Piecework wages

Also known as: performance-related pay

Piecework wages are wages that are directly related to the work performed by an employee.

Definition / explanation

In piece wages, a distinction is made between time and money pieces. With the time chord, which is more common in practice, the default time per order or per unit of quantity forms the basis.

As a rule, the employee receives a basic remuneration that meets the requirements, on which the piecework surcharge is calculated. The piecework rate is determined from the components of basic remuneration and piecework surcharge.

There is no basic wage with the Geldakkord. The employee's earnings are entirely dependent on the amount achieved.

Criteria for the application of piecework wages

Folgende Kriterien müssen erfüllt sein, damit Akkordlohn in einem business Anwendung finden kann:

  • repetitive workflows
  • mentally and physically suitable employees for piecework wages
  • no major disruptions in the workflow
  • measurable default times
  • Quantitative output that can be influenced by the employee and that is not influenced by external factors

If one of these criteria is not met, the work is not suitable for piecework.

Types of piecework wages

  • pure piecework wages - which is based exclusively on the service provided
  • Mixed piecework wages - includes a time component and piecework wages
  • Individual piecework wages - which is assigned to a single person
  • Group piece wage - which relates to the performance of a group
  • Proportional piecework wages - which provides for a fixed wage per performance unit

Benefits of piecework wages

Since the employee's remuneration is linked to the service rendered, they have a strong incentive to perform.

Disadvantages of piecework wages

  • Often there is an overworking of the employees
  • Determining the default times can be very time-consuming
  • Coupling of volume performance and remuneration can lead to a reduction in product quality
  • In the event of illness, the employee receives his average chord, in order not to endanger this, employees often take sick leave due to minor illnesses
  • if employees are exhausted and need a break from their work, there is a risk of an intentional malfunction of the machine so that the employee can rest while the repair is being carried out
  • If the employee recognizes an optimization possibility, he will withhold this from his colleagues, as this knowledge secures his piece of work

calculation

Chord straightening rate - The piecework rate is calculated by adding up the basic remuneration and the piecework surcharge.

The following parameters are required to calculate the gross wage: standard time, minute factor and number of pieces worked.

Default time - The default time is the time that is needed to complete the task on average. It is determined by dividing 60 by the normal performance.

Minute factor - The minute factor is obtained by dividing the chord straightening rate by 60.

Gross wage of the employee = standard time * minute factor * number of pieces worked

Summary

  • Remuneration that provides a direct reference to the work performed by an employee
  • there is a time and money accord
  • The prerequisites for piecework wages are repetitive work processes, suitable employees, a smooth workflow, measurable standard times and controllable volume output
  • The advantage of the employee's performance incentive is offset by disadvantages such as employee overload, deterioration in quality and time-consuming determination of the standard times
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