The system of fixed piece-work rates has been the subject of some little controversy, but it appears to work very well in certain cases where it is skilfully supervised. In some instances it is said that rates have remained unchanged for the past twenty years.
The analytical piece-work system is carried out to a greater extent of perfection in America than in this country, and the scientific method in which the calculations are made commands the greatest attention and respect.
Mr. Francis G. Burton, in " The Commercial Management of Engineering Works," says that in one instance an investigation of the piece-work rate fixing department " revealed the fact that none of the lathes, planers, boring machines, &c., which were of standard patterns and supplied by the best makers, were designed and speeded so as to cut steel to the best advantage. The company therefore demanded variations from standard designs in almost every machine they subsequently purchased, and in many cases specially designed the machines they required for their own purposes. Thus an investigation originally intended to arrive at a scientific basis for payment of workmen, eventually resulted in the improvement in machines or in methods of using them." The system of differential piece-work rates is more scientific still, and is credited as being one of the last words on this subject. The system has been indicated above (5), and it is only necessary to add here that it has been considered more efficient in reducing the percentage of cost so as to increase the ratio of output to the labour employed.
Although the method adopted is on quite different basis from tie ordinary methods of payment for piece-work, the incentive to energy on the part of the workmen is much greater, and there can be no doubt that the best results are obtainable under this system. It will be readily understood that where some method of classifying men according to their ability is adopted it generally results in extreme dissatisfaction ; but the differential piece-work rate effects this classification automatically, and from the description which has been given it will be observed that if the workmen are slack and dilatory their action affects their own pockets and not those of their employers.
Bonus method is somewhat on a par with differential piece work rates, for the main idea is that when the job is given out a certain time is allocated to its completion. If the work has been performed in a less time than has been allowed a bonus is granted, varying in amount with the time saved. If, however, the job takes longer than was anticipated, the worker will be paid his regular hourly rate of wages, so that from the work man's point of view, while he may by extra exertion increase his rate of pay, the system does not involve the loss of money by his failure to do this. The advantages of the system are directly in line with those of all piece-work systems, as there is an incentive to skill and effort, and increased wages or account thereof. The method of working the system has been excellently
described by Mr. Henry Spencer, whose work on " Commercial Organisation of Engineering Factories ' has already been quoted in the article " Estab lishment Charges " " (1) The time allowed for any job will be fixed by the management, and will be as near as can be ascertained to the time which would be taken on the job when working under the old system.
" (2) The time allowed will include all the time necessary to procure tools, set up machine, and obtain materials for doing the job.
" (3) A time allowance, after it has been established, will only be changed if the method or means of manufatIture are changed.
" (4) For calculating the bonus, the time taken on the job will include all hours between the starting time of the job and the starting time of the next job.
"(5) The hourly rate of wages will in all cases be paid for the hours worked. If a man takes longer to do a job than the time allowed, this will in no way affect the bonus which he may have made or may make on any other job.
"(6) Overtime, night-shift, and other allowances will be paid to the men on the same conditions as already prevail.
" (7) In the case of overtime and night-shift the bonus will be calculated on the actual time worked, without taking the extra time due to overtime, &c., into account.
" (8) If the workmanship when finished does not pass the inspection the workman will receive no bonus for that part unless he can make the work good within the time allowed, in which case he will receive any bonus earned.
" (9) If any part turns out defective while being machined and is con demned, due to a flaw in the material, the workman will receive no bonus on that part (of course, he gets his time wages) ; but if he has several parts on the one job note and one of them is condemned, due to a flaw in the material, he will get the bonus, if earned, on the remainder.
" (10) In cases of dispute the matter will be referred to the management, whose decision shall be final.
" (11) Each workman on starting a job will receive a " job note," on which he will find a description of his job, the time when started, and the time allowed. When the job is finished, he will return his " job note " to his foreman.
" (12) In the case of a job requiring the services of a squad of men, a time allowance will be fixed for the complete job. If the total time taken by the squad is less than the time allowed, a bonus will be paid to each man in the squad, varying with his ordinary rate of pay.
"The introduction of the bonus system will doubtless lead to the work men suggesting improvements, devising better methods of doing many jobs, and pointing out defects in machinery and tools, and so justify the increased wages bill."