Halsey Plan, Rowan Plan, Emerson Plan, Straight piece-work system

1. A
PRESENTATION ON
‘INCENTIVE SCHEMES’

2. What is incentive schemes?
The Incentive Schemes are the programs
designed to encourage and motivate workmen for
higher efficiency and greater output. According to
International Labor Organization (ILO), the incentives
are “payment by results”

3. TYPES:
Halsey Plan
Rowan Plan
Emerson Plan
Straight Piece-Work System

4. STRAIGHT PIECE-WORK SYSTEM
Definition:
The Straight Piece-Work System is the simplest
incentive method in which the rate per unit of output is fixed,
and the earnings of the worker are computed by multiplying
his total output by the rate per unit.
• If the per unit rate is 10 Paise and the total output is 1000
units, then his earnings will be 0.10 x 1000 = Rs 100.

5. HALSEY PLAN
Definition:
Under Halsey Plan, the standard time for the
completion of a job is fixed and the rate per hour is
then determined.
• Standard Time: 8 hrs
Rate per Hour: Rs. 2
• Case (1): Time Taken = 8 hrs
Earnings = 8 x 2 = Rs 16

6. • Case (2): Time Taken = 10 hrs
Earnings = 10 x 2 = Rs 20
• Case (3): Time Taken= 6 hrs
Earnings:
Time wages = 6x 2 = Rs 12
Bonus = ½ x 2 x 2 = Rs Rs 2

7. ROWAN PLAN
Definition:
Under Rowan Plan, the standard time for the
completion of a job and the rate per hour is fixed.
• Standard Time = 8 hrs
Rate per hour = Rs 2
• Case (1): Time Taken = 8 hrs
Earnings = 8 x 2 = Rs 16

8. • Case (2): Time Taken = 10 hrs
Earnings = 10 x 2 = Rs 20
• Case (3): Time taken = 6 hrs
Earnings:
Time Wages = 6 x 2 = Rs 12
Bonus = 2/8 X 6 = Rs 1.5

9. EMERSON PLAN
Definition:
Under Emerson Plan, the standard time for the completion
of a task is fixed against which the actual performance of the
workers is measured. The worker’s efficiency can be determined
by dividing the time taken by the standard time.
• Standard output in 10 hrs = 200 units
Rate per unit = Rs 2
• Case (1): Output in 10 hrs = 100 units
Efficiency = 50% (100/200 x 100)
• As efficiency is below 67% the worker is entitled to only time
wage, thus, Earnings = 10 x 2 = 20.

10. • Case (2): Output in 10 hrs = 200 units
Efficiency = 100% (200/200 x 100)
• As the efficiency is 100%, then the worker is paid time
wages, plus a bonus of 20% on wages earned. Thus,
Earnings:
Time Wages = 10 x 2 = Rs 20
Bonus = 20/100 x 20 = Rs 4
Total earnings = Rs 24

11. • Case (3): Output in 10 hrs = 260 units
Efficiency = 130% (260/200 x 100)
• For 100% efficiency, the worker will get a bonus of 20% on
wages earned, plus one percent additional bonus for every
one percent increase in efficiency, i.e. 30%. Thus, the total
bonus of 50% of time wage is paid to the worker.
• Earnings:
Time wages = 10 x 2 = Rs 20
Bonus = 50/100 x 20 = Rs 10
Total Earnings = Rs 30