WAGE SYSTEMS 1. Systems of pay.—The most prominent systems of pay in the United States are the day-work plan, the piecework plan, and various modifications of the premium or bonus plans.
The first method is usually employed where special conditions prevail. Thus, it would be fatal to adopt a system of wages in a department where great care and accuracy were demanded if the system stimulated the worlanen to produce more but inferior work.
The piecework system provides for the payment of work by the piece. It wa,s at first hailed with en thusiasm by the worker, but so many abuses which proved hurtful to the pieceworker, crept into the system that the latter now generally regards it with suspicion. One of the abuses is the practice of cut ting rates when the men begin to earn high wages. The mischief is very largely caused by poor judgment in the establishment of the piece-rate in the first place. Neither the standard prices nor the standard times were based upon scientifically determined data, but upon some such basis as the "best previous records," an "ordinary try-out," or the foreman's estimate. The laborer generally saw that by working harder he could increase his income by several per cent, but this gener ally led to a corresponding cut in the price. Thus the laborer was obliged to work very much harder than a few days before, for a return in wages no larger than formerly.
2. The premium or bonus system.—With the day work plan and the piecework system as a basis, other methods have been made possible by the more accurate determination of standard times. The premium, or bonus system is one which sets a definite time for the accomplishing of a task, and which provides for the payment of an extra sum of money if the work is com pleted within this time. This is a modification of the day-work plan, whereby a definite task has been more scientifically determined in regard to the time neces sary to accomplish it. The principle involved in this system, as in the other, is to establish a fixed rate of pay per day, so that if the laborer turns out less work than is demanded by this standard he will be insured at least a living wage. On the other hand, if he at tains the standard' set, or exceeds it, he will be paid a proportionately larger wage.
3. The Halsey system.—The Halsey system, named after its inventor, is an example of a wage sys tem formulated along these lines.
A standard time is set for accomplishing a task but if for some cause beyond the control of the work man that piece of work cannot be done in the time set, the laborer gets the wage previously agreed upon. It is also understood that this rate of wages will not be cut. Suppose that the man were working on a six hour-day basis, he would be expected to finish in six hours, and if he did, would be paid 25 cents an hour, or $1.50 a day. If he did the work in five hours he would get a part of the wages which he had saved by finishing an hour sooner. If the proportion agteed upon were one-half, he would then get $1.37% for the five hours' work—namely, five hours' work at 25 cents, plus 12% cents for the hour he saved. If he did the work in three hours he would get three times 25 cents, plus one-half of the wages for the time saved, or $1.12%.
Under this system, therefore, the laborer never fell below the day-rate that was fixed, and he always had the chance of earning more by turning out more work. This was a compromise between the day-work and the piecework system which lessened the effects of each. The employer received part of the benefit of the em ploye's increased output; thus his temptation to cut the laborer's wages was eliminated. On the other hand, the workman would not be inclined to limit his output because he wished to do as little work as possi ble as under the day-work plan, or for fear that his wages would be cut, which so frequently happens under the piecework system.
4. Taylor digerential system.—Another system is that known as the Taylor differential piece-rate sys tem, also named after its inventor. This is based on an accurately determined standard time, a careful study having been made of the operations involved and of estimates of how long it would take a first-class man to accomplish a given piece of work. If that standard is reached, the workman receives a high rate of wages. If he just falls short of the standard set, a considerable deduction from the day-rate is made.