation provides for a premium for production/salesproducts in excess of the standard. Improvement in productivity, improvement in the quality of products, reduction in the number of defects, costs, etc. can also serve as bonus indicators.

Indirect piecework earnings

This form of remuneration is used to pay for the work of employees responsible for the smooth functioning of the equipment. Thanks to these specialists, the main production personnel are not idle.

The calculation is made by multiplying the price by the number of products produced on the production line.

Piece-progressive form

This option is used to dramatically increase output. With such a scheme, until the norm established by the enterprise is reached, the calculation is carried out at fixed prices. If the volume of output starts to exceed the norm, increased tariffs are applied.

This system is considered one of the most motivating.

Chord chart

It involves the calculation not for a unit of goods, but for a separate operation or the entire work as a whole. In the order for the performance of the production task, the start and end times of the activity are set.

As a rule, such a scheme is used in agricultural, transport, construction enterprises. At the same time, it can be set for an individual worker or a team.

Terms of transition to piecework payment

It is advisable to introduce such a system at an enterprise if:

• Accounting for manufactured goods orservices provided.
• The supply of materials, raw materials and other resources for production is uninterrupted.
• The company has an effective quality control system.
• Adequate billing schemes and production standards have been developed.
• It is possible to track the quantitative performance of each individual employee.
• The company needed to significantly increase the level of sales/production.

Benefits

Piece payment allows:

• Increase production and sales.
• Increase employee motivation.
• Track the quality of work of each person individually.
• Push employees to self-development if pay increases depend on merit.
• Increase the mutual assistance of workers. This is true for the chord brigade system - the whole team is interested in the quick completion of the work.

Disadvantages of piecework payment system

Among the main disadvantages are:

• Possible decrease in quality due to haste.
• The need for uninterrupted supply of materials and components.
• Reluctance of an employee to do other things than work. For example, cleaning the workplace, cleaning equipment, etc.
• Possible non-compliance with technology, safety rules.

Striving to get the job done quickly canlead to high costs of raw materials and supplies.