ECONOMICS

Detailed explanation-1: -Taylor’s differential piece-rate system posits that the worker who exceeds the standard output within the stipulated time must be paid a high rate for high production. On the other hand, the worker is paid a low rate if he fails to reach the level of output within the standard time.

Detailed explanation-2: -Taylor’s Differential Piece Rate system Standard time per unit = 20 seconds Differentials to be applied: 80 % of piece rate below standard 120% of piece rate at or above standard. Worker A produces 1, 300 units per day and worker B produces 1, 500 units per day.

Detailed explanation-3: -In, two piece rates are set for each job.

Detailed explanation-4: -Differential Piece Rate System was introduced by Taylor, the father of scientific management. The underlying principle of this system is to penalise a slow worker by paying him a low piece rate for low production and to reward an efficient worker by giving him a higher piece rate for a higher production.